Blockade party

6 January 2021 By George Hay Follow @gfhay

Ending Riyadh’s three-year embargo with Doha gives both states a minor economic boost. It also removes one of U.S. President-elect Joe Biden’s Saudi-related headaches. But its main benefit could be to reduce the extent to which foreign investors see the kingdom as kryptonite.

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Saudi Arabia, the United Arab Emirates, Bahrain and Egypt agreed to restore full ties with Qatar at a summit in the kingdom on Jan. 5, the Saudi foreign minister said.

Faisal bin Farhan al-Saud told a news conference there was political will to restore diplomatic and other ties, including resumption of flights, that have been dormant since the four countries implemented a blockade in June 2017.

Separately on Jan. 5, Saudi Arabia offered to make voluntary cuts in its oil output of 1 million barrels per day in February and March as part of a deal under which most OPEC+ producers will hold production steady in the face of new coronavirus lockdowns.

Saudi is going beyond its promised cuts as part of the OPEC+ group of oil producers to support both its own economy and the oil market, Energy Minister Abdulaziz bin Salman said.

Two producers - Russia and Kazakhstan - will be allowed to bump up their output by a combined 75,000 barrels per day in February and a further 75,000 barrels in March, Kazakhstan's energy minister said.

As of 0900 GMT on Jan. 6, Brent was trading at $53.69 a barrel, compared to $51 a barrel on Jan. 4.

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Context News

Saudi Arabia, the United Arab Emirates, Bahrain and Egypt agreed to restore full ties with Qatar at a summit in the kingdom on Jan. 5, the Saudi foreign minister said.

Saudi is going beyond its promised cuts as part of the OPEC+ group of oil producers to support both its own economy and the oil market, Energy Minister Abdulaziz bin Salman said.

As of 0900 GMT on Jan. 6, Brent was trading at $53.69 a barrel, compared to $51 a barrel on Jan. 4.

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