IA) Political Developments: Covid-19 Pandemic
Regional Impact of Covid-19: Vaccines Begin Making the Difference
In February 2021, there was a perceptible decline in the new Covid-19 cases and deaths in most of the WANA countries over the previous month. Thus the new cases which grew by 16.8% in January fell to 10.3% in February and the corresponding figures for deaths came down from 13.6% to 8.1%. The biggest differentiator was the vaccination process although it was only towards the month-end that a correlation between the ratio of people vaccinated in a country and the infection and deaths could emerge. For the second month, the two rates for WANA were superior to the respective figures for the world at large. Moreover, out of 23 WANA countries in the table below, none saw the two numbers grow by more than 100% during the month and only three countries saw their death rates grow by 50% or more. The picture was muddied by the introduction of new more virulent strains of the virus from the UK and Brazil. The details are in the table below:
Source: Johns Hopkins University Coronavirus Resource Center;
Legend: =: Nearly same since last month #: Grew ~10% since last month; *: Grew ~20% since last month; ^: Grew ~50% since last month.
Covid-19 and the Individual WANA Countries:
- Despite being at the top of the global vaccination ratio, Israel had a higher number of new cases and fatalities this month perhaps due to the arrival of the newer, more vaccine-resistant virus strains, the impact of the Jewish holidays and post-vaccination nonchalance. By the month-end, the government claimed to have the pandemic under control with nearly half the population having received at least one jab. It began lifting restrictions from Feb 21.
- After days of being held up by Israeli customs, the Gaza Strip authorities finally received a consignment of Sputnik-V on Feb 17. The schools in West Bank were shut for two weeks on Feb 27 to avoid the spread of the pandemic.
- On Feb 19, Iran’s President warned of the pandemic’s fourth wave comprising of a mutated virus. Nine cities were put under ‘Red Zone’ restrictions. Iran also claimed that its home-developed vaccine CovIran Barekat was 90% effective in Phase-II trials. A vaccination campaign commenced on Feb 9 with supplies from Russia.
- On Feb 23, World Bank warned Lebanon authorities that fresh out of turn vaccinations of MPs and other VIPs would result in stoppage of funding of the entire program worth $34 mn.
- Two ministers resigned in Jordan on Feb 28 for attending public functions in violation of the Covid restrictions.
- Kuwait barred entry of non-nationals indefinitely on Feb 20; however, four days later the ban was relaxed to permit the domestic workers accompanying returning nationals.
IB) Political Developments
The White House Transition and the WANA Region:
While there was plenty of flux as the Biden administration commenced its initiation rites with the several regional players, there was more heat than light in the uneven process. The various acts of commission and omission by the White House and the Foggy Bottoms to “recalibrate” ties with the region created their own buzz. The new US WANA policy being in a formative stage, the policymakers would have preferred more time and deliberation for a comprehensive overhaul in style and substance of Trump era regional paradigms. However, with the developments and stimuli kept coming thick and fast, they were often forced to react to them in a tentative and minimalist manner. To their credit, they managed to be, on the whole, in control of the narrative and downsizing the exceptionalism in America’s bilateral ties with several important players. Thus, for nearly a month President Biden did not have phone conversations with any of the WANA leaders – an unusual and conspicuous put down which also hinted at a lower priority being attached to the region. Eventually, he talked with Israeli PM Netanyahu (17/2), Iraqi PM Mustafa al-Kadhimi (24/2) and Saudi King Salman (25/2) – but not with his Crown Prince MbS. Interestingly – and perhaps not by coincidence – Secretary of State Antony Blinken also talked with his Saudi counterpart Faisal bin Farhan Al-Saud. According to American sources, they discussed the importance of Saudi progress on human rights.
Much of the Biden administration’s regional engagements during February were along the two axes: Saudi Arabia and Iran.
US-Saudi Arabia: De-Trumping the Relationship
During their Feb 25 teleconversation, President Joe Biden promised King Salman “to work for strong and transparent bilateral ties.” The contact was followed the next day with the release of the declassified summary of the finding of the Office of Director of National Intelligence (ODNI) murder of Jamal Khashoggi, a Saudi dissident-journalist, resident in the US, was murdered by a Saudi hit squad on October 2, 2019, inside the Saudi Consulate in Istanbul. The four-page document is summed up in the following two sentences:
“We assess that Saudi Arabia’s Crown Prince Muhammad bin Salman approved an operation in Istanbul, Turkey to capture or kill Saudi journalist Jamal Khashoggi.
We base this assessment on the Crown Prince’s control of decision-making in the Kingdom, the direct involvement of a key adviser and members of Muhammad bin Salman’s protective detail in the operation, and the Crown Prince’s support for using violent measures to silence dissidents abroad, including Khashoggi.”
Relevant to note that Saudi Arabia claimed that it was a rogue operation and had tried and convicted many of those involved. However, in wake of this ODNI conclusion, (completed during the Trump era but kept under wraps), the State Department instituted a “Khashoggi Ban” on those who threaten or assault activists, dissidents and journalists on behalf of foreign governments. It began with barring the entry of 76 Saudis from entering the US. Besides, the Treasury Department imposed sanctions on Ahmed Hassan Mohammed al-Asiri, Saudi Arabia’s former Deputy Head of General Intelligence Presidency, and Saudi Arabia’s Rapid Intervention Force (RIF). Despite ODNI pointing finger at Crown Prince Mohammed bin Salman, the US chose discretion over logic in avoiding subjecting him to any adversarial measures. In fact, on Feb 17, Secretary of Defence Lloyd Austin had phoned MbS, as his counterpart and had reaffirmed strategic defence partnership and voiced commitment to assist Saudi Arabia in defence of its borders. Earlier, in a speech at State Department on Feb 4, President Biden called the Yemeni war “a humanitarian and strategic catastrophe” and pledged an end to all support (to Saudi Arabia) for offensive operations. While revoking the designation of Ansarallah (al-Houthis) as a foreign terrorist organisation and specially designated global terrorist by the Trump administration in it last week, the State Department warned them on Feb 16 that they could face new sanctions unless they stopped missile and drone attacks and call off their campaign on Marib. Timothy Lenderking was appointed as a Special Envoy to Yemen to try and end the war.
US-Iran: Talking about Talks
Biden Presidency’s rendezvous with Iran during the month was even more extensive and with several interlocutors engaged in intense shadow-boxing –with scant movement on the ground. In a CBS interview on Feb 7, President Biden ruled out lifting the sanctions on Iran to facilitate the bilateral talks – as demanded by the Iranian leadership, including the Supreme Leader Ayatollah Ali Khamenei. Later on Feb 16, Secretary of State Blinken, however, declared “the path to diplomacy is open right now.” He reiterated following his Feb 18 discussions with FMs of E3 countries (the UK, France and Germany) that the US was ready to talk to Iran about both countries returning to the JCPOA, but had no plans any relief on the sanction before talks. Blinken expressed his readiness to send Special Envoy Robert Malley to meet with Iranian officials – an offer which was promptly turned down by Iranian FM Javad Zarif who, nevertheless, urged the American side to make the first move. Supreme Leader Khamenei’s pointed remarks “no time for words, we need action for action” (Feb 18) and “Iran could enrich uranium to 60% level if it needed” (Feb 22) were summarily ignored as “posturing” by the State Department. While Iran and the IAEA went into the twists and turns about Iran ending its compliance with the Additional Protocol on sudden inspections wef Feb 21, but allowing an interim “black-box arrangement” for the next three months, the US kept its cool with Blinken expressing readiness to extend and strengthen the JCPOA (Feb 22). By end of the month, there were hints about a format of talks linked with some one-off non-sanction economic relief being contemplated.
Comments:
While these were only initial overtures in Biden Presidency’s foray with the WANA countries, some outlines of the emerging policy towards the region emerged. Firstly, although there was a near-total “reset” from Trump-era diplomacy (that was transactional and openly partisan), there has not been an indiscriminate recast and much of the previous architecture has been left in suspended animation. If anything, initial Biden diplomacy seems content – either by a design or by a coincidence – keeping a safe distance from all the usual regional pro-US pretenders, viz. Israel, Saudi Arabia, Turkey, UAE, Egypt, Morocco and Qatar. It is worth noting that the Biden Presidency deliberately chose to publish the ODNI’s report damaging MbS. On other hand, it showed no alacrity either to engage Iran and ignored several time-hoops set by the leaders in Tehran. While some saw the emergence of a return to Obama-2 isolationist diplomacy towards the region, it’s a bit too early to be definitive on that score. One has also to note that Obama-2’s hands-off policy on the Arab Spring is often blamed for the current bloody mess in Libya, Syria, Yemen as well as the JCPOA which was signed under its watch. Eight years later, there are obvious contextual differences: such as a greater Iranian ingress into Levant and Yemen, resurgent Russia in Syria, Turkey and Libya, Turkish free-lancing, the Pandemic and continuing oil haemorrhage. Even more profound is the US’s own preoccupations at home as well as an incipient existentialist cold war with China. All these push-pull factors would make the Middle East a more interesting and unpredictable region than it has always been.
Further Reading: (i) Washington Post Editorial:
https://www.washingtonpost.com/opinions/2021/02/26/mohammed-bin-salman-is-guilty-murder-biden-should-not-give-him-pass/?arc404=true ;
(ii) Financial Times:
https://www.ft.com/content/9f95ee6a-8676-4e97-8404-530872480d98
Iran:
On Feb 12, a Belgian court found Assadollah Assadi, an Iranian diplomat to Austria, guilty of planning to bomb a 2018 convention of an Iranian dissident group in Paris and was sentenced to 20 years in prison. On Feb 12, Turkey arrested Mohammed Reza Naserzadeh, an Iranian Consular official, for instigating the killing of an Iranian dissident. Iran denied the respective charges.
Iraq:
A rocket attack at a US-led military base near Erbil on Feb 15 killed a civilian American contractor and wounded five. It was the most deadly attack on a US base in past one year. Two similar rocket attacks on the US facilities in Baghdad’s Green Zone on Feb 22, which caused no casualties, were also blamed on Kataib Hezbollah (KH), a Shite militia under the rubric Popular Mobilisation Force (PMF) allied to Iran. The Biden administration expressed its outrage and promised a response which came on Feb 26 in form of US air attacks on assets of KH and its associate Kataib Sayyid al-Shuhda in Syria’s Deir al-Zor area bordering Iraq. This was the first military action in the Middle East taken by the Biden administration which led to the death of 17 militants.
NATO Ministerial meeting in Brussels decided on Feb 16 to increase the number in its training mission from current 500 to 4000 or 5,000 in response to rising violence and to compensate for the withdrawal of the US troops from Iraq.
Five people were killed and over 175 wounded in a week of violent protests in Nasiriyah demanding removal of the Governor and justice for the victims of the 2019 killings.
Further Reading: “Shadowy militants in Iraq complicate US efforts to ease tensions” Financial Times, Feb 28;
https://www.ft.com/content/f42fc5f5-ce8a-4f04-ad4d-126a8aca9c26
Israel:
On Feb 5, the International Criminal Court at Hague ruled by a majority that it has jurisdiction over the situation in Israeli occupied territories (OT). The ruling paved the way for setting up a tribunal to conduct a war crimes investigation. The ruling was vociferously criticised by Israel and the US, both non-members of the ICC. In particular, Israeli Prime Minister Binyamin Netanyahu called ICC “a political body.” Palestine Authority welcomed the ruling seen as a victory.
Comment:
The ICC wading into the Israel-Palestine dispute to investigate the war crimes, is likely to further complicate and polarise the ground situation, particularly as more neutral Biden administration takes over the White House. While the Israeli military actions in OT has often been criticised by the UNGA, UNHCR Arab and Islamic Countries, NAM and the NGOs, the US veto in UNSC has so far mostly spared it of being on the wrong side of the international law. Au contraire, the Jewish state has domestically fostered the pristine self-image of the “Israeli Defence Force” fighting the terrorists with great self-restraint. However, these comforting paradigms are likely to be challenged by the ICC war crime investigations, beginning with the 2014 Gaza war, which lasted seven weeks and resulted in the death of over 2,000 Palestinians and 72 Israelis. The ICC would investigate the war crimes by both sides, the IDF as well as Hamas.
On Feb 25-26, MV Helios Ray, an Israeli vehicle-carrying cargo ship in the Gulf of Oman was damaged by two explosions, which did not cause any casualties. Israeli Defence Minister Gantz blamed Iran on basis of the initial assessment.
On Feb 17, Israeli and Syria exchanged prisoners (two Syrians and one Israeli) who had strayed across their ceasefire line. The exchange was facilitated by Russia.
Turkey:
On Feb 20, President Recep Tayyip Erdogan stated that the common interests with the US outweighed the difference over such issues as Ankara’s acquisition of the S-400 air defence system from Russia and Washington’s support to YPG, a Syrian Kurdish militia Turkey regards as a terrorist entity.
Turkey’s redeployment of research vessel in a disputed area of the Aegean Sea was criticised by Greece as an unnecessary complication to the recently resumed bilateral border talks.
The killing of 13 Turkish military personnel and police, held by PKK Kurdish militia as prisoners in northern Iraq, provoked Ankara into launching a military operation in that area on Feb 14. Turkey also criticised equivocal support from its NATO allies on this issue.
Kuwait:
On Feb 17, Emir Nawaf al-Ahmed al-Sabah suspended the National Assembly session for a month to cool the political crisis caused by a section of MPs insisting on parliamentary scrutiny of several newly appointed ministers in Prime Minister Sheikh Sabah Al-Khalid Al-Sabah, who resigned in protest but was reappointed.
Comment:
The political crisis, in its second month, mirrored similar stalemates between the Royal family and the legislative which have affected governance over the past decade.
Libya:
After a long gestation, the political process moved at a rapid clip during the month. During the first week of February, a UN Sponsored Conference selected four members of the Interim Executive Authority (IEA) to lead the divided and civil-war ravaged country through a national election in December 2021. The proposed IEA is to be chaired by Mohammed Younes Menfi, a former diplomat and would have Abdul Hamid Dbeibah, a Misrata based billionaire, as its Prime Minister. The proposed names of IEA members are to be ratified by the House of Representatives which is itself divided into Tripoli and Benghazi factions.
In a statement on Feb 10, the UN Security Council unanimously welcomed the formation of the proposed Presidential Council as an “important milestone”.
On Feb 12, in Benghazi, its Chairman-designate Mr Menfi met with LNA leader Gen Khalifa Haftar, who gave his backing to the IEA.
On Feb 18, Egyptian President Sisi met Libyan PM-designate Mr Dbeibah and offered Egypt’s support. Egypt, a staunch supporter of Gen Haftar in past, also decided to reopen its embassy in Tripoli.
On Feb 25, PM-designate Dbeibah announced that he has proposed a “Governing Plan” to the House of Representatives.
Comments:
Slow but steady progress made by the UN-led national reconciliation process in Libya during the month owes its success to a myriad of factors. Perhaps most important among those is the need for the several stakeholders to be on their “best behaviour” in anticipation of the White House transition. In addition, early groundswell in favour of IEA leading to re-unified Libya shifted the political calculus: The foreign influencers – interested in oil, infrastructure, bases and other deals – could no longer count on their existing links with the GNA and LNA and tribal leaders. Hence, instead of supporting the two warring factions, the great game was rapidly shifting to positioning their respective pawns on the unfolding politico-economic chessboard of the oil-rich country at a stone’s throw from southern Europe’s shores. Last, but not least, if the country eventually has a stable government, mega-entrepreneurs like Dbeibah would be destined to play an even bigger role in its political-economy, rebuilding of infrastructure destroyed during a decade of the civil war.
Further Reading: “Fourth time lucky – Can a new administration reunite war-torn Libya?” The Economist, Feb 13th 2021; https://www.economist.com/middle-east-and-africa/2021/02/13/can-a-new-administration-reunite-war-torn-libya
UAE:
The UAE became the fifth nation to put a satellite in a Martial orbit on Feb 10. This was the first-ever inter-planetary project by an Arab state was named Amal, or Hope.
Comment:
The UAE’s space success was spectacular, particularly when seen against a dim context of a shrinking economy, low oil revenues, resurgent Covid-19 pandemic, postponed Dubai Expo and regional turmoil. It was milked to the hilt for its rich symbolic potential in the golden jubilee year of the UAE’s formation. It was rarely mentioned that the probe was largely assembled by several US universities, launched on a Japanese rocket and more than half the experts controlling the mission were non-Emiratis. Further Reading: “Hope and despair: An Emirati probe journeys into outer space” The Economist, Feb 20 2021; https://www.economist.com/middle-east-and-africa/2021/02/20/an-emirati-probe-journeys-into-outer-space
On Feb 16, the BBC Panorama TV programme aired a video about Sheikha Lateefa, a 36-year-old daughter of Sheikh Mohammed bin Rashid Al-Maktoum, Vice President of the UAE and Ruler of Dubai, who claimed to be under detention incommunicado in a Dubai villa for nearly three years after her thwarted attempt to flee the country. The TV expose and the demarches in its wake by the UK Foreign Secretary and the Office of the UN Human Rights Commissioner elicited a cryptic official UAE reply asserting that Her Highness was well and was being cared for at home supported by the family and the medical professionals.
On Feb 22, the Emirati and Qatari delegations met in Kuwait to discuss the normalisation of relations after the al-Ula GCC Summit in the previous month. It was the first publicly acknowledged meeting since the four-country boycott of Qatar in 2017.
Abu Dhabi International Defence Exhibition and Conference (IDEX), held as scheduled on Feb 21-25, was a subdued affair due to the pandemic. Defence deals worth $1.36 bn were signed during the event. Much anticipated Israeli participation did not materialise due to Covid-19 restrictions. Nevertheless, SIPRI data revealed that the arms sales to the region were up 61% during the past five years.
Saudi Arabia:
In reaction to the published US ODNI report, Saudi Foreign Ministry statement on Feb 27 had the following relevant extracts:
“The government of the Kingdom of Saudi Arabia completely rejects the …. assessment in the report pertaining to the Kingdom’s leadership, and notes that the report contained inaccurate information and conclusions,”
“The crime was committed by a group of individuals that have transgressed all pertinent regulations… and the kingdom’s leadership took the necessary steps to ensure that such a tragedy never takes place again,”
“The Ministry of Foreign Affairs affirms that the partnership between the Kingdom of Saudi Arabia and the United States of America is a robust and enduring partnership,”
Al-Houthi forces launched several drone and rocket attacks on Saudi targets (including Riyadh, Jizan, Khamis Mushat and Abha) during the month as the hostilities escalated on the ground in Yemen. Most conspicuous of these was a hit on an empty airliner at Abha airport on Feb13.
Woman-rights activist Loujain al-Hathloul was released on bail on Feb 10 after three years in jail.
Yemen:
On Feb 8, Al-Houthi forces launched an offensive to take Marib city in the centre-north of the country. This unleashed the most intense fighting and air-attacks by the Saudi-led coalition since the siege of al-Hodeidah port in 2018. By end of the month, al-Houthi forces had made some gains but were still short of controlling the city.
Comment:
The fighting in the Marib region is significant for several reasons: Firstly, it last holdout of the al-Hadi government in the northern part of the country and its control would underwrite al-Houthi control of the entire north (The “Yemen Arab Republic” before unification in the 1990s) in any future political negotiations. On the other side, Marib is the only major Yemeni city left under the control of the al-Hadi government as Aden is already controlled by STC (the southern separatists). Thus, the fall of Marib to al-Houthis would effectively partition the country and make the position of al-Hadi’s government quite tenuous. Secondly, it is an oil-producing region. Besides, Marib is also strategically important lying at the crossroads connecting Yemeni highlands with coastal plains and Hadramaut desert. Al-Houthi offensive also leveraged the end of the Biden administration’s support to Saudi war efforts.
Martin Griffiths, UN mediator for Yemen visited Tehran to discuss the Yemeni crisis with Foreign Minister Javad Zarif. In a report to the UN Security Council on Feb 18, he reiterated his warning about Yemen being the contemporary world’s largest humanitarian crisis with 80% of the country’s population in need of help.
Algeria:
President Abdelmadjid Tebboune returned on Feb 12 to the country after over a month-long medical absence in Germany for an operation on his foot.
On Feb 18 President Tebboune announced the dissolution of the Parliament and pardoned around 60 Hirak activists. However, the opposition group resumed its weekly mass protests from Feb 26 to demand political reforms.
Egypt:
On Feb 11, Cairo’s Al-Ahly football club won third place in FIFA Club Football Cup tournament held in Doha. This was Al-Ahly’s best performance at the world level, even as they have been African champions nine times.
Tunisia:
A political stalemate between the President and Prime Minister over swearing-in of some of the newly appointed cabinet ministers over “Conflict of Interest” worsened the political uncertainty and economic angst in the country that has witnessed popular disappointment after a decade since the Arab Spring.
Syria:
Anwar Raslan and Eyad al-Gharib, two Syrian asylum seekers who had worked for the Syrian intelligence Service before migrating to Germany, were tried in a Koblenz court for complicity in crimes against humanity. In a judgement on Feb 24, the court found Eyad al-Gharib, the junior among the two, guilty and sentenced him to four and a half years in jail. Anwar Raslan’s trial is to continue at least till October 21.
Comment:
The sentencing of Eyad al-Gharib was a legal landmark as it was for the first time in the world that an employee of the Bashar Al-Assad government was convicted in this manner. Ironically, the two accused were tried after they sought German police protection against reprisals by the Al-Assad regime. The accompanying publicity led to them being accused by some of their victims also seeking asylum in Germany.
Qatar:
A Feb 23 article in the London-based The Guardian claimed that at least 6,500 foreign workers have died for various causes while working on FIFA World Cup-related infrastructure in Qatar. According to the paper, of those killed, the highest number, 2711, were Indians.
Further Reading: “Revealed: 6,500 migrant workers have died in Qatar since World Cup awarded”
https://www.theguardian.com/global-development/2021/feb/23/revealed-migrant-worker-deaths-qatar-fifa-world-cup-2022
Sudan:
A UNHCR report put the number of Ethiopian asylum seekers in Sudan from the Tigary conflict at 7,000.
II) Economic Developments
Oil Related Global Developments:
- On Feb 4, IMF urged Arab leaders to implement reforms to accelerate recovery of their pandemic-battered economies. It warned that unless this was done, they risk the new decade being lost.
- A report by ThinkTank Carbon Tracker on Feb 11 put the cumulative collective government revenue loss by 2040 to the oil and gas producing countries from declining consumption at $13 tr. As the world tries to limit the rise in global temperature to 1.65C. According to its estimation the 40 “petrostates” would stand at an average loss of 46% of their 2020 oil and gas revenue. It called upon them to diversify their economies at the earliest.
- Brent oil prices reached $66.13/barrel on Feb 28 having risen 18% in February in anticipation of the OPEC+ meeting on March 4 continuing with the current production ceiling despite a rising consumption due to the gradual global economic recovery.
Following economy-related developments took place in individual WANA countries:
- On Feb 15, the Saudi Finance Minister asked the international companies desirous of participating in Saudi government contracts and partake the investment opportunities in the Kingdom to relocate their regional headquarters to Saudi Arabia. This regulation imposing this requirement, called “Project HQ” would be announced by end of 2021 and would take effect from 2024. He pointed out that although Saudi Arabia was the region’s biggest economy, only 5% of such companies had their regional headquarters based in the Kingdom. Comment: The new Saudi stipulations would create a dilemma among foreign companies, who have hitherto preferred Dubai and Abu Dhabi for several reasons. However to be effective, the Project HQ scheme would have to go some distance to match the ease of doing business of the UAE: Currently, the UAE is ranked 16th while Saudi Arabia is at 63. There is no question, the lucre of large Saudi government contracts and investment opportunities under “Vision 2030” would be increasingly irresistible.
- On Feb 28, Saudi Aramco sought a one-year extension on a $10 bn loan maturing in May 2021. The loan originally meant to partly finance the $70 bn acquisition of SABIC Industries which was delayed from its original schedule in Q4/2020. The extension was also necessitated to shore up Aramco economic situation. Despite a sharp decline in profits in 2020 due to pandemic, the world’s largest oil company maintained its commitment of $75 bn in dividend, most of which went to the Saudi government.
- Iranian Foreign Minister Javad Zarif claimed on Feb 21 that his country has suffered economic damages of nearly $1 tr due to US “maximum pressure” policies under which President Trump re-instated 800 old economic sanctions and added nearly 800 new ones on Iran. He hinted at Iran seeking reparations for the damage inflicted to its economy. Separately on Feb 22, South Korea agreed to release a part of “close to $10 bn” of Iranian funds held back by Korean banks in compliance with the US economic sanctions. No specifics of the deal precipitated by the detention of a South Korean ship by Iran were provided.
- On Feb 21, Iraq decided to freeze its first crude prepayment deal with a Chinese importing company as the prices have bounced back to above $60/barrel.
- During the month, Qatar Petroleum signed two long term LNG supply agreements with Bangladesh and Pakistan. The agreement with Bangladesh signed on Feb 22, mediated by Vitol, was to supply 1.25 mn tons of LNG annually for 21 years. On Feb 26, Pakistan signed an agreement to import 3 mn tons of LNG for the next 10 years. Pakistani sources claimed that the new deal would leverage a 31% drop in LNG prices and save Pakistan millions of dollars annually. Qatar also pledged $60 mn to build a gas pipeline from Israel to Gaza by 2023. The project which would supply gas from Leviathan gas field in Israeli offshore would resolve the power generation problems in Gaza Strip.
- On Feb 21 Sudan sharply devalued its currency to bring the largely fictitious official rate of US$ 1 = Sudanese Pound 55 aligned with the market rate. Post devaluation, the new rate was US$ 1 = SP 375.
III) Bilateral Developments
- On Feb 17, Prime Minister Narendra Modi had a teleconversation with Sultan Haithem bin Tarik, Sultan of Oman.
- On Feb 17, PM Modi said that India planned to undertake oil and gas infrastructure projects worth $103 bn over the next five years. He also declared the government’s intention to bring natural gas under the GST mechanism.
- Sheikh Abdullah Bin Zayed Al Nahyan, Foreign Minister of the UAE visited India on Feb 26 for talks with EAM Dr S. Jaishankar. They reviewed the growing bilateral cooperation with the discussions underscoring shared purpose and common interest.
- On Feb 17 Minister of Petroleum and Natural Gas Dharmendra Pradhan urged OPEC+ to ease the production cuts as the higher oil prices were hitting the demand and adding to inflation. In his opinion, for at least the next few months, OPEC+ should give primacy to demand recovery over crude revenue maximisation.
- The spot market purchases by India, the world’s third-largest crude consumer, increased by 10 to 15% due to OPEC+ cuts and increased consumption of petrol and LPG. This led to significantly higher crude purchases in Dec 2020 from the US and Nigeria. The increased demand pushed the refineries to work above their installed capacity.
- India joined Iran-Russia joint naval drill held in the northern Indian Ocean on Feb 16-17.
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(The views expressed are personal)
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