Why South Sudan should mourn dead Saudi’s King Abdullah Ibn Saud

BY: Deng Leuth Yuang, CALGARY, Alberta, CANADA, JAN/24/2015, SSN;

“The fear of the unknown is going to be supportive to crude oil prices. King Abdullah was the architect of the current strategy to keep production high and force out smaller players instead of cutting,” said John Kilduff, partner at Again Capital LLC in New York.

Following the death of Saudi Arabia King, the US West Texas Intermediate benchmark rose by more than 2% selling at $47.76 a barrel and the international Brent Crude benchmark rose by more than 1.5% selling at $49.10 a barrel.

Wow! A world of Unbelievables, a Little United States of America in the heart of Middle East is exerting its pressure upon world’s energy giants – oil and gas economies, companies and individual dealers to either adjust, stay put or do away with oil. Unbelievable!

This brings me to the South Sudan’s economy. There was some uproar among certain quarters of South Sudanese when Pres. Salva Kiir sent condolences to the people of the Kingdom of Saudi Arabia for the death of their leader. These critics claimed that late King Abdullah was an Islamic Jihadist, and hence there are better things Mr. Kiir should spend his time on such as expediting the peace process or mourning those killed in the country by his self-made senseless war.

That is great, but one thing is crystal clear. I do think President Kiir was playing out his international diplomatic role as a leader in his own right to ‘appease and recognize the Kingdom’ as an important partner in the world market today.

In any particular market set up, there are two main sets of competitors, the major vs the fringe. Saudi Arabia is a major player whereas South Sudan is a fringe or minor.

Actions by Saudi Arabia can send waves across the energy markets whereas South Sudan’s actions are just a drop in the ocean.

The answer lies in the production capacities of approximately 9.7 million vs 160, 000 bpd for Kingdom and South Sudan respectively. Look at those numbers!

Henceforth, Saudi Arabia is holding the energy world hostage. How South Sudan economy fares well in the next 2-3 years will be determined neither by US nor the Arusha intra-party or Addis Ababa national peace talks, but by this relatively small superpower, not weaponry or technology but oil guru, the Kingdom of Saudi Arabia!

That is to say, if you live in South Sudan and you want an end to that scarcity of hard currency in Juba, especially that exorbitant Forex rate of up to 7.3 SSP a dollar; or you are looking for US dollars for your overseas treatment, rental and other family obligations such as studies and other accessories, pray to and plead with the new King Salman Ibn Saud to cut oil production in his country.

Saudi Arabia holds the key to South Sudan finding its footing again in the community of nations. Meanwhile, the US government is just a mere spectator waiting for an opportunity from OPEC to wink so as to exploit the situation.

The US laissez faire system is unregulated and run by a myriad of greedy oil companies such as Exxon Mobil, Chevron, BP and others, competing for profits. They won’t cut anything till the invisible hand of the market reigns them out.

However, such intricacies make us to understand why President Kiir did that unremarkable thing to mourn the death of the KING to our economy.

That is the big reason why South Sudan should not go it alone but dance to the tune of other singers.

The commentator is an Economist. Reach him at delyuang@gmail.com

5 Comments

  1. AGUMUT says:

    Saudi Arabia itself is on the brink of war and collapses. Imagine a new king is 79 year old,that mean that Kingdom can not be rule by young people again,but people of USA should thank Obama for keeping US alive today because United States was nearly gone. We have to wait for next president of US in the year 2016 how he or she going to handle that country for next eight years.

  2. Majongdit says:

    Good article and good views. Very few are as articulative as you Mr Deng Leuth

  3. AGUMUT says:

    A new king is almost Octogenarian,Danger and end of fake religion.

  4. J A C Ramba says:

    Mr Yuang the Economist

    I don’t know whether this is about Saudi’s position as a leading Oil producer or about South Sudan’s diplomatic relationship with Saudi Arabia or is it about how the South Sudan government conducts itself?

    However sending condolences to a country that lost its leader is of course a good thing to do.

    What I am not sure about is how President Salva Kiir’s message of condolences to the Saudi ruling family could possibly convince the Al Saud family to cut down Oil production in order to help the ailing economy of South Sudan ?

    I still believe that the US government has more leverage on Saudi Arabia than does any other country in the world – south sudan included.

    The US is set to increase its Oil production as much as it able to do at the moment . The Saudi’s have always played political games with Oil, and so is it this time around.

    The only difference is that instead of the usually cut in Oil production to increase its price and subsequently hit real and perceived enemies, this time they are using the same Oil weapon by producing in excess.

    Of course excess production which drops the price of Oil is also meant to equally harm certain real and perceived enemy economies !

    The Saudi’s will always do what serves their interests best, while others like South Sudan may benefit or lose depending on where the wind is blowing. However on the whole a lower OIl price is better for most underdeveloped countries paradoxically including South Sudan too!

  5. Chol says:

    Mr. Deng Lueth,

    l though economists are always well versed in their economics-cum-politics—-geo-politics to be exact. A well natured human beings cannot gloat over the passing of another human beings, however, you may not like their policies or how they conduct or run their countries and Salva Kiir was just doing the right thing the well-natured human beings always do to other human beings that have passed-on, as a leader of South Sudan.

    But your assertion as to “Why South Sudan should mourn dead Saudi’s King Abdullah Ibn Saud” is absolutely rubbish chap. First of all, your Saudia Arabia is not an independent state, it is a corporate America oversea state—Saudia Arabia is a US 51st state if you want.

    The current fall of oil prices is not the creation of Saudia Arabia as you want others to believe, but a corporate America creation to punish Russia and Iran, over Russia bellligerent in Syria and Ukraine and the involvement of Iran in Syria. Saudia Arabia was just nudged by the US to produce more oil to float market and doing so would rubbish the Russians rouble and tank the Russian economy and the Russians would be forced to stand up to their strongman, Mr. Putin and dethrone him out of power and a guy that would be malleable to corporate America would be throned in and the corporate America would be a winner and the Russians loose.

    With Iran though, it is being pressured to get the hell out of Syria, so that the gulf Arab states of Qatar and Saudia Arabia can pass their gas pipeline through Syria to Europe and the influence of shites would be put on lead in Syria Lebenon and Iraq.

    So the Reason many western leaders were going to Saudia Arabia to go and kiss the dead corpse is not because they admire the Saudia Arabia King, but just a neccessary thing to do—–a geo-political necessary thing to do for that matter. Remember, Saudia Arabia is the opposite of what many western nations stand for?!!

    Just a few hours earlier, President Obama was lecturing the Indians to be respectful of their women, but in Saudia Arabia where women are not allowed to drive their cars, where other religions are persecuted and freedom of speech and opinions are not condoned; Mr. Obama kept his mouth shut.

    So Mr. Deng Lueth, this is all about geo-politics—–Saudia Arabia is a US occupied territory get it chap. And the US don’t want to those monarchies out otherwise, the ISIS/L would take over and they would be a problem to everyone including South Sudan.

    Note: Back cheap oil prices, we the consumers would be the big winners, but the US and the boys in the world streets think; they are punishing Russia and Iran, but they would all be big losers in the long run. This is economics warfare being waged by the US, but the US will lose it and other countries that don’t want to play the US geo-politcal economics warfare would be forced to pay for the US misadventure like in 2008, US caused recesssion.

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