Gulf economies struggle as crude futures collapse
Gulf debt and equity markets fell on April 21 and the Saudi currency dropped in the forward market, after U.S. crude oil futures collapsed below $0 on a coronavirus-induced supply glut.
Saudi Arabia’s central bank foreign reserves fell in March at their fastest rate in at least 20 years and to their lowest since 2011, while the kingdom slipped into a $9 billion budget deficit in the first quarter.
GCC countries cut oil production following OPEC+ deal
OPEC, Russia and other oil-producing nations on April 12 finalized an unprecedented production cut of nearly 10 million barrels, or a tenth of global supply, in hopes of boosting crashing prices amid the coronavirus pandemic and a price war, officials said.
Following the deal, Saudi Arabia announced its official crude pricing (OSP) for May, selling oil more cheaply to Asia while keeping prices flat for Europe and raising them for the United States.
Oman has told its oil producing companies to cut 200,000 barrels per day (bpd) starting from May 1 until the end of June in line with OPEC+ crude supply reduction pact and will inform its customers of the same plan, its oil ministry said.
The United Arab Emirates (UAE) is committed to reducing oil production from its current level of 4.1 million bpd, energy minister Suhail Al Mazrouei said in a tweet on April 12.
Kuwait’s oil minister said on April 12 that his country would be cutting more than 1 million bpd in actual oil supply, taking into consideration its current April production of around 3.25 million bpd.
Gulf states adjust curfews, airport restrictions
Saudi Arabia eased curfews on April 26 across the country but kept 24-hour lockdowns in place in the city of Mecca and neighborhoods previously put in isolation to curb the spread of the new coronavirus, state news agency SPA said. The country also said it would allow entry into and exit from Qatif province starting April 30.
Meanwhile, the emirate of Dubai said on April 26 it had lifted its full lockdown on two commercial districts that have a large population of low-income migrant workers, after the UAE eased nationwide coronavirus curfews the previous weekend
Kuwait decided to extend the suspension of work in the public sector including at government ministries until May 31 and expand a nationwide curfew to 16 hours as part of efforts to combat the coronavirus, a government spokesman said on April 20.
Bahrain reopened the Bahrain International Airport for transit passengers, Manama-based Gulf Air said on April 4, though entry to the country remains limited to Bahraini nationals and residents.
Saudi Arabia, UAE, Qatar, Kuwait implement new economic measures
Saudi Arabia was set to raise $7 billion with a three-tranche bond deal on April 15, a document showed, as the world’s biggest oil exporter seeks to replenish state coffers battered by low oil prices and expectations of lower output. King Salman has also ordered up to 9 billion riyals ($2.4 billion) to be disbursed to pay part of the wages of private-sector workers to deter companies from laying off staff, the state-run Saudi Press Agency reported on April 3.
The UAE central bank has urged commercial lenders to use the $70 billion-worth of capital and liquidity measures launched by the regulator to support the economy during the coronavirus outbreak, reported Reuters on April 13. Dubai’s department of finance has told all government agencies to slash capital spending by at least half and halt new hiring until further notice, in response to the coronavirus outbreak, reported Reuters on April 9.
Qatar’s ruler has asked the government to postpone $8.2 billion in unawarded contracts on capital expenditure projects due to the coronavirus outbreak, according to a bond prospectus dated April 7.
Kuwait announced measures early on April 1 aimed at shoring up its economy against the coronavirus pandemic, including soft long-term loans from local banks. The country’s central bank asked banks to ease loan repayments for companies affected.
Gulf states deport and repatriate migrant workers due to coronavirus
The UAE and Pakistan are working to add more flights to repatriate Pakistani citizens, a Dubai government source said on April 22. More than 20,000 Pakistani workers stuck in the UAE have registered since April 3 with the consulate to go home, as the Gulf Arab state tightens restrictions due to the coronavirus outbreak.
Qatar detained dozens of migrant workers and expelled them in March after telling them they were being taken to be tested for the new coronavirus, human rights group Amnesty International said on April 15.
Saudi Arabia has deported 2,870 Ethiopian migrants to Addis Ababa since the start of the coronavirus pandemic, the U.N. migration agency said on April 13, urging Riyadh to suspend the practice for the time being.
Saudi Arabia ends flogging, death sentences for minors
Saudi Arabia said on April 26 that it would no longer impose the death sentence on individuals who committed crimes while still minors, according to a statement from the state-backed Human Rights Commission (HRC), which cited a royal decree by King Salman.
The country also said that it is ending flogging as a form of punishment, according to a document from the kingdom’s top court seen by Reuters on April 24.
GCC monarchies to establish food supply safety network
The Gulf Cooperation Council’s (GCC) six Arab monarchies have approved Kuwait’s proposal for a common network for food supply safety, the state-run Kuwait News Agency reported on April 16.
The decision was taken after a virtual meeting of GCC trade and industry ministers to discuss the COVID-19 outbreak’s impact on food supply safety.
Qatar pushes back against US accusations of World Cup bribery
The organizers of the 2022 World Cup in Qatar have strongly denied allegations from the U.S. Department of Justice that bribes were paid to secure votes for the hosting rights to the tournament.
On April 6, for the first time, prosecutors set direct, formal allegations regarding the 2018 and 2022 World Cups down in an indictment.