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Saudi Arabia is losing control of the region
Material posted: Publication date: 01-01-2014

Saudi Arabia is gradually losing control over the region and soon may lose control over the oil market. The growth of shale gas production in the U.S. could undermine Saudi Arabia's position in world energy markets much faster than previously thought. Experts believe that such dynamics of shale gas production can greatly affect the situation in North Africa and the middle East.

Another factor, which also complicates the situation around the world leader in oil production, is forced increasing of budget expenditures. In 2014, the authorities plan to spend 3.4 percent more than in the past. The planned amount of social spending is $228 billion.

It should be noted that Saudi Arabia is forced to reduce the rate of increase of budget expenditures in connection with growth of cost of oil for the financial break-even budget.

Estimates of experts vary but a large majority believes that the price of oil for the financial break-even budget in 2014 for the country will be from $80 to $90 per barrel.

While high oil prices and problems with supply and production allow Saudi Arabia to generate significant revenue next year, however, Iran may start its program to return its market share. Before the sanctions came into force last year, Iran was the second largest exporter of oil in the OPEC cartel after Saudi Arabia, exporting 2.7 million barrels per day. Iran hopes to reach a final agreement on its nuclear program by mid-2014, which completely frees it from sanctions. Tehran is expected to lobby for a better share in total OPEC production in the next year.

It is linked to concerns of the Royal family of Saudi Arabia: the emerging rapprochement between Iran and the US in the first place has a negative impact on the position of the Kingdom in the region. As a result the government of Saudi Arabia expressed its disappointment with U.S. policy in the middle East.

The head of the national security Council (NSC) of Saudi Arabia Bandar bin Sultan announced plans for a “major revision” of relations with America. Sources Reuters reported that Prince Bandar announced the start of the tapering coordination with the United States in the war with Syria. Saudi Arabia will continue to Finance and train militants who are involved in the war against the Syrian authorities. The government of the Kingdom also “consider all possible options for their future actions in other areas”.

Against this background, the authorities have intensified and are trying to prevent the strengthening of Iran's influence in the region. Before it became known that Saudi Arabia will allocate the funds to the Lebanese army $3 billion This will be the largest infusion of funds to the Lebanese army in the entire history of its existence. Apparently, Saudi Arabia is seeking to permanently oust Libya from the organization Hezbollah, which is actively supported by Iran.

In late July, Bandar paid a visit to Moscow as a senior negotiator of the Saudis. Then, the media were sketchy reports of this meeting. Bandar tried to influence the Russian position on the situation around Syria is actually through bribery and blackmail.

Source: NEWS

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