Category Archives: Saudi Arabia

(Reuters) Trump calls CIA assessment of Khashoggi murder premature but possible  

(Reuters) President Donald Trump on Saturday called a CIA assessment blaming Saudi Crown Prince Mohammed bin Salman for the killing of Saudi journalist Jamal Khashoggi “very premature” and said he will receive a complete report on the case on Tuesday.

Trump, on a trip to California, said the killing “should never have happened.” The report on Tuesday will explain who the U.S. government believes killed Khashoggi and what the overall impact of his murder is, Trump said. It was unclear who is producing the report.

Trump also said the CIA finding that bin Salman was responsible for the killing was “possible.” Trump made the remarks hours after the State Department said the government was still working on determining responsibility for the death of Khashoggi, a U.S.-based Washington Post columnist.

“Recent reports indicating that the U.S. government has made a final conclusion are inaccurate,” State Department spokeswoman Heather Nauert said in a statement. “There remain numerous unanswered questions with respect to the murder of Mr. Khashoggi.”

President Donald Trump speaks to reporters as he departs the White House, November 9, 2018.

Kevin Lamarque | Reuters
President Donald Trump speaks to reporters as he departs the White House, November 9, 2018.

Nauert said the State Department will continue to seek facts and work with other countries to hold those involved in the journalist’s killing accountable “while maintaining the important strategic relationship between the United States and Saudi Arabia.”

Trump discussed the CIA assessment by phone with the agency’s director, Gina Haspel, and Secretary of State Mike Pompeo while flying to California on Saturday, White House spokeswoman Sarah Huckabee Sanders told reporters.

The CIA had briefed other parts of the U.S. government, including Congress, on its assessment, sources told Reuters on Friday, a development that complicates Trump’s efforts to preserve ties with the key U.S. ally.

A source familiar with the CIA’s assessment said it was based largely on circumstantial evidence relating to the prince’s central role in running the Saudi government.

The CIA’s finding is the most definitive U.S. assessment to date tying Saudi Arabia’s de facto ruler directly to the killing and contradicts Saudi government assertions that Prince Mohammed was not involved.

Khashoggi, a critic of the crown prince, was killed in October at the Saudi consulate in Istanbul when he went there to pick up documents he needed for his planned marriage.

As lawmakers push legislation to punish Saudi Arabia for the killing, both Republican and Democratic senators on Saturday urged Trump to be tough on the crown prince, with whom he has cultivated a deep personal relationship.

“Everything points to the Crown Prince of Saudi Arabia, MbS, ordering @washingtonpost journalist Jamal #Khashoggi’s killing. The Trump administration should make a credible determination of responsibility before MbS executes the men who apparently carried out his orders,” tweeted Senator Bob Corker, chairman of the Senate Foreign Relations Committee, on Saturday.

Trump and top administration officials have said Saudi Arabia should be held to account for any involvement in Khashoggi’s death and have imposed sanctions on 17 Saudis for their role in the killing.

But they have also stressed the importance of Washington’s ties with Riyadh, one of the biggest clients of the U.S. defense industry. Trump wants to preserve the Saudi arms deals, despite growing opposition in Congress.

“They have been a truly spectacular ally in terms of jobs and economic development,” Trump said. “As president, I have to take a lot of things into consideration.”

Marine General Joseph Dunford, chairman of the Joint Chiefs of Staff, noted on Saturday that the kingdom plays a key military role for the United States in the Middle East.

“Saudi Arabia has been an important partner to regional security in the past. I expect they will be in the future,” he said at a security forum in Halifax, adding Middle Eastern allies including Saudi Arabia are “a stabilizing force in the region.”

On Thursday, Saudi Arabia’s public prosecutor said he was seeking the death penalty for five suspects charged in the killing of Khashoggi.

The prosecutor, Shaalan al-Shaalan, told reporters the crown prince knew nothing of the operation, in which Khashoggi’s body was dismembered and removed from the consulate. Saudi officials have said a team of 15 Saudi nationals were sent to confront Khashoggi and he was accidentally killed in a chokehold by men who were trying to force him to return to the kingdom. Lawmakers critical of Saudi Arabia for Khashoggi’s killing and its role in Yemen’s civil war are ramping up their efforts to clamp down on the country.

“Trump must accept (for once) his intelligence experts’ incontrovertible conclusion: Crown Prince MBS is culpable for Khashoggi’s monstrous murder. This brazen killing must have consequences – sanctions, prosecution, removal of MBS & others, not continued cover-up, enabled by Trump,” tweeted Democratic Senator Richard Blumenthal on Saturday.

(ZH) Khashoggi Remains Reportedly Discovered In Garden Of Saudi Consul General’s Home

(ZH) Hours after Turkish President Erdogan demanded that Saudi Arabia disclose the whereabouts of journalist Jamal Khashoggi’s remains, body parts reportedly belonging to Khashoggi have been found, according to Sky sources, though the exact location wasn’t revealed. According to anonymous sources cited by Sky News, the writer had been “cut up” and his face “disfigured.”

One source suggested that Khashoggi’s remains had been discovered in the garden of the Saudi consul general’s home. “Why has the body of someone who was officially said to be killed not been found yet?” Erdogan asked during his speech at Turkey’s parliament on Tuesday.

He added that all 18 of the Saudi nationals arrested in connection with the killing should stand trial in Istanbul.

The circumstances surrounding the discovery of Khashoggi’s body parts both contradict Saudi Arabia’s explanation for his death. According to the Saudis, Khashoggi’s body was handed off to a local fixer after being wrapped in a rug. Though Erdogan didn’t mention Crown Prince Mohammad bin Salman in his speech, the kingdom and the prince have denied his involvement.

If accurate, the discovery of Khashoggi’s remains will likely unleash a new round of international pressure on the Saudis, who have seen foreign investors pull money from their stock market while Wall Street CEOs and a handful of industrialists and tech titans have pulled out of the kingdom’s “Davos in the Desert.”

(ZH) Saudi Crown Prince Spoke To Khashoggi By Phone Moments Before He Was Killed: Report

(ZH) In the latest bombshell report involving the Khashoggi murder, Saudi Crown Prince Mohammed bin Salman reportedly spoke on the phone with journalist Jamal Khashoggi moments before he was murdered in the Saudi consulate in Istanbul. Turkish pro-government daily Yeni Safak disclosed the new alleged details of the case in a report on Sunday, contradicting claims by Saudi authorities that Prince Mohammed played no part in Khashoggi’s murder.

“Khashoggi was detained by the Saudi team inside the consulate building. Then Prince Mohammed contacted Khashoggi by phone and tried to convince him to return to Riyadh,” the report said.

“Khashoggi refused Prince Mohammed’s offer out of fear he would be arrested and killed if he returned. The assassination team then killed Khashoggi after the conversation ended,” it added.

While the report is so far unconfirmed, the New Arab reports that so far Turkish pro-government media have been receiving a steady stream of leaks many of which turned out to be accurate, including pictures of the hit team as they entered Turkey and reports of audio recordings of the murder said to be in the possession of Turkish authorities.

Meanwhile, the Saudi version of events has been changing significantly over the past two weeks with authorities conceded Saturday that Khashoggi, the Washington Post columnist and a Riyadh critic, was killed inside the kingdom’s Istanbul diplomatic compound following a “brawl”. The admission came after a fortnight of denials with the insistence that the journalist left the consulate alive, starting on October 5, when Crown Prince MBS told Bloomberg that Khashoggi was not inside the consulate and “we are ready to welcome the Turkish government to go and search our premises”.

On Saturday, the kingdom announced it had fired five top officials and arrested 18 others in an investigation into the killing – a move that has widely been viewed as an attempt to cover up the crown prince’s role in the murder.

The shifting Saudi narrative of the killing has been met with scepticism and condemnation from the international community, and has left the U.S. and other allies struggling for a response on Sunday. As Bloomberg reports, France demanded more information, Germany put arms sales to Riyadh on hold and the Trump administration stressed the vital importance of the kingdom and its economy to the U.S.

In Sunday radio and TV interviews, Dominic Raab, the U.K. politician in charge of negotiating Britain’s exit from the European Union, described the latest Saudi account as not credible; French Finance Minister Bruno Le Maire called for “the truth’’; and Germany’s Foreign Minister Heiko Maas said his government would approve no arms sales so long as the investigation was ongoing.

Earlier on Sunday, Saudi Foreign Minister Adel al-Jubeir acknowledged a cover-up attempt. The dramatic reversal, after Saudi officials had previously said the columnist left the building alive, has only complicated the issue for allies.

Saudi Arabia’s al-Jubeir told Fox News on Sunday that the journalist’s death was an “aberration.”

“There obviously was a tremendous mistake made and what compounded the mistake was the attempt to cover up,” he said, promising that “those responsible will be punished for it.”

More importantly, he said that Prince Mohammed had no knowledge of the events, although if the Turkish report is confirmed, it will be yet another major flaw with the official narrative.

Several senior members of US President Donald Trump’s Republican Party said they believed Prince Mohammed was linked to the killing, and one called for a “collective” Western response if a link is proved. In an interview with The Washington Post, President Trump, too, said the Saudi narrative had been marked by “deception and lies.’’ Yet he also defended Crown Prince Mohammed bin Salman as a “strong person,’’ and said there was no proof of his involvement in Khashoggi’s death. Some members of Congress have questioned his willingness to exonerate the prince.

“Obviously there’s been deception and there’s been lies,” Trump said on the shifting accounts offered by Riyadh.

On Sunday, Turkish President Recep Tayyip Erdogan promised to disclose details about the case at a meeting of his AK Party’s parliamentary faction on Tuesday, Haberturk newspaper reported.

Meanwhile, as Western firms and high-ranked officials scramble to avoid any Saudi involvement, Russia is more than happy to step in and fill the power vacuum void left by the US. As a result, Russian businesses are flocking to attend the investment forum in Saudi Arabia, as Western counterparts pull out.

Russian President Vladimir Putin has had considerable success boosting Moscow’s influence in the Middle East at U.S. expense, by standing by regimes that fall afoul of the West, including in Syria and Iran. Last week Putin signed a strategic and partnership agreement with Egypt’s President Abdel-Fattah El-Sisi, backed by $25 billion in loans to build nuclear reactors. Until El-Sisi came to power, Egypt had been closely allied to the U.S.

Meanwhile, all eyes are fixed squarely on the Crown Prince whose position of power is looking increasingly perilous. Congressional leaders on Sunday dismissed the story proffered earlier by the Saudis, with Republican Senators Lindsey Graham of South Carolina and Bob Corker of Tennessee saying they believed the crown prince was likely involved in Khashoggi’s death.

Lawmakers said they believe the U.S. must impose sanctions on Saudi Arabia or take other action if the crown prince is shown to have been involved. Speaking on NBC’s “Meet the Press,” Senator Dick Durbin of Illinois, the chamber’s No. 2 Democrat, said the Saudi ambassador to the U.S. should be formally expelled until a third-party investigation is done. He said the U.S. should call on its allies to do the same.

“Unless the Saudi kingdom understands that civilized countries around the world are going to reject this conduct and make sure that they pay a price for it, they’ll continue doing it,”’ Durbin said.

The obvious question is what happens and how the Saudi royal family will respond if it is pushed too far, and whether the worst case scenario, a sharp cut in oil exports, could be on the table if MBS feels like he has little to lose from escalating the situation beyond a point of no return.

(ZH) “They Cut Him Up While He Was Still Alive”: Grisly Details Of Saudi Journalist Killing Emerge

(ZHUpdate (12 pm ET): Speaking again on the subject of Khashoggi, President Trump emphasized the importance of maintaining the US’s business relationship with the Saudis, and added that the public would hear the full story of what happened by “the end of the week.” Trump added that the US “needs Saudi Arabia’s help” in the fight against terrorism. Trump also said he has requested the audio tapes that the Turkish government claims to have which should prove that Khashoggi was murdered “if they exist.”

Meanwhile, after his meeting with Turkish officials in Ankara, Secretary of State Mike Pompeo refused to speculate about whether Khashoggi was alive or dead.

“I don’t want to talk about any of the facts. They didn’t want to either,” Pompeo said.

* * *

Update (8 am ET): Speaking with reporters during his trip to Turkey, Secretary of State Mike Pompeo repeated his comments about the Saudis promising a “thorough, transparent” investigation that will be conducted “in a timely fashion.”

Per Bloomberg:

“They told me they were going to conduct a thorough, complete, transparent investigation”and made a commitment to holding anyone connected to any wrongdoing accountable, Pompeo told reporters Wednesday as he headed to Turkey, where the journalist was last seen entering the kingdom’s consulate in Istanbul.

Nobody from the Trump administration has responded to the latest explosive allegations about Khashoggi’s death, though it’s worth noting that Turkish officials who have spurred claims about Saudi’s role in Khashoggi’s disappearance haven’t produced any tangible evidence – though Turkish President Recep Tayyip Erdogan has promised a “thorough” investigation.

* * *

While President Trump would love it if the Western media, along with prominent executives in tech and finance, would buy Saudi Crown Prince Mohammad bin Salman’s claims that he had “no knowledge” of the confrontation at the Saudis’ consulate in Istanbul that’s believed to have precipitated the killing of insider-turned-Washington Post columnist Jamal Khashoggi, yet more evidence has emerged this morning to contradict the official Saudi narrative.

Trial balloons floated by the kingdom in the Western press, as well as Trump’s own suggestions, point to “rogue operatives”, but in a story published last night, the New York Times managed to corroborate Turkish officials’ claims that several suspected members of the 15-man ‘hit squad’ have been directly linked with MbS.

And now, in what has been billed as the first glimpse of the grisly circumstances of Khashoggi’s murder, the Middle East Eye and the Wall Street Journal have reported that “it took seven minutes for Khashoggi to die.”

Khashoggi

But in what was probably the most gruesome details from the report, MEM reported that Dr. Salah Muhammad al-Tubaigy, who was identified by the Times and other media outlets as an “autopsy expert” whose presence cuts against Saudis’ suggestions that the killing wasn’t premeditated, started cutting Khashoggi’s body into pieces while the journalist was unconscious, but still breathing. Previously, Khashoggi had been knocked unconscious after being injected with a mysterious substance.

MEM attributed its information to a person who had listened to the Turkish government’s recording of the murder (its agents had apparently bugged the Saudi consulate, which is unsurprising given the tense relations between the two Muslim powers that only deteriorated during last year’s Qatari crisis). That recording, which hasn’t been publicly shared, has served as the basis for dozens of media reports about Khashoggi’s death. According to this source, after arriving at the consulate, Khashoggi was dragged from the consul-general’s office at the Saudi consulate in Istanbul into his study next door, before being pinned down on the table and injected with an unknown substance. During the attack, horrifying screams were heard by witnesses.

After Khashoggi had been knocked unconscious (never to awaken again), al-Tubaigy put on his headphones and started the grim process of dismembering the body with a bone saw.

Tubaigy began to cut Khashoggi’s body up on a table in the study while he was still alive,the Turkish source said. The killing took seven minutes, the source said.

As he started to dismember the body, Tubaigy put on earphones and listened to music. He advised other members of the squad to do the same.

“When I do this job, I listen to music. You should do [that] too,” Tubaigy was recorded as saying, the source told MEE.

A three-minute version of the audio tape has been given to Turkish newspaper Sabah, but they have yet to release it.

A Turkish source told the New York Times that Tubaigy was equipped with a bone saw. He is listed as the president of the Saudi Fellowship of Forensic Pathology and a member of the Saudi Association for Forensic Pathology.

Later, the NYT reported that the hit squad cut off Khashoggi’s fingers while he was still conscious during an interrogation where he was also beaten and tortured before being dragged into another room where they finished butchering him.

According to WSJ, voices on the tapes can be heard asking the Saudi consul to leave his office before the hit squad murdered Khashoggi. The consul, Mohammad al-Otaibi, departed Turkey for Riyadh Tuesday afternoon after the Saudis, in a sudden reversal, denied Turkey’s requests to search Otaibi’s residence, saying his home was off limits to investigators.

When Otaibi objected to the killing happening in his office, he was told to shut up “if he wanted to live.”

“Do this outside. You will put me in trouble,” Mr. al-Otaibi, the consul, told them, according to the Turkish official and the report in Yeni Safak, both citing audio recordings said to have been obtained by Turkish intelligence.

“If you want to live when you come back to Arabia, shut up,” one of the agents replied, according to both the official and the newspaper.

“Horrendous tortures were committed on Khashoggi, who came to the consulate for documents,” the Yeni Safak account said.

Should other media organizations confirm these reports (which has become a pattern since Khashoggi disappeared into the consulate on Oct. 2 after being asked to return to pick up a marriage license), calls for sanctions, an arms sales ban – or even the deposing of Crown Prince Mohammad bin Salman could grow louder.

But while MbS remains ensconced in his protective shield of power, those directly involved in the killing have good reason to be afraid. The United Nations human rights chief Michelle Bachelet has called for the lifting of diplomatic immunity for any facilities and persons tied to the killing, which means that, even if Saudi Arabia gives its nominal “rogue operatives” a pass, extradition requests from Turkey or another UN member would greatly increase their chances of arrest.

(ZH) Trump To Saudi King: “You Wouldn’t Last Two Weeks Without Us”

(ZH) One week after President Trump accused Saudi Arabia of deliberately conspiring to drive up oil prices during his speech before the United Nations General Assembly, the president stepped up his rhetoric against America’s most important strategic ally in the Middle East during a rally in Southaven Mississippi Tuesday night, implying that the US could withdraw the military protection it provides to the kingdom and warning that the Saudi regime that it wouldn’t survive for “two weeks” without US support.

In a rebuke that may have been inspired by OPEC’s refusal to raise production at the September meeting in Algiers (though Saudi officials have said both on the record and in several reported leaks that they’re looking into unilateral cuts) Trump told the crowd that he had warned Saudi Arabia’s King Salman that he “might not be there for two weeks without us,” adding “you have to pay for your military.” Trump’s remarks triggered uproarious applause.

“We protect Saudi Arabia. Would you say they’re rich. And I love the King, King Salman. But I said ‘King – we’re protecting you – you might not be there for two weeks without us– you have to pay for your military.'”

Last week’s remarks at the UN were only the latest example of Trump’s demands that Saudi Arabia, the de facto leader of OPEC, act to suppress oil prices since they started breaking higher earlier this year. Most of those warnings have come via twitter. At one point, Trump said that Saudi Arabia had agreed as early as June to do more to push oil prices lower.

Donald J. Trump

@realDonaldTrump

We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!

Donald J. Trump

@realDonaldTrump

Just spoke to King Salman of Saudi Arabia and explained to him that, because of the turmoil & disfunction in Iran and Venezuela, I am asking that Saudi Arabia increase oil production, maybe up to 2,000,000 barrels, to make up the difference…Prices to high! He has agreed!

Donald J. Trump

@realDonaldTrump

Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!

Reports emerged Wednesday morning claiming that Russia and Saudi Arabia had agreed to boost production through December, though Saudi Energy Minister Khalid al-Falih said during a speech Wednesday morning that he felt the global market was oversupplied.

Watch a clip from the rally below:

(Reuters) Saudi Arabia aims to keep crude in $70 to $80 band: sources

(Reuters) Saudi Arabia wants oil to stay between $70 and $80 a barrel for now as the world’s biggest crude exporter strikes a balance between maximizing revenue and keeping a lid on prices until U.S. congressional elections, OPEC and industry sources said.

After announcing the flotation of Saudi Aramco in 2016, the kingdom began pushing for higher crude prices partly to help maximize the valuation of the state oil company ahead of an initial public offering (IPO), originally scheduled for 2018.

That changed in April when U.S. President Donald Trump put public pressure on Riyadh to keep crude prices in check, wanting to stop U.S. fuel costs rising ahead of the U.S. midterm elections in November.

Now, even though the IPO has been shelved, Saudi Arabia still wants to keep oil prices as high as possible without offending Washington, the sources said. Saudi needs cash to finance a series of economic development projects.

OPEC and Saudi Arabia do not have an official price target and are unlikely to adopt one formally.

“The Saudis need oil at about $80 and they don’t want prices to go below $70. They want to manage the market like this,” one of the sources told Reuters.

“They need cash. They have plans and reforms and now the IPO is delayed. But they don’t want anyone else talking about oil prices now. It’s all because of Trump,” the source said.

An informal target of $70 to $80 raises the prospect of Saudi Arabia making regular tweaks to its output to influence the cost of crude as the market responds to other factors affecting global supply and demand.

One industry source said it may have done precisely that last week.

With Brent heading toward $80 a barrel, Saudi Arabia told the market about an increase in its production last month sooner than it would have usually released such information, the source, who follows Saudi output policy, said.

“The Saudis will probably put a few more dampening signals out, given where prices have gone,” the industry source said.

OPEC U-TURN

The aspiration for $70 to $80 is similar to that of other producers within the Organization of the Petroleum Exporting Countries. Algeria, for example, says it sees $75 as fair.

“Everybody has been talking about these kinds of numbers,” said an OPEC delegate from outside the Gulf.

Brent crude has fluctuated between $70 and $80 since April 10. After hitting $70.30 on Aug. 15 the oil price has climbed steadily to touch $79.72 on Tuesday.

Earlier this year, Riyadh hoped to see oil prices above $80 and was ready to continue with a supply cut pact until the end of 2018, only to make a U-turn after Trump called on OPEC in April to boost supplies.

Riyadh has long been a close Washington ally. But ever since Trump became president in 2017, Saudi Arabia has become even more sensitive to U.S. requests and both countries have coordinated policy more closely than under Trump’s predecessor.

In June, for example, OPEC agreed with Russia and other oil-producing allies last month to raise output from July – with Saudi Arabia pledging a “measurable” supply boost.

Saudi industry sources briefed the market about record oil production in which Aramco was planning to pump 10.6-10.8 million barrels per day (bpd) in June and as much as 11 million bpd in July, the highest in its history.

In the end, Saudi Arabia’s production in June was 10.488 million bpd and in July it fell to 10.29 million.

‘DIFFICULT TASK’

The plan to boost output to record highs had been driven mainly by worries of a sudden supply shock after U.S. officials said Washington aimed to reduce Iran’s oil revenue to zero, the sources said.

But since then, Washington has said it would consider waivers on Iranian sanctions and worries about a trade war between Washington and Beijing have threatened to hit future demand for oil, the sources said.

One industry source said the kingdom’s crude production plans were made according to its customers’ needs and that oil demand has not materialized as forecast.

“We can raise production as high as 11 (mln bpd) or even 12 but then where will it go? We can’t push oil to the market,” that industry source said.

In an August report, the Oxford Institute for Energy Studies www.oxfordenergy.orgsaid Saudi Arabia was trying to manage the Brent price within a very narrow range of $70 to $80 – and it was not an easy task.

It said the strategy was mainly to put a ceiling on crude amid concerns about the impact of high prices on demand as the trade war between Washington and Beijing escalates – and to keep a floor under prices to maintain revenues and market stability.

This echoes Saudi price aspirations from a decade ago, when the kingdom identified $75 as a fair price. This held for a few years, only to be dropped as prices moved much higher.

“Striking a balance between the various objectives, and doing it within a narrow price range, is an extremely difficult task given the wide uncertainties and the different shocks hitting the oil market,” the Oxford Institute’s note said.

“Saudi Arabia is in need of flexibility in its output policy.”

(BBG) Saudi Fund in Talks to Invest in Tesla Buyout Deal

(BBG) Elon Musk’s attempt to take Tesla Inc. private will receive added scrutiny this week as the electric-car maker’s board meets with advisers to assess a proposal that’s drawn interest from Saudi Arabia’s sovereign wealth fund.

The Saudi Kingdom’s Public Investment Fund is working to be part of any investor pool that emerges to take Tesla private, people with knowledge of the fund’s plans told Bloomberg News on Sunday. The fund, which recently built a stake just shy of 5 percent, is exploring how it can be involved, the people said on condition of anonymity.

The potential transaction’s staggering $82 billion price tag means Tesla is still likely to need to tap other sources of cash. Musk is hoping to avoid having one or two large stakeholders in a company and would instead prefer to gather the funds from a larger group, the people said, and is canvassing other potential investors including asset managers. Tesla directors will probably tell Musk, the chairman, to recuse himself, according to CNBC, and they’ve told him to hire his own separate advisers.

Musk’s tweet announcing the deal — and a proclamation of “Funding secured” — shocked investors, and he has yet to back up his claim that he has financing for the transaction. The U.S. Securities and Exchange Commission is examining whether the tweet was meant to be factual, according to a person familiar with the matter, and at least two investors have sued Musk and Tesla alleging share-price manipulation. While the entrepreneur owns 20 percent of Tesla, more than $60 billion would be needed to buy the business from public shareholders.

The Public Investment Fund didn’t respond to requests for comment, and Tesla declined to comment.

Tesla shares were little changed at $355.16 as of 10:29 a.m. on Frankfurt’s Tradegate, before the U.S. market opens.

It won’t be easy for Tesla to obtain the funding, according to Nannan Kou, a senior associate at Bloomberg NEF in Beijing.

“The question is still around Tesla’s future sales. This is essentially a chicken-and-egg problem,” Kou said in an email. “At this stage, it is hard for Tesla to convince the general investors that delivery will ramp up quickly. So the potential investor must be patient and strategic-looking.”

Earlier Discussions

Discussions over taking Tesla private have failed before. Musk and SoftBank Group’s Masayoshi Son held talks last year that touched on taking Tesla private, two people with knowledge of the talks have said. The discussions failed to progress due to disagreements over ownership.

SoftBank isn’t planning to participate as a potential source of capital in a deal taking Tesla private, according to people with knowledge of that matter who asked not to be identified as the details aren’t public. Among the reasons, they said, is that SoftBank has already placed big bets on the future of the automobile with General Motors Co., and that Tesla faces increased competition and has yet to deliver on its mass-market ambitions.

The Saudi fund’s talks began before the controversial Aug. 7 tweet in which Musk said he was weighing a plan to take the company private. The PIF sees its investment in Tesla as a strategic way for the world’s biggest crude producer to hedge against oil, said the people, who asked not to be identified. The Saudi fund hasn’t made any firm decisions on whether to increase its stake, or by how much, but talks are ongoing, they said. It wasn’t immediately clear how much the fund would invest in Tesla.

Wall Street is awash with speculation on who might team up with Musk to do a deal. Musk and his advisers are seeking a wide pool of investors to back a potential take-private of the automaker to avoid concentrating ownership among a few new large holders, according to people familiar with the matter. Musk has said he still expects to own about 20 percent of Tesla after any transaction, and that he hopes all shareholders will remain owners of a private company.

The SEC, which already had been gathering information about Tesla’s public pronouncements on manufacturing goals and sales targets, is intensifying scrutiny of the company’s statements in the wake of Musk’s tweet, people familiar with the matter have said.

The Public Investment Fund approached Musk several months ago to discuss buying a minority stake, but he initially resisted the investment and said there were no plans to issue new shares, according to a different person familiar with the talks at the time. As a result, PIF itself decided to buy about $2 billion in Tesla shares on the market with the help of an investment bank, the person said.

The current talks about the PIF potentially participating in a take-private transaction started in recent weeks, the other people said.

The Saudi government is planning to turn the PIF into a $2 trillion powerhouse to help diversify the kingdom’s oil-dependent economy. In a tweet on Sunday, the nation’s Energy Department said Saudi Arabia currently is working to develop a city to support the supply of raw materials and parts for the automobile industry. The goal is to reduce imports, increase exports, encourage foreign investments and provide jobs.

(Haaretz) Why Younger Saudis Won’t Fund, Facilitate or Fight for a Palestinian State

(Haaretz) An emerging Gulf leadership has shaken off its elders’ attachment to the Palestinian cause. They’re convinced an independent Palestine means handing Iran and Sunni political Islamists yet another Arab capital

That there is a wide gap between the position of Saudi Arabia‘s King Salman bin Abdel Aziz, endorsing full rights for Palestinians, as opposed to his son, Crown Prince Mohammed bin Salman (known as MBS) should come as no surprise to Western policymakers.

There have been clear recent indications of this difference. The Crown Prince has recognized Israel’s right to exist and was reported as saying the Palestinians should either “shut up” or make peace with Israel.

Pushing back, King Salman reiterated “the kingdom’s steadfast position towards the Palestinian issue and the legitimate rights of the Palestinian people to an independent state,” and lately declared that U.S. President Trump’s peace plan had to include East Jerusalem as the Palestinian capital.

Women walk past a poster of Saudi Arabia's King Salman bin Abdulaziz Al Saud on the outskirts of Riyadh, Saudi Arabia. February 12, 2018
Women walk past a poster of Saudi Arabia’s King Salman bin Abdulaziz Al Saud on the outskirts of Riyadh, Saudi Arabia. February 12, 2018 \ Faisal Nasser/ REUTERS

The Gulf states, particularly Saudi Arabia and the United Arab Emirates, are experiencing tremendous socio-political change that has accelerated a generation gap that has been widening for some time.  One particular divergence in the thinking between the younger generations and the older ones is what approach to adopt towards the Palestinians.

Older Saudis grew up in the 1950s and 1960s during the heyday of Arab nationalism, and its embrace of the Palestinian cause as the main driver for all events in the region. While the Saudis never fully embraced Arab nationalism, they adopted the Palestinian cause to preempt attacks based on a lack of solidarity from their arch-opponents, Arab nationalists.

Thus, the older generation in the Gulf that Saudi King Salman embodies believes deeply in the Palestinian cause, whatever political complexion the Palestinian leadership exhibits.

However, the younger generations, characterized and led by MBS and his close ally Mohamed bin Zayed (MBZ), the crown prince of Abu Dhabi and primary driver of the UAE’s foreign policy, display far less political equanimity; they prioritize realpolitik over political nostalgia. They long ago stopped overlooking what they consider problematic political biases within the West Bank, Gaza, and even among the Palestinian diaspora around the world.

They realize that Palestinians in general are not enthusiastic toward or supporters of Saudi and Emirati interests in checking the power of political Shia Islamists, most notably Iran, and Sunni political Islamists, primarily the Muslim Brotherhood.

There has long been a school of thought in the Gulf that called for a separation between Gulf states’ national interests and the Palestinian cause, but this was still an unpopular position among the general public. But over the last few years, this position has been increasingly adopted, first by younger elites and then more broadly, not least as Saudi Arabia itself has come under missile attack from Iranian proxies.

A Palestinian man uses a slingshot during clashes with Israeli forces along the border with the Gaza strip, May 14, 2018
A Palestinian man uses a slingshot during clashes with Israeli forces along the border with the Gaza strip, May 14, 2018 SAID KHATIB/AFP

The younger Gulf generation has seen for itself the attacks launched by Palestinians against their countries on social media, including the burning of MBS’ pictures in Gaza. During the soccer World Cup, many Palestinians rushed to root for Iran against its Western opponents, while supporting Western countries against the Saudi national team. This immediate, visceral experience differentiates the younger Gulf generation from its elders.

The older generation of Saudi and Emirati policymakers have known these Palestinian political tendencies for years, but they overlooked them in the hope that once a Palestinian state is established, local actors sympathetic to Iran would have an incentive to moderate their positions, providing the Saudis offer generous financial contributions. The general prognosis was that the emergence of other moderate groups would counterbalance the radicals.

However, the younger Gulf generations are now unconvinced that moderation would follow the establishment of a Palestinian state. They believe it is more likely that a fully independent Palestinian state would itself be hostage to radical forces, and would in fact become an extreme source of instability in the region.

MBS and MBZ believe that establishing a Palestinian state would mean handing Iran and Sunni political Islamists another Arab capital to control and influence. Iranian influence among Palestinian groups has solidified over the years, and the two crown princes’ assessment is that it is irreversible.

They are fortified in that position by the example of Gaza. Sunni political Islamists have run the Strip disastrously for over a decade, opening the door for Qatar and Turkey to project influence there. That this is also leading to conflict in Egypt further reinforces the belief that an independent Palestine would be a source of instability.

MBS and MBZ are certainly not foolish enough to lobby for and fund the establishment of a state that would most certainly be an Iranian client state, analogous to a Soviet-era satellite state.

Despite this, many Western policymakers still fantasize about the idea that the Gulf countries could provide money to birth and develop a Palestinian state – indeed, this is reportedly one of the founding principles of the Trump-Kushner peace plan.

U.S. President Donald Trump shakes hands with Saudi Arabia's Crown Prince Mohammed bin Salman in the Oval Office at the White House in Washington, DC, U.S. March 20, 2018
U.S. President Donald Trump shakes hands with Saudi Arabia’s Crown Prince Mohammed bin Salman in the Oval Office at the White House in Washington, DC, U.S. March 20, 2018 \ Jonathan Ernst/ REUTERS

That is never going to happen. Those who actively dictate policy in the Gulf are convinced that every dollar the Saudis give to the Palestinians means handing it to Iran. The Saudis and Emirates are likely to promise to provide financial assistance in public, but U.S. policymakers should not believe that they would ever deliver when push really comes to shove.

For those in Washington dreaming of another peace process breakthrough, another Rabin-Arafat handshake on the White House lawn, this time midwifed by the Gulf – there is little chance this will become anything more than a mirage.

The Middle East has moved on from the 1990s, and just like the Saudis and Emirates have woken up to the facts of the Palestinians’ political biases, policymakers in D.C. must keep up and evolve their thinking to better serve American interests, and not repeat the mistakes of the past.

Haisam Hassanein is a PhD candidate at Tel Aviv University and a former Glazer Fellow at The Washington Institute for Near East Policy. Twitter: @HaisamHassanei1 

(ZH) “What They Did Was Unacceptable”: Saudis To Dump Canadian Assets “No Matter The Cost”

(ZHUpdate 2: Saudi foreign minister Adel Al-Jubeir has made a new statement – attempting to talk back The Kingdom’s rhetoric somewhat (or perhaps avoid sending its Canadian asset prices tumbling into a firesale).

“What Canada did was unacceptable.

Canada committed a big mistake, must rectify it.

We in Saudi Arabia do not accept dictation, interference.

There is no need for mediation, Canada knows what it needs to do, it must change its policies, ways with The Kingdom.

The Saudi measures only apply to new investments [ZH: so no immediate asset dumping]

Saudis are still weighing other measures to take against Canada.

The Loonie rebounded:

*  *  *

Update 1: Russia has sided with Saudi Arabia in the ongoing diplomatic rift with Canada on Wednesday, issuing a statement accusing the latter of attempting to “politicize human rights issues.”

The statement said Russia rejected the “authoritative tone” of Canada toward Saudi Arabia, adding that the Kingdom had the full sovereign right to manage its own affairs.

“We consistently and firmly advocate compliance with universal human rights with due regard for the specific national customs and traditions that developed in a given country over a long period of time. We have always said that the politicization of human rights matters is unacceptable,” Russian Foreign Ministry spokeswoman Maria Zakharova said in a statement posted on the ministry’s website.

*  *  *

The Saudis have escalated their fury towards Trudeau’s “progressive” propaganda. Having expelled the Canadian ambassador, froze new trade and investment with the G7 member, suspended a student exchange program and halted Saudi Arabian Airlines flights to Canada, the Saudis are stepping up their pressure very directly.

The FT reports that the Saudi central bank and state pension funds have instructed their overseas asset managers to dispose of their Canadian equities, bonds and cash holdings “no matter the cost.”

Third-party managers are estimated to be mandated to invest more than $100bn of Saudi funds in global markets, executives say. While the proportion of that figure invested in Canadian holdings would be “fairly small in absolute terms,” the asset sale sent a strong message, one of the people said.

The sell-off began on Tuesday and underlines how the Gulf monarchy is flexing its financial and political muscle to warn foreign powers against what it regards as interference in its sovereign affairs.

“This is severe stuff,” said one banker.

The most immediate reaction appears to be in the currency…

Why are the Saudis doing this (aside from responding to Ottawa’s criticism of the arrest of a female activist)?

One Twitter wit noted – “to secure funding for the Tesla LBO?”

(BBG) Saudi Arabia Crucifies Myanmar Man for Theft and Murder

(BBG) Saudi Arabia executed and crucified a Myanmar man in the holy city of Mecca on Wednesday in a rare form of punishment reserved for the most egregious crimes.

Elias Abulkalaam Jamaleddeen was accused of breaking into the home of a woman from Myanmar, firing a weapon in it then repeatedly stabbing her, which led to her death, the official Saudi Press Agency reported, citing an Interior Ministry statement. He was also accused of stealing weapons and trying to kill another man whose home he broke into, as well as attempting to rape a woman.

The ruling was supported by the country’s supreme court and endorsed by the king.

Crucifixions in Saudi Arabia entail hanging a body in public after an execution, and are unusual. A Yemeni man was crucified in 2010 for raping and killing a girl and shooting dead her father.

(ZH) “Qatar Island”: Saudis Launch Massive Canal Project To Cut Off Neighbor

(ZH) It almost sounds too insane to be believed, but Saudi Arabia’s move to further isolate neighboring Arab rival Qatar by literally turning it into an island is but the latest in an intense year long feud between the two countries that has already produced its fair share of bizarre headlines.

Tiny but ultra-wealthy Qatar is a peninsula which shares a 37.5 mile border (60km) with Saudi Arabia on the kingdom’s northeast side and juts out from the Arabian peninsula about 100 miles into the Persian Gulf.

Saudi media revealed this week the kingdom is quickly moving forward with ambitious plans to dig a 200 meter wide and 15-10 meter deep canal the entire length of the land border, effectively creating ‘Qatar island’ — as some Mideast news sources are already calling it.

Of course, the Qataris don’t appear to have a say in their own country’s geographic fate, and the Saudis and Emirates further plan to locate nuclear waste sites and a military base along the proposed canal to boot. 

The so-called “Salwa Marine Canal Project” has reportedly opened up to bidding among five international companies that specialize in digging canals, with bids closing next Monday and the project to be awarded in 90 days, according to regional sources. The canal project is estimated to cost up to 2.8 billion riyals ($750 million) according to Saudi-based Sabq newspaper.

Qatar has remained defiant throughout its unprecedented summer diplomatic crisis with Saudi Arabia and other Gulf Cooperation Council (GCC) states which have brought immense pressure to bear on the oil and gas rich monarchy through a complete economic and diplomatic blockade imposed by its neighbors. Saudi and UAE officials have long accused Qatar of supporting terrorism, aligning with Iran, and meddling in the affairs of its gulf neighbors in a crisis that has resulted in the near complete unraveling of the GCC. 

The Salwa canal was first announced in April but many observers dismissed it as but the latest in outrageous Saudi claims and punitive measures aimed at Qatar.

Newsweek reported in early April:

Apparently, Riyadh is not content with traditional isolation. The so-called “Salwa Marine Canal Project” would establish a military base in one area of the border and a nuclear waste site in another. The waste would come from the nuclear reactors that Saudi Arabia is planning to build. The border would then be clearly demarcated by a wide canal. The UAE would also build a nuclear waste site at its border’s closest point to Qatar.

But it now appears to be concretely advancing and not a bluff.

Beyond nuclear waste and military installations, Riyadh further envisages beach resorts in Salwa, Sakak, Khor al-Adeed and Ras Abu Qamees, and marinas for yachts and leisure.

According to Dubai-based Gulf News the canal will be fully within the Saudi side of the border, meaning Qatar will have no rights or access to the waterway. Gulf News further (somewhat enthusiastically) notes that“In April, Saudi border guards took control of the Salwa crossing, effectively cutting off Qatar’s only terrestrial link with the outside world.”

The project will reportedly be funded entirely but UAE and Saudi private investors, and it will be interesting to see if it actually comes to fruition. If so, building what is essentially a massive 60km long mote to physically cut off an entire country would certainly constitute a first in the history of diplomatic warfare.

P.O. (BBG) Saudi Govt Is Said to Halt Orders from German Companies: Spiegel

P.O.

…A huge slap in the face and rebuff of Germany by Saudi Arabia…

…And i have to say that if i were in the shoes of the Saudi Government i         would have done the exact same thing.

…Iran is an obvious and fierce enemy of Saudi Arabia.

…So why would Saudi Arabia promote business and give money to a Country that    defends its enemy…

FCMP

(Bloomberg) — Crown Prince and First Deputy Prime Minister
Mohammed bin Salman ordered a halt to government orders for
German companies, German weekly Der Spiegel reports without
saying where it got the information.
* Cites anger over German position on Iran
* Large companies including Daimler, Siemens, Bayer, Boehringer
affected
* 800 German companies are active in Saudi Arabia; exports from
Germany amounted to EU6.6b in 2017: Spiegel
* NOTE, Mar. 18: Saudi Arabia Is Said to Block Some German
Business Over Rift
* NOTE, Nov. 18: Saudi Arabia Recalls Ambassador to Germany, SPA
Says

(BBG) Boeing deploys executive to Rolls-Royce as 787 engine woes mount

(BBG) Leverkuhn’s special assignment to Rolls signals the importance Boeing is placing on containing the disruption to its marquee jetliner

Boeing Co. has dispatched a prominent executive to help Rolls-Royce Holdings Plc work through escalating engine problems that have grounded dozens of 787 Dreamliners.

Keith Leverkuhn is serving as Boeing’s eyes and ears at Rolls factories in Singapore and Derby, England, where the Trent 1000 engine is manufactured and being repaired. Leverkuhn, an engineer with expertise in propulsion, is best-known for steering Boeing’s 737 Max through development to its commercial debut a year ago, months ahead of schedule.

Leverkuhn’s special assignment to Rolls signals the importance Boeing is placing on containing the disruption to its marquee jetliner — and placating airline customers as the crucial summer travel season approaches. About 34 Dreamliners are parked and awaiting repaired engines, and the number is at risk of rising in the coming months, said people familiar with the matter, who asked not to be identified because the details are private.

“We’re managing our assets both on the production line and in field support to try and minimise impact to our global airline customers,” Boeing Chief Executive Officer Dennis Muilenburg said on the sidelines of the manufacturer’s April 30 annual meeting. “This is very important to us. While the new engines going into the production system are not affected, engines in the installed fleet around the world — they need our attention.”

It’s not unusual for aerospace manufacturers to deploy teams of engineers or mechanics to help struggling suppliers to troubleshoot problems. Less common is Boeing Commercial Airplanes Chief Kevin McAllister’s decision to divert a vice president like Leverkuhn, 57, from an assignment to shepherd the upgraded version of the 737, the company’s biggest source of profit.

‘Partnership Working’

“We said we would work as closely as possible with Boeing and our airline customers, and this is a great example of that partnership working,” London-based Rolls said in an email.

Durability problems on engines that power about a quarter of the global 787 fleet first emerged in 2016, and intensified in December when Air New Zealand Dreamliners suffered in-flight turbine damage on successive days. The problems centre on potential cracking of the Trent’s intermediate pressure compressor blades, and it could take Rolls four years to retrofit the 383 affected engines with redesigned components.

The number of parked planes mushroomed after US regulators in April ordered stepped-up inspections of the engine variant, known as the Trent 1000 Package C.

Dreamliner operators that rely on the power plant for so-called ETOPS routes, typically over ocean routes with few diversionary airports, are now required to check for signs of cracking or unusual wear after every 80 flights. That means taking the planes out of service on a near-monthly basis — far more onerous than the previous standard required by regulators of checks every 200 flights.

Blade Repairs

About 30 per cent of inspected engines have been removed from the wing for repairs, the people familiar with the matter said. The failure rate could worsen as Dreamliners that have been re-routed to non-ETOPS flights come in for inspection.

“Now, if the blade fails the inspection, then the engines come off wing, go into the shop,” Aengus Kelly, CEO of AerCap Holdings NV, the world’s largest aircraft lessor, told investors earlier this month. “The problem at the moment is that there are not enough spare engines.”

That shortage is “what is driving most of the aeroplanes that are on the ground at the moment. A number of them are our aeroplanes,” Kelly added.

The bottlenecks are compounded by Rolls’s business model, which emphasises handling engine maintenance in-house or through a limited number of vendors — unlike the global repair networks favoured by competitors such as General Electric Co.

‘Stressed Aftermarket’

“It’s going to stress what is already a very stressed aftermarket supply chain,” said Ken Herbert, an analyst with Canaccord Genuity.

For Boeing, the main risk is damaging a reputation for efficiency that the 787 has garnered since its initial stumbles that delayed the plane’s 2011 debut by three years, Herbert said in an interview. So far, the plane maker seems confident that Rolls’s engine woes won’t disrupt Boeing’s plans to speed output of the wide-body to a record 14-jet monthly pace in mid-2019, he said.

About 70 per cent of Dreamliners due to be delivered through early 2019 will sport a GE engine that’s not affected by the cracking issues, easing the pressure on Rolls, said Uresh Sheth, a blogger whose posts on Dreamliner production are closely followed by Wall Street.

While Trent-powered 787s are rolling off Boeing’s final assembly lines without engines — but with weights dangling off their engine pylons to ensure balance — there’s been little disruption to production, Sheth said. Seven “gliders” are parked outside its factories, he said in an interview, using the industry nickname for assembled aircraft awaiting engines.

‘Significant Delays’

“Safety remains our top priority as we work through ongoing inspections with Rolls-Royce Trent 1000 Package C engines,” Paul Bergman, a Boeing spokesman, said in an email. “Teams are engaged with Rolls-Royce, and deployed worldwide with customers to mitigate service disruption.”

Latam Airlines Group has been working with Boeing and Rolls as it rushes to limit the damage since seven of its 24 Dreamliners are out of service. The Santiago, Chile-based carrier had ordered the carbon-fiber aircraft to serve as its workhorses on long-range flights, particularly across the Pacific to Australia and New Zealand.

Facing “significant delays in processing times,” Latam has taken several steps to maintain its flight schedule, including leasing five aircraft and reassigning jetliners in its existing fleet to new routes, a spokesman for the company said.

+++ (BBG) Saudis Shoot Down Missiles, Drones as Mideast Tensions Flare

(BBG) Saudi Arabia said it intercepted ballistic missiles and shot down drones sent from Yemen, in the latest attack by pro-Iranian rebels that showed improved military capabilities more than three years into the conflict.

One missile was intercepted over Riyadh, with loud blasts heard in the night sky above the Saudi capital on Wednesday. Two other missiles were intercepted over the southern areas of Jazan and Najran, authorities said. The Saudi-led coalition fighting the Houthis in Yemen said it also downed a drone targeting an airport in the southwestern province of Abha and another in Jazan.

The missiles were fired just hours after President Donald Trump confirmed the U.S. would strike Syrian President Bashar al-Assad, whose forces are backed by Russia and Iran, over a suspected chemical weapons attack. The State Department said the Houthi attacks on Saudi population centers were “fueled by the Iranian regime’s dangerous proliferation of weapons and destabilizing activities in the region.”

“It’s hard to see the timing of the latest Houthi strike on Saudi Arabia as purely coincidental,” said Hani Sabra, founder of Advisory, a New York-based consultancy. The attack is probably an Iranian message to embarrass Saudi Crown Prince Mohammed bin Salman, who is wrapping up a foreign tour to world capitals and has repeatedly accused Iran of seeking to destabilize the kingdom, he said.

The Houthis have been aiming their ballistic missiles at major Saudi cities and targets more regularly in the past few months than any other period in the three-year war. The kingdom and its allies accuse Iran of arming the Houthis, a charge Tehran denies.

Iranian Message?

“The Houthis have indeed been stepping up their attacks on their northern neighbor, but with regional tension sharply escalating, particularly as a result of recent Syria-related developments, Iran, through the Houthis, probably wanted to send Crown Prince Mohammed bin Salman a message,” Sabra said.

A missile fired in December was aimed at the main royal palace during a cabinet session headed by King Salman. Last month, Saudi defenses intercepted seven ballistic missiles fired at Riyadh and other cities by the Houthis, the biggest such barrage since the war began in March 2015.

The Houthis, who have repeatedly targeted the kingdom in retaliation for its offensive inside Yemen, said Wednesday’s attack on Riyadh was directed at the defense ministry.

Increasing Risks

“The Houthis’ capabilities have improved — with outside assistance — over the course of the conflict, and it is reasonable to expect that they will continue to do so for the duration of the conflict,” said Allison Wood, an analyst with Control Risks. And while Saudi Arabia has one of the world’s best defense systems, the risk of a missile or a drone hitting targets “at some point” will increase with more regular attacks, he said.

Saudi Arabia and its allies have been able to recover areas in southern Yemen from the Houthis, but the rebels still control the capital Sana’a and territories in the north.

The conflict has caused a humanitarian disaster with thousands of civilian deaths, disease, hunger and displacement.

+++ V.V.I. (BBG) Saudi Crown Prince Says Israel Has Right to State: Atlantic

(Bloomberg) — Saudi Crown Prince Mohammed Bin Salman said
in interview published in The Atlantic that he believed both
Israelis and Palestinians have right to their own land, but that
a peace agreement is needed to assure stability.
* “We have religious concerns about the fate of the holy mosque
in Jerusalem and about the rights of the Palestinian people.
This is what we have. We don’t have any objection against any
other people”
* “There are a lot of interests we share with Israel and if
there is peace, there would be a lot of interest between Israel
and the Gulf Cooperation Council countries and countries like
Egypt and Jordan”
* Said Saudi government does not finance terrorist groups
** “Yes, there are people from Saudi Arabia who financed
terrorist groups. This is against Saudi law”
* Bin Salman hopes to be friendly with Qatar again; said one
problem in relationship is that they have not been letting the
country use the financial system to collect money from Saudis to
give to extremist organizations
** “We hope they learn fast. It depends on them”
* On Iran’s supreme leader: he’s “trying to conquer the world.
He believes he owns the world. They are both evil guys. He is
the Hitler of the Middle East”
* On Yemen: there are “bad decisions and worse decisions”
** “Our campaign is focused on helping the legitimate government
and bringing stability”
* Bin Salman says he wants to “move on” from guardianship
customs for women and “figure out a way to treat this that
doesn’t harm families and doesn’t harm the culture”
** “Saudis don’t want to lose their identity but we want to be
part of the global culture”
* NOTE: Earlier, A Wild Ride Behind the Scenes as Saudi Crown
Prince Does America

(Reuters) Saudi crown prince says Israelis have right to their own land

(Reuters) Saudi Arabia’s crown prince said Israelis are entitled to live peacefully on their own land in an interview published on Monday in U.S. magazine The Atlantic, another public sign of ties between Riyadh and Tel Aviv appearing to grow closer.

Asked if he believes the Jewish people have a right to a nation-state in at least part of their ancestral homeland, Mohammed bin Salman was quoted as saying:

“I believe the Palestinians and the Israelis have the right to have their own land. But we have to have a peace agreement to assure the stability for everyone and to have normal relations.”

Saudi Arabia – birthplace of Islam and home to its holiest shrines – does not recognize Israel. It has maintained for years that normalizing relations hinges on Israeli withdrawal from Arab lands captured in the 1967 Middle East war, territory Palestinians seek for a future state.

“We have religious concerns about the fate of the holy mosque in Jerusalem and about the rights of the Palestinian people. This is what we have. We don’t have any objection against any other people,” said Prince Mohammed who is touring the United States to drum up investments and support for his efforts to contain Iranian influence.

Increased tension between Tehran and Riyadh has fueled speculation that shared interests may push Saudi Arabia and Israel to work together against what they see as a common Iranian threat.

“There are a lot of interests we share with Israel and if there is peace, there would be a lot of interest between Israel and the Gulf Cooperation Council countries”, Prince Mohammed added.

Saudi Arabia opened its airspace for the first time to a commercial flight to Israel last month, which an Israeli official hailed as historic following two years of efforts.

In November, an Israeli cabinet member disclosed covert contacts with Saudi Arabia, a rare acknowledgment of long-rumored secret dealings which Riyadh still denies.

Saudi Arabia condemned U.S. President Donald Trump’s move to recognize Jerusalem as the capital of Israel last year, but Arab officials told Reuters at the time that Riyadh appears to be on board with a broader U.S. strategy for an Israeli-Palestinian peace plan still in its early phases of development.

(BN) Saudi Crown Prince Goes to Washington With a Reputation at Stake

…No wonder…

(Bloomberg) — Saudi Arabia’s crown prince, Mohammed bin
Salman, arrives in Washington on a grand tour of the U.S. this
week seeking to burnish his credentials as a decisive reformer
to do business with.
With reports of brutality at home, delays to his plans to
transform the economy and a deepening proxy conflict with Iran
in neighboring Yemen, the prince’s charm offensive to the
American capitals of government, finance and entertainment has
taken on more urgency.
The 32-year-old prince will meet Donald Trump on March 20,
his first trip to the U.S. since taking over as de facto leader
of the world’s largest oil exporter. The aim is to strengthen
their bond after he rolled out the red carpet for the U.S.
president last May in Riyadh. On that visit, both sides played
up their mutual interests in containing Iran, tackling Islamic
extremists and enhancing business ties.
Since then, things have changed. Prince Mohammed locked up
dozens of the Saudi business elite in November for about three
months in a declared crackdown on corruption. The kingdom is
also likely to delay the sale of a stake in oil giant Aramco
until next year. Cuts to government subsidies are proving
trickier and there’s uncertainty about how the country’s ultra-
conservatives are reacting to social changes.
Prince Mohammed “will try to convince the U.S. business
community that the anti-corruption campaign is not a threat to
commercial operations in Saudi Arabia,” said Hani Sabra, founder
of New York-based Alef Advisory. “He will play up his social
reform agenda to try to repair the image of Saudi Arabia in the
U.S. He will advance the narrative that he’s the steward that
will take the country in a more liberal direction.”
The White House said the visit will strengthen ties between
the U.S. and Saudi Arabia. Prince Mohammed will also dine with
National Security Adviser H.R. McMaster to discuss $35 billion
of business deals, Iran’s threat to their interests and the
humanitarian crisis in Yemen, according to a National Security
Council spokesperson.
There are also companies the Saudis are courting to help
shift their economy away from oil. Planned meetings include the
heads of Apple Inc. and Google as well as top movie executives
on a tour with likely stops in New York, Boston, Los Angeles,
San Francisco and Houston, according to person familiar with the
itinerary. They spoke on condition of anonymity because the
plans aren’t final.
Saudi officials and those at Apple and Google parent
Alphabet Inc., which is in talks with Aramco to jointly build a
technology hub in the kingdom, declined to comment.Ritz Report
Prince Mohammed received a boost to his narrative last week
when Goldman Sachs Group Inc., an erstwhile adviser to companies
and governments in the Middle East, said it would deploy its own
money in Saudi Arabia for the first time.
The image of a place to do business, though, took a hit
earlier this month.
The New York Timesreported on March 11 that 17 of those
detained at the Ritz as part of the purge were hospitalized for
physical abuse and one later died. Others were stripped of their
wealth without due process. The Saudi government has denied that
any torture occurred during their detention.
The U.S. is just the latest stop for Prince Mohammed. But
his handshakes with the Egyptian leadership and dinner with the
British monarchy in recent weeks haven’t obscured setbacks in
his foreign policy.
The Saudi-led coalition is bogged down in a three-year old
war in Yemen. The push last June to isolate Qatar has gone
nowhere, indeed the natural gas producer even managed to improve
ties with the U.S. albeit under the outgoing Secretary of State
Rex Tillerson.
Yemen loomed large on his trip this month to the U.K. In
London, about 100 protesters carried signs near 10 Downing
Street denouncing Saudi Arabia’s military action. “Do Not
Welcome Killers” was written next to a picture of Prince
Mohammed.
His foreign policy “will raise questions among senior
officials of the Trump administration and other governments
about his ability to achieve his goals,” said James M. Dorsey, a
Middle East specialist at Singapore’s Nanyang Technological
University. “The New York Times report will also likely make
foreign investors even more hesitant than they have been since
the November purge.”
The public relations machine is in full swing. Ahead of the
prince’s visit to the U.K., Saudi Arabia advertised around
London with placards declaring “he is creating a new, vibrant
Saudi Arabia.”
He can also count on the support of liberal Saudis who like
the social changes he is bringing about: the right for women to
drive, movie theaters and more entertainment.
The enthusiasm for change was on display at a gallery in
London, where Saudis in western attire and their European fans
sipped fresh juices and surveyed work from some of the kingdom’s
leading artists.
“We are trying to give the viewer a picture more whole
about Saudi Arabia,” Raneem Zaki Farsi, the curator of the
exhibition, said as musicians played classical Arabic music. “We
created a narrative through the art works that gives the viewer
more aspects about the kingdom. This is just the beginning.”
There was also a financial dividend, one the Saudi
government will be keen to advance further in the U.S. It signed
about $2.1 billion in deals with Britain, including one between
Aramco and Royal Dutch Shell Plc. The kingdom also signed a
memorandum of intent with the British government to purchase
fighter jets.
The key now for the crown prince is to cement his
relationship with the Trump administration and bring that
message home, said Paul Pillar, a former CIA officer who’s know
a professor at Georgetown University.
“Most Saudis realize that continued support from, and close
relations with, the U.S. are in Saudi interests,” he said. “A
demonstrated adeptness in handling the relationship with
Washington can cancel out some other policy setbacks, either
foreign or domestic.”

(GB) Alwaleed sells Damascus hotel stake to Assad-linked businessman – report

Sold out of his own free will…?
I wouldn’t bet one cent on it.

FCMP

(GB)The deal is said to have taken place while the businessman was still detained under Saudi’s anti-corruption drive.


Saudi billionaire Prince Alwaleed bin Talal has reportedly sold his stake in the Four Season hotel in Damascus to a Syrian businessman linked to President Bashar al-Assad.

The Financial Times cited sources as confirming the sale, which was completed while Alwaleed was still detained as part of Saudi’s Arabia’s November anti-corruption drive.

The buyer was Samer Foz, a businessman with close ties to Assad’s inner circle, according to the publication.

Alwaleed was released from Riyadh’s opulent Ritz-Carlton hotel, used as a luxury prison for those detained in the corruption purge, at the end of January.

He is reported to have handed over assets in exchange for his freedom, like hundreds of other businessmen, royals and government officials that were detained, but has denied any settlement took place.

The billionaire’s investment firm, Kingdom Holding, had been divesting its stakes in hotels long before Alwaleed’s detention.

Reports in January suggested it also sold its stake in the Four Seasons Beirut for $100-$115m including debt and was in the process of a similar deal for its stake in Beirut’s Movenpick hotel.

Sources told the FT that the Damascus Four Seasons transaction generated a larger sum than the one in Beirut.

However, it said the deal could stir controversy given the sensitivity of dealing with the Syrian regime.

Foz is said to have businesses across the Middle East ranging from a water company to transport, cement and contracting, investments in hotels and a gold mine in Turkey.

He uses Dubai as a business hub, according to the publication.

(CNBC) Saudi king shakes up military leadership; names new generation to economic, security roles

(CNBC)

  • Saudi Arabia’s King Salman announced a reshuffling of military leadership and made new appointments to economic and security roles.
  • The military changes were seen as a sign of frustration with the war in Yemen, but the Saudi government said the changes were part of a normal rotation.
  • The appointments also included the rare naming of a woman to a deputy minister role.

Saudi Arabia's King Salman

Yuri Kadobnov | Reuters

Saudi Arabia’s King Salman, in a series of late-night decrees, replaced top military leaders, promoted others and assigned new younger officials in economic and security roles, according to the Saudi Press Agency.

The king terminated both the commander of air defenses and the military chief of staff and assigned new leaders to the air defense and land forces. The decree said the changes were made on the recommendation of the minister of defense, who is the Crown Prince Mohammed bin Salman.

“These appointments were part of a normal rotation in line with the new Ministry of Defense development plan. While some senior officers who had reached retirement age left the service, others were promoted or moved to newly created positions,” the Saudi Arabian government said in a statement to NBC News.

But some analysts saw the military changes as the result of frustration with the three-year-old war in Yemen against the Iran-backed Houthis. The crown prince was the architect of the war.

“The answer is Yemen, but whether it means there’s going to be a change in Yemen policy or whether they’re going to bang their heads against the same brick wall, I don’t know,” said Simon Henderson, Washington Institute director, Gulf and Energy Policy Program.

A series of other decrees were also issued, assigning some mayoral posts and a new undersecretary of the Ministry of Interior for security affairs. In a rare move, a woman, Tamadur bint Youssef al-Ramah was named deputy minister of labor.

Prince Turki bin Talal was named deputy governor of Asir province. The prince is the brother of Prince Alwaleed Bin Talal, who was arrested in the government’s anti-corruption sweep.

The new appointments were seen by some analysts as an effort to promote younger officials, who would be loyal to the crown prince and promote his Vision 2030. Vision 2030 is a wide-ranging program that is aimed at transforming the kingdom economically and socially and making it less dependent on oil.

“It’s a generational revolution in Saudi Arabia where his base of support is decidedly millennial,” said Helima Croft, head of global commodities strategy at RBC.

Croft said the crown prince is crafting a new power base and has growing support among everyday Saudis.

P.O. (BBG) Saudi Wealth Remains Hidden as Government Pursues $100 Billion

P.O.
…Extortion…
…That’s what it’s called…
…Regardless of the eventual ilegal acts or not of the detained, to arrest someone and ask for money to release that person is extortion and a crime in itself.
…There is no way around it.
…The reputational damage is behond any calculation, and will not go away as long as people remember.
And will last at least one generation.
Francisco (Abouaf) de Curiel Marques Pereira

(BBG) When the Riyadh Ritz-Carlton starts accepting guest bookings next month, it will be the end of the luxury hotel’s stint as a prison for Saudi Arabian princes, billionaires and dignitaries accused of corruption. It also closes the door on a rare glimpse into the enduring mystery of private wealth in the oil-rich kingdom.

The Bloomberg Billionaires Index, a daily ranking of the world’s 500 richest people, has documented 15 individuals with a combined net worth of $63 billion from Saudi Arabia, a nation of 32 million. In Canada, which has a population of 36 million, the index has counted 31 with a combined $171 billion. In Singapore, a city-state of only 5.6 million people, the index tallies 14 with $85 billion.

The government’s goal of recouping up to $100 billion from the princes and businessmen detained in the purge suggests there may be a lot more wealth hidden in Saudi Arabia. The amount is about equal to the funds it says has been drained from state coffers through corruption.

“Personal wealth is extremely private there,” said Marcus Chenevix, an analyst at investment research firm TS Lombard in London. “It’s no one’s business.”

There are two Saudi royals on the Bloomberg index: Prince Alwaleed bin Talal, who owns publicly traded investment group Kingdom Holding, and Prince Sultan bin Mohammed Al Kabeer, chairman of the country’s biggest dairy company, whose sons were among a group of princes arrested for staging an alleged unlawful protest earlier this month.

Prince Miteb bin Abdullah, former head of the National Guard, paid more than $1 billion for his release three weeks after the November purge. His name wasn’t on any of the world’s wealth rankings at the time. Alwaleed, a backer of Twitter Inc. and Citigroup Inc., could be on the hook for $6 billion.

Crown Prince Mohammed bin Salman, the man behind the crackdown, has been linked to some lavish spending of his own, reportedly dropping more than $1.2 billion on personal assets that include a mansion bought in 2015, a yacht and a Leonardo Da Vinci painting that sold for $450 million, 12 days after he began the purge.

Royal Revenue

Tracking the nation’s billionaires is unusually difficult because financial disclosures are scant. Take the royal family. Thousands of members have probably been receiving stipends from oil in some form since it was first discovered in the 1930s. The income stream could represent a cumulative windfall of more than $260 billion, according to Bloomberg calculations. The payments aren’t detailed in the Saudi budget and are likely doled out before being distributed to the Saudi Arabian Oil Co., say experts, making it virtually untraceable.

Other common avenues of royal self-enrichment have included acting as agents or silent partners for foreign companies, or trading property, where their advantage lies in easy access to the government’s land bank. A leaked 1996 cable published on Wikileaks detailed some of the more nefarious tactics, like defaulting on bank loans and managing “off-budget” state programs.

The true extent of Saudi wealth may even be a mystery to the government itself, which imposes no taxes on income or wealth, so has no reason to assess the personal finances of its citizens. Identifying royals who’ve amassed the kind of wealth that would put them among the world’s richest people is possible only if they break out with a business that’s public or otherwise discloses financials, a rarity for closely held Saudi companies.

“In most societies, wealth gets exposed because people want to expose who’s behind it,” said TS Lombard’s Chenevix. “But if the politicians are the wealthy, if wealth and power are the same thing, that political pressure doesn’t exist.”