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Saudi Arabia

Saudi Arabia


Saudi Arabia Sovereign Fund acquired shares in four European oil companies for about $1 billion
President Donald Trump's administration is returning to its beloved tactics of international relations.
The U.S. is threatening to impose duties to end a war on oil prices that could ruin dozens of American companies. In conversations with oil company executives and lawmakers, Trump talked about the possible imposition of oil import duties under the same trade law that was used against China, informed sources say. Such tactics are designed to put pressure on Saudi Arabia and Russia to reduce their oil production and thus their excess supply in the market.

At the same time, the U.S. insists that oil production will be reduced under the pressure of market forces. They are not going to reduce their own production here, nor are they going to send a representative to participate in oil negotiations, sources say.

At a briefing on Wednesday Trump said that he is optimistic about the prospects of the deal and will wait for developments before talking about a possible reaction.

"I have many opportunities. There are many good opportunities," Trump said.

U.S. Federal Reserve leadership is responding with increasing concern to the challenges posed by the Coronavirus pandemic.
The central bank has already lowered the key interest rate twice off-schedule and signaled its intention to keep interest rates low until the economy recovers from the emergency slowdown.

According to the minutes of the Open Market Committee meeting published on Wednesday, most central bank managers considered the second, more significant, interest rate cut necessary due to the high probability of a much steeper decline in economic activity. "All participants agreed on the sharp deterioration of the U.S. economy's prospects in recent weeks and its extreme uncertainty," the protocols say.

At the same time, some of the leaders argued that a significant reduction in interest rates could send excessively negative signals to markets about the state of the economy, preferring a reduction of the rate by half a percentage point. Of these, only Fed-Clivid President Loretta Mester formally disagreed with the general decision.

Some leaders noted that after the second interest rate cut there may be a perception in society that the Fed's instruments are exhausted. Others argued that the central bank would be able to provide additional stimulus to the economy through reports on the future direction of monetary policy and asset purchases. "In particular, it is possible to provide additional advance indication and take balance sheet measures," the protocols say.

The protocols do not contain any other hints that would shed light on further actions by the central bank, reflecting the rapidity of events that subsequently forced the Fed to adopt more decisive stimulus measures.
Saudi Arabia's Sovereign Fund has acquired shares in four European oil companies worth about $1 billion.
The Fund took advantage of the market collapse triggered by the Coronavirus pandemic and the fall in oil prices to buy assets deemed undervalued here.

In recent weeks, the fund has acquired open market shares in Equinor, Royal Dutch Shell, Total and Eni and may continue such purchases in the future. "The fund has resumed its activity in the market, and I would not be surprised if we see such deals again," said the source.

The size of the shares acquired by Saudi Arabia in European oil companies is not known, but according to knowledgeable persons, their total value is about $1 billion.

Representatives of Equinor, Royal Dutch Shell, Eni and J.P. Morgan refused to comment on the acquisitions, while representatives of the Saudi Arabia Sovereign Fund and Total did not respond to the request for comments.



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