MIDDLE EAST NEWS

What the Emir wants, the Emir gets. He wanted the international media present at this shindig, and was willing to shell out to make this happen. So here we were, jetlagged and woozy from a champagne-soaked flight.

The international media consisted of myself; Tom, a wry freelancer who claimed to have fathered “dozens of children”; Luke, a young educated hippie six months into the job; Mark, a broad-shouldered, soft-spoken Texan; John, a depressed Atlantan in his late forties; Elizabeth, a very funny middle-aged woman from a Malaysian tabloid, and Wang, an unnervingly young-looking reporter from the New China Daily. There was absolutely no common editorial link between our publications, and by the end of the trip, we would all agree that there was absolutely no point in any of us being there.

We had been promised unforgettable hospitality, unparalleled access to senior figures, and a massive story: the establishment of a fully-fledged trading hub in the Middle East.

The Middle East produces vast quantities of crude oil and natural gas, but this is all sold directly to Western energy firms who take it at a fixed price and then sell it on the major commodity exchanges in New York, London and Singapore.* The Middle Eastern producers don’t get to wear brightly-coloured jackets and shout at each other, like in Trading Places. Understandably they feel left out, and want to set up their own, which is what they’re doing, which is why we were there.

On the morning of the first day, we were visibly excited. A grand ribbon-cutting of a sparkling new futuristic energy city!Pages and pages of easy-to-write copy, with dazzling photographs! Mucking about with the Qatari oil minister! It doesn’t get any better than this.

Unfortunately the morning of the first day was cancelled. We repaired to our hotel rooms, watched one of the eight channels devoted to football, had a look out of the balcony, read the awful local paper, wondered if we had enough time to check out the sauna, decided that we didn’t, and reconvened in the lobby at noon.

*Some more background: the Middle East and Russia produce sour crude, while the West produces sweet crude – West Texas Intermediate (WTI) from Texas, and Brent crude from the North Sea. Sour crude requires more refining before it can be turned into gasoline, so it is cheaper. Fair enough. But prices for crude oil are “discovered” by the balance of supply and demand on Western exchanges, which use Brent and WTI as the benchmark grades. That is, the price of Brent and WTI is determined by the actual supply and demand for Brent and WTI, while everything else – including Middle Eastern sour crude – is priced at discount to those benchmarks. Sour crude producers would rather see it prices for sour crude set by the underlying supply and demand for sour crude, and are eager to establish a sour crude benchmark in the same vein as Brent or WTI, most likely on a Middle Eastern exchange. This way, “price discovery” could occur nearer to home.