Saudi Arabia Shoulders Oil Output Cuts as Economic Outlook Dims

Here is today’s Foreign Policy brief: Saudi Arabia leads OPEC+ oil production cuts, Democrats appear poised for victory in both Georgia Senate runoff races, and North Korean leader Kim Jong Un admits to failures at party congress.

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The OPEC+ group of oil producing countries have agreed to cut production in February, as Saudi Arabia volunteered to take one million barrels of its oil off the market per day in order to shore up prices.

The decision seems to have done the trick, at least temporarily. The U.S. oil price benchmark passed the $50 dollar mark for the first time since February in the wake of the news.

Russia keeps pumping. The unusual arrangement allows Russia—which had argued for production increases—to pump an additional 65,000 barrels per day in February. Kazakhstan was also permitted to increase output by the same measure, while all other nations hold production steady.

The Saudi decision reflects the uncertain global economic prospects in the year ahead. Vaccine programs, heralded as the quickest route to normalcy, have sputtered in some countries and are potentially years away in others.

A lost decade. The World Bank shares that cautious outlook. On Tuesday, the bank revised down its estimates for global growth in 2021 from a 4.2 percent forecast in June to 4 percent. Ayhan Kose, an acting World Bank vice president, warned of a “lost decade” for economic growth and called on policy makers to “act aggressively to get ahead of the pandemic.”

The end of OPEC? Saudi Arabia’s decision to shoulder the production cuts seems to have kept oil producing countries together, but as Edoardo Campanella argued in November, the group needs to reimagine its role if it is to remain relevant in a changing world.

Democrats ahead in Georgia. Democrat Raphael Warnock has been declared the winner in his race against Republican Sen. Kelly Loeffler while the other race between Jon Ossoff and Sen. David Perdue remains too close to call, although the New York Times predicts Ossoff is likely to win. Warnock has a lead of more than 50,000 votes and Ossoff is ahead by more than 16,000 with most of the uncounted votes remaining in the heavily Democratic Atlanta area. If Democrats win both seats, they would take control of the Senate with Vice President Kamala Harris casting the tie-breaking vote.

Foreign Policy’s Mike Hirsh argues that no matter who prevails in Georgia, the effect on President-elect Joe Biden’s foreign policy is likely to be minimal. “Over the past four years the Senate Republicans have been more willing to challenge President Donald Trump on foreign-policy issues—and thus may end up being more receptive to Biden’s plans, especially when it comes to restoring relations with U.S. allies that have been so damaged during the Trump years,” Hirsh writes.

WHO blocked from China. Members of a World Health Organization team investigating the origins of the coronavirus have been blocked from entering China, as authorities cite visa issues. Mike Ryan, the head of the WHO’s emergency response said he hoped the decision was “just a logistical and bureaucratic issue that can be resolved very quickly.” Talks between the WHO and Chinese authorities on carrying out the investigation have been ongoing since July.

The news comes as Chinese state media has mounted a face-saving information campaign to cast doubt on the coronavirus origin story.

Kim admits failures. North Korean leader Kim Jong Un admitted that his five-year plans had failed to meet goals “on almost every sector” as he addressed the opening of the Worker’s Party congress on Tuesday. Kim is expected to lay out new five-year plans in the coming days. He is also set to announce changes to the country’s leadership structure—with a more senior role for Kim Yo Jong, Kim’s sister, a possibility. 

Hong Kong activists arrested. Roughly 50 Hong Kong pro-democracy activists have been arrested in the single largest police action since new national security laws came into effect in June. Those arrested allegedly broke the new laws by holding an unofficial primary to select candidates for legislative elections last year. Over 600,000 Hong Kong citizens participated in those primaries, which Beijing criticized as a “serious provocation.” One U.S. citizen, a human rights lawyer, was also arrested—in what appears to be the first use of the law to detain a foreign national.

Brexit deal aftermath. Green party members of the European Parliament have called on the European Commission to deny permits to U.K. financial services companies wishing to access the single market unless firmer commitments are made to combat money laundering and tax avoidance—two issues left out of the “rebalancing” provisions in the Brexit deal.

In a letter to European Commission President Ursula von der Leyen and EU chief Brexit negotiator Michel Barnier, the group called on the leaders to use EU leverage to “to the maximum extent in order to gain robust commitments against tax dumping and in favor of financial transparency.”

The war on Chinese tech. A Trump administration executive order has banned eight Chinese-made mobile payment apps, including ones made by giants Tencent and Ant Group in the latest move targeting the Chinese tech sector. The order blamed the apps for practicing “bulk data collection,” putting U.S. national security at risk. It’s unclear whether the ban can take effect in the short-term: A similar ban on the Chinese-owned TikTok app is held up in litigation.

Germany is to add more diversity to the traditionally German names it gives its storms and weather systems following a stunt from an online campaign.

The naming of German weather systems is open to the public as long as they pay fees ranging from 240 euros (cold and wet weather) to 360 euros (sunny). A group called New German Media Makers (NDM), whose aim is to make Germany’s diversity more visible, exploited this fact, buying up the naming rights for the first 14 weather systems of 2021.

Arabic, Greek, Hebrew, Kurdish, Polish, and Turkish names will now appear on a number of pressure systems heading toward the country in 2021. For example, the low-pressure system Ahmet, a Turkish male name, currently sits above Germany.

Sebastian Münzenmaier, a member of parliament for the far-right party Alternative for Germany (AfD)—which has frequently presented immigrants as an existential threat, though not a meteorological one—criticized the campaign, calling it “diversity mania.”

“Making the weather more diverse is only a symbolic step … What’s important is that social diversity finally becomes normal, everywhere,” said Ferda Ataman, the chair of NDM.

That’s it for today.

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