New Saudi energy minister says country wants to enrich uranium

According to sources JPMorgan Chase has been chose to lead Saudi Aramco's initial public offering. ― Reuters pic

According to sources JPMorgan Chase has been chose to lead Saudi Aramco's initial public offering. ― Reuters pic

Conditions have calmed since, so now we have a market that is being supported by improving relations between the two economic powerhouses and talk of an extension of the OPEC-led production cuts.

In March, Reuters reported the USA has already approved the sale of nuclear power technology to the Saudi kingdom. Saudi officials, however, have said they wouldn't agree to a deal that denies them the possibility of enriching uranium or reprocessing spent fuel, which could lead to a nuclear bomb.

"It's all about incremental contributions that can make a deal work and work better, or may work in a less optimal way", Prince Abdulaziz said. He put his diplomatic skills to brokering the kind of fudge that's seen the group through many hard meetings and the next day his boss was able to tell the world the kingdom's oil policy remained on track. The major oil producers have agreed to curb production this year by 1.2 million barrels a day, with Saudi Arabia as the kingpin of OPEC shouldering the bulk of the cartel's cuts.

The price of Brent crude surged on the comments and was trading near $62.75 a barrel, well below the $80 a barrel that the kingdom based this year's budget on.

An IPO of Saudi Aramco would happen "very soon", Amin Nasser cited the Kingdom's new Energy Minister Prince Abdulaziz Bin Salman as saying, adding that the ultimate decision on the venue and timing of the flotation rested with the Saudi government.

He was promoted to deputy oil minister in 1995 and later became an assistant minister for petroleum affairs from 2004 to 2015.

The ministers will consider fresh reductions, even though analysts are doubtful such a move would succeed in bolstering crude prices which have been badly dented by the US-China trade war.

While putting a prince in charge of oil policy is unprecedented, Abdulaziz is no novice.

The 25-nation OPEC+ group, dominated by the cartel's kingpin Saudi Arabia and non-OPEC production giant Russian Federation, agreed to reduce output in December 2018. This will be further confirmation that the OPEC-led production cuts are working to drive down USA inventory.

Rumayyan's rise and Falih's removal are further signs that Prince Mohammed is relying more heavily on a new generation of advisers.

The new factor is the trade dispute between the United States and China, whose tit-for-tat tariffs have created fears of a global recession that will undermine demand for oil. They come from different generations - MbS is more than 20 years younger and Prince Abdulaziz had never been seen as part of his inner circle. "The world can no longer afford such policy miscalculations".

Despite MbS's attempts to diversify the economy away from oil, the crude price remains the single most important influence on the health of the Saudi economy.

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