Opel Price, a specialist in oil news, said the sharp drop in world oil prices and the fallout from the killing of Saudi journalist Jamal Khashoggi contributed to the rise in interest rates on Saudi sovereign bonds.
Saudi Arabia's interest rate for 2028 rose sharply last week to 4.6 percent, well above the 3-year US 10-year bond rate.
The return on tradable Saudi certificates of deposit increased by 96 basis points in the first quarter of the year, an increase of 41%, the highest increase in 40 certificates of deposit followed by the Bloomberg index.
The decline in global crude prices has contributed to the increase in interest on Saudi bonds, an increase that reflects the increased risk associated with the purchase of these bonds, especially as oil revenues account for 90% of Saudi export revenues and 42% of GDP. $ 75 a barrel to about $ 55.
International concerns about the Saudi government's involvement in the murder of journalist Jamal Khashoggi earlier this month have increased the likelihood that the United States will impose sanctions on Riyadh.
Trump Management
Opel Price adds that despite Saudi Arabia's difficult geopolitical situation, this situation is unlikely to deteriorate any more. This is due to the exclusion of US President Donald Trump's administration from imposing large-scale sanctions on the Saudi regime for Khashoggi's crime, despite pressure from him. Members of Congress.
The US administration is prepared to turn a blind eye to Riyadh's human rights violations in order to implement the tactical agreement between the two countries on the world oil markets. The US is pushing for a reduction in the revenues of Iran's oil exports to zero under sanctions. On the stability of crude prices as the largest oil exporter in the world.
Opel Price says no one expects oil prices to fall to 2014 levels when they fall below $ 30 a barrel, giving investors a significant margin in oil markets.