As the world economy slumps, Saudi Arabia’s growth picks up on high oil prices
As the outlook for the global economy darkens with the risk of a recession, Saudi Arabia is among the big winners from the current situation, which is particularly marked by the energy crisis in Europe. After several years of falling oil prices, the oil monarchy is benefiting from the surge in oil prices that has accompanied the post-Covid recovery and war in Ukraine. Result: In the second quarter, gross domestic product (GDP) grew by 11.8%, in line with an already excellent first quarter with an increase of 9.6%. According to the International Monetary Fund (IMF), Saudi Arabia’s annual growth is expected to increase by 7.6% in 2022.
This growth is the result of “the significant increase in oil activity by 23.1%, in addition to the increase in non-oil activity by 5.4%,” the General Statistics Office said on Sunday.
In general, the rise in crude prices is benefiting exporting countries, including those in the Gulf, which are being courted by Western powers, who are urging them to open the floodgates of production to calm markets and thus limit global inflation. The Crown Prince of Saudi Arabia, who has effectively ruled the country since 2017, received US President Joe Biden in early July and met French President Emmanuel Macron this week.
OPEC+ meeting this week
However, Saudi Arabia, which is leading OPEC+ with Russia, is resisting for now and sticking to the production commitments of this powerful cartel of exporting countries. With another OPEC+ meeting scheduled for this week, analysts expect no change in policy. On Friday, with little hope of an increase in supply, oil prices ended higher as fears of a slowdown in activity persisted.
The barrel of American West Texas Intermediate (WTI) for same-month delivery rose 2.28% to $98.62. At the start of the session, the US barrel was up more than 5%. A barrel of North Sea Brent for delivery in September, the last day of trading, closed at $110.01, up 2.67%.
“Oil prices have risen after Exxon and Chevron expressed optimism about the outlook for crude demand and expectations that OPEC+ would not increase production in September,” said Edward Moya of Oanda.
Market participants expect the Organization of the Petroleum Exporting Countries and its ten partners (OPEC+) to leave their September production targets unchanged at their next videoconference meeting on Wednesday in Vienna, the cartel’s headquarters.
BIN LADEN FAMILY DONATIONS £1MILLION to THE PRINCE CHARLES FOUNDATION
Prince Charles, heir to the British Crown, has accepted a £1m donation from the Bin Laden family for his foundation, according to the Sunday Times. Several of his advisers have pleaded for the foundation not to accept the payment from the wealthy family of the mastermind of the September 11, 2001 attacks, Osama bin Laden, according to sources quoted in the British newspaper’s article. Although the Saudi family members who denied Osama bin Laden are not suspected of a possible crime, this information raises awareness around the Prince Charles Foundation, which police launched an investigation in February.
This investigation aims to determine whether donations to the Prince Charles Foundation were rewarded with honorary degrees and used to support a naturalization application by Saudi businessman Mahfouz Marei Mubarak ben Mahfouz. The agreement for the £1m donation from Saudi family patriarch Bakr bin Laden (Osama’s half-brother) and his brother Shafik dates back to 2013 during a meeting between Bakr bin Laden and Prince Charles in London, according to the Sunday Times.
Ian Cheshire, the foundation’s chairman, says the donation was accepted by all five trustees at the time. The case, which Scotland Yard was investigating, was uncovered last year and spattered the heir to the British throne at 73.
His former valet Michael Fawcett, who is said to be very close to Charles, is suspected of using his influence to help Saudi businessman ben Mahfouz, a generous donor from monarchy-linked charities, win an award. Mahfouz Marei Mubarak ben Mahfouz, who denies any wrongdoing, is said to have donated large sums of money to restoration projects. Michael Fawcett resigned in November 2021. Britain’s Charity Inspectorate also launched an inquiry last November into whether the wealthy Saudi businessman’s Mahfouz Foundation had received donations intended for Prince Charles’s.
“The investigation will examine whether certain donations received by the Mahfouz Foundation were intended for the organisation, whether they were used for the benefit of the donors and whether they should be returned,” the commission said at the time. .
However, the Prince Charles Foundation, established in 1986, is not regulated by this commission but is dependent on the Scottish Regulator for Charities. The latter also launched an investigation, but this time for several hundred thousand euros from a Russian donor.
The Bin Laden Group, Saudi Arabia’s largest construction empire, founded by Osama bin Laden’s father in 1931, has grown rich for decades thanks to its close ties to royalty. But he is now heavily in debt.