Trump’s vow to promote U.S. oil puts pressure on OPEC states

President Donald Trump’s inaugural promise to unleash the U.S. oil industry and stifle the Biden administration’s push toward renewable fuels produced muted reactions in Saudi Arabia, the world’s No. 2 oil producer after America.

Asked about what Trump’s vow to “drill, baby, drill” and vastly increase U.S. petroleum production meant for OPEC countries, Saudi Aramco CEO Amin Nasser said he’s confident that rising world oil demand – particularly from China – will cushion the impact.

“We still think the market is healthy,” Nasser told Reuters in an interview on Tuesday on the sidelines of the World Economic Forum in Davos, Switzerland. “Last year we averaged around 104.6 million barrels (per day); this year, we’re expecting an additional demand of about 1.3 million barrels … so there is growth in the market.”

UAE Economy Minister Abdulla bin Touq, meanwhile, expressed frustration with the European Union over maintaining his country on its “black list” of countries that are not doing enough to combat money laundering.

Bin Touq said the UAE will hold talks with the E.U. to settle the issue. “I do not understand how the UAE is still on the black list,” he told Bloomberg in an interview at Davos. The Paris-based watchdog Financial Action Task Force’s decision dropped the UAE from its parallel “gray list” last year.

At its pavilion on the Davos Promenade Tuesday morning, the UAE delegation hosted a breakfast talk featuring Minister for Cabinet Affairs Mohammad Al Gergawi, International Holding Co.  CEO Syed Basar Shueb and 2PointZero CEO Mariam Almheiri.

Kushner hails Saudi Arabia as another startup nation

RIYADH, Saudi Arabia — In the absence of any Biden administration officials, veterans of the Trump White House took to the stage at Saudi Arabia’s flagship international conference on Tuesday to remind investors of their accomplishments in connecting Israel and the Arab world.

Jared Kushner, who as a White House senior advisor brokered the Abraham Accords on behalf of former President Donald Trump, his father-in-law, went so far as to hail Saudi Arabia as a “startup nation,” using the nickname Israel earned by generating thousands of technology companies. Kushner, who now runs a private equity firm backed by $2 billion in Saudi investment, is reportedly putting some of the cash in Israeli startups.

“The Abraham Accords peace that was made in 2020 has unleashed a lot of connectivity in the region,” Kushner said at the Future Investment Initiative conference, an annual economic meeting that has been dubbed “Davos in the Desert” and brought 7,000 participants to the plush Ritz Carlton Hotel in the Saudi capital here.

“You see this region now, where Israel, which is a startup nation and the [United Arab Emirates], which is a startup nation, and even Saudi Arabia, which is a startup nation, are starting to think about their future generations,” Kushner said. “I think you’re going to see over the next decade a lot of progress and growth coming from this part of the world.”

The appearance by the 41-year-old founder of Miami-based Affinity Partners served to emphasize the absence of any representatives from the current White House and the simmering hostility between President Joe Biden and Saudi Crown Prince Mohammed bin Salman. Former Treasury Secretary Steve Mnuchin, who also runs a fund backed by Saudi investors, was scheduled to appear at the conference on Wednesday.

While startups founded by Saudi entrepreneurs are few, the kingdom’s $620 billion Public Investment Fund has backed some of the world’s biggest young companies, including WeWork, the provider of shared-office space created by Israeli-American Adam Neumann that was valued at $47 billion before its IPO was withdrawn in 2019. The share sale finally took place a year later and its stock is now worth about $2 billion.

Biden called the Saudi prince a “pariah” during his presidential campaign and later released CIA material connecting him to the killing of Jamal Khashoggi, the Saudi royal court adviser who later became a government critic and a columnist for The Washington Post. The U.S. president traveled to the kingdom in July in a bid to patch up the relationship, but the feud reemerged this month when Saudi Arabia and Russia cooperated to slash oil production from countries in the OPEC+ bloc, raising fuel prices across the world.

When he was president, Trump said the relationship with Saudi Arabia, the biggest U.S. arms customer, was too important to be derailed by the Khashoggi killing. Kushner cultivated a personal relationship with the prince, often referred to by his initials, MBS, and was said to communicate with him frequently through text messages.

While Saudi Arabia has yet to sign the normalization agreements with Israel that the Trump administration brokered with the UAE, Bahrain, Morocco and Sudan, the kingdom allows some Israeli companies to quietly operate within its borders.

“I think the crown prince understands that in order to transform the Saudi economy from an economy that has been almost wholly dependent on oil to one that has a vibrant tech sector, he needs to connect his people to the country that has the most vibrant tech sector in the Middle East, which is Israel,” Mark Dubowitz, CEO of the Foundation for Defense of Democracies, a Washington research institute, told The Circuit.

“What we’re talking about is a process,” Dubowitz, who is attending the conference, said. “Step by step, the kingdom is moving to greater and greater normalization with Israel.”

The conference, started by the prince in 2017 to showcase his ambitious “Vision 2030” plan for diversifying the economy and weaning it from dependence on oil, has been a magnet for some of the world’s most influential business leaders, although many stayed away after the Khashoggi killing. Among those attending this year were JPMorgan Chase CEO Jamie Dimon, Goldman Sachs CEO David Solomon and Blackstone Group CEO Stephen Schwarzman.

Weekly Circuit: Electric vehicle pioneer drives growth of startups + Turkey reconciles with Israel

GOING PLACES

An electric vehicle pioneer drives growth of Mideast transportation startups

Michael Granoff, whose $160 million venture capital fund invests in companies that expand the way people get from one place to another, hates driving the family car to work. Granoff, founder and managing partner of Maniv Mobility, generally commutes to his Tel Aviv office from a northern suburb by train, bus, taxi or riding with a neighbor. For a meeting across town, he often hops on one of the motorized rental scooters clustered on city sidewalks. “I prefer anything than having to sit in traffic and not be productive and be frustrated and then having to park,” Granoff, 53, toldThe Circuit’s Jonathan Ferziger. “It actually doesn’t cost me more.”

Self-driving cars: Granoff is not just trying to save money. He’s an evangelist and battle-scarred veteran in the global revolution to widen vehicular choices. To date, Maniv has made investments in 37 companies spread across eight countries. The businesses range from designing sensors in Israel for self-driving cars and running a Tesla ride-sharing service in Manhattan to unleashing electric scooters on the United Arab Emirates.

Gulf ventures: It’s the Gulf that gets him jazzed these days. Just a week after the UAE and Bahrain signed the Abraham Accords with Israel at the White House on Sept. 15, 2020, Granoff jumped on a plane. He was soon introduced to the founders of Fenix, which runs the Emirati scooter fleet, and made his first investment — $3.8 million — in the company. “Dubai is becoming a bit of a technology magnet for the Arab world in a similar way that the [San Francisco] Bay Area is, and the government there is committed to nurturing the tech sector and entrepreneurship,” Granoff said. “I think there will be lots more opportunity over time.”

Better Place burns: Granoff grew up in New York City, the son of clothing maker and philanthropist Martin Granoff, who is also a champion horse breeder. Among the younger Granoff’s biggest investments was Better Place, an ambitious effort in Israel at building a charging network for electronic vehicles, or EVs. Founded by charismatic entrepreneur Shai Agassi, the company enchanted investors including Israel’s Idan Ofer, France’s Groupe Renault, HSBC and Morgan Stanley. Better Place burned through $1 billion in capital before going bankrupt in 2013.

Back in business: Around that time, Granoff moved to Israel with his wife and four children, where he established Maniv Mobility in an effort to find alternatives to gasoline-fueled engines. EV purchases have soared by 70% in Israel over the past year with more than 10,000 new vehicles on the road. Granoff’s resilience after Better Place’s demise has established him as an important investor today for early-stage mobility companies, said Brian Blum, author of Totaled: The Billion-Dollar Crash of the Startup that Took on Big Auto, Big Oil and The World. “It was a real blow to have this thing that he believed in so much fall apart,” Blum told The Circuit. “The thing is it didn’t stop him from continuing on his mission of investing in the future of mobility and technology. You know, he just jumped right back into it.”

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