Corruption Crackdown in Saudi Arabia Sends Oil Soaring
Nov 07, 3:51 pm
Saudi Arabia's Deputy Crown Prince and Minister of Defense Mohammed bin Salman speaks with Secretary of Defense Ash Carter at the Pentagon June 16, 2016. The two leaders met to discuss matters of mutual importance. (DoD photo by Senior Master Sgt. Adrian Cadiz)(Released)
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Saudi Crackdown Fuels Rally
Oil markets were subject to fresh volatility on Tuesday in response to a political purge in Saudi Arabia which saw the government cracking down on several princes and ministers accused of corruption. This move is seen as heightening geopolitical tensions in the region, leading to the rally in Oil. As Saudi Arabia is head of the OPEC pack, any news of political tensions tends to underpin oil, and as the market was already moving in a bullish trend, with investors expecting OPEC to extend their production cut, the news has simply added fuel to the fire.
OPEC Expected to Extend Output Curbs
OPEC has been coordinating with Russia and other key non-OPEC producers since January to reduce oil output by around 1.8million barrels a day. The latest data shows that OPEC output fell once again in October and that compliance with the deal’s parameters moved to its highest level. The group is widely expected to extend the agreement when it meets later this month in-line with comments from political leadership in Saudi Arabia and Russia as well as pressure from major oil companies.
Tensions in the region were already boiling over following the firing of a rocket from Yemen into the Saudi Arabian capital of Riyadh in response Saudi Arabia waging war on Iranian-backed rebels in Yemen.
Billionaire Apple Investor Arrested Ad Part Of Crackdown on Corruption
The purge was led by the crown prince of Saudi Arabia, Mohammed bin Salman, and has seen the arrest of key persons such as Prince Alwaleed bin Tala, a billionaire investor who has concerns in Citigroup, Apple & 21st Century Fox. Kingdom Holdings, which is Alwaleed’s investment group, has publicly commented saying that the Saudi government has assured its “full confidence” in the group which oversees $12.5bln worth of assets.
Read more: https://www.orbex.com/blog/2017/11/corruption-crackdown-saudi-arabia-sends-oil-soaring