Saudi fashion set to steal the show
Arab Fashion Council signs partnership deal with British counterpart to transform Kingdom’s burgeoning style sector
LONDON: A partnership announced on Monday between the Arab Fashion Council (AFC) and the British Fashion Council (BFC) is tipped to mark the dawn of a new season for Saudi designers and the Kingdom’s burgeoning style sector.
Over the course of a multi-year partnership, the BFC will act as a growth partner, helping to deliver a development plan designed to bolster design talent and establish the fashion industry as a key pillar for creative economies across the region.
Speaking at an event to announce the partnership in London on Monday morning, Layla Issa Abuzaid, Saudi Arabia country director at the Arab Fashion Council, said: “Part of our quest is to strengthen the fashion sector in Saudi Arabia, to support talent in a young society where 70 percent of the population is under 30 years of age.
“We are confident that we are on the right track to transforming the fashion industry of the Kingdom into the leading economy sectors for Saudi Arabia, creating new job opportunities, opening markets for Saudi exports and supporting the economic development of the country by becoming part of a world industry worth over $3 trillion.”
The AFC, which aims to unite 22 Arab countries under one umbrella, recently launched its regional office in Riyadh. Princess Noura bint Faisal, honorary president of the Arab Fashion Council, took the
AT last. After a year of pain, the Organization of the Petroleum Exporting Countries (OPEC) and its allies are getting close to reaping the full benefits of their self-restraint on production.
The International Energy Agency, the archrival of OPEC, said in its monthly report on Feb. 13 that oil stocks in the OECD countries had fallen by 55.6 million barrels in December. The stocks overhang should be cleared and back to its seasonal normal level in the second quarter of this year if OPEC and its allies, including Russia, continue cutting production by a little less than 1.8 million barrels a day.
It should be a moment of rejoicing for all OPEC ministers, but for Saudi Energy Minister Khalid Al-Falih, the job is far from done.
In a joint press conference with his Russian counterpart Alexander Novak in Riyadh on Feb. 14, Al-Falih said that OPEC and its allies should continue with their agreed production cuts until the end of the year, even if the market rebalanced earlier.
Al-Falih voiced concern over OECD stocks data and global oil stocks data in general, saying that these figures may not be reliable enough. So it is better to see a slightly overbalanced market — another way of saying a tight market — than exiting the deal early and then realizing that the data is not good and the goal has not been achieved.
Ever since oil prices increased and inventories fell down sharply, there were talks that OPEC and Russian oil companies would consider exiting the cuts deal in June when OPEC next meet. Arguably, Al-Falih is suggesting that exiting the deal this year is not going to happen and media reports on any gradual “exit strategy” by producers should be put to rest.
The deal OPEC has with Russia and others is a golden opportunity that OPEC is trying to seize by looking at cooperation beyond 2018. Why is that? The answer is simple. It is because of shale oil production.
As long as shale oil producers in North America are increasing production, the oil market will always be vulnerable to price swings. It seems that there will be no exit for the producers for the next two to three years, or until shale oil producers run out of steam, and that is not expected before 2022.
The US Energy Information Administration (EIA) has predicted continued development of shale and tight oil and gas resources, which could lead to the US transitioning from a net energy importer to a net energy exporter by 2022. Crude oil production might average above 10 million barrels a day this year, but this level will plateau from 2020 onward.
Forecasting the level of growth in US shale oil production is not easy, the EIA said in its annual energy outlook released in February. This is because shale formations “have relatively little or no production history, and extraction technologies and practices continue to evolve rapidly.” opportunity on Monday to announce the inaugural Arab Fashion Week in Saudi Arabia.
The show will take place in Riyadh next month, but preparations have been underway for some time, Princess Noura told Arab News, adding that she hoped this would be a “major historical moment.”
“We’re opening doors for all international markets to come into Saudi Arabia,” she said.
In such a volatile environment, OPEC and its allies must continue to safeguard the market. However, in order to keep Russia and others in the alliance, the structure of the cooperation needs to be amended to accommodate Russian oil companies that operate on a different model than all of OPEC’s stateowned oil enterprises.
A new agreement is in the pipeline, as Al-Falih said in Riyadh last week. A few days earlier, OPEC’s Secretary-General Mohammed Barkindo told reporters in Cairo that Venezuela is proposing a five-year cooperation between OPEC and non-OPEC allies.
But will OPEC succeed in keeping Russian oil companies and other producers in the agreement? We will need to wait and see as any decision on oil policy in Russia comes from President Vladimir Putin. The coordination between Riyadh and Moscow now is impressive and appears promising, but that is not enough because there are many variables and both countries have different long-term energy goals.
Meanwhile, it is interesting to see how the comments of the Saudi energy minister develop and evolve. In March last year, during CERA Week in Houston, Al-Falih said that producers may not need to cut production beyond the first six months of 2017. Later in the year, he emphasized the need for cuts to continue until the goal of bringing down the OECD stocks to the five-year average is met. Now, Al-Falih is saying that this goal may not be achieved and a new definition of a normal level for global oil inventories is needed — and that is what OPEC and Russia will work on until the next meeting of ministers in Jeddah in April.
A few months ago, I wrote a column in this newspaper saying that the goal of bringing oil stocks down to their normal level is going to be a “moving average.” Today, the situation hasn’t changed and the goal of balancing the market will remain a moving target as the purposes behind the agreement keep changing and the market dynamic keeps developing.
OPEC and Russia need to establish a longterm deal and institutionalize the current agreement. The Russian reluctance to commit for longer must be abandoned, and OPEC must be unified, with its members sharing the burden of the deal equally, in order for this cooperation to go forward.
So far, the entire agreement rests on the shoulders of Russia and Saudi Arabia, with the Saudis making the biggest sacrifice among all producers. There are still many gaps to fill in the current agreement, given the situation with Libya and Nigeria. OPEC, therefore, must shape up before going into any long-term deal.
Wael Mahdi is an energy reporter specializing on OPEC and a co-author of “OPEC in a Shale Oil World: Where to Next?” He can be reached on Twitter @waelmahdi
In a statement, Princess Noura said the new alliance “reflects the global interest in our vision to transform the fashion and retail sector in Saudi Arabia into both a regional and global destination.
“This can only happen by stimulating local and regional industry, by encouraging trade exchange and global business in line with the Vision 2030, as our gateway to a future that reflects the cultural image of Saudi Arabia and its people.”
Abuzaid said: “By launching the first Arab Fashion Week in Riyadh, we are aiming at more than to organize a world-class fashion event. We believe that to promote the fashion sector will support other economy sectors such as tourism, hospitality, travel and trade. Our fashion sector is among the fastest growing in the world.”
Caroline Rush, chief executive of the British Fashion Council, said: “We look forward to working with AFC as they develop their fashion infrastructure and community. We also look forward to developing opportunities for brands and businesses to expand into the Arabic countries through this new relationship with the AFC, who are experts in their market.”