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  • זוג בקורונה בשדה תעופה

    Coronavirus Affects The Middle East Energy Market

    The new plague known as the corona virus keeps the world on alert. The price of the
    oil stock prices was already worryingly low. In the energy market, the mineral better
    known as black gold (oil) has been unstable since 2018.The new virus definitely
    caused the price to drop to $ 20.30 BPD.

    The corona virus effect came at a rather complicated time for the crude oil trade,
    today this mineral is not the only one that provides energy and it is known that many
    countries began a series of investments in new technologies and renewable energy.
    Considering that in this area there are a lot of the oil-producing countries, adding to
    that the large reserves of natural gas discovered offshore in northern Israel, the Middle
    East is a power to consider in energy resources, but destiny, along with the new
    discoveries, seems to be a negative factor on the economy, withholding a lot of the
    transfer of crude from Asia to the Persian Gulf countries, even leading to Saudi
    Arabia itself decreasing its oil demand.
    This decrease in oil demand is a trend that came to the Middle East from Saudi
    Arabia, who realized that in order get out of its economic crisis it can no longer rely
    on black gold.
    Today we can see their interest in new Start-ups and also the surprising relations with
    the western countries, including Israel. Saudi Arabia along with the United Arab
    Emirates who are the main producers of crude oil in the Middle East and OPEC want
    to reduce their dependence on it, many companies within the Kingdom have already
    started to invest in "clean energy", providing significant savings not only to the
    companies themselves but to the governments as well.
    As we know, the best strategy in the face of any crisis in this market was to reduce
    crude oil production to raise the price. The problem that the price is “stuck” and in
    order for producing countries to have some kind of profit, it would have to reach 70
    dollars per barrel, and that is far from possible. The corona virus immobilized the
    Midstream companies responsible for their transport, and the new reduction in
    production proposed by OPEC created a new conflict between Russia and Saudi
    Arabia.
    According to Putin, Russia is satisfied with the price, but the Saudi purposes is no
    longer to raise the price but to prevent a resounding fall, which the intervention of the
    big banks is not managing to do even with their investments.
    Cutting production means canceling 400,000 BPD more than the million that was
    already decided on, but Russia refuses to do so and such and agreement cannot be
    achieved without Russian consent, Now it is uncertain how the Moscow-Riyadh
    alliance will continue.
    The drop in demand, the search for new resources and the virus that paralyzed much
    of the Asian market, could be a trap in which the reduction in oil production will not
    help the biggest players in the oil market.
    Russia may face the crisis, but will Saudi Arabia too?

  • דגל ישראל

    Is Israel facing a great opportunity in the gas market?

    In recent weeks, the Persian Gulf was the scene of violent events that are viewed as acts of aggressive offensive by Iran in response to US sanctions, and it is obvious that the tension influences the energy market. However, the price of crude oil did not rise as expected.

    The Iranian attacks on the oil tankers undoubtedly influence the market and harm the oil traffic in the Gulf of Oman, although there are other non-violent factors that are important enough to influence the price trajectory without the need to shoot a single bullet. We are talking about OPEC, OPEC +’s  reduction policies and of course, the behind  the scenes games that the major oil companies belonging to these organizations are playing to prepare themselves for any crisis in the future.

    Throughout this period we ask ourselves why, how is it possible that the price is almost unchanged in such a conflicting time? There is no logic. If the sanctions make it difficult for producing countries like Venezuela and Iran, OPEC began its reduction plan and the United States did not use up all of its inventories, then how is it possible there is literally no change in the price? Are we really getting closer to the peak oil demand? If so, how will it affect energy related companies in the next decade?

    The answer to the last question is one of the reasons why the price did not rise according to expectations. The decreased oil demand caused uncertainty in the big oil companies that began to search for different investment sources in the energy sector, since the growth of natural gas production and new renewable energy projects seem more and more promising, contrary to the fragile market that is not promising a secure future.

    With everything that happened, the remaining oil producing companies found themselves facing a market that was not interested in their product. We are even talking about refineries that start working only with natural gas and others that reduced the purchase of crude oil.  This led speculators to a massive sale in the oil field.

    Winds of war

    In a critical situation where war could be used as the ultimate solution to the problem, different media outlets reported only the position of the Iranian side, since the American position is very clear. Now, the Western media reported that the US sanctions would have managed to get Iran to minimize its threats in some way. The media is trying to convince the reader that Iran in the face of the approaching economic crisis might not want to enter into a conflict and would be doing everything possible to stop another war from happening in the Persian Gulf; the latest attacks are disproving this claim.

    To understand this we must know that the Middle East countries do not only use their armies while responding to wars. There are also terrorist organizations that are aligning themselves to a country in the area, and that is what happens with Iran, who has no problem opening other fronts through organizations like Hezbollah fighting in Lebanon and Syria, Iran has many combat capabilities, a lot of them beyond the borders of the Middle East. For example, In Yemen, the Islamic Republic of Iran assists the Houthi rebels, in Iraq, the Shiite militias operate under their orders and in the Gaza Strip, they have a great influence on the Islamic Jihad. In addition, they have invested and trained several terrorist cells in the world which can be activated at any time. The war in the Middle East can be carried out from many fronts of combat.

    That is why we are not surprised that President Trump has canceled the imminent attack, although this could be a truce before the battle or, as it is known in the Middle East, “Hudna”.

    Israel looks to the future

    This situation created a reality in which raising the oil price is not an option at the moment, and now we can see that the prediction of some of the analysts that in the beginning of the year warned us that in mid-2019 there will be a  great demand for gas  wasn’t a mistake.

    This reality is changing especially in the energy market field. The scenario that the demand for oil will decrease and the demand for natural gas will grow is going to present a great opportunity for Israel.

    The energy market map is unclear, especially today when the most important mineral called black gold is no longer a relevant player. If we look at what I explained before, we can understand why the reduction of its production and transportation is no longer the strategy that benefits the great giants. The fact that today these big companies and even governments begin to utilize other sources for the development of energy was what surprised the investors; the oil price has fewer sources to rely on.

    As we all know Israel found a large natural gas reserve in the maritime zone that it shares with Cyprus. Although part of the land is still under discussion due to the claim of rights that Turkey and Lebanon demand in a large part of the deposits, the perforations began to bear fruit and contracts were finalized for the construction of pipelines that connects this mineral with Egypt and Jordan. There is also the ambition to have the pipelines reach Europe, something that is very difficult, but today no longer impossible.

    If Israel becomes a strong player in the energy market, it means that it will have to become a producing country without ignoring the international policy that influences the energy world. Especially since Israel is the country that unites the West with the Middle East, and it is precisely what makes a future trade with a Europe more possible.

    Israel will not only become a powerful influence in the energy field. We expect that, as with every achievement, it will try to share their find with the rest of the world as much as possible. This discovery aroused the interest of many investors and along with that the initiative to create the “The Excellence in energy, engineering and water Center.” This project will be carried out in cooperation with the United States in order to promote the energy security and economic development of Israel together with the United States through cooperation in the research and development of innovative technologies of companies, research institutions and universities in Israel and the United States. The center will deal with fossil energy (mainly natural gas), cyber protection for water and energy facilities, water and energy interfaces and energy storage.

    Even though this is a very confusing time in the energy market, where “oil versus new technologies” is losing its importance, Israel begins a new stage that will only benefit the rest of the world.

    By: Gaston Saidman

  • From left to right: Eran Cohen, Leon Amiras, Ambassador Salina Shambos, Mr. Sofronis Papageorgiou and Gastón Saidman.

    Israel and Cyprus launch commercial and parliamentary cooperation

    The meeting was attended by the President of the Chamber of Commerce Israel Cyprus, Adv. Leon Amiras, the General Manager of the Chamber of Commerce, Mr. Eran Cohen, the Ambassador of Cyprus in Israel, Ms. Salina Shambos and the Head, Commercial and Economic Affair  Mr. Sofronis Papageorgiou. The meeting was organized by Yediot Ha Knesset, which always supports this type of activities as a journalistic medium, granting a parliamentary information service from an internal base.

    The relationship Between Cyprus and Israel encompasses the diplomatic, military, political and commercial areas. Although during the course of history, these relations had moments of tension, especially in the 80s when Israel maintained a stable friendship with Turkey. This bond was never disconnected, on the contrary, it was strengthened thanks to commercial relations especially since natural gas was found offshore Israel, where it was discovered that the same reserves shared the maritime area with Cyprus.

    The parliamentary cooperation

    The lunch took place at 1:00 PM in the Deputies buffet at the Israeli Parliament. After a brief presentation of the participants, the ambassador expressed her gratitude at being invited to the meeting. She emphasized the following topics that need to be developed: food, tourism and the implementation of a future project that will facilitate the tax system to improve relations in the bilateral market. She also expressed her interest in participating in future conventions that will be able to promote these initiatives together with the lobby of Foreign Trade and the Ministry of Economy.

    The Chamber of Commerce Israel-Cyprus was founded in 2003 to promote commercial relations and provide a solution for Israeli businesspersons interested in developing their commercial relations in this Mediterranean country.

    Adv. León Amiras, President of the Israel-Cyprus Chamber of Commerce, added to the meeting the contribution of the Chamber for new ventures and stated the following: “The Chamber has an important list of accessible Israeli companies that are already working in Cyprus.” In this case, he stressed the importance of promoting the tourism area, as it is a market that has expanded in recent years, apart from numerous opportunities that the short distance between the two countries gives us, which allows a comfortable transport to the businesspersons on their business trips.

    Adv. Amiras summed up: “This was an excellent meeting with the Parliament where we managed to build commercial bridges between Cyprus and Israel. Cyprus is adjacent to Israel, only 40 minutes away and both countries count on good relations between companies of high magnitude in the financial, banking and tourist areas.

    Our goal is to promote important issues for both countries, not only the well-known gas industry, which has already shown results, but mainly in new markets like the examples mentioned above, in addition to medical tourism and legal and financial advice. In a world where the image of the State of Israel is so criticized, the power to consolidate relations with Cyprus will strengthen relations with Greece and the rest of Europe, not only commercial relations but also camaraderie between the two peoples.

  • Israel, Cyprus and Argentina – A new initiative for peace, business and more

    The new management team of the Chamber of Commerce Israel – Cyprus is preparing for a year of new initiatives with an extensive agenda. The Chamber of Commerce will be part of not only commercial projects but will also work together with the different governmental institutions to improve mutual relations between the two countries in the near future.

    The board began a series of meetings with the aim of marking its contribution on political, social and of course, commercial issues.

    The Chamber and the Parliament

    The meeting that took place last December in the Israeli Parliament marked the beginning of their relations and the establishment of the commercial ties. This achievement not only gives prestige to the members of the steering committee who were the pioneers in this new cooperation, but is also the beginning of new projects in which the Chamber will improve and enrich the relationship with Cyprus.

    Cooperation between the two Chambers of Commerce

    On December 18, a delegation arrived from the Cyprus-Israel Chamber of Commerce included the chairman, Mr. Christodoulos Angastiniotis. On that day a welcome dinner was given by the leading members of the Israel-Cyprus Chamber of Commerce including the chairman adv. Leon Amiras and the CEO Eran Cohen, also invited to this meeting was the ambassador of Cyprus in Israel, Mrs. Salina Shambos. The Chamber of Commerce began a series of activities to promote commercial ties by a number of projects that will be published on our website along with the rest of the activities from now on.  In the near future, Israel will be able to open new markets with Greece and the rest of Europe through commercial cooperation with the help of the Chamber.

     Argentina, Cyprus and Israel – the future

    Together with these projects we must highlight the important connections that our Chamber of Commerce has made recently, which will greatly help the commercial development but not only between Cyprus and Israel. The objective is to open our market to the world and vice-versa through the hard work and efforts of the chamber’s representatives.

    The Argentinian Ambassador in Israel Mr. Mariano Caucino, who is also in charge of the diplomatic relations of Argentina in Cyprus, with whom the Chamber has a great relationship, made a Christmas trip to greet the Argentine military troops of UNFICYP (United Nations Peacekeeping Force in Cyprus) as part of the forces that maintain the order between the Greco-Chiprian and Turkish Cypriot communities. Being in a conflicted zone is hard, as we already know in Israel, and despite that, the Ambassador manages to do a great job not only in commercial development but also in maintaining the peace in the area.  The Israel Cyprus Chamber of Commerce will have a fundamental role in achieving improved relations between the countries and will be the institution that opens more doors to Argentina in the Middle East and from the Middle East along with Argentina to the rest of Latin America.

    According to Adv. Leon Amiras, the Chamber will be able to help increase Argentine trade in Cyprus, especially in areas such as tourism.

    We are facing a great opportunity if we know how to take advantage of the good relations between these two countries, especially after the visit of the Israeli Prime Minister Benjamin Netanyahu to Argentina in which an important rapprochement was achieved, said Ambassador Caucino in an interview for Infobae. Along with this, he said that in the future, apart from the bilateral relationship development the idea would be the promotion of shared values, human rights, human dignity and progress, there is also the interest to strengthen the bonds of scientific, technological and educational cooperation.

    Author: Gastón Saidman

  • דגל ישראל

    Israel-Europe gas pipeline MoU signed

    Energy Ministers from Israel, Greece, Italy and Cyprus agreed to push ahead with the 2,100 kilometer pipeline linking Israel and Italy.

    Ministers of Energy from Israel, Cyprus, Greece and Italy today signed in Cyprus a memorandum of understanding (MoU) for the laying of an underwater gas pipeline from Israel to Italy, Israel’s Ministry of National Infrastructures, Energy and Water Resources has announced. The ministry said, ‘This is a major step in promoting the laying of an underwater gas pipeline from Israel via Cyprus, Greece and Italy.”During the summit in Nicosia, the four minister put out a joint statement that this is a strategic infrastructure project representing the shared interests of the countries and the EU regarding natural gas.The planned pipeline will be 2,100 kilometers long, cost NIS 25 billion, and will be completed by 2025.Minister of National Infrastructures, Energy and Water Resources Yuval Steinitz who has worked intensively to promote the project, said after the signing ceremony, “The vision that I declared in Israel took shape at the meeting in Cyprus today. The Israel-Italy underwater gas pipeline will make Israel an important player in the European energy market.”

    The planned pipeline will allow Israel to sign long term deals to export gas to Greece, Italy and other European markets. Steinitz said, “This project will strengthen the energy security of the EU and diversify Europe’s sources of supply of natural gas.”

  • דגל קפריסין

    S&P upgrades Cyprus on ‘gradual recovery’

    in a statement, it said that it “has raised its foreign and local currency long-term sovereign credit ratings on the Republic of Cyprus to ‘BB’ from ‘-BB-’.”

    At the same time the ratings agency affirmed its ‘B’ foreign and local currency short-term sovereign credit ratings on Cyprus.

    “We expect the Cypriot economy will expand by about 2.7% this year, surpassing our March 2016 forecast, with annual growth at about 2.5% in real terms in 2017-2019,” the agency said. It said that Cyprus’ recovery is supported by resilient business services, tourism, gradually reviving private consumption, and construction. The restructuring in the financial sector is advancing, but the agency expects it will be a few years before the sector contributes to economic growth.

    “We think that the sovereign’s budgetary position will continue improving over the next few years, standing at close to balance or in surplus, with gradually declining government debt,” it noted.

    S&P said that the positive outlook reflects its view that “we could upgrade Cyprus within the next 12 months if its reduction of currently high levels of non-performing loans accelerates, indicating a convergence of Cyprus’ credit and monetary conditions, including the monetary transmission mechanism, with those of the eurozone”.

    The rating agency also expects the unemployment rate, 15 per cent at year-end 2015, will drop further to below 12 per cent by 2018, which will support households’ disposable incomes and private consumption.

    “We expect the Cypriot economy will continue to grow at about 2.5 per cent in real terms in 2017-2019, even though high levels of non-performing loans (mainly loans past due for more than 90 days and forborne loans for a minimum observance period even if they meet the new repayment programme) remain a key concern for financial stability and economic performance,” it said.

    In the long run, S&P said it also factored in the possibility of a reunification of the island, which would represent an important positive contribution to the country’s growth rate, despite initial micro- and macroeconomic challenges.

  • The Finance Committee Reveals Its Agenda

    During the last year, due to the failed attempts to create a government in Israel, the parliamentary committees were inactive; with only the Finance Committee being allowed to continue working in order to deal with issues such as the annual budget and the possibility of having control over the budget permits in case of elections.

    However, the epidemic and the economic crisis that followed it, crashed the market by affecting the wages of the work force and especially the independent business owners.

    Deputy Oded Forer (Yisrael Beytenu), who assumed the chairmanship of the Finance Committee a few weeks ago, made it clear from the outset that during his term the benefits of the ultra-Orthodox will not be given priority. The new agenda will be based on favoring those who have finished their military or national service, serve in the reserve and participate in the labor market. The second issue that became more important is that of property taxes, a problem that is spreading fear in the hearts of the citizens.

    Deputy Forer, due to receiving a lot of chaotic information, demanded that the Ministry of Economy establishes an orderly procedure for the matter of property taxes, for the benefit of individual employers and workers. This way they will know who to go to and how to get their rights.

    Deputy Forer submitted a plan to the parliament in which he requests a 20% increase in the financial aid program on top of the 15% which was planned on by the Prime Minister and the Minister of Finance. From now on, any financing initiative will require the approval of the Committee In and a monthly report will be sent to the committee on how the program will be implemented.

    Social aid and support for entrepreneurs

    The presented plan aims to help the economy in the following way: social security and help for households in the amount of 22 billion shekels, 11 billion shekels are destined to go to the unemployed, health services and civil protection against the virus. Approximately 41 billion shekels are required for business assistance, and a sum of 6 billion shekels will be designated to boost the economy.
    It should be noted that the budget defined in the law includes a grant of 500 shekels per child; in turn, the committee reported that after a discussion with representatives of the Ministry of Economy, it was decided to grant an extra sum, reaching a total subsidy of 950 shekels at least for the retirees. The mechanism for the distribution of the new budget requires separate legislation.

    Serving as chairman of the committee for a short period of time only and in a crisis that surprised us all, Oded Forer said: “we can feel satisfied with quite a few of the agreements reached during the talks with the Ministry of Finance. Although it is not relevant to the new law, it should be noted that the Medical Association asked the committee to verify that the medical staff’s salary wasn’t affected during the isolation period. An extra sum of money will be given to lone soldiers (haialim bodedim).

    We had the opportunity to interview the deputy Oded Forer, President of the Finance Committee and to hear his opinion on the situation:

    G.S: How do you see the commercial relations between Israel and the world in light of the crisis?

    Dep. O.F: We must work simultaneously on several levels: the Israeli government needs to rebuild the economy and national production in order to start moving the wheels of the local market so we can get it out of the crisis. Also, trade relations with the rest of the world must be restored to normal. In this regard, cargo flights should also receive assistance, due to the decrease in passenger flights, many of which also carried cargo.

    G.S: What must the State of Israel do to gradually return the tourism industry to the numbers we knew before the crisis?

    Dep. O.F:    The next period will be very challenging for the tourism industry and it will suffer a significant economic blow. First, precise guidelines must be adhered to in this “virus routine”. Hotels, restaurants and tourist sites must be duly prepared when tourists arrive. The second step will be to reduce regulation and bureaucracy in the sector so we can reduce market prices and provide a tourist alternative for countries that are still in crisis.

    Assistance must be provided to the tourism industry so that it can survive the crisis without crashing and be able to return to full activity as soon as possible.

    Regarding the tourism crisis, the Finance Committee has already appealed to the Ministry of Economy asking for an extra sum valued at 700 million Shekels.

    Deputy Forer stated: “Part of the plan will be to build an exit plan, otherwise it will be very difficult. We must create hope in our society instead of despair, tourism is an important part of our economy, stop saying there is no tourism here.”

  • דגל קפריסין

    The gas era will revolutionize the Middle East

    Oil was always the most used mineral because of its use in the development of multiple products that are necessary for our daily lives without us even realizing it, such as the construction of asphalt, plastic to create a simple pen and even the ink for the pen.

    Although the mineral was discovered much earlier, it was only in the year 1908 that large reserves were found in the area of Iran (at the time part of the Ottoman Empire).  That sparked an interest to create companies such as British Petroleum. These companies reached an agreement with various governments and that put an end to the cartels of the oil market in the 1920’s.

    If we take a brief tour through history, we will see that the oil market went through many important events. Its price was affected by the different situations that marked great changes in the economic sector such as  the crisis of 1929, the reforms of former US President Franklin D. Roosevelt called “The New Deal” “, the second world war, the cold war and finally the creation of OPEC that in some way tried to balance the price.

    Today we can see that in the last two years the price of crude underwent important changes. Saudi Arabia is the largest oil exports and production country, and over time, they had to take control of many crises and changes that this mineral caused.

    Nowadays the oil market is again facing a major change where the Saudi country faces several situations such as the internal economic crisis, the rivalry with Iran that will remain unstable till the end of November, and of course the future dilemma they will have to face when the oil will become second to the natural gas and other new energy technologies.

    According to the different analysts, from now until the year 2050, significant changes are expected and that is because according to the meteorological observes the following winters will be very hard and that implies an increasing demand for gas that is estimated to begin in 2019. Faced with this, what will happen to oil? In this case, LNG (Liquid Natural Gas) is not the only obstacle for large oil producers. If we look at how new technologies for the production of energy have progressed, we will notice that oil is lagging behind because its use within the field is losing prestige as a result of the new electric-battery cars that have already hit the market in certain parts of the world (for example the United States and Israel).  This means that the demand for crude would be decreasing in the energy sector, but not because we are running out of the mineral itself as many people think.

    To understand this we must know that the oil market is divided into two groups; the first is formed by the countries that have a high demand for oil along with a great possibility of technological investment, and the second are those that have a large capacity of production but its demand is relatively low and of little technological level without much amplitude of investment. Now, although in a normal market interaction between the seller and the client is usually understood in a reasonable way, this is not the case in the black gold market when the fair exchange of technology investment for oil was never achieved. Today, thanks to new technologies for fuel, we need less and less oil to produce energy.

    Saudi Arabia and the change in its economy

    The expectation of a growing demand for gas puts at risk the status of Saudi Arabia in the energy market at a time when the kingdom is going through one of its worst economic crises.  Apart from the corruption case that was exposed recently, they also don’t have a mineral that can replace oil in an era where the demand for it will decrease.

    Although Saudi Arabia always based its economy on the export of crude because it is one of the countries with the highest production, we must say that they did not know how to manage their income. They don’t only spend a lot on personal expenditures of the monarchy, but also on their eternal ambition to be the leading country in the Islam world. This led them to spend a fortune on constructing mosques around the world, and even as we know, fund terrorist organizations in addition to their intervention in the Yemen war.

    Unfortunately, it wasn’t a good year due to the impact of lower oil prices along with OPEC’s decision to change their production. Even though Saudi Arabia had already sold future contracts, they were not enough to cover the loss of its annual income that was reduced to 360 billion dollars. Added to this the corruption network exposed before the reporter Jamal Khashoggi was killed in a Mysterious way on October 2 at the Saudi consulate located in Turkey.

    This economic crisis leaves Saudi Arabia with 40% unemployment and a population that consists of 70% citizens around 30 years old. This requires the government to create new sources of employment.

    To face this reality, the Saudi prince started a new economic plan that aims to solve the crisis through new reforms. These reforms require the modernization of the tourism industry, even though Saudi Arabia is not a country with a developed tourism services and even less so for the Western countries. As a country that still bases its law on religious foundations that are not attractive to the Western culture, making changes would mean a cultural reform that would have to be authorized by the country’s religious elite. This will make it very difficult and we won’t see a significant change in the short term.

    In a country where there are social differences according to the religious group that you belong to and especially where there are whole areas that entry is forbidden for non-Muslims, it will take time to create a plan that will get the attention of the west. There is also the delay of the industry development that will take time; no country ever became an industrial power in a matter of one day.

    Unfortunately for the Crown Prince, his plan to reach an agreement with companies such as ARAMCO in which he tried to have part of the earnings given to the government for the development of new projects failed, on the contrary, ARAMCO announced that it will decrease the crude drilling in some areas which already implies less production.

    Iran facing sanctions

    Iran will have its worst nightmares come true because of Trump’s threat to tighten the sanctions. It seems that this is influencing other countries such as China, India and Iraq’s decision to join the United States. A few weeks ago, the Iraqi government announced that it would cut the export of oil to Iran by 30,000 barrels. This will cancel the agreement between the two countries based on their geographical areas and involves moving small volumes of oil from its oil field northern of Kirkuk to Iran in exchange for Tehran delivering the same amount of oil to southern Iraqi ports, and it is now speculated that the same amount will be transferred to Turkey instead.

    So far, this means that there will be a massive reduction in the oil production and that will give an advantage to the natural gas proponents, which means less dependence on oil producing countries. It is possible that this scenario is what caused the decrease in oil prices in the last few weeks. We have to pay attention because this could be an investment tactic to boost their sales influenced by the future shortage of this mineral – sell massively today and buy at the price of $ 63 then resell when the sanctions will be implemented and the price will reach $ 100 per barrel. It is not such a bad idea.

    Middle East prepares for a change

    It is very possible that the Middle East is changing, if there is something we can learn from its history is that this kind of change will affect future policies and I will even dare say that we will have new leading countries that will influence the global economy. This means that if Saudi Arabia was the main player in the energy market, they will not enjoy that status for much longer, and this is where we should be vigilant and prepared for the new bosses!

    The huge amounts of natural gas found 90 kilometers west offshore from Haifa (Israel) is attracting the interest of new investors in the energy field, but even more the commercial relationship that is already beginning between Israel and Arab countries such as Egypt and Jordan. These new relationships could change the political interests. Why?

    These days, Israel finished signing an agreement that consists of creating pipelines that will provide gas to Egypt in significant quantities to the point that it will place Egypt as a player of great influence in the energy market within the Middle East. The flow of natural gas into the country will greatly benefit their local economy. Now, the most important thing is that this agreement will create a solid platform that encompasses the interests not only of these two governments but also of the public. We could say that the strengthening of these relations provides Israel with a more positive image of being open to future peace processes in the area and that gives the whole region an aura of stability.

    The creation of these pipes allows liquid gas to be transferred more easily than crude and this ease could satisfy the needs of other countries in the area. The objective is not only the edges of the Middle East; it is quite possible that thanks to the large amounts of gas combined with the growing demand, Israel will become the new supplier for the European countries. That being the case, Egypt will not need Russian gas and perhaps neither will other countries, something that will undoubtedly change the policy we know today.

    Author: Gaston Saidman

  • The Saudi Arabia Game In The Middle Of The Oil War Next To The Increasing Influence Of Israel In The Gulf

    Since the start of the covid19 pandemic, the oil price WTI fell from 45$ per barrel to 10$ BPD, considering that although the price was between 45-50$, this was still not enough to see large gains. Since that, ,  over  the last few years, the price has suffered a drop from $ 80 to the $ 45 mentioned before the pandemic arises. The black gold market has not lived its best moment for a long time.

    With the covid19 pandemic the market get close, airports, ports and therefore the transfer of crude oil reached its minimum, affecting the producing countries, which decided after a long discussion with Russia to cut production and try to revive the price, something that did not happen, at least not at the desired time.

    Saudi Arabia along with the OPEC+  associated countries was the one who led the first production cut when the fall price was in its beginnings, the idea was to see the possibility of balancing the price and reducing losses, the problem was that this strategy did not was as expected , investors did not see that this move achieves an expected rise, something very different from previous years, so they did not collaborate and a massive sale together with the effect of the pandemic, ended by lowering the price of a barrel to $ 10.

    On May 4, countries such as New Zealand and India reported a relaxation in the restrictions implemented by the pandemic, due to the low numbers of infected people. Expectations were very positive, since together with these changes the same day the charts showed an upward change placing the price at $ 20.85, the feeling of relief when also hearing that other countries opened their borders enthusiasm the investors who saw the opportunity. The end of the fall had ended and is confirmed on May 15 with a closing of $ 29.51 BPD, bringing the price we see today between $ 39-41 BPD. Although for the producing countries to see relevant gains, the price should reach 70 dollars, Saudi Arabia revived mass production, breaking with the implemented cut-off rules dictated by OPEC+, and let’s not forget that they were requested by Saudi Arabia, who today breaks the pact taking advantage of the situation and the future demand that is approaching when the heavens open, which implies fuel consumption again.

    Currently Saudi Arabia is suffering one of its worst economic crises where the sale of crude oil is not a fort as we knew years ago, this influences its desire to be the leading country in the Arab world, a position that competes against Iran, and part of its strategy is to begin to make public its approach to the West. It is not new that Saudi Arabia has relations with the United States, England or France; it is new that the last two years it has begun to make public its relations with Israeli businessmen that until the moment they were behind the scenes.

    The Saudi interest is to start a series of investments in new technologies with the aim of being able to align with the modern world and get out of the aforementioned crisis.

    Israel strengthens in the zone

    At a time when conflicts between the United States, Russia and China are growing, Israel could be the most reliable country at the moment, even that other Gulf countries are also interested in beginning a careful approach to the Jewish state.

    Saudi Arabia may be interested in purchasing the Firefly, a marauding kamikaze drone built in Israel, part of the Spike family of missiles, which was sold to several countries in Europe and sparked the kingdom’s (Saudi) interest, while it was under Iranian threats.
    The same interest is being born in other countries in the Middle East, increasing the importance of Israel in the eyes of various Gulf States. The problem arises from the accusing finger of the United States who criticizes the sale of the Russian S-400 anti-missile defense system to the Saudis, at a time when Trump criticizes Turkey for closing a purchase of the same anti-missiles, describing the agreement as a business with a country that said leader supports terrorism, referring to Erdoğan, which puts the Saudis in a quite conflictive situation, so what better than to start closing agreements with Israel, a country that apart from being an advantage against China and Russia, does not maintain relations with Iran which is also considered by Saudi Arabia as the UAE its arch enemy and a threat to the Middle East.
    Let us also remember that the lack of support from the Americans during the season of revolts in the Middle East known as the “Arab Spring” revolution, weakened the image of the United States creating a distrust that lasts until today, followed by the same American disinterest in failing to react forcefully to alleged Iranian attacks on key Saudi oil facilities, as well as oil tankers off the coast of the United Arab Emirates.

    Gulf states may be beginning to understand that cooperation with Israel could be very positive, being in a very good time today to buy Israeli weapons at a time when the interest in erasing Iran’s influence in Syria is mutual with Saudi Arabia and the UAE. This is an opportunity for all the opponents of the Islamic Republic that governs from Tehran; we can say that now Israel would be the best ally for this fight.
    Seeing everything so positive from the West, we have to understand that normalizing relations between the Gulf countries and Israel is still not so easy. Although it is difficult, it is not impossible in a few years.

    At the moment they can start to build these relationships, very carefully. The Gulf countries at the same time must take care of their image before the public opinion of their citizens who base their way of life, beliefs and customs still under the strict law of Islam and its traditions that partly see western culture as a threat to the union between their cultural legacy and religion.

    The argument taken by the rulers of these countries to start this new path should be the technological potential of this cooperation and how it could contribute to stabilize the labor market, which was badly damaged by the losses brought about by the fall of the Petroleum. It is very good to imply that cooperation with Israel is not only limited to the field of security. As Israel is a Startup Nation, the installation of laboratories in search of new energy sources, for example, or smart technologies, would provide jobs, goods and public services.
    Today the Middle East is facing an opportunity that if it knows how to use it will be great for all participants, but this cooperation will have to be done intelligently and not quickly, respecting the times and conditions required by the political culture of the zone, understanding that in part there will be things that are beginning to be made public and others that will take a different rhythm, Israel could be the new door to the Middle East for new entrepreneurs and innovators.

    Author: Gastón Saidman

    Israel - Cyprus Chamber of Commerce

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