The panel will have to wait to hear from LIV CEO Greg Norman and Yasir Al-Rumayyan, the governor of the Saudi Arabian national wealth fund behind the rival circuit.
The Senate Permanent Subcommittee on Investigations said Ron Price, the PGA Tour’s chief operating officer, and board member Jimmy Dunne have agreed to appear July 11.
Now that the PGA Tour and European tour have a deal with the Saudis, one step is deciding how players can return from LIV Golf if they so choose.
A Senate subcommittee is asking executives from the PGA Tour, Saudi golf interests and LIV Golf to testify as Congress investigates the shocking business deal that upended the sport.
The leader of a Senate subcommittee wants the PGA Tour and Saudi Arabia’s LIV Golf to present records about negotiations that led to their new agreement and plans for what golf will look like under the arrangement.
HARTFORD, Conn. (AP) — U.S. Sen. Richard Blumenthal was expected to be discharged from a hospital Monday following what he called successful surgery on a minor leg fracture he suffered during a victory parade for the national champion University of Connecticut men’s basketball team over the weekend.
Sen. Richard Blumenthal, D-Conn., who chairs the panel, and ranking member Sen. Ron Johnson, R-Wis., said Norman and Al-Rumayyan cited scheduling conflicts as to why they would not be able to appear.
LIV Golf is playing outside London this week. Its next tournament is not until early August.
“We appreciate the PGA Tour working with us and look forward to a robust, thoughtful exchange with both Ron Price and Jimmy Dunne on July 11, focusing on the details and background of this deal and what it means for this cherished American institution,” Blumenthal and Johnson said in a joint statement.
They said they regret Al-Rumayyan and Norman’s schedules will keep them from the hearing because “they have valuable information to share about the operations of the Public Investment Fund, the future of LIV Golf, and Saudi Arabia’s plans to invest in golf and other sports.”
“Consistent with our subcommittee’s practice, we look forward to working with both witnesses to find a mutually agreeable date for them to appear in the very near future,” they said.
The New York Times said LIV instead offered Gary Davidson, who is acting chief operating officer of LIV. It cited a person familiar with LIV’s thinking as saying Davidson was more involved in the league’s day-to-day operations and the ramifications of the deal.
Norman was not involved in the seven weeks of negotiations that led to the framework agreement, in which the PIF, PGA Tour and European tour would pool commercial businesses and rights in a separate for-profit company.
Neither was Price. The only people involved in the deal were Al-Rumayyan, Monahan and PGA Tour board members Dunne and Ed Herlihy.
The title of the hearing is, “The PGA-LIV Deal: Implications for the Future of Golf and Saudi Arabia’s Influence in the United States.”
“Americans deserve to know what the structure and governance of this new entity will be,” Blumenthal said last week in asking for the hearing. “Major actors in the deal are best positioned to provide this information, and they owe Congress — and the American people — answers in a public setting.”
___
AP golf: https://apnews.com/hub/golf and https://twitter.com/AP_Sports
At least two people died in a shooting incident near the United States consulate in Jeddah, Saudi Arabia on Wednesday, according to local police and a spokesperson for the consulate. One of those killed was a consulate security guard.
“A person in a car stopped near the American consulate building in Jeddah Governorate and got out of it carrying a firearm in his hand,” Saudi state news agency SPA reported citing a statement by the Mecca city police spokesperson. That person was killed in an exchange of fire with security forces, it said.
“A Nepalese worker in the consulate’s security guards was injured and then later died,” it also said.
A spokesperson for the consulate confirmed the incident. “There were two fatalities, including a member of the Consulate’s local guard force as well as the assailant, who was killed by Saudi security forces,” they said.
The spokesperson said the consulate was locked down during the incident, no Americans were harmed in the attack, and all official American and locally employed staff have been accounted for.
“We offer our sincere condolences to the family and loved ones of the deceased local guards member,” the spokesperson said.
Saudi authorities are investigating the the incident.
A shooting outside the U.S. Consulate General in Jeddah, Saudi Arabia, left a local security guard dead, a State Department spokesperson said Wednesday. The assailant was killed by Saudi security forces.
“The Consulate was appropriately locked down and no Americans were harmed in the attack. Accountability of all official American and locally employed staff has been achieved,” the spokesperson said. The incident remains under investigation.
A spokesperson for the Makkah Al-Mukarramah Police said that the assailant stopped his car near the port city’s American consulate on Wednesday evening, the Saudi Press Agency reported. He got out carrying a firearm, and there was an exchange of gunfire with the consulate’s security authorities. A Nepalese security guard employed by the consulate and the assailant were killed in the exchange, the police spokesman said.
“We offer our sincere condolences to the family and loved ones of the deceased local guard member,” the State Department spokesperson said.
Saudi Arabia says its massive investment in sports is part of a larger strategy to transform its economy. Jon Wertheim investigates if it’s about transformation, or sportswashing human rights abuses.
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
Sportswashing: it’s likely a term you have heard a lot recently..the use of games and teams and competition to cleanse a country’s image and launder a reputation. Earlier this month, the sporting world was stunned when LIV Golf, the breakaway tour funded by Saudi Arabia, ended a bitter legal dispute and abruptly merged with the PGA Tour. It brings another round of scrutiny to Saudi Arabia’s lavishly-funded foray into international sport: hosting events, buying teams, and attracting athletes with colossal paydays. Is this investment an attempt to diversify the economy and cater to younger citizens, as its leaders claim? Or is it done to paper over human rights abuses, authoritarian rule and even murder? As we first reported back in April, we visited the Kingdom to check out the sports world’s new nerve center and check out what the Saudis and their neighbors are getting for their money.
Argentina may have claimed the World Cup last December, but it wasn’t the only country to emerge as a big winner. A controversial choice to host, the oil-rich Gulf State of Qatar threw more than $200 billion into staging the event and dribbled past criticism over its appalling human rights record. And another winner was next door. Saudi Arabia fielded the one team that beat Argentina — a triumph celebrated around the Arab world — not least by Prince Abdulaziz bin Turki Al Saud, the country’s minister of sport.
Prince Abdulaziz: It was unbelievable. It was just a milestone that we ticked that shows that if you put the effort and– and the right resources behind it, you can achieve impossible things.
The improbable continued after the World Cup. Saudi Arabia’s enormous resources—that is, sloshing oil money—enticed Cristiano Ronaldo of Portugal, a generational star, to play for a team in Riyadh. His salary? More than $200 million a season. That’s right $200 million: roughly the annual playing wages of LeBron James, Steph Curry, Aaron Judge and Patrick Mahomes, combined.
The opening bell for Saudi Arabia’s investment in global sports sounded three years ago with “The Clash on the Dunes,” a heavyweight title fight.
A few months later the Kingdom staged the world’s richest horse race.
There’s Formula 1 racing and a 10-year deal with the WWE. But, to many, these mega-events in Saudi Arabia are financial loss leaders being used to launder the image of a country, while cloaking repression and authoritarian rule.
Prince Abdulaziz bin Turki Al Saud, Saudi Arabia’s minister of sport
60 Minutes
Jon Wertheim: You’ve heard this term sportswashing, this idea that countries can cover up bad acts through sports. Do you believe in the concept that a country can use sports this way?
Prince Abdulaziz: Not at all. I don’t agree with that, with that term. Because I think that if you go to different parts of the world then you bring people together. Everyone should come, see Saudi Arabia, see it for what it is, and then make your decision. See it for yourself. If you don’t like it, fine.
Which is precisely why we came to Saudi Arabia late last year—to see this unlikely sports hub for ourselves. December is the off season for pro tennis, yet Riyadh was the site of an exhibition, studded with top 10 stars and embroidered with local touches… falcons enlisted to help with the draw ceremony. But the real draw? Australia’s Nick Kyrgios was blunt.
Interviewer: What brought you here at the end?
Nick Kyrgios: Well, the money is pretty good, I am not going to lie.
Despite deserts of empty seats—and little in the way of television rights, usually the lifeblood for sports—the players were paid millions just to show up. And Taylor Fritz, a Californian, earned $1 million in prize money for winning the weekend event.
The Saudis aren’t just hosting events. Through the kingdom’s sovereign wealth fund, they bought an English Premier League soccer team, Newcastle United. We saw them for a visiting game against a local team… pointedly, abandoning their usual striped kits, for the green of the Saudi flag.
Then there is, to date, Saudi’s biggest swing in sports: that $2.5 billion breakaway LIV Tour, which Tiger Woods dismissed as quote, “an endless pit of money.” Top players, including Phil Mickelson and Dustin Johnson, switched their tour allegiances, both paid, as they were, north of $100 million. Earlier this month, the PGA and LIV merged… a win for the Saudis.. securing their foothold in the sport.
LIV Golf putting green
60 Minutes
Jon Wertheim: This flood of Saudi money into sports is just absolutely, it’s a disruptor. It’s, it’s completely changing the face of sports. Is, is that the intention?
Prince Abdulaziz: Not at all. It adds a lot to the sport.
Jon Wertheim: But you have to realize the impact this has. I mean, when winners of LIV Golf events are making multiple times what Tiger Woods won the last time he won the Masters, that’s a big economic change.
Prince Abdulaziz: It doesn’t matter I think if the impact of increasing the participation of sports and the interest in that sport is growing– then why not?
The sports minister insists that the massive investment is an essential pillar of what is called “Vision 2030:” A $7 trillion plan by the kingdom’s effective ruler Crown Prince Muhammad Bin Salman, or MBS, to diversify the economy beyond oil, while softening some of its most restrictive social conventions and laws. It’s now permitted for women to drive, uncover their head, hold a passport and travel without a male guardian.
On the country’s fields, and in gyms and rec centers, young Saudis—male and female—are embracing sport. So are their moms. Rasha Al Khamis is the country’s first female certified boxing coach. Back in 2019 she attended the“Clash on the Dunes”fight.
Rasha Al Khamis is Saudi Arabia’s first female certified boxing coach
60 Minutes
Jon Wertheim: This is your country. These are two international superstars, and you’re not watching them on TV. You’re watching ’em live, here. What was that like?
Rasha Al Khamis: I would never imagine that me– going to the fight, driving my car and attending the fight in– in my own country. So that’s a h– that’s a massive transformation. And you can feel that the change is tangible.
Yet, these changes come at a cost. Loujain Al-Hathloul led the Saudi woman-to-drive movement—and was punished for her activism: arrested, charged with terrorism, and sentenced to prison, where she says she was tortured. Even after her release, she is prevented from leaving the country. Her sister Lina lives in exile and spoke with us remotely.
Lina Al-Hathloul: When we talk about sports, of course we do want to have entertainment in Saudi Arabia. We do want to have this. But not at the expense of, of our freedoms. We don’t want to be living in fear and not knowing if tomorrow they will break into our house and take our sister or our daughter. I do not want to live in this country. I want to live in a country where I feel free, truly.
Jon Wertheim: Even if they have fancy sporting events?
Lina Al-Hathloul: I want both.
Her sister’s harsh treatment, she says, underscores a stark paradox: at a time when social freedoms have expanded, political repression in Saudi Arabia has become more severe.
Lina Al-Hathloul
60 Minutes
Jon Wertheim: You’re saying this is window dressing. This is– this is cosmetic. And behind the games there’s mass executions and repression like never before.
Lina Al-Hathloul: Absolutely. Exactly. This is what’s happening.
The cultural shift goes beyond sports. Who would have pegged Saudi Arabia to start hosting an annual desert rave? Bruno Mars and DJ Khaled were among the headliners. It’s all of a piece: sports, entertainment, tourism. To marry it all, the crown prince turned to American impresario, Jerry Inzerillo.
Jon Wertheim: What’s a guy from Brooklyn doin’ in a place like this?
Jerry Inzerillo: Creating magic, makin’ a place welcoming for everybody to come see the kingdom the birthplace of the kingdom. Very exciting times. Salaam-Alaikum.
In his career in hospitality and entertainment, Inzerillo launched Atlantis in the Bahamas. Name a global celebrity and, be assured, Jerry has made their acquaintance.
Jerry Inzerillo: I’ve done five decades in tourism. My job is to welcome people and to create joy and festivity. With Vision 2030 now we want people to come to Saudi.
Today he oversees a massive $63 billion development on the site where the Saudi state was born, converting it into a modern Xanadu with homes for 100,000 people, luxury hotels and restaurants. We asked Inzerillo about his comfort level representing this autocracy. He told us he focuses on the positive.
Jerry Inzerillo: You know I went to school in Las Vegas, and there’s a gambling term that when you’re way ahead, you’re playing with house money.
Jon Wertheim: You winning?
Jerry Inzerillo: Oh, I’m– not only am I winning, I’ve won.
Jerry Inzerillo
60 Minutes
Jerry Inzerillo: You know there’s an old country western song, ‘Dance with the one who brung ya.’
Jon Wertheim: Who brung ya?
Jerry Inzerillo: Who brung me here?
Jon Wertheim: Yeah.
Jerry Inzerillo: Vision 2030, a very benevolent, very loved king, and a very visionary, dynamic crown prince.
But it’s the less noble doings of the crown prince that have stained the country’s reputation, both accelerating and complicating its foray into sports. A CIA report said MBS approved the 2018 assassination and dismembering of Washington Post journalist Jamal Khashoggi. Under MBS’ rule, executions have drastically increased, including a mass beheading of 81 people in one day last year. The mildest criticism of the state, even on Twitter, has been met with detention, torture and long and arbitrary prison sentences.
Jon Wertheim: We’ve heard a lot about transition. We’ve seen it with our own eyes. But the concern is that this country right now is still not fit to hold international sporting events.
Prince Abdulaziz: We’re not saying that we’re perfect, but what I’m trying to say is that these things help us to achieve a better future for our population.
Jon Wertheim: I think no country would say they’re perfect, but are you saying that every country has a leader that, according to the CIA, has ordered a murder of a journalist? Are you saying that every country has 81 beheadings in a single day? And if the answer is no, doesn’t it make this relative argument, this whataboutism, doesn’t it make that irrelevant?
Prince Abdulaziz: Well, what I’m trying to say is that, ‘Let’s look at the good side about this.’ And– and, you know, you’re just pinpointing certain topics that if we– I go and, you know, we had the mass shooting a couple of weeks ago in the U.S. Does that mean that we don’t host the– the World Cup in the U.S.? No. We should go to the U.S. We should get people together.
Jon Wertheim: A mass shooting is not a government actor. Let’s be clear about that.
Prince Abdulaziz: Still, whatever– whatever, people died. But what I’m trying to say is that if we look at only the bad side, then we shouldn’t do anything.
Jon Wertheim: Are there not universals, are there not basic thresholds you think need to be met?
Prince Abdulaziz: As I said, there is a lot of issues with a lot of countries. But then you mention that the order came from the crown prince, and that’s not true. There’s no proof of that– as we speak–
Jon Wertheim: You’re denying that the CIA’s report that says this was ordered and approved–
Prince Abdulaziz: I don’t think the CIA report actually says that, if you look at it.
The CIA report concluded: “Saudi Arabia’s Crown Prince Muhammad bin Salman “approved an operation…. to capture or kill Saudi journalist Jamal Khashoggi.”
Still, the games go on… so do the choices. Earlier this year, FIFA-soccer’s governing body, not known for occupying ethical high ground-responded to protests from players and turned down Saudi Tourism’s sponsorship offer for this summer’s Women’s World Cup. These moral dilemmas will only intensify.
Jon Wertheim: When we were in Saudi Arabia, we saw a top-level tennis event– a top-level golf event had just been held. Bruno Mars had given a concert. What would your message be to the athletes and entertainers who are coming in to perform and compete?
Lina Al-Hathloul: My message is that, why would you go to Saudi Arabia and stay silent on what is going on on the ground? Why– why won’t you speak on behalf of the prisoners who have been muzzled, on– on all the families that cannot speak? Because when you go to Saudi Arabia you are part of– of– this covering up machine.
Jon Wertheim: What do you think the purpose is of throwing around billions and billions of dollars into sports like this?
Lina Al-Hathloul: I think the Saudi government, the Saudi regime and– and MBS, he wants people to think of– Ronaldo– when they think about Saudi and not about Khashoggi.
Jon Wertheim: That’s become the association now. We’ve gone from the murdered journalist to the star soccer player.
As a child, when the time for the annual Hajj would approach, I would often hear the same story from my father. He would tell me about Syed Yussef, a relative of my great-grandfather who travelled to Mecca to perform the Hajj at the turn of the 20th century
At that time, the journey from our homeland in northern Kenya to Islam’s holy places was an arduous one and many pilgrims did not make it back, falling victim to disease, exhaustion or attacks by bandits.
Knowing full well these dangers, Syed Yussef set out for Mecca overjoyed that he would be fulfilling his religious obligation, experiencing a journey of spiritual purification and feeling the cool marble flooring around the Holy Kaaba. It would take him four months – traveling on foot, by boat and camel – to reach the holy site.
More than a century after my distant relative crossed seas and deserts to get to Mecca, I also made the journey – which took me just a few hours by plane. It was 2019, a year before the COVID-19 pandemic. I was appointed to a World Health Organization team which was dispatched to Saudi Arabia to support the Ministry of Health in health crisis preparedness and disease outbreak prevention during the Hajj season.
I was impressed by the public health measures that the Saudi authorities already had in place to keep safe the millions of people who poured in. They had made sure that pilgrims had access to clean water and sanitation facilities, food, transportation and medical care. The elderly, the sick and people with disabilities were also accommodated so they to could participate fully in the Hajj. The holy sites were kept clean and there was constant monitoring for disease outbreaks.
The Hajj I saw was not only a wondrous unforgettable spiritual journey for the pilgrims, but also a safe one where people did not have to risk their lives to undertake it – as my legendary relative and many others had to in the past. And that was not only because the Saudi health ministry was doing its job well, but also because Muslims had learned from past disasters. In fact, one could argue that the Hajj has shaped global public health practices used today around the world.
As a mass gathering of people, the Hajj has had a history of public health crises. For example, in 1865, during the Hajj season, a cholera epidemic broke out, killing 15,000 of the 90,000 pilgrims that undertook it. Once the pilgrimage was over, people went back to their homes, carrying with them the deadly disease and causing various outbreaks in Africa, Asia and Europe. The total death toll from the epidemic was estimated at 200,000 people.
As cholera spread to Europe, the French government was alarmed. Under its initiative, in 1866, the Ottoman authorities hosted in Istanbul the International Sanitary Conference held, which was exclusively devoted to the disease outbreak.
At the summit, which was dominated by European nations, the cholera epidemic in Europe was linked to the Hajj. The measures that were discussed focused on ways to prevent the spread towards European countries, including by closing ports to arrivals from the Arabian Peninsula and imposing maritime quarantine. However, tackling the epicentre of the outbreak in the East was hardly discussed, which was a mistake.
Quarantine centres were set up in al-Tur in the Gulf of Suez, the Kamaran Island in the Red Sea, and in Izmir, Trabzon and on the Bosphorus in the Ottoman Empire. They targeted specifically Muslim pilgrims who were hoarded into camps and kept there for at least 15 days to ensure they were not carrying the disease.
Unsurprisingly, the quarantine stations were deeply unpopular and pilgrims resented being detained and overseen by people of another faith. The result was that many would travel longer distances so that they would not have to go through these ports and experience such humiliation.
Many Muslims avoided the quarantine despite them knowing the public health teaching of Prophet Muhammad: “If you hear of an outbreak of plague in a land, do not enter it; but if the plague breaks out in a place while you are in it, do not go out escaping from it.”
There would have been more compliance had Muslim communities been properly consulted and included in developing the quarantine measures, instead of being coerced. These policies were clearly designed to serve the interests of rich and powerful European nations and that provoked distrust and rejection. This is a recipe for disaster in any public health strategy.
Meanwhile, Muslims learned the lessons of the 1865 outbreak and put in place policies to prevent another one in their holy sites. In Mecca, various sanitation measures were implemented to reduce the risk of cholera, which proved successful. Outbreaks of cholera dwindled afterwards.
Fast-forward to today, the public health knowledge and traditions accumulated over centuries have been embedded in Saudi Arabia’s modern policies, which ensure that the Hajj is carried out in a safe manner.
When the COVID-19 pandemic broke out in the 2020, the kingdom immediately took measures to prevent the Hajj from becoming a superspreader event. The number of pilgrims was dramatically reduced to just 1,000 and the rituals were carried out under strict social distancing and masking mandates.
The COVID-19 pandemic was tough on all of us, not only physically but psychologically and socially as well. This year, we will have the first Hajj without strict pandemic measures in place, enabling more than 2.5 million Muslims to embark on this spiritual journey. This is great news.
In 2019, I witnessed the impact the Hajj has on Muslims from all over the world, of all races, of all walks of life. I observed what American psychologist Abraham Maslow calls transcendence and defines as: “the very highest and most inclusive or holistic levels of human consciousness, behaving and relating, as ends rather than means, to oneself, to significant others, to human beings in general, to other species, to nature, and to the cosmos.”
But with the end of the COVID-19 pandemic, we should not let our guard down. In an increasingly hotter and interconnected world, the next global public health emergency may be just around the corner; we know it is a question of when not if.
That is why, we should learn from past mistakes. The cholera outbreak of 1865 demonstrates how measures that lack a public buy-in and trust can undermine efforts to curb the spread of a disease. We need to keep in mind these lessons as world leaders discuss a new pandemic accord that can help improve how pandemics are detected and responded to.
In a time of heightened mis- and dis-information, amplified by social media, reflecting on the facts and working with communities on pandemic preparedness and response will determine our success and failure.
In all this, the Hajj can be a beacon of hope. It can offer not just a religious and spiritual path but also a public health one. It stands as an example where science supports transcendence, spirituality and human solidarity.
The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.
Officials for the PGA Tour have agreed to testify next month before a Senate subcommittee which is investigating the organization’s controversial plan to join with Saudi-backed LIV Golf.
In a letter Wednesday addressed to PGA Tour Commissioner Jay Monahan, Sens. Richard Blumenthal and Ron Johnson said that the Senate Permanent Subcommittee on Investigations — which is under the banner of the Homeland Security Committee — will hold a public hearing about the planned merger on July 11, and requested that Monahan testify.
In a statement provided to CBS News Wednesday night, the PGA said that “we look forward to appearing” before the subcommittee “to answer their questions about the framework agreement we believe keeps the PGA TOUR as the leader of professional golf’s future and benefits our players, our fans, and our sport.”
Jay Monahan, PGA Commissioner, speaks during the trophy ceremony during the final round of The Players Championship at TPC Sawgrass on March 12, 2023, in Ponte Vedra Beach, Florida.
JARED C TILTON / Getty Images
The PGA did not specify who exactly would testify.
The proposed merger earlier this month sent shockwaves across the golf world and sparked major criticism against Monahan for his seeming about-face regarding LIV Golf, which is owned by Saudi Arabia’s sovereign Public Investment Fund (PIF).
The plan would see the PGA Tour and PIF create a for-profit golfing league, with the $620 billion wealth fund providing an undisclosed capital investment. Monahan would serve as CEO of the new entity.
PIF has been accused of what some see as Saudi Arabia’s attempt to “sportswash” in an effort to distract from its record on human rights abuses.
The proposed merger also drew heavy criticism from family members of victims of the Sept. 11 attacks, who accused the PGA of hypocrisy.
“Our entire 9/11 community has been betrayed by (Monahan) and the PGA as it appears their concern for our loved ones was merely window-dressing in their quest for money — it was never to honor the great game of golf,” Terry Strada, chair of 9/11 Families United, said in a statement after the deal was announced.
Immediately after forming last year, LIV Golf poached several high-profile golfers from the PGA by offering exorbitant upfront signing fees of hundreds of millions of dollars, including Phil Mickelson, Bryson DeChambeau and Dustin Johnson.
An acrimonious rivalry ensued, with the PGA at the time announcing that any golfers joining LIV would be banned from playing on the PGA Tour. LIV responded by filing an antitrust lawsuit.
In their letter, Blumenthal, chair of the subcommittee, and Johnson, it’s ranking member, requested that Monahan “be prepared to discuss the circumstances and terms of the planned agreement between PGA Tour and the PIF, how any new entities formed through the planned agreement will be structured, the expected impact on PGA Tour and LIV Golf players, and the anticipated role of the PIF in U.S. professional golf.”
Manchester City owner Sheikh Mansour bin Zayed bin Sultan Al Nahyan during the UEFA Champions League final match at the Ataturk Olympic Stadium, Istanbul.
Martin Rickett – Pa Images | Pa Images | Getty Images
Manchester City’s victory in the UEFA Champions League final over Inter Milan was historic for a number of reasons.
It was the club’s first European triumph, securing a famous treble after its success in winning the English Premier League title and the FA Cup this season.
related investing news
It also marked the first time that a state-backed club claimed Europe’s top trophy, with the English soccer club owned by Sheikh Mansour bin Zayed, the brother of Mohammed bin Zayed, the third president of the United Arab Emirates and the ruler of Abu Dhabi.
Manchester City’s win, heavily backed by UAE money, comes as Saudi Arabia and Qatar look to ramp up their investment in the sport. The Gulf states have sought to use sport as an economic diversification tool in recent years as well as an attempt to improve their international image.
The UAE’s Sheikh Mansour purchased the club in 2008 and has since proceeded to spend more on transfers than any other club in world soccer. Data from German-based website Transfermarkt.com, which specializes in soccer transfers, estimates the club’s net transfer spending since 2008 comes in at an eye-watering $1.64 billion, outspending arch-rivals Manchester United over the same period by roughly $200 million.
The scale of the investment has attracted criticism, with human rights group Amnesty International saying the UAE’s spending amounts to one of soccer’s “most brazen attempts to ‘sportswash’ a country’s deeply tarnished image.” A spokesperson for the UAE’s foreign ministry did not respond to a CNBC request for comment.
“The success that Manchester City is achieving is not just vanity, it’s not just economic,” Simon Chadwick, professor of sport and geopolitical economy at the Skema Business School, told CNBC’s “Street Signs Europe” on Friday.
“But in terms of soft power, image reputation, nation branding, I think it’s significant as well.”
It also bankrolled the much-publicized LIV Golf, before a shock merger was announced last week between the breakaway circuit and the U.S.-based PGA Tour.
In recent weeks, the PIF has acquired 75% stakes in four of its country’s clubs, with the aim of acquiring some of Europe’s top soccer players.
Karim Benzema acknowledges the fans as they are presented to the crowd during the Karim Benzema Official Reception event at King Abdullah Sports City on June 08, 2023 in Jeddah, Saudi Arabia.
Yasser Bakhsh | Getty Images Sport | Getty Images
Ballon d’Or winner Karim Benzema has signed a deal worth a reported 100 million euros ($107.7 million) per season with the Al-Ittihad Club, while there is feverish speculation of several other well-known international players being courted.
In an interview with CNBC last week, PIF Governor Yasir Al-Rumayyan cited the young demographic of the kingdom’s population as he outlined the kingdom’s sports strategy.
“In the past, I think eight, maybe five years ago, we created different numbers of federations for every sport that you can think of. So, we are interested in all these sports, it’s not only golf or football or basketball, but it’s many other sports there.”
French soccer club Paris Saint-Germain was acquired by Qatar Sports Investments, a subsidiary of the country’s sovereign wealth fund, in 2011.
Now, Doha is attempting to purchase Manchester United after the club’s American owners, the Glazer family, announced they would explore “strategic alternatives” for the club.
A statue of George Best, Denis Law and Bobby Charlton standing outside Old Trafford, home of Manchester United in Manchester, England.
Mike Hewitt | Getty Images Sport | Getty Images
Little-known royal Sheikh Jassim bin Hamad al-Thani has bid for the club, facing up against INEOS founder Jim Ratcliffe.
If Qatar were to succeed with its reported $6.3 billion bid for Manchester United, it would be a major coup for the Middle Eastern nation, particularly given the club’s storied past, worldwide fanbase and marketing appeal.
Irrespective of who acquires Manchester United, the recent rise in interest in soccer clubs from Middle East countries is unlikely to end anytime soon, according to Chadwick.
“I think what we’re going to see, what we’ve already seen over the last 20 years, but what we’ll see again over the next 20 years is the continuing investment in sport by these nations,” Chadwick said.
That’s “because it will help them to diversify, but as we know, there are other benefits associated with it too,” he added.
Correction: This story has been updated with the current comparison for net spend between Manchester City and Manchester United.
A top senator on Monday opened the first inquiry into the controversial deal between the PGA Tour and the Saudi-backed LIV Golf, raising the alarm about “a foreign government entity assuming control over a cherished American institution.”
Sen. Richard Blumenthal (D-Conn.) wrote to the heads of the two sports organizations requesting a slew of records related to the deal. Blumenthal highlighted documents that could shed light on the behavior of the Saudi Public Investment Fund, which owns LIV Golf, as well as the PGA Tour’s tax-exempt status and any law enforcement investigations regarding the agreement or the previously contentious relationship between the two entities.
The Public Investment Fund “has announced that it intends to use investments in sports to further the Saudi government’s strategic objectives,” Blumenthal wrote in the letters, which he sent in his capacity as the chairman of the Senate Homeland Security Committee’s subcommittee on investigations.
“Critics have cast such Saudi investments in sports as a means of ‘sportswashing’ — an attempt to soften the country’s image around the world — given Saudi Arabia’s deeply disturbing human rights record at home and abroad,” the senator continued.
The PGA Tour battled LIV after the latter’s inception last year, including in federal court, and many top golfers decried the Saudi gambit. The two agreed to drop their legal disputes after they announced their shocking plan for a merger last week.
The PGA Tour claimed that it would have ultimate power over the new golf behemoth. But many observers say that is extremely unlikely given the proposed organization’s reliance on a promised infusion of funding from the Saudi state.
LIV Golf declined to comment on Blumenthal’s investigation. A representative for the PGA Tour did not immediately respond to a request for comment.
Congress has limited influence to block the deal between the two bodies, but Blumenthal and other skeptics could spur public uproar making it harder to achieve.
U.S. officials’ appetite for challenging Saudi Arabia has sharply plummeted in recent years after many policymakers pledged to press the kingdom over its close cooperation with Russia and actions like the state-sponsored assassination of journalist Jamal Khashoggi in 2018.
President Joe Biden’s 2020 campaign promise to rethink U.S.-Saudi ties led to few policy changes. And Republicans have shown little interest in questioning the golf organizations’ moves. Former President Donald Trump ― a pro-Saudi voice who is the GOP’s 2024 presidential front-runner ― has praised LIV, and Sen. Ron Johnson (R-Wis.), Blumenthal’s counterpart on the Senate investigative panel, argued Capitol Hill has no role in the deal.
Goldman Sachs analysts slashed their oil price forecast by almost 10% on the back of whey they see as increasing supply and slower demand for crude.
According to a report released late Sunday, the investment bank lowered its Brent outlook for December to $86 a barrel, down from $95 a barrel. In the same report, Goldman also revised down its WTI forecast for December from $89 per barrel to $81.
“Significant supply beats from Iran and Russia have driven speculative positioning to near record-lows,” Goldman analysts led by the bank’s Global Head of Commodities Research Jeffrey Currie said in the research report.
Russia’s oil production has remained resilient even in the face of Western sanctions, with Deputy Energy Minister Pavel Sorokin in April ascertaining that Moscow’s oil production will remain stable until 2025, according to the Neftegazovaya Vertikal magazine.
“After an initial sharp 1.5 million barrels per day drop, Russian supply has nearly fully recovered despite the decision by many companies to stop buying Russian barrels,” Goldman’s economists said.
The bank made upward revisions for oil supply forecasts coming from nations facing sanctions, with “2024 upgrades for Russia, Iran, and Venezuela of 0.4/0.35/0.05 mb/d, respectively.”
“Hope of a U.S.-Iran dealwithin grasp is one thing. But guarantee of a quick and unencumbered passage of such a complex, layered deal is quite another,” Mizuho’s Vishnu Varathan said in a daily research note.
Goldman is of the view that the additional cuts implemented by Saudi Arabia are unlikely to result in a price spike, even as the kingdom’s output will see a decline to 9 million barrels per day from around 10 million barrels in May.
“The extra Saudi cut and our expectation that OPEC+ will extend half of its April voluntary cut in 2024 will likely only partly offset these bearish shocks,” the report continued.
The PGA said in a surprise announcement that it is merging with the Saudi-backed LIV Golf. The controversial move comes after LIV managed to poach some of golf’s most recognizable names with lucrative contracts. Manuel Bojorquez has more.
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
WASHINGTON — Members of Congress had plenty to say Tuesday about the surprising merger between the PGA Tour and Saudi-backed insurgent league LIV Golf after months of tension between the two rival organizations.
LIV Golf is backed by the Saudi Arabia Public Investment Fund, which is controlled by Saudi Crown Prince Mohammed bin Salman. The Saudi leader has been accused of trying to cover up his government’s human rights violations by investing in sports organizations around the world, a practice known as “sportswashing.”
“So weird,” tweeted Sen. Chris Murphy (D-Conn.). “PGA officials were in my office just months ago talking about how the Saudis’ human rights record should disqualify them from having a stake in a major American sport.”
“I guess maybe their concerns weren’t really about human rights?” added Murphy, a member of the Senate Foreign Relations Committee.
Greg Norman, CEO of LIV Golf, was also widely criticized for his comments downplaying the killing of Washington Post journalist Jamal Khashoggi by Saudi agents in Turkey.
The agreement will combine the golf-related commercial businesses and rights of the Public Investment Fund, which includes LIV Golf, with the PGA Tour and DP World Tour, to create a new “for-profit entity to ensure that all stakeholders benefit from a model that delivers maximum excitement and competition among the game’s best players,” according to a news release.
Public Investment Fund is “prepared to invest billions” into the new entity, according to CNBC.
“In the end, it’s always about the money,” tweeted Rep. Chip Roy (R-Texas). “Saudi Arabia just bought themselves a one-world golf government.”
Progressive Rep. Ro Khanna (D-Calif.), meanwhile, told HuffPost the merger should be scrutinized by federal regulators like the Federal Trade Commission. He said his concerns were not limited to human rights abuses by Saudi Arabia, but also monopoly power.
“A merger of this size & weight deserved a vote from the PGA Tour Players ― another reason why player unions matter. Golf is one of the only major professional sports leagues in the US without one,” Khanna added on Twitter.
Not every lawmaker was concerned.
Rep. James Clyburn (D-S.C.), who met with the LIV CEO last year, called the merger “a good thing.”
And Rep. Nancy Mace (R-S.C.), chair of the Congressional Golf Caucus, tentatively praised the deal, suggesting it would benefit the sport and her district, which boasts many golf courses.
“Obviously Saudi money being involved … you know, I’d have some concerns over that. But look at my district — we’ve got over 30 golf courses,” Mace told HuffPost.
Mace said it would be appropriate for government regulators to take a hard look at the merger.
“Any type of large acquisition or merger certainly deserves scrutiny in any industry, just in general,” Mace said.
In an attempt to salvage his country’s waning influence in the Middle East, US Secretary of State Antony Blinken is embarking on a three-day visit to Saudi Arabia this week. But advancing “strategic cooperation” with his Saudi and Gulf counterparts may well prove an uphill battle.
In July last year, President Joe Biden attended the Gulf Cooperation Council summit in the kingdom and vowed that the United States “will not walk away and leave a vacuum to be filled by China, Russia, or Iran”. But that is precisely what has been happening.
Despite US objections, the past year has seen its regional allies go hybrid: they have improved relations with Beijing and Tehran and maintained strong ties with Moscow.
Although the Biden administration has publicly downplayed the importance of the recent Chinese-brokered Saudi-Iranian agreement to re-establish diplomatic relations, it seems frantic about the growing Chinese influence in the oil-rich Gulf region and the greater Middle East.
Over the past two decades, the US has ramped up oil and gas production, becoming virtually energy independent. It may no longer need Gulf oil as much, but it insists on being in charge in the region so it is able to cut China off of vital energy supplies in the event of a conflict, and secure them for its allies.
As Blinken warned last month, “China represents the most consequential geopolitical challenge we face today: a country with the intent and, increasingly, the capability to challenge our vision for a free, open, secure, and prosperous international order.”
But Beijing’s autocracy may actually be an easier and better fit for the region’s autocrats than Washington’s democracy.
Russia’s sway in the Middle East and beyond has also made the US nervous.
Fed up with their ambiguity, even complicity with Russia, the Biden administration has been ramping up pressure on certain Middle Eastern states, making clear that its patience is running out. It has been warning countries in the region against helping Russia evade sanctions and demanding they pick sides – or else face the wrath of the US and G7 nations.
But to no avail.
Saudi Arabia has thus far refused the US request to substantially increase oil production to lower its market price and offset the effect of Western sanctions on Russia. It has maintained good relations with Moscow and dragged its feet on supporting Ukraine. Saudi Crown Prince Mohammed bin Salman’s “middle finger to Washington” has reportedly made him extremely popular in the region.
Last year, in response to Biden’s threats to punish Riyadh for its presumed insolence, the kingdom went on to host the Chinese president, Xi Jinping for bilateral talks and the China-GCC and China-Arab summits. Saudi Arabia then normalised relations with Iran under Chinese auspices, just as the West was tightening sanctions against Tehran, and in a clear snub to the US, went on to repair ties with Syria.
But this new attitude towards relations with the US is not only evident in Riyadh; it is a regional phenomenon. The United Arab Emirates, another US ally, has also cultivated closer ties with China, improved strategic relations with France, and worked on engaging Iran, Russia and India. This, at times, has been at the expense of its relations with the US.
The region as a whole has been diversifying its global engagement. This is quite apparent in its commercial relations. Between 2000 and 2021, trade between the Middle East and China has grown from $15.2bn to $284.3bn; in the same period, trade with the US has increased only modestly from $63.4bn to $98.4bn.
Six Middle Eastern countries – among them Saudi Arabia, the UAE and Egypt – have recently requested to join the Chinese-led BRICS group, which also includes Russia, India, Brazil and South Africa. This is despite the West’s ever-widening sanctions regime imposed on Russia.
Of course, America has been the dominant strategic power in the Middle East the past three decades and remains so today. But will it be in the next three decades?
In a region where autocratic regimes and the general public do not agree on much if anything at all, saying no to America is a very popular stance because the majority believes it is a hypocritical imperial power that pays only lip service to human rights and democracy.
This is particularly apparent in US foreign policy on Palestine, which staunchly and unconditionally supports the Palestinians’ coloniser and occupier – Israel.
On his visit to Riyadh, Secretary Blinken will likely put pressure on Saudi Arabia to normalise relations with Tel Aviv, hoping to lower its asking price, which reportedly includes a nuclear civilian programme and major security assurances.
The UAE, Bahrain, Morocco and Sudan have already normalised relations with Israel at the expense of the Palestinians in return for American concessions, such as the sale of US-made F-35s to Abu Dhabi, US recognition of Moroccan claims over Western Sahara, and the lifting of US sanctions on Khartoum. All so that the Israeli government does not have to make any “concessions” of its own and end its decades-long occupation of Palestine.
But the Palestinian cause, which is quite close to the heart of ordinary Arabs, is not the only issue that has convinced the Arab public that America is a duplicitous power that should be kept at a distance.
Thanks to satellite television and social media platforms, people of the region saw with their own eyes US crimes in Iraq and its humiliation in Afghanistan, and do not think of it as a guardian of civilisation, let alone an invincible power. The balance sheet of US interventions in the Middle East over the past 20 years since the 9/11 attacks is firmly not in its favour.
No wonder that in a 2022 poll conducted by the Doha-based Arab Center for Research and Policy Studies in 14 Arab countries, 78 percent of respondents believed that the biggest source of threat and instability in the region was the US. By contrast, only 57 percent thought of Iran and Russia in these terms, both of which have had their own share of dirty work in the region – from Syria to Iraq and Yemen.
In his aptly titled book, Grand Delusion: The Rise and Fall of American Ambition in the Middle East, former US official Steven Simon estimates the US has wasted some $5-7 trillion on wars that have resulted in the death of millions of Arabs and Muslims, and the devastation of their communities. In addition, these conflicts have killed thousands of US soldiers, injured tens of thousands and led to some 30,000 suicides of US veterans.
It is no coincidence then, that more Middle Easterners (and Americans) agree that the region’s decoupling from America and at least some American disengagement from the region is as desirable as it is inevitable.
Such a turn of events would also be terribly consequential with messy long-term implications for both sides and it would be determined by whether and how America chooses to change its foreign policy.
Saudi Arabia will reduce how much oil it sends to the global economy, taking a unilateral step to prop up the sagging price of crude after two previous cuts to supply by major producing countries in the OPEC+ alliance failed to push oil higher.
The Saudi cut of 1 million barrels per day, to start in July, comes as the other OPEC+ producers agreed in a meeting in Vienna to extend earlier production cuts through next year.
Calling the reduction a “lollipop,” Saudi Energy Minister Abdulaziz bin Salman said at a news conference that “we wanted to ice the cake.” He said the cut could be extended and that the group “will do whatever is necessary to bring stability to this market.”
Saudi Minister of Energy Prince Abdulaziz bin Salman al-Saud arrives for the 35th OPEC (Organization OF Petroleum Exporting Countries) and non-OPEC ministerial meeting in Vienna, Austria, on June 4,2023.
JOE KLAMAR/AFP via Getty Images
The new cut would likely push up oil prices in the short term, but the impact after that would depend on whether Saudi Arabia decides to extend it, said Jorge Leon, senior vice president of oil markets research at Rystad Energy.
The move provides “a price floor because the Saudis can play with the voluntary cut as much as they like,” he said.
The slump in oil prices has helped U.S. drivers fill their tanks more cheaply and gave consumers worldwide some relief from inflation.
“Gas is not going to become cheaper,” Leon said. “If anything, it will become marginally more expensive.”
That the Saudis felt another cut was necessary underlines the uncertain outlook for demand for fuel in the months ahead. There are concerns about economic weakness in the U.S. and Europe, while China’s rebound from COVID-19 restrictions has been less robust than many had hoped.
Saudi Arabia, the dominant producer in the OPEC oil cartel, was one of several members that agreed on a surprise cut of 1.6 million barrels per day in April. The kingdom’s share was 500,000. That followed OPEC+ announcing in October that it would slash 2 million barrels per day, angering U.S. President Joe Biden by threatening higher gasoline prices a month before the midterm elections.
All told, OPEC+ has now dropped production on paper by 4.6 million barrels a day. But some countries can’t produce their quotas, so the actual reduction is around 3.5 million barrels per day, or over 3% of global supply.
The logo of the Organization of Petroleum Exporting Countries (OPEC) is seen at its headquarters in Vienna on June 3, 2023.
JOE KLAMAR/AFP via Getty Images
The previous cuts gave little lasting boost to oil prices. International benchmark Brent crude climbed as high as $87 per barrel but has given up its post-cut gains and been loitering below $75 per barrel in recent days. U.S. crude has recently dipped below $70.
That has helped U.S. drivers kicking off the summer travel season, with prices at the pump averaging $3.55, down $1.02 from a year ago, according to auto club AAA. Falling energy prices also helped inflation in the 20 European countries that use the euro drop to the lowest level since before Russia invaded Ukraine.
The Saudis need sustained high oil revenue to fund ambitious development projects aimed at diversifying the country’s economy.
The International Monetary Fund estimates the kingdom needs $80.90 per barrel to meet its envisioned spending commitments, which include a planned $500 billion futuristic desert city project called Neom.
The U.S. recently replenished its Strategic Petroleum Reserve — after Biden announced the largest release from the national reserve in American history last year — in an indicator that U.S. officials may be less worried about OPEC cuts than in months past.
While oil producers like Saudi Arabia need revenue to fund their state budgets, they also have to take into account the impact of higher prices on oil-consuming countries.
Oil prices that go too high can fuel inflation, sapping consumer purchasing power and pushing central banks like the U.S. Federal Reserve toward further interest rate hikes that can slow economic growth.
The Saudi production cut and any increase to oil prices could add to the profits that are helping Russia pay for its war against Ukraine. Russia has found new oil customers in India, China and Turkey amid Western sanctions designed to limit Moscow’s crucial energy income.
However, higher crude prices risk complicating trade by the world’s No. 3 oil producer if they exceed the $60-per-barrel price cap imposed by the Group of Seven major democracies.
Russia has found ways to evade the price cap through “dark fleet” tankers, which tamper with location data or transfer oil from ship to ship to disguise its origin. But those efforts add costs.
Under the OPEC+ deal, Russian Deputy Prime Minister Alexander Novak said Moscow will extend its voluntary cut of 500,000 barrels a day through next year, according to Russian state news agency Tass.
But Russia might not be following through on its promises. Moscow’s total exports of oil and refined products such as diesel fuel rose in April to a post-invasion high of 8.3 million barrels per day, the International Energy Agency said in its April oil market report.
On Sunday, the Organization of the Petroleum Exporting Countries and its partners (known as OPEC+) made no changes to its planned oil production cuts for the rest of the year. However, the world’s top oil exporter Saudi Arabia announced further voluntary output cuts which will be implemented from July.
The kingdom’s output will decline to 9 million barrels per day from around 10 million barrels in May, Saudi’s energy ministry said in a statement.
Both benchmarks rose more than 2% on Monday during early Asia trade but dipped lower by mid-morning. Global benchmark Brent futures were last trading up 0.93% at $76.84 a barrel, while U.S. West Texas Intermediate futures rose 0.98% to $72.44 per barrel. OPEC+ pumps approximately 40% of the world’s crude and production decisions can have a significant impact on prices.
On April 3, several producers of the oil cartel had revealed a combined 1.66 million barrels per day of production declines until the end of this year. And many market watchers, including analysts at Goldman Sachs, had expected the alliance to keep output unchanged this time around.
“The market did not widely expect the Saudi decision to cut production by 1 million barrels per day unilaterally,” the president of analysis firm Rapidan Energy, Bob McNally, told CNBC in an e-mail following the decision.
“It once again demonstrated that Saudi Arabia is willing to act unilaterally to stabilize oil prices,” McNally said, citing the example of January 2021 when the oil titan unilaterally cut by production by 1 million barrels per day.
“We see large global deficits materializing in the second half of 2023 and crude prices exceeding $100 next year,” he added.
Similarly, Kang Wu, head of global demand and Asia Analytics at S&P Global Commodity Insights, estimates that the significant rise of global oil demand in the Northern Hemisphere’s summer season will lead to an oil inventory draw and “support higher oil prices” over the coming months.
This weekend marked an “ultimate failure of the Saudis” to marshal together all the OPEC+ members to undertake “what was required to bring better prices into the market,” said Ed Morse, Citi’s global head of commodities research and managing director.
Morse told CNBC’s “Squawk Box Asia” Monday that it’s still “an extremely weak” oil market in part due to disappointing demand in the three largest consuming regions: China, the European Union and the United States.
“We have a potential for supply to be a lot bigger than where demand growth is going,” he said, citing the potential of a recession on the horizon. “There is no guarantee that [oil prices] won’t go below $70,” he said.
Commonwealth Bank of Australia is of the view that Saudi Arabia will extend July’s production cuts if Brent futures remain in the $70 to $75 per barrel range, or even drop below that. “We think Saudi Arabia will look to deepen production cuts if Brent futures sustainably drop below $US70/bbl,” CBA’s Vivek Dhar wrote in a research note Monday.
FRANKFURT, Germany (AP) — Saudi Arabia will reduce how much oil it sends to the global economy, taking a unilateral step to prop up the sagging price of crude after two previous cuts to supply by major producing countries in the OPEC+ alliance failed to push oil higher.
The Saudi cut of 1 million barrels per day, to start in July, comes as the other OPEC+ producers agreed in a meeting in Vienna to extend earlier production cuts through next year.
Calling the reduction a “lollipop,” Saudi Energy Minister Abdulaziz bin Salman said at a news conference that “we wanted to ice the cake.” He said the cut could be extended and that the group “will do whatever is necessary to bring stability to this market.”
The new cut would likely push up oil prices in the short term, but the impact after that would depend on whether Saudi Arabia decides to extend it, said Jorge Leon, senior vice president of oil markets research at Rystad Energy.
The move provides “a price floor because the Saudis can play with the voluntary cut as much as they like,” he said.
The slump in oil prices has helped U.S. drivers fill their tanks more cheaply and gave consumers worldwide some relief from inflation.
“Gas is not going to become cheaper,” Leon said. ”If anything, it will become marginally more expensive.”
FILE – Saudi Arabia’s Crown Prince Mohammed bin Salman meets with Secretary of State Mike Pompeo at Al Salam Palace in Jeddah, Saudi Arabia, June 24, 2019.
That the Saudis felt another cut was necessary underlines the uncertain outlook for demand for fuel in the months ahead. There are concerns about economic weakness in the U.S. and Europe, while China’s rebound from COVID-19 restrictions has been less robust than many had hoped.
Saudi Arabia, the dominant producer in the OPEC oil cartel, was one of several members that agreed on a surprise cut of 1.6 million barrels per day in April. The kingdom’s share was 500,000. That followed OPEC+ announcing in October that it would slash 2 million barrels per day, angering U.S. President Joe Biden by threatening higher gasoline prices a month before the midterm elections.
All told, OPEC+ has now dropped production on paper by 4.6 million barrels a day. But some countries can’t produce their quotas, so the actual reduction is around 3.5 million barrels per day, or over 3% of global supply.
The previous cuts gave little lasting boost to oil prices. International benchmark Brent crude climbed as high as $87 per barrel but has given up its post-cut gains and been loitering below $75 per barrel in recent days. U.S. crude has recently dipped below $70.
That has helped U.S. drivers kicking off the summer travel season, with prices at the pump averaging $3.55, down $1.02 from a year ago, according to auto club AAA. Falling energy prices also helped inflation in the 20 European countries that use the euro drop to the lowest level since before Russia invaded Ukraine.
The Saudis need sustained high oil revenue to fund ambitious development projects aimed at diversifying the country’s economy.
The International Monetary Fund estimates the kingdom needs $80.90 per barrel to meet its envisioned spending commitments, which include a planned $500 billion futuristic desert city project called Neom.
The U.S. recently replenished its Strategic Petroleum Reserve — after Biden announced the largest release from the national reserve in American history last year — in an indicator that U.S. officials may be less worried about OPEC cuts than in months past.
While oil producers like Saudi Arabia need revenue to fund their state budgets, they also have to take into account the impact of higher prices on oil-consuming countries.
Oil prices that go too high can fuel inflation, sapping consumer purchasing power and pushing central banks like the U.S. Federal Reserve toward further interest rate hikes that can slow economic growth.
The Saudi production cut and any increase to oil prices could add to the profits that are helping Russia pay for its war against Ukraine. Russia has found new oil customers in India, China and Turkey amid Western sanctions designed to limit Moscow’s crucial energy income.
However, higher crude prices risk complicating trade by the world’s No. 3 oil producer if they exceed the $60-per-barrel price cap imposed by the Group of Seven major democracies.
Russia has found ways to evade the price cap through “dark fleet” tankers, which tamper with location data or transfer oil from ship to ship to disguise its origin. But those efforts add costs.
Under the OPEC+ deal, Russian Deputy Prime Minister Alexander Novak said Moscow will extend its voluntary cut of 500,000 barrels a day through next year, according to Russian state news agency Tass.
But Russia might not be following through on its promises. Moscow’s total exports of oil and refined products such as diesel fuel rose in April to a post-invasion high of 8.3 million barrels per day, the International Energy Agency said in its April oil market report.
AP reporter Fatima Hussein contributed from Washington.
Saudi Minister of Energy Prince Abdulaziz bin Salman al-Saud arrives for the Organization of Petroleum Exporting Countries (OPEC) meeting in Vienna on June 3, 2023.
Joe Klamar | Afp | Getty Images
The influential Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, on Sunday made no changes to its planned oil production cuts for this year, as coalition chair Saudi Arabia announced further voluntary declines.
OPEC+ also announced in a statement that it will limit combined oil production to 40.463 million barrels per day over January-December 2024.
Previously, the alliance agreed to a 2 million barrels-per-day decline in October. Some OPEC+ members also announced some voluntary drops of just over 1.6 million barrels per day in April. Russia’s Deputy Prime Minister Alexander Novak said Sunday that all voluntary cuts, which were initially set to expire after 2023, will now be extended until the end of 2024, in comments reported by Reuters.
Asked whether Russia, hit by Western sanctions, will carry out its pledge to cut output, UAE oil minister Suhail al-Mazrouei on Sunday acknowledged there were discrepancies between figures supplied by Moscow and the independent Russian production estimates of analysts and trade publications.
“Some of the things that we have seen from Russia on a technical basis just … [don’t] add up from some of the independent sources, and we will be reaching out to those independent sources,” he said during a press briefing after the OPEC+ meeting.
Saudi Arabia’s energy ministry said Riyadh will implement an additional voluntary one-month 1 million-barrel-per-day cut starting this July, which can be extended. This will bring the kingdom’s total voluntary declines to 1.5 million barrels per day over the period, reining in its production to 9 million barrels.
The Saudi energy minister described the kingdom’s additional 1 million barrel-per-day voluntary reduction as a “Saudi lollipop” and stressed it will implemented.
“We have always honored our commitments,” he said during the Sunday press briefing. He left unanswered whether the kingdom will extend its voluntary reduction beyond July.
The move by the 23-country alliance follows contentious talks that dragged well into the night on Saturday, as well as a more-than four-hour Sunday meeting of the alliance’s Joint Ministerial Monitoring Committee, which recommends, but does not implement, policy.
At stake for OPEC+ is a battle to reconcile an outlook of tighter supply in the second half of the year, current macro-economic and inflationary concerns, and intergroup diplomacy.
Ahead of the meeting, Saudi oil minister Prince Abdulaziz bin Salman in late May warned oil market speculators to “watch out,” in a comment widely read as heralding another supply cut.
It remains to be seen if the 2024 reduction in output will offer long-term support to current oil futures prices when markets open on Monday, following months of pressure from global financial turmoil since the start of the year.
Brent futures most recently settled at $76.13 per barrel on Friday, with several OPEC+ delegates noting the deepening divide between prices and supply-demand fundamentals.
The producers’ alliance also agreed to review baselines — the starting level from which producers cut their output during OPEC+ agreements, usually by a similar percentage — for 2025, following a study of countries’ output capacities by oil analysts IHS, Wood Mackenzie and Rystad Energy.
A higher baseline translates into a higher output ceiling. Critically, baselines are often reused in new iterations of OPEC+ agreements and their review and later adjustment are often contentious, meaning they could bind producers longer term.
OPEC heavyweight UAE has been long vying for an upward revision to its baseline, receiving part of such a concession in July 2021.
Other producers of the alliance, such as Angola and Nigeria, have meanwhile long fallen short of lifting their output to their assigned OPEC+ quotas amid sabotage, depleting capacity and underinvestment — but potential changes to their baselines to reflect these realities were not formally broached before because of the sensitivity of these discussions, delegates told CNBC.
JEDDAH — The Zakat, Tax and Customs Authority (ZATCA) has thwarted two attempts two smuggle 1,029 kilograms of marijuana.
The authority said that the marijuana was found hidden in incoming consignments through both of the customs of King Abdulaziz International Airport in Jeddah and King Fahad International Airport in Dammam.
ZATCA has indicated that this amount of narcotic marijuana was found during the detection and inspection process on a number of parcels coming to Saudi Arabia via express transport.
It has noted that the methods of reporting all attempts to smuggle contraband are through its official channels, from inside Saudi Arabia: 1910 — from outside the Kingdom: +966114208417 — or via its email: 1910@zatca.gov.sa
Led by Saudi Arabia and Russia, OPEC+ agreed in early October to reduce production by 2 million barrels per day from November.
Vladimir Simicek | Afp | Getty Images
The OPEC+ alliance of oil producers will decide further production policy steps over the weekend, as crude prices reflect an ongoing struggle between supply-demand fundamentals and broader macro-economic concerns.
After convening remotely throughout the Covid-19 pandemic, OPEC+ has returned to in-person meetings and will gather in Vienna on June 4. The OPEC ministers gather for a separate meeting unlikely to address output on June 3.
Ministers face an oil market rattled by supply volatility, demand uncertainty, and a prospective recession, which could throttle transport fuel consumption. Since October, OPEC+ — a 23-member alliance including heavyweights Russia and Saudi Arabia — has lowered output by 2 million barrels per day in an effort to combat lower demand. Some members have also announced additional voluntary cuts totaling 1.6 million barrels per day in April.
Group members are expected to coagulate their individual positions and proposals in the 24-48 hours before the meeting, some OPEC+ delegates told CNBC, speaking on condition of anonymity — while public comments so far have been conflicting.
On May 23, Saudi energy minister Prince Abdulaziz bin Salman warned oil market speculators they could face further pain ahead, in comments some have read as hinting further supply cuts could be in the cards.
“I keep advising [speculators] that they will be ouching. They did ouch in April. I don’t have to show my cards, I’m not [a] poker player … but I would just tell them, watch out,” he said at the time.
Russia’s Deputy Prime Minister Alexander Novak later indicated that he expected no further steps from the OPEC+ meeting, but then said his comments were misinterpreted as downplaying an output cut, according to Russian state news agency Tass.
Russia and Saudi Arabia have been united in their public OPEC+ stance since a March 2020 dispute that led to the one-month dissolution of their oil partnership and an ensuing price war.
Moscow and Riyadh later mended ties through a new OPEC+ agreement to respond to a demand plunge driven by the Covid-19 pandemic — and have remained like-minded on OPEC+ matters since. Voiding the perception of a public rift, Saudi Foreign Minister Prince Faisal bin Farhan al-Saud and his Russian counterpart Sergey Lavrov on Thursday met on the sidelines of a BRICS summit in Cape Town.
The two reviewed the cooperation between their countries and “ways to strengthen & develop them in all fields, in addition to discussing the consolidation of bilateral & multilateral action,” according to the Saudi foreign ministry.
Two OPEC+ delegates, who did not want to be named due to the market sensitivity of the meeting, told CNBC that further output cuts were unlikely this weekend. One noted that this will remain the case unless demand stays low in China — where recovery has fallen short of expectations, in the wake of shedding strict Covid-19 restrictions.
A third source said that OPEC+, which prioritizes the state of global inventories over outright prices, would be comfortable with futures above $75 per barrel, while a fourth estimated near $70-80 per barrel.
Brent futures with August expiry were trading at $75.70 per barrel at 10:24 a.m. in London, up $1.42 per barrel from the Thursday settlement.
The OPEC+ group isn’t “after spikes” and seeks a “balanced market,” the fourth delegate told CNBC, stressing that the alliance must continue to strike a “precautionary” production strategy. Deep cuts also risk re-attracting U.S. ire, as Washington has historically criticized supply reductions that pile strain on consuming households.
Goldman Sachs’ analysts expect OPEC+ to keep production unchanged this weekend. However, they said in a note Wednesday that they see a “sizeable 35% subjective probability” of further OPEC cuts, as oil prices are “clearly below our $80-85/bbl estimate of the OPEC put. Very low positioning, the Saudi determination not to give speculators free rein, and the decision to meet in person also suggest that deeper cuts will likely be discussed.”
OPEC+ has waded stormy waters for the better part of the year. Oil markets have historically been steered by physical supply and demand fundamentals — which have been increasingly overshadowed by broader macro-economic concerns over the fuel consumption impact of high inflation, bolstering interest rates and the spring collapse of several U.S. and European banks.
OPEC+ delegates also said the group had been following U.S. debt ceiling negotiations, as the proposal of President Joe Biden and House Speaker Kevin McCarthy transited several debate and vote stages in a bid for the world’s largest economy to avoid defaulting on its bills.
“The impact of higher oil prices on the global economy will weigh heavily on the ministers’ minds,” Jorge Leon, senior vice president of oil market research at Rystad Energy, said in a Thursday note, adding that OPEC+ could maintain production as a precaution. “The ministers might therefore take a ‘wait and see’ approach and hold off taking any action. Demand forecasts remain lukewarm at best, so maintaining current output could be the most prudent course. “
Supply is also under question, given involuntary declines.
Roughly 450,000 barrels per day of northern Iraqi exports were frozen by a legal dispute between Baghdad, Ankara, and the Kurdistan Regional Government. Nigeria, typically West Africa’s largest oil producer, self-reported its April crude production at just 999,000 barrels per day following disruptions, according to OPEC’s Monthly Oil Market Report for May.
Meanwhile, the true extent of Russian output losses remains unclear, as vessels carrying Moscow’s crude turn off their satellite tracking and Russia looks to further shift its clientele east.
Cristiano Ronaldo concedes he did not expect to finish the season empty-handed at Al Nassr but the Portuguese forward says he is happy in Saudi Arabia and hopes other big-name players will follow him to the league for the next campaign.
Ronaldo signed a two-and-a-half year contract estimated by media to be worth more than 200 million euros ($220.16 million) with Al Nassr, making his debut in January.
He scored 14 goals in 16 games but it was not enough to help his side win the Saudi Pro League (SPL) title, with Al Nassr finishing second behind Al Ittihad.
The 38-year-old, who missed the final matchday due to injury, said the league was very competitive but that there were many opportunities to grow.
“We have very good teams, very good Arab players, but the infrastructure – they need to improve a little bit more. Even the referees, the VAR system, should be a little quicker,” he said in an SPL interview.
“But I’m happy here, I want to continue here, I will continue here.”
Ronaldo said he had adapted to life at the club, though there were many differences from his time at Europe where he played for elite teams such as Manchester United, Juventus and Real Madrid.
“In Europe we train more in the morning and here we train in the afternoon, or night. When you start Ramadan, we train at 10 o’clock in the night. It was so strange,” he added.
Since Ronaldo’s arrival, several other top players have been linked with a move to the Saudi league, with Lionel Messi receiving a formal offer to join Al-Hilal next season.
Ronaldo’s former team mate and Ballon d’Or winner Karim Benzema has reportedly received an offer worth more than 100 million euros from Al Ittihad.
“If they are coming, big players and big names, young players, ‘old players’, they are very welcome,” said Ronaldo.
“If that happens, the league will improve a little bit. Age is not important.”
