G20 fails to issue joint statement amid US-Saudi spat over OPEC+ cuts
Issues such as oil production, price cap, Ukraine-Russia conflict, and new global financial challenges drive G20 members away from consensus, as another meeting ends without a joint communique.
The G20 has closed talks in Washington without issuing a joint communique, as a growing US-Saudi feud created new tensions in a group already divided over Russia’s attack on Ukraine.
Finance ministers and central bankers from the Group of 20 major economies met during the IMF and World Bank annual meetings that have focused on the conflict, soaring inflation and the climate crisis.
“We could do a communique that doesn’t mention the war in Ukraine, but we don’t want a communique that sweeps things under the rug,” a source familiar with the discussions told the AFP news agency.
Indonesian Finance Minister Sri Mulyani Indrawati, whose country chairs the G20 this year said at a news conference, “All member countries underlined that it is very important to continue to preserve this G20 as the premier economic forum for cooperation.”
She acknowledged that the group faces “many challenges” and “differences in view”, with “escalating geopolitical conflicts, a war in Ukraine which exacerbated and worsened the economic situation.”
German Finance Minister Christian Lindner said before the meeting that it was “better to have a forum to speak in than none.”
READ MORE: No joint communique as Ukraine casts shadow on G20 finance talks
Washington and Riyadh have locked horns over a decision by the OPEC+ group of oil exporters, led by Saudi Arabia and Russia, to sharply cut production — a move that could send energy prices soaring higher.
The source close to the G20 discussions said Western nations explained at the meeting that they were “disappointed” and that the cuts went against Saudi interests “because the risk for them is that they cause a recession.”
President Joe Biden has threatened “consequences” for Saudi Arabia.
The OPEC+ cut comes as the Group of Seven wealth democracies is seeking to impose a price cap on Russia’s crude exports, a move aimed at stripping the country of a major source of funding for its war machine.
While Western nations have imposed unprecedented sanctions on Russia, other countries have maintained economic ties with Moscow, with India and China stepping up their purchases of Russian oil.
Despite the lack of a joint communique, Indonesia’s Indrawati said the G20 made progress on a number of issues, including sustainable finance and efforts to impose a global minimum tax on major corporations.
READ MORE: Biden warns of ‘consequences’ for Saudi Arabia over OPEC+ oil cuts
Parliamentary resolution calls for price control of goods and services in Ramadan
Maduvvari MP and opposition People’s National Congress’ (PNC) parliamentary group leader Adam Shareef Umar, on Monday, submitted a resolution to the parliament that calls upon the government to control the prices of goods and services during the month of Ramadan.
MP Adam Shareef’s resolution states that the prices of Maldivians’ staple food products have been increased by seven percent following the hike in the Goods and Services Tax (GST) in January. It was also noted that prices increased by 7.82 percent last year, while inflation rose by 75 percent.
The resolution, referring to statistics publicized by the National Bureau of Statistics, said prices of eateries had increased by 4.3 percent.
Statistics publicized by the National Bureau of Statistics show that food prices increased the most between last year’s January and this year’s January. As per the authority, the prices of food products increased by 7.82 percent during this period.
MP Shareef, in his resolution, emphasized that most people have no avenue to increase their income while living expenses continue to gradually rise. He also alleged an increase in payable monies to the government in the guise of fines and others as the public brave through these difficult times.
Therewith, he called on the government to revise the GST rates which was increased and urged state-owned companies to decrease the prices of the services they provide. He also called on the government to control the prices of goods that have plunged above reach for the public, and make arrangements to ensure price control during the month of Ramadan.
OPEC secretary general ponders energy security, transition
HOUSTON, March 7 (Xinhua)– Haitham Al Ghais, Secretary General of the Organization of the Petroleum Exporting Countries (OPEC), said on Tuesday the energy industry needs considerable investment to meet rising global demand and ensure market stability as energy security concerns return to the fore.
Meanwhile, he said the oil and gas industry, which will retain its share as a critical component of the energy mix, must transform and decarbonize operations.
As COP28 comes up in Dubai later this year, “We at OPEC stand fully behind the UAE to bring on board everybody,” he said during the annual CERAWeek global energy forum in Houston.
SECURITY OF SUPPLY
“The key thing that we focus on is always trying to make sure that there is stability, there’s adequate supply to the market,” said the secretary general, warning of the “underinvestment” in hydrocarbons.
“We’ve seen a significant shortfall in investments in the oil sector,” he said.
It can take a long time to come into actual energy production since the typical span is a “few years at best” and up to seven years before new projects come online, he explained.
As the global economy doubles in size, energy demand will increase by 23 percent, but “there is no imaginable way renewables can alone do this (meet the demand),” he told the audience.
He said the energy industry needs 12.1 trillion U.S. dollars in capital investment. “Unless this happens, I’m afraid, honestly, that we could be facing issues in the future with regard to energy security and, accordingly, affordability,” he added.
“We are investing already, and we urge and call others to invest. It’s a global responsibility that OPEC cannot shoulder on its own,” he went on.
SECURITY OF DEMAND
Al Ghais said it is not a concern that Russia redirects its crude oil exports while Middle East exports are increasingly going to Europe, citing his 30 years of experience in the industry.
“It’s quite normal to see this,” he said, “We’ve always seen redirection of flows, whether it’s related to geopolitical events or demand centers being created and others disappearing. So this is typical where we have a redirection in flows from the east to the west or the west to the east.”
According to the forecast from OPEC, oil demand will increase by 2.3 million barrels a year, with the majority of the rise in demand coming from China and India, the secretary general said.
However, the global energy market is big enough despite improving demand, said Al Ghais.
“What concerns us more is actually the slowdown we see in Europe and the U.S. in terms of the financial situation and the inflation,” he said, noting a divided market is emerging on the demand side.
“There is phenomenal demand growth in Asia,” he said, and Russia’s oil production has been “resilient and managed to find new homes.”
He added that without the existence of OPEC and its allies, a group known as OPEC+, there would be more instability and volatility.
“With security of supply, there is also a requirement for security of demand, and the tools fit in together like hand and glove,” said the OPEC chief.
OPEC sees energy transitions as “absolutely an opportunity,” Al Ghais said.
“I don’t think it’s a threat. Again, it was something that we are already embracing. We believe this is an opportunity for us to meet our Paris Agreement goals,” he said.
“I think it’s important to look at the whole issue of energy transition, which I prefer to call energy transitions, by the way, not transition, with a sense of reality,” he said, “There is no one size fits all solution.”
Al Ghais said the energy transitions should “focus on different countries’ capabilities, circumstances, their potentials, their financial capabilities, and so forth.”
“When we talk about transition here in the U.S. or in Europe, it means nothing to other people around different parts of the world. What we take here for granted, like switching on the light, (a) switch is not available in other places in the world,” he went ahead, noting there are a million Africans alone who have no access to electricity.
The five-day CERAWeek will conclude on Friday and is focused on the dual challenges of meeting the world’s growing energy demand while reducing emissions.
More than 7,000 participants, including policymakers, industry leaders, company executives, investors and researchers from over 80 countries and regions, joined the forum, according to organizer S&P Global.
Saudi Arabia deposits 5 bln USD at Turkish Central Bank
RIYADH, March 6 (Xinhua) — Saudi Arabia announced on Tuesday that it had deposited 5 billion U.S. dollars at the Central Bank of Türkiye.
The deposit, which was part of an agreement between the Saudi Fund for Development and the Central Bank of Türkiye, revealed the close cooperation and historical ties between the two countries, the Saudi Press Agency reported.
The kingdom’s King Salman Humanitarian Aid and Relief Centre launched in February a nationwide donation campaign to help the earthquake-hit victims in Syria and Türkiye through an online platform.
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