Oil has crossed the $100-a-barrel mark again, but for Gulf countries this is not simply good news. Brent reached about $100.07 on Wednesday, its highest level since July, as the U.S.-Iran war and attacks on Saudi energy facilities raised fresh fears about supplies.
For countries such as Saudi Arabia and the UAE, the basic calculation is simple.
When oil sells for more, governments can earn more from every barrel they export. That can mean more money for government budgets, infrastructure and large development projects.
The higher price is being caused by the war itself. If attacks damage oil facilities or make shipping routes unsafe, Gulf producers may have fewer barrels to sell.
That risk is already visible in Saudi Arabia, where Iran-backed Houthi forces have attacked energy facilities in the south, including sites around Jazan.
The Strait of Hormuz adds another layer of risk. Before the latest escalation, around 8-9 million barrels of oil a day were moving through the waterway; recent flows have fallen to below two million barrels a day.
Saudi Arabia has some protection because part of its oil can be moved through pipelines to the Red Sea, avoiding Hormuz. But other Gulf economies remain exposed to the cost of disrupted shipping.
The UAE is in a stronger position because its economy is less dependent on oil than it was in the past. Dubai earns heavily from real estate, tourism, aviation, trade and financial services, so higher oil prices can help government finances while also increasing costs for businesses and consumers.
And that is where the $100 price becomes complicated. Expensive oil brings more revenue, but war also means higher shipping, insurance, transport and energy costs, while weaker tourism, aviation and property activity can put pressure on the wider economy.
For the Gulf, therefore, $100 oil is a benefit only if producers can keep exporting. If prices remain high because the region is losing production and shipping capacity, the extra money from oil may come with an increasingly expensive bill elsewhere.
Afghanistan says its forces have killed 41 fighters and captured 62 others after several days of fighting in eastern Nuristan, accusing Pakistan&rs...
Iranian President Masoud Pezeshkian has accused the U.S. and Israel of seeking to foment internal divisions in Iran after failing to defeat the cou...
The U.S. Senate has blocked a resolution that would have required President Donald Trump’s administration to report to Congress on alleged hu...
The European Union's decision to simultaneously advance accession talks with Ukraine, Moldova, Montenegro and Albania marks its most ambitious enlargement effort in more than two decades.
Iranian President Masoud Pezeshkian has accused the U.S. and Israel of seeking to foment internal divisions in Iran after failing to defeat the country militarily, Iran's state news agency IRNA reported.
U.S. President Donald Trump has denied reports that he offered Iran sanctions relief and access to frozen funds in exchange for nuclear concessions.
Ukrainian President Volodymyr Zelenskyy said on Monday that more than 8,000 North Korean troops are currently in Russia, with preparations under way to send another 10,000.
Russian strikes hit Kyiv and Ukraine’s Black Sea region of Odesa overnight into Tuesday, damaging infrastructure and civilian sites, while Moscow said it had also targeted vessels carrying military cargo.
Israel believes an incident aboard a flydubai flight from Dubai to Tel Aviv may have been an attempted “terror attack” by one of the pilots, after the plane rapidly descended and was diverted to Saudi Arabia.
The war between Iran and the U.S. is creating a widening security challenge for Saudi Arabia, stretching from Yemen’s Red Sea coast to Iraq as the Houthis emerge as a growing source of pressure on the kingdom.
North Korea has dismissed as a “farce” Seoul’s claim that Pyongyang was responsible for a landmine explosion south of the Military Demarcation Line that injured three South Korean soldiers.
Saudi Arabia and the United Arab Emirates have renewed high-level contact as a Houthi offensive in Yemen increases pressure on Riyadh and raises concerns over security around a crucial Red Sea shipping route.
The Spanish government has unveiled plans to extend protections against evictions until the end of 2030 as it seeks to address growing concerns over housing affordability and tenant security.
You can download the AnewZ application from Play Store and the App Store.
What is your opinion on this topic?
Leave the first comment