DUBAI: Amin Nasser, president and chief executive of Saudi Aramco, expects a continuing improvement in the global oil market after the most difficult time he has ever seen in the energy business.
Nasser, speaking to Energy Intelligence ahead of a conference this week, said the events of the past six months — when oil demand was severely affected by worldwide economic lockdowns — were unlike any other cyclical downturn in crude markets.
“It’s completely different. My generation hasn’t seen anything like this. I don’t think the world has seen anything like this. If you look at the economic impact and what happened across the world, this is clearly significant,” he said.
But he said there were signs that the worst was over, despite the threat of second wave impacts from the COVID-19 pandemic. “At this stage we see the recovery picking up but, of course, this depends on whether there is a vaccine and how soon it will be available, if there is a second wave and how significant. We could see some back and forth, but there are good signs and we’re expecting to see a better market in the fourth quarter and next year,” he said.
In April daily global demand crashed from around 100 million barrels per day (bpd) to between 75 million and 80 million, and West Texas Intermediate crude, the American benchmark, fell briefly to minus $40 a barrel, meaning producers would pay customers to take oil away.
“It is encouraging to see that the worst is over and demand has sharply recovered from those exceptionally low levels. If you look at the forecasts from the International Energy Agency, they show demand recovering to 96 million by the fourth quarter of this year and 99 million toward the end of next year,” Nasser said.
The recovery was especially strong in Asia, he added. “What we see in Asia, especially China, which is our biggest market, is a strong recovery. In China, almost all demand for oil products is back to pre-COVID levels, except for jet fuel.”
Aramco, which listed on the Saudi Arabia stock market last year to become the world’s most valuable oil company, is monitoring its financial position in light of the revenue decline from low prices.
“We have intensified our cost discipline and are focusing on capital flexibility. We are being very prudent when it comes to capital spending, adhering to strict capital discipline. We are looking at all of our projects and stretching some discretionary ones out where necessary, while maintaining our maximum sustained capacity of 12 million bpd. Also, we are continuing to expand our gas portfolio in the Kingdom,” Nasser said.
“A lot of focus is on capital discipline and maximizing value for our shareholders. That’s what we have demonstrated in the first and second quarters, despite difficult conditions, while meeting our commitment when it came to dividends.”
He added that there were opportunities to “squeeze more value” from its existing assets, especially in downstream operations. Some energy experts have suggested Aramco should spin off or refinance assets such as its pipeline business.
“We’re going to do it right and will make sure what’s executed by this organization [the new Corporate Development unit within Aramco] is in line with our longterm view, the strategy of retaining our core businesses in-house and what can be optimized with our partners. This involves a careful review process that will take some time,” Nasser said.
He will be named Energy Executive of the Year 2020 in a ceremony at the conference next week. “Nasser has guided the world’s largest oil company through a period of considerable change and upheaval in Saudi Arabia itself and in global oil markets more generally,” Energy Intelligence said.
Oil recovering from 'worst time in my generation' — Aramco president
https://arab.news/bje24
Oil recovering from 'worst time in my generation' — Aramco president
- Nasser said there were signs that the worst was over, despite the threat of second wave impacts from the COVID-19 pandemic
- He will be named Energy Executive of the Year 2020 in a ceremony at the conference next week
Pakistan may import crude oil from US to lower tariff burden — official
- Countries are scrambling to find ways to lower US tariff burdens, which include buying more American oil
- High-level Pakistani delegation is scheduled to travel to US to discuss American tariffs, trade imbalance
KARACHI: Pakistan’s government is mulling “very good options” which range from importing crude oil from the United States (US) to abolishing tariffs on American imports, an official privy to the matter said on Wednesday, as Islamabad attempts to offset a trade imbalance that has triggered higher tariffs from Washington.
US President Donald Trump has imposed a 10 percent baseline tariff on all imports to the US and higher duties on dozens of other countries. Pakistan faces a 29 percent tariff due to a trade surplus with the US of about $3.6 billion, although that is subject to the 90-day pause Trump announced last week.
The US is the largest buyer of Pakistan’s textile goods, importing goods worth $5.43 billion last year through June, according to State Bank of Pakistan. In return, cash-strapped Pakistan imported $1.88 billion worth of American goods, resulting in the trade imbalance.
Countries are scrambling to find ways to lower their US tariff burdens, and Pakistan is no different. Pakistan’s Finance Minister Muhammad Aurangzeb said last week Islamabad will send a high-level delegation to Washington to discuss the American tariffs.
“There have been talks of Pakistan potentially importing oil, soya been (oil) and cotton from the US. That’s already it,” an official who spoke to Arab News on condition of anonymity as he was not authorized to speak to media, said.
The finance ministry did not respond to Arab News’ request for a comment till the filing of this report.
The official said the Pakistani delegation will inquire about the expectations of the American government regarding trade, which could include abolishing duties or non-tariff barriers against US products.
“Or they may ask us to buy more cotton from them,” the official said.
A senior official from Pakistan’s commerce ministry who spoke on condition of anonymity as well, said the discussions were at an “immature stage” and further meetings would be held to finalize them.
“What decisions are taken, what we offer to them, all options are being examined,” he said. “Everything is on the cards but what is finalized, that cannot be said right now.”
Pakistan spends about $17 billion annually on oil imports, most of which come from the United Arab Emirates and Saudi Arabia. Pakistan is also counted among the largest buyers of cotton, which it uses as raw material for its huge textile industry. Most of Pakistan’s cotton imports come from the US.
As per official data, Pakistan spent more than half a billion dollars ($578 million) last year on the import of 204,890 tons of raw cotton and 119,845 tons of soya bean oil after the local harvest was found to be in poor quality.
In 2023, Pakistan began buying discounted Russian crude oil banned from European markets due to Russia’s war in Ukraine. Muhammad Waqas Ghani, head of research at the Karachi-based JS Global Capital Ltd., said Pakistan faces limitations in diversifying its product slate when it comes to Russian crude oil.
He said this was because Russian crude oil yields a higher output of furnace oil. a less desirable fuel in the country’s evolving energy mix.
“Importing US crude could offer access to a wider range of crude grades, better aligned with Pakistan’s long-term goal of phasing out furnace oil,” Ghani explained. “This move would also open doors for improved trade terms and potentially pave the way for tariff relief which is our primary objective for now.”
‘OTHER VERY GOOD OPTIONS’
Pakistan’s cotton production has been hit hard by low quality of seeds and climate-induced calamities such as floods caused by excessive rains.
“Apart from that (US oil import) there are other very good options which are being discussed,” the official said.
However, he confirmed that none of these options had been finalized yet as the delegation would want to meet the American officials and gauge Washington’s expectations.
“Let’s listen to them first,” he said.
Pakistan’s financial experts and independent think tanks have advised Islamabad to establish trade agreements with emerging economies such as Africa or the Central Asian Republics (CARs) or reinforce existing partnerships with China or the Middle East.
Financial experts have also called upon the country to use America’s imposition of tariffs as an opportunity and diversity its exports market to other regions to mitigate potential losses.
Closing Bell: Saudi main index edges up 0.15% to close at 11,634
RIYADH: Saudi Arabia’s Tadawul All Share Index closed Wednesday’s trading session in positive territory, rising 17.61 points to reach 11,634.42, an increase of 0.15 percent.
The total trading turnover on the main index stood at SR5.79 billion ($1.54 billion), with 109 stocks advancing while 131 declined.
The MSCI Tadawul 30 Index also posted gains, climbing 6.2 points, or 0.42 percent, to end the day at 1,479.9.
Meanwhile, the Kingdom’s parallel market, Nomu, recorded a slight dip, falling 57.73 points—or 0.2 percent—to close at 29,083.57. Thirty stocks advanced on the parallel market, while 42 closed lower.
Lazurde Company for Jewelry led the gains on the main index with a sharp rise of 10 percent, closing at SR14.08. Saudi Industrial Export Co. followed, increasing 9.69 percent to SR2.49. Shares of Mobile Telecommunication Company Saudi Arabia advanced 5.65 percent to SR13.08.
Saudi Real Estate Co. also recorded a notable uptick, with its shares climbing 4.88 percent to SR23.20, while Takween Advanced Industries Co. rose 4.78 percent to close at SR9.20.
On the other end of the spectrum, Al Mawarid Manpower Co. was the day’s worst performer on TASI, with its shares dropping 4.93 percent to SR142.60. City Cement Co. fell 4.56 percent to SR20.10, and Umm Al-Qura Cement Co. declined 3.96 percent to SR17.94.
On the Nomu market, Watani Iron Steel Co. emerged as the top gainer, with its share price climbing 7.14 percent to SR2.40. Hedab Alkhaleej Trading Co. and Knowledge Tower Trading Co. also performed well, with their shares increasing by 5.61 percent and 4.62 percent to close at SR43.30 and SR13.60, respectively.
Other notable gainers included Nofoth Food Products Co. and Knowledge Net Co.
On the losing side, Jana Medical Co. posted the steepest decline on Nomu, with shares dropping 8.53 percent to SR19.30. Almuneef Co. for Trade, Industry, Agriculture and Contracting fell 8.02 percent to SR7.45, while Horizon Educational Co. slipped 7.67 percent to SR83.
Saudi Arabia sees 333% surge in private hospitality licenses amid tourism boom
RIYADH: Saudi Arabia issued 8,357 licenses for private hospitality facilities in 2024, marking a 333 percent year-on-year surge as the Kingdom ramps up efforts to build a globally competitive tourism sector.
The latest data, released by the Ministry of Tourism, reflects soaring investor interest in the hospitality segment and the government’s push to expand capacity across accommodation types, particularly individually owned, furnished units licensed to serve paying guests, the Saudi Press Agency reported.
This surge in permits aligns with a nearly fourfold increase in tourism license applications since Saudi Arabia secured the hosting rights for the 2034 FIFA World Cup, according to Vice Minister of Tourism Princess Haifa bint Mohammed Al-Saud, who made the remarks during an event earlier this month.
As part of Vision 2030, Saudi Arabia aims to draw 150 million annual visitors by the end of the decade and is investing heavily in mega-tourism and hospitality projects such as NEOM, the Red Sea destination, and Diriyah Gate.
Mohammed Al-Rasasmah, the official spokesman for the Ministry of Tourism, said that “the increasing growth in the number of licenses issued for private tourism hospitality facilities confirms the ministry's keenness to enable individual investors in the hospitality sector to obtain the necessary ministry license to operate, within the framework of the ministry's keenness to ensure the improvement of services provided,” the SPA reported.
“He pointed out that these efforts come within the framework of the "Our Guests Are a Priority" campaign; which aims to enhance hospitality facilities' commitment to licensing and classification standards, and ensure their compliance with the requirements and requirements set by the Tourism System and its regulations,” it added.
Earlier this month, the ministry reported an 89 percent increase in licensed hospitality facilities across Saudi Arabia, reaching 4,425 units by the end 2024. The rise reflects mounting demand from domestic and international travelers as the Kingdom accelerates tourism development under Vision 2030.
Makkah accounted for 1,030 of these licensed facilities — an 80 percent annual jump — making it the leading region for the number of certified accommodations and rooms. The ministry said the uptick supports its commitment to improving the visitor experience, especially for Umrah pilgrims.
In a post on X at the time, Al-Rasasimah described the surge as “remarkable,” adding that it reflects efforts “to support the sector’s growth and enhance its investment attractiveness.”
The ministry emphasized that the regulation of private hospitality providers is not only intended to enhance competitiveness but also to protect guest rights and uphold service standards, particularly in high-demand areas like Makkah and Madinah.
GCC banks poised to weather global trade turbulence: S&P report
RIYADH: Despite rising global trade tensions and heightened market volatility, banks across the Gulf Cooperation Council are expected to remain resilient, according to a recent report by S&P Global Ratings.
In its analysis titled “GCC banks can cope with the fallout from intensifying trade tensions,” the ratings agency pointed to the region’s strong financial fundamentals as a key buffer against economic uncertainty stemming from evolving US tariff policies and global investor jitters.
S&P highlighted investor risk aversion and market volatility as the most immediate threats, but noted that Gulf banks are well-positioned to absorb potential shocks. “GCC banks appear to be in a good position to withstand these threats,” the report stated, citing robust liquidity levels, solid profitability, and healthy capitalization as major strengths.
While the direct impact of trade tensions on GCC economies is expected to be limited—due in part to their relatively low export exposure to the US — the report warned of more significant indirect effects. In particular, a sustained decline in oil prices could weigh on fiscal spending and economic sentiment across the region. S&P has revised its assumed oil price forecast for 2025 to $65 per barrel.
“A prolonged period of lower oil prices could lead to reduced government spending, dampen business confidence, and potentially trigger an uptick in non-performing loans,” the report noted.
To gauge the sector’s resilience, S&P conducted stress tests modeling severe scenarios, including sharp capital outflows and a surge in NPLs. Even under a worst-case scenario—where NPLs increase by 50 percent—the top 45 banks in the GCC would face cumulative losses of $30.3 billion, significantly lower than their combined projected net income of $60 billion in 2024.
The findings reinforce the region’s financial stability amid global economic headwinds, underlining the strength of its banking sector even in the face of mounting external pressures.
“Even in our worst-case scenario, we still expect the shock to affect banks’ profitability rather than their solvency,” the report noted.
Qatari banks were identified as more vulnerable due to their net external debt position, but strong government support mitigates risks. In contrast, UAE banks exhibit the highest resilience, thanks to their robust net external asset position.
The report also pointed to regulators’ proactive measures as a critical factor. During the COVID-19 pandemic, forbearance policies helped banks navigate uncertainty, and similar actions are expected if trade tensions escalate further.
While challenges loom, GCC banks enter this period of uncertainty from a position of strength. “Banks continue to display strong capitalization, with an average Tier 1 capital ratio of 17.2 percent at year-end 2024,” S&P noted.
The combination of solid fundamentals and potential regulatory backstops suggests the sector is prepared to weather the storm.
Riyadh, Jakarta hold talks to strengthen ties in mining sector
JEDDAH: Economic ties between Saudi Arabia and Indonesia are set to deepen as the Kingdom’s top minister visits Jakarta to explore investment opportunities and enhance cooperation in the mining and industrial sectors.
Saudi Minister of Industry and Mineral Resources Bandar Alkhorayef is leading a high-level delegation to Indonesia from April 15 to 17, aiming to strengthen bilateral business relations and forge strategic partnerships across mining, food, pharmaceuticals, and auto parts industries, the Saudi Press Agency reported.
This comes as the Kingdom aims to position mining as a foundational pillar of its industrial economy, with its mineral wealth estimated at SR9.4 trillion ($2.4 trillion).
In a post on his X account, Alkhorayef said: “At the start of my visit to Indonesia, I met with the Special Presidential Envoy for Energy and Environmental Affairs to discuss cooperation in mining and explore opportunities to strengthen bilateral partnerships.”
His meeting with Special Envoy Hashim Djojohadikusumo focused on enhancing collaboration in the mining sector. The Indonesian official highlighted promising prospects in the production of strategic minerals, including nickel and copper, according to a statement from the Saudi Ministry of Industry.
Alkhorayef emphasized the alignment of Saudi-Indonesian priorities, citing the mining sector’s key role in Saudi Arabia’s economic diversification under Vision 2030.
The Saudi minister also held a meeting with Industry Minister Agus Gumiwang Kartasasmita and Minister of State-Owned Enterprises Erick Thohir.
“During the two meetings, we discussed ways to enhance industrial cooperation and expand partnerships between private sector entities in the two countries, in addition to reviewing investment opportunities and the Kingdom’s goals to become an industrial and logistics hub in the region.” Alkhorayef said.
As part of his trip, Alkhorayef also visited PT Vale Indonesia Tbk and Mining Industry Indonesia, or MIND ID, to learn about their pioneering efforts in mineral exploration and mining.
During these visits, he held discussions with senior executives on ways to boost cooperation in strategic minerals — particularly nickel, cobalt, and copper — while promoting sustainable practices and outlining Saudi Arabia’s National Mining Strategy and investor-friendly ecosystem.
The talks also focused on strengthening private sector collaboration, attracting investment, and sharing expertise in critical minerals essential to the global energy transition.
Technology and innovation were highlighted as key drivers of growth in the mining sector, aligned with broader sustainable development goals.
At MIND ID, both sides discussed best practices in mining operations and explored potential partnerships to develop strategic minerals sustainably.
Conversations with PT Vale underscored the importance of innovation and technology in shaping the future of mining.
Alkhorayef noted that Indonesia’s mining achievements align closely with Saudi Arabia’s mining strategy, which aims to unlock domestic mineral resources, localize value chains, and position the Kingdom as a global hub for mining investment and innovation.
Indonesia ranks among the world’s top producers of strategic minerals, including nickel, cobalt, copper, tin, and gold. In 2023, the mining sector contributed 11.9 percent to the country’s gross domestic product, underscoring its critical role in the national economy.
The country continues to attract international investment focused on developing downstream industries and reinforcing global mineral supply chains — goals that mirror Saudi Arabia’s own strategy to localize value chains and maximize its mineral wealth, the ministry’s statement added.
