Frankly Speaking: Saudi role in OPEC+ contributed to ‘strong global economy recovery,’ says Daniel Yergin

01 | Saudi Arabia has played a vital role
0 seconds of 44 secondsVolume 90%
Press shift question mark to access a list of keyboard shortcuts
Next Up
02 | Relationship between KSA & Russia key to oil market stability
00:37
00:00
00:44
00:44
 
Short Url
Updated 21 June 2021
Follow

Frankly Speaking: Saudi role in OPEC+ contributed to ‘strong global economy recovery,’ says Daniel Yergin

  • Energy historian made the remarks in the series of video conversations with leading decision-makers
  • Yergin sees alliance of oil producers as a stabilizing force aiding recovery from economic collapse

DUBAI: Saudi Arabia’s leading role within the OPEC+ alliance of oil producers has been instrumental in rebalancing global markets, according to one of the world’s leading energy experts.

Daniel Yergin, the Pulitzer Prize-winning historian of the oil industry, told Arab News: “OPEC+ brought a kind of predictability and stability and caution to the market, and obviously Saudi Arabia has been at the forefront of that. It is a contribution to this incredible strong global economic recovery that we’re seeing right now.”

Yergin, who is also vice chairman of the IHS Markit consultancy, gave his views on Frankly Speaking, the series of video interviews with policy makers and business leaders.

He spoke of the prospects for a resurgence of the US shale industry, the challenge of climate change for the energy industry and the recent controversial “scenario” by the International Energy Agency (IEA) that suggested an end to all new investment in hydrocarbon fuels.

On the recovery in oil markets, which many experts put down to Saudi Arabia’s role as the biggest exporter in OPEC+, Yergin said: “Let’s not forget, it’s only a little over a year ago when the appalling collapse happened. Which was not only a shock for oil-producing and exporting countries, but you had countries like India and Japan, who were deeply concerned because they were fearful of the destruction, the undermining of the global oil industry and the gas industry on which their economies depend so heavily.”




Pulitzer Prize-winning historian of the oil industry Daniel Yergin, who is also vice chairman of the IHS Markit consultancy, gave his views on Frankly Speaking. (Screenshot/AN Photo)

The price of Brent crude has recovered to pre-pandemic levels, and many analysts are forecasting it might hit $100 by the end of this year as post-pandemic recovery accelerates demand for energy.

“OPEC+ has been a moderating force and a stabilizing force and really a mechanism for navigating a recovery from an appalling economic apocalypse,” Yergin said.

IHS Markit analysts see global economic growth at 6 percent in 2021, with the crucial US economy projected to grow by 7.4 percent, he added.

The relationship between the two biggest producers in OPEC+ — Saudi Arabia and Russia — has been crucial to the rebalancing and resumption of demand, Yergin said, adding that the US oil industry had become less significant for the dynamic of the global market.

“The US was part of the Big Three in April 2020. I think the US has stepped aside from that now as a governmental player, and so that means this relationship between Saudi Arabia and Russia is very significant and is the foundation for making OPEC+ work. I think it’s in the interest of both countries to continue,” he said.

A recent visit to the heartland of the US oil industry in Houston, Texas, has persuaded him that a revival of US shale could be under way. “Shale is facing a second revolution. It had to change its relationship with investors and return money to investors and that’s what it’s doing. There’s a mantra of capital discipline that wasn’t there before,” Yergin said.

“It’s stabilized and — as long as prices are in a reasonable range — we’ll see modest growth. What we won’t see is that explosive growth for which there was no precedent which contributed to a sudden oversupply in the oil market. So, you could say shale sort of settled down in a more mature state.”




“OPEC+ brought a kind of predictability and stability and caution to the market, and obviously Saudi Arabia has been at the forefront of that. It is a contribution to this incredible strong global economic recovery that we’re seeing right now,” Yergin said of the Kingdom’s efforts. (Screenshot/AN Photo)

The US oil industry is also facing a new situation of regulatory oversight and investor activism that has cast doubt on long-term prospects. Yergin agreed that the attitude of the Biden administration — in contrast to the Trump presidency’s approach — amounted to a new hostility to the hydrocarbon industry, and that there could be more environmental restrictions imposed. “We’ll see an effort to use regulatory machinery to constrain the industry. I think the regulatory challenges are still ahead,” he said.

But the administration also had to weigh the fact of US energy independence that has come about as part of the shale revolution. “The US spent $400 billion importing oil in 2008. It doesn’t spend anything now and I think Biden and some of the people around him see that energy dependence is a place they don’t want to be,” Yergin said.

The new alliance of environmental and financial activism in the oil industry, which has brought a surge in challenges to oil companies, was recently highlighted when the IEA controversially outlined a scenario in which all new investment in fossil fuels was immediately halted.

“It was very puzzling because only a few months earlier the IEA had been warning that not enough investment was going into oil and gas and that was going to lead to a supply crunch, high prices and turbulence,” he said.

“I think the oil and gas industry would look to the IEA to be a kind of independent objective source. They look at the IEA differently now and say what happened? Why did this come about? So, there’s been a kind of a shift from one side to the other.”




Yergin’s most recent book, “The New Map”, published last year, is an analysis of the interrelation between, energy, climate and geopolitics. (Supplied)

But Yergin was adamant that so-called fossil fuels would continue to play a vital part in global energy for a long time. “The energy mix is going to change. Oil and natural gas are going to share more and more space with renewables and alternatives. So, I think we’re going to have a mixed system. But in 2050 I think the world is still going to be using oil and gas, along with a lot of other things,” he said.

Yergin’s most recent book, “The New Map”, published last year, is an analysis of the interrelation between, energy, climate and geopolitics. John Kerry, the special presidential envoy on climate change, recently praised Saudi Arabia for its contribution to the global campaign against the effects of climate change and efforts to meet the goals of the Paris Agreement.

The Kingdom has announced plans to phase out oil from the domestic energy mix altogether by 2030, along with a big program of tree-planting to mitigate CO2 emissions.

“What Saudi Arabia is doing is in line with what you see around the world — a much bigger role for renewables. Obviously solar has a big role in Saudi Arabia. The notion of using gas to free up liquids for export and plans to plant trees are steps which of course are really about removing carbon from the atmosphere,” Yergin said.




The relationship between the two biggest producers in OPEC+ — Saudi Arabia and Russia — has been crucial to the rebalancing and resumption of demand, Yergin said, adding that the US oil industry had become less significant for the dynamic of the global market. (Screenshot/AN Photo)

“So, I think the direction Saudi Arabia is moving in is in line with what other countries are doing, and particularly in electric power.”

While the Kingdom’s strategy of a circular carbon economy, in which greenhouse gases are reduced and ultimately eliminated from the atmosphere, was a viable approach to the problem of climate change, Yergin cautioned: “Some in Europe don’t like carbon capture because they don’t like the hydrocarbon industry.”

He said renewable energy sources such as wind and solar were coming down in price to become viable options along with hydrocarbons, and new energy sources like hydrogen could also become part of the energy mix in the next 15 years.

In “The New Map,” Yergin explained how energy and climate change challenges could become big factors in what he called the “clash of nations,” replacing the “WTO consensus” that helped harmonize relations between, principally, the US and China.

“You’re seeing rhetoric today that you wouldn’t have heard five years ago and it is concerning. With all that said, you know by nature I’m an optimistic person,” he said.

“At the end of the book, I was trying to be realistic, but I’m also optimistic, because I believe that there are solutions.”

-----------------------

Twitter: @frankkanedubai


Closing Bell: Saudi main index slips to close at 11,411 

Updated 04 May 2025
Follow

Closing Bell: Saudi main index slips to close at 11,411 

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Sunday, losing 132.17 points, or 1.14 percent, to close at 11,411.50. 

The total trading turnover of the benchmark index was SR3.5 billion ($944.3 million), as 41 stocks advanced and 198 retreated.    

Similarly, the Kingdom’s parallel market Nomu lost 116.45 points, or 0.41 percent, to close at 28,013.32. This comes as 30 of the listed stocks advanced while 39 retreated.    

The MSCI Tadawul Index lost 20.74 points, or 1.41 percent, to close at 1,451.17.     

The best-performing stock of the day was Umm Al Qura for Development and Construction Co., whose share price surged 2.77 percent to SR25.95.   

Other top performers included National Industrialization Co., which saw its share price rise 2.26 percent to SR9.49, and Arabian Contracting Services Co., whose share price increased 1.69 percent to SR132.00. 

Zahrat Al Waha for Trading Co. recorded the most significant drop, falling 7.05 percent to SR27.70. 

Saudi Automotive Services Co. saw its stock prices fall 5.67 percent to SR61.50. 

Emaar The Economic City also saw its stock prices decline 4.50 percent to SR14.00. 

On the announcements front, Dar Alarkan Real Estate Development Co. reported its interim financial results for the period ending March 31. 

According to a Tadawul statement, the company posted a net profit of SR209.34 million in the first quarter of 2025, marking a 36.2 percent increase compared to the same quarter in 2024.  

The rise in net income was primarily driven by higher property sales. Increased lease revenues, lower finance costs, and greater non-operating income from Islamic Murabaha deposits also contributed to the gains, though these were partially offset by higher operating expenses and reduced earnings from associates. 

Dar Alarkan Real Estate Development Co. ended the session at SR21.04, down 1.05 percent. 

Saudi Aramco Base Oil Co. – Luberef has announced its interim financial results for the first quarter of 2025. A bourse filing showed the company recorded a net profit of SR221.5 million for the period ending March 31, reflecting a 7.3 percent decline compared to the same quarter last year. The drop in earnings was mainly due to lower by-product crack margins, despite an increase in base oil crack margins. 

Luberef’s shares closed the session at SR98.70, down 0.20 percent. 

Dr. Sulaiman Al Habib Medical Services Group has announced its interim financial results for the period ending March 31. According to a Tadawul statement, the firm posted a net profit of SR557.01 million in the first quarter of 2025, marking a 1.09 percent increase compared to the same quarter in 2024. The growth was primarily driven by higher revenue, although fixed operating costs from recent strategic expansions have temporarily weighed on profit margins. These expansions are still ramping up and are expected to gradually reach full operational efficiency. 

The company’s shares closed at SR289.00, down 2.15 percent. 

The National Agricultural Development Co. reported its consolidated financial results for the first quarter of 2025, posting a net profit of SR103.42 million for the period ending March 31 — a 2.06 percent rise compared to the year-earlier period.  

The increase was supported by higher revenue, reduced general and administrative expenses, stronger operating profit, and increased treasury income. These gains were partially offset by higher cost of sales, increased impairment losses on trade and other receivables, and a decline in finance costs. 

NADEC shares ended the session at SR22.20, down 1.54 percent. 

Saudi Basic Industries Corp. announced a net loss of SR1.21 billion for the first quarter of 2025, compared to a net profit of SR250 million in the same period last year. The loss was primarily due to a SR1.05 billion decline in gross profit, driven by higher feedstock prices and increased operating expenses. These included non-recurring costs of SR1.07 billion linked to a strategic restructuring initiative aimed at improving long-term performance and reducing costs. 

SABIC shares closed at SR60.70, down 2.77 percent. 


Jeddah unveils 29 real estate projects across industrial, residential, retail sectors

Updated 04 May 2025
Follow

Jeddah unveils 29 real estate projects across industrial, residential, retail sectors

RIYADH: Jeddah Municipality has announced 29 new investment opportunities across more than 1.4 million sq. meters, targeting sectors such as commercial, industrial, residential, and recreation. 

Jeddah’s investment package includes 13 commercial opportunities featuring developing and operating retail shops and commercial complexes across various districts. The initiatives include the development of an integrated container city spanning 846,684 sq. meters and a second container park at 429,223 sq. meters.  

This latest undertaking also follows a similar wave of investment opportunities recently launched in Riyadh, underscoring a nationwide push to diversify Saudi Arabia’s economy and enhance urban livability.  

Jeddah’s additional projects feature a 145,472-sq.-meter barley milling and packaging facility, eight worker residential compounds, and eight public parks equipped with kindergartens and retail outlets.  

A food truck zone under the municipal incubator program in South Obhur has also been introduced. In the education sector, a health college project has been announced.   

The strategically distributed initiatives aim to meet neighborhood needs while ensuring synergy between activities.   

The municipality has invited investors to submit proposals through the Furas Saudi investment portal. It noted that the bid submissions will be accepted from May 1 until July 8, as per the scheduled timeline. The Furas portal streamlines investor access, reflecting a unified approach to municipal investments.  

This undertaking underscores Jeddah’s commitment to economic growth and urban development in alignment with national objectives. 

Riyadh’s 2025 investment portfolio — spanning commercial, industrial, and leisure projects — mirrors the Kingdom’s strategic focus on private-sector-driven development under Vision 2030. 

In March, the Riyadh Municipality unveiled 20 new investment prospects across 175,000 sq. meters, including mixed-use spaces, retail hubs, and industrial zones, with contracts ranging from five to 25 years.  

Key districts like Jarir, Al-Rawdah, and Al-Qadisiyah are prioritized to ensure balanced growth. Complementing these efforts, the city has expanded its green infrastructure, adding 87 parks since 2022 to reach over 745,000 sq. meters of green space — transforming them into multifunctional community venues. 

These parallel initiatives highlight Saudi cities’ commitment to sustainable urbanization, economic diversification, and elevated quality of life, cementing the Kingdom’s position as a regional leader in transformative urban development. 


Saudi Arabia rolls out new guidelines for off-plan property deals

Updated 04 May 2025
Follow

Saudi Arabia rolls out new guidelines for off-plan property deals

JEDDAH: Saudi Arabia has issued a detailed procedural guide to implement its previously approved off-plan real estate regulation, aiming to enhance transparency, protect buyers, and formalize developer obligations.

The new framework was formally approved by Real Estate General Authority CEO Abdullah bin Saud Al-Hammad on May 2 and took effect immediately, according to the official gazette Umm Al-Qura.

This guide is part of the regulatory rollout following the Cabinet’s 2023 decision to formalize off-plan real estate sales and leasing. It is designed to strengthen investor confidence in a sector that accounts for approximately 7 percent of Saudi Arabia’s gross domestic product and plays a crucial role in supporting related industries such as construction and finance.

In a post on its official X handle, REGA stated: “The Real Estate Authority issued the procedural guide for the sale and rent of real estate projects off-plan, with the aim of clarifying the requirements of the procedures that regulate and control the stages of licensing, marketing, selling, leasing, and managing real estate projects off-plan, including requests for amendments or changes, opening and managing an escrow account, and other regulatory procedures.”

The updated model outlines 55 defined scenarios, covering applications by legal and individual developers to register or update their status, improve evaluation scores, or request project modifications. It also details processes for certifying completion, changing contractors, switching project banks, and reallocating escrowed funds.

Refunds to buyers from escrow accounts are permitted in cases such as the cancellation of marketing permits, project delays exceeding 180 days, or failure to secure a sales license. The guide also addresses scenarios involving project restructuring, title transfers, license revocations, and developer substitutions for delayed projects.

The reforms are intended to provide legal clarity and investor assurance as off-plan development becomes an increasingly prominent feature of the Kingdom’s residential and commercial real estate landscape.

Legal entities and individuals seeking to develop off-plan properties must now comply with strict registration and reporting requirements, including updates to developer evaluations and the appointment of certified consultants and accountants.

The regulatory update underscores Saudi Arabia’s push to build a robust legal infrastructure for its real estate sector, positioning the Kingdom as a competitive and secure environment for local and foreign investors.


Qatar welcomes over 1.5m international visitors in Q1 2025

Updated 04 May 2025
Follow

Qatar welcomes over 1.5m international visitors in Q1 2025

RIYADH: Qatar received more than 1.5 million international visitors in the first quarter of 2025, according to newly released figures, as the country continues to push forward with its comprehensive tourism strategy anchored in major events, strategic partnerships, and diverse travel offerings.

While slightly below the 1.6 million visitors recorded during the same period in 2024, the latest numbers highlight Qatar’s sustained momentum in attracting global travelers.

Visitors from Gulf Cooperation Council countries accounted for 36 percent of arrivals, followed by Europe at 28 percent and Asia and Oceania at 20 percent, underscoring Qatar’s growing appeal across varied markets.

The increase aligns with the nation’s long-term objective of drawing six million visitors annually by 2030. It also coincides with the third phase of the Qatar National Development Strategy (2024–2030), launched in January 2024, which designates tourism as a critical pillar in the country’s economic diversification agenda.

“The achievements of the first quarter of 2025 demonstrate some of the planned outputs of our long-term approach to tourism development,” said Saad Bin Ali Al-Kharji, chairman of Qatar Tourism and chair of the board of directors of Visit Qatar.

“Part of the development transcends into deepening collaboration across local, regional and international markets and continue to diversify source markets, enhance visitor experiences, and reinforce Qatar’s position as a dynamic, year-round destination. We are excited to have welcomed 1.5M in Q1 and look forward to welcoming more guests throughout this year,” he added.

Qatar’s multi-access strategy also appears to be paying off. Of the total visitors, 51 percent arrived by air, 34 percent by land, and 15 percent by sea.

During the Eid Al-Fitr holidays, the country recorded its highest holiday visitor count in three years, attracting 214,000 travelers over an eight-day period — a 26 percent increase from 2024. Nearly half (49 percent) of those visitors came from GCC countries, representing an 18 percent year-on-year rise. Hotel occupancy during this period reached 77 percent, up from 67 percent the previous year.

The hospitality industry reported robust performance overall in Q1, with an average hotel occupancy rate of 71 percent and 2.6 million room nights sold. Key drivers included major international events such as Web Summit Qatar, the Doha Jewellery & Watches Exhibition, and the Qatar International Food Festival.

Reinforcing its position as a regional tourism hub, Qatar also hosted the 51st UN Tourism Regional Committee for the Middle East. The gathering focused on leveraging the country's strengths in sports, innovation, and infrastructure to promote sustainable tourism across the region.

Looking ahead, Qatar is set to continue its tourism push with a strong slate of upcoming events. The country will annually host the T100 Triathlon World Championship Final in partnership with the Professional Triathletes Organization through 2030. Additional highlights include the FIFA Arab Cup Qatar 2025, the Visit Qatar E1 Grand Prix of Electric Boats, and a series of high-profile festivals and sports events, all aimed at enriching Qatar’s tourism offerings and supporting its continued growth.


Syria to sign deal to import electricity from Turkiye, minister says

Updated 04 May 2025
Follow

Syria to sign deal to import electricity from Turkiye, minister says

CAIRO: Syria is set to sign a deal to import electricity from Turkiye through a 400-kilovolt transmission line between the two countries “soon,” the Syrian state news agency cited the country’s energy minister as saying on Sunday.
Syria is also working on establishing a natural gas pipeline connecting the Turkish border town of Kilis and Syria’s northern city of Aleppo, minister Mohamed Al-Bashir said.
“The pipeline will allow the supply of 6 million cubic meters of gas per day to power plants in Syria which will contribute in improving the country’s energy situation,” he added.
Syria has suffered from severe power shortages. On separate occasions, the country said it was working with partners including Gulf states, in the energy and electricity sectors.