The Wall Street Journal - 09.03.2020

THE WALL STREET JOURNAL. ** Monday, March 9, 2020 |A

of Rapidan Energy Group, a

Washington, D.C., energy-mar-

ket consulting firm.

The fall in Aramco’s shares

marks a major blow for the king-

dom, which sold a 1.5% stake in

the company in December in the

world’s largest-ever initial public

offering.

It was billed as a test of

Crown Prince Mohammed bin

Salman’s global standing and a

fresh source of funding for his

economic reforms.

WORLD WATCH

LEBANON

Beirut to Default

On Dollar Debt

Lebanon said it would default

on its dollar-denominated debt,

intensifying the Middle Eastern

state’s financial turmoil and set-

ting up a possibly messy negoti-

ation with foreign investors.

Beirut’s failure to honor its

debt load was expected and not

related to the economic turmoil

caused by the coronavirus out-

break. But it comes at a time

when global finances are on edge.

Lebanon said Saturday it

would fail to pay back U.S. dollar

denominated bonds with a face

value of $1.2 billion due Monday,

the first time the country has

ever failed to pay its debt. It has

another $700 million due in April

and $600 million in June.

“Lebanon is facing an eco-

nomic crisis of unprecedented

scale,” said Prime Minister Has-

san Diab, who took the helm

earlier this year. “How could we

pay creditors while hospitals are

subject to medical-supplies

shortages?”

Lebanon’s problems are in

some ways unusual. The bulk of

the government’s dollar borrow-

ing was from local banks, which

used high interest rates to at-

tract dollar deposits from Leba-

non’s overseas diaspora.

Those remittances dried up

last year as the country was

rocked by anticorruption pro-

tests, banks were temporarily

closed and investor confidence

plummeted. Without the inflow

of fresh dollars, Lebanon’s finan-

cial system began to seize.

Analysts don’t think it likely a

default will spill over to other

emerging markets. Lebanon

makes up a small part of most

emerging-market bond portfo-

lios.

—Avantika Chilkoti

TURKEY

Thousands of Women

Protest in Istanbul

From the streets of Manila to

the plazas of Santiago, Chile,

people around the world marked

International Women’s Day on

Sunday with calls to end exploi-

tation and increase equality.

But tensions marred some

celebrations, with police report-

edly using tear gas to break up a

demonstration by thousands of

women in Turkey and security

forces arresting demonstrators at

a rally in Kyrgyzstan.

“In many different ways or

forms, women are being ex-

ploited and taken advantage of,”

Arlene Brosas, the representative

of a Filipino advocacy group said

during a rally that drew hundreds

to the area near the presidential

palace. Protesters called for

higher pay and job security, and

demanded that President Rodrigo

Duterte respect women’s rights.

Turkish riot police fired tear

gas to disperse demonstrators

who, in defiance of a government

ban, tried to march along Istan-

bul’s main pedestrian street to

mark International Women’s Day,

according to local media.

Authorities declared Istiklal

street, near Istanbul’s main Tak-

sim square, off-limits, and said

the planned march down the av-

enue was unauthorized.

Thousands of demonstrators,

most of them women, gathered

near Istiklal anyway and tried to

break through police barricades

to reach it, according to the op-

position Cumhuriyet newspaper

and other media. Several demon-

strators were detained, Cumhuri-

yet said.

Turkish authorities have re-

stricted protests in the country in

recent years, citing security.

—Associated Press

NORTH KOREA

Launch of Projectiles

Is Second in a Week

North Korea launched three

short-range projectiles off its east

coast on Monday, Seoul’s military

said, Pyongyang’s second weap-

ons test in a week after a period

of inactivity.

South Korea’s military said the

projectiles were fired from the

Sondok area of the North’s South

Hamgyong province, a region

where the Kim Jong Un regime

has conducted many of its

launches. They were launched at

7:36 a.m. local time, soaring about

31 miles high, covering a distance

of around 125 miles and landing

in the waters between South Ko-

rea and Japan.

The Monday weapons test

comes just a week after the re-

gime launched what South Ko-

rean military officials believe was

two short-range ballistic missiles.

The launch appears connected

to North Korea’s wintertime exer-

cises that include last week’s

test-fire and a drill directed by

Mr. Kim late last month, Seoul’s

military said.

South Korea’s government ex-

pressed “strong regret” over the

latest launch, adding it compli-

cates an inter-Korean pledge to

build trust and tone down mili-

tary tensions.

—Timothy W. Martin

Women confronted Turkish police during a rally marking International Women’s Day in Istanbul on Sunday.

SEDAT SUNA/EPA/SHUTTERSTOCK

A photo showing reconstructed

wreckage of flight MH17.

PETER DEJONG/ASSOCIATED PRESS

A Dutch court on Monday

opens the trial of four men ac-

cused of helping move into

Ukraine a Russian missile that

shot down a passenger jet, kill-

ing all 298 on board and spark-

ing international outrage.

Also on trial, unofficially, is

the Kremlin.

The West blamed the 2014

shootdown of Malaysia Airlines

Flight 17 on Russia, which was

pouring men and military equip-

ment into eastern Ukraine in

support of antigovernment

forces, as part of its effort to

keep Ukraine under Moscow’s

influence.

President Vladimir Putin has

denied Russian military involve-

ment in the six-year conflict or

the downing of the plane. But

the trial will make public evi-

dence to the contrary—includ-

ing telephone intercepts and

witnesses—that could compli-

cate renewed efforts to end the

war. French President Emman-

uel Macron has launched a new

attempt to engage Mr. Putin,

which has drawn criticism from

some European officials who

say it is premature.

Russia has criticized the in-

vestigation as incomplete and

biased, blamed Ukraine for the

shootdown, and provided a vari-

ety of unsubstantiated theories

about what happened.

Petro Poroshenko, who was

Ukrainian president when the

plane was shot down near the

eastern city of Donetsk, said the

results of the lengthy investiga-

tion should expose the true na-

ture of the Kremlin’s military in-

terventions in Ukraine and

elsewhere.

“What will Putin do now?

What about his claims that

‘there are no [Russian soldiers]

there’?” Mr. Poroshenko said in

an interview. “It will be clear

that he has been lying for six

years.”

The downing of the plane,

which was flying from Amster-

dam to Kuala Lumpur on July

17, 2014, drew international con-

demnation of Russia and added

momentum to sanctions against

Moscow. The Netherlands, the

country with the largest number

of victims, took charge of the

criminal investigation, sup-

ported by investigators from

Australia, Belgium, Ukraine and

Malaysia.

Prosecutors filed charges

against four suspects, including

three with ties to the Russian

military and security services.

They aren’t expected to appear

at the trial, as they are in Russia

or in the part of Ukraine not

controlled by Kyiv.

The suspects include Igor

Girkin, a former colonel in Rus-

sia’s Federal Security Service

who was defense minister for

the self-proclaimed Donetsk

People’s Republic, or DNR, at

the time. He denies rebels shot

down the plane.

Prosecutors say the suspects

facilitated the transport of the

missile, which they say came

from Russia’s 53rd Antiaircraft

Missile Brigade. They have ap-

pealed for more witnesses and

hope to charge other suspects,

including the crew handling the

missile and those who ordered

them into Ukraine.

Investigators have made pub-

lic parts of their investigation,

including what they say are in-

tercepted calls between Russian

government officials and the

leadership of the DNR in which

they discuss administration, fi-

nancing and military support

from Russia. “We now have the

information, have the proof,

that the Russian Federation is

involved in this tragedy, in this

crime, one way or another,”

lead prosecutor Fred Wester-

beke said in June.

—Georgi Kantchev in Moscow

contributed to this article.

BYJAMESMARSON

Kremlin

Scrutinized

In Flight

MH17 Trial

WORLD NEWS

on record.

Trading in the futures con-

tract on the S&P 500 was lim-

ited after it declined by its

maximum 5%. Dow futures

were down more than 1,

points, or 4.2%.

Overseas stock markets also

fell sharply on fears of an oil

glut. Australia’s S&P/ASX 200

was down almost 6%, Japan’s

Nikkei was down 5% and other

markets fell as well.

The Saudi gambit is part of

an aggressive campaign to

snatch some of Moscow’s mar-

ket share, according to dele-

gates from the Organization of

the Petroleum Exporting Coun-

tries and Saudi officials. It

comes after a longstanding

partnership between some of

the world’s largest oil produc-

ers, including Saudi Arabia and

ContinuedfromPageOne

their detention said it was ex-

pected that the princes might

be released later Sunday, as

officials sought to portray the

arrests as a pointed warning

to the princes to maintain sup-

port of Prince Mohammed.

The Saudi royal court had ini-

tially accused the two men of

plotting a coup to unseat the

king and crown prince, The

Wall Street Journal reported.

The series of arrests included

dozens of interior ministry offi-

cials, senior military officers,

and others accused of support-

ing the alleged coup attempt.

The clampdown follows

years in which Prince Moham-

med has centralized power

since his father, the king,

made him heir to the throne in

2017, supplanting the former

crown prince, MBN. At the

time, MBN was held overnight

in a palace lounge and forced

to sign a pledge of loyalty to

the new crown prince.

In several waves of arrests,

the prince has detained other

royals, business leaders, and

political dissidents. In Novem-

ber 2017, authorities rounded

up hundreds of the Saudi elite,

including investors and senior

princes, and held them in the

Ritz-Carlton hotel in Riyadh.

The detainees were later forced

to pay billions of dollars to the

government as part of a crack-

down on alleged corruption.

Under Prince Mohammed,

Saudi authorities also arrested

a series of prominent activists

who campaigned to lift a ban

on women driving cars. The

Crown Prince granted women

the right to drive in a 2017 or-

der, but the activists told in-

vestigators they were tor-

tured. The women remain in

prison.

The latest royal crack-

down—Friday’s detentions of

princes—triggered speculation

about the health of King Sal-

man. Some suggested it was

part of an effort by Prince Mo-

hammed to sideline rivals and

secure his eventual ascension

to the throne.

The government appeared

to allay concerns about the

king’s condition on Sunday. A

video published on the veri-

fied Twitter account of a royal

court photographer shows the

king standing and shaking

hands with two ambassadors

at a swearing-in ceremony

that took place on Sunday, the

kingdom’s official Saudi Press

Agency reported. The section

of the video that shows the

king speaking to the two offi-

cials is silent.

Separately, the Saudi inte-

rior ministry said it was ban-

ning travel in and out of Qatif

governorate in the country’s

east, citing concerns about

coronavirus. The ministry said

all 11 confirmed cases of the

virus in the kingdom had come

from the area. Residents of the

governorate who are currently

outside the area would be al-

lowed back in, the ministry

said.

A majority Shiite area in

the predominantly Sunni king-

dom, residents of Qatif have

staged protests against the

government demanding civil

rights. The government has

cracked down on the protests.

CAIRO—Saudi authorities

began releasing officials and

royal family members ques-

tioned in a security clamp-

down, as the government

sought to end speculation

about the health of King Sal-

man by publishing photo-

graphs and video of the 84-

year-old monarch.

Interior Minister Abdulaziz

bin Saud bin Nayef and his fa-

ther, Prince Saud bin Nayef,

were both released after being

summoned for questioning by

the royal court, people famil-

iar with the matter said.

The two were questioned

during a roundup of dozens of

officials and members of the

royal family that began on Fri-

day, part of what appeared to

be an attempt by Crown Prince

Mohammed Bin Salman to

consolidate power within the

royal family. The government

didn’t respond to requests for

comment on the situation.

Also detained in the sweep

were two of the country’s

most prominent royals, Prince

Ahmed bin Abdulaziz al Saud,

a brother of King Salman, and

Prince Mohammed bin Nayef

bin Abdulaziz al Saud, the

king’s nephew known as MBN.

Prince Ahmed and MBN re-

mained in custody Sunday af-

ternoon. People familiar with

BYSUMMERSAID

ANDJAREDMALSIN

Saudis Release Royal Detainees

King Salman, right, Prince Mohammed bin Nayef, center, and Crown Prince Mohammed bin Salman

BANDAR AL-JALOUD/SAUDI ROYAL PALACE/AFP VIA GETTY IMAGES

Russia, splintered on Friday.

The sides failed to reach an

agreement on production cuts

to support the price of oil in

the face of the coronavirus-re-

lated economic slowdown.

The declines came after the

Saudi oil giant, Aramco, said in

a notice to buyers Saturday

that it was cutting most of its

prices. It slashed its popular

medium crude by $7 a barrel to

the U.S., by $8 a barrel to

Northern Europe and by $6 to

the Far East for oil deliveries

next month.

The price cuts are aimed di-

rectly at Russia’s market share,

Saudi officials said, but don’t

encompass the entirety of the

kingdom’s strategy, as it is set

to boost its crude output as

well to 10 million barrels a day,

up from about 9.7 million bar-

rels a day in January. The offi-

cials said Saudi Arabia would

up output next month to above

10 million barrels a day and

could increase to its maximum

capacity of 12 million barrels a

day if needed.

Fears of an impending oil-

price war sent shares of Saudi

Arabian Oil Co., as the com-

pany is formally known, slid-

ing as much as 9% in Sunday

trading in Riyadh, dropping

below 30 riyals ($8). That

takes the stock below the 32

riyals-a-share price at which it

was listed less than three

months ago.

Saudi Arabia flooded the

crude market in 2014 and

weakened prices, hoping to un-

dermine U.S. producers. A pro-

duction surge now would come

as there is little foreseeable de-

mand for extra Saudi oil.

Saudi Arabia had signaled

last week that it was reducing

exports by 500,000 barrels a

day because of a lack of de-

mand for its oil in China. The

Asian powerhouse has reduced

its consumption as refineries

were forced to shut down and

travel became restricted to halt

contamination from the deadly

coronavirus. Analysts expect

the spread of the virus in the

rest of Asia as well as Western

Europe and the U.S. to further

impede the appetite for crude.

“What makes this price war

especially dangerous and his-

toric is it breaks out simultane-

ously with a massive demand

shock...from the coronavirus,”

said Robert McNally, president

The shares have run into a

plunge in oil prices and, more

recently, political upheaval in

the kingdom. Over the weekend,

Prince Mohammed launched a

broad security crackdown by

rounding up royal rivals, gov-

ernment officials and military

officers, The Wall Street Jour-

nal reported Saturday.

The crown prince had ag-

gressively lobbied President

Vladimir Putin of Russia to join

OPEC for a round of production

cuts in recent weeks, fearing

the impact of the coronavirus

on oil demand—and on his

plans to reform the economy

following Aramco’s IPO.

Friction between Saudi Ara-

bia and Russia began in early

February, when Prince Moham-

med asked his father, King Sal-

man, to call Mr. Putin and to

request Russia’s cooperation on

new output curbs. When the

king called, Mr. Putin initially

wouldn’t make himself avail-

able to speak to him. When he

did talk to the king, Mr. Putin

refused to commit, according to

Saudi officials.

—Avantika Chilkoti

and Rory Jones

contributed to this article

Oil-Price

Showdown

Escalates

Daily change in Aramco share

price since December listing

Source: FactSet

5

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%

Jan. Feb. March