Saudi Arabia Bracing for ‘Twilight of the Oil Age’

Sunday, April 3, 2016
By Paul Martin

Saudi Arabia is getting ready for the “twilight of the oil age,” Deputy Crown Prince Mohammed bin Salman told Bloomberg in an interview.

He said the kingdom is planning to establish a $2 trillion sovereign wealth fund. The money will be used to cut Riyadh’s reliance on oil.

What is more, as part of the plan, Saudi Arabia plans to sell shares of state-owned oil company Saudi Aramco. The initial public offering (IPO) could happen as soon as next year, with the government currently planning to sell less than five percent, according to Bloomberg.

As of April 1, oil traded at around $39 a barrel. In order to stabilize prices, oil producers are going to freeze output at the level of January 2016. The upcoming talks will take place on April 17 in Doha. The meeting will involve 12 countries.

At the same time, Saudi Arabia will freeze output only if Iran does the same.

“If all countries including Iran, Russia, Venezuela, OPEC countries and all main producers decide to freeze production, we will be among them,” bin Salman told Bloomberg.

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