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