SINGAPORE/KUALA LUMPUR: Demand for gasoline in Asia may peak much earlier than expected as millions of people in China and India buy electric vehicles over the next decade, threatening wrenching change for the oil industry, oil and auto company executives warned.
They said refiners should prepare for a future in which gasoline, their biggest source of revenue, will be much less of a cash cow.
Change is being prompted by policy moves in India and China, where governments are trying to rein in rampant pollution, cut oil imports and compete for a slice of the fast-growing green car market.
In its “roadmap,” released in April, China said it wants alternative fuel vehicles to account for at least one-fifth of the 35 million annual vehicle sales projected by 2025.
India is considering even more radical action, with an influential government think-tank drafting plans in support of electrifying all vehicles in the country by 2032, according to government and industry sources interviewed by Reuters late last week.
“We will see a clear shift to electric cars. It is driven by legislation so electric cars are coming, it is not a niche anymore,” Wilco Stark, vice president for strategy and product planning at German car maker Daimler, told Reuters.
Stark and other executives were interviewed during the Asia Oil & Gas Conference in Kuala Lumpur this week.
Daimler sees electric vehicles contributing 15-20 percent of its overall sales by 2025 and at least an additional 10 percent of sales coming from hybrids, he said.
Electric cars currently make up less than 2 percent of the global car fleet and any faster-than-expected growth in that percentage will materially impact oil demand and the refining business.
“Technology is moving fast. In 10-15 years... our gasoline market might not be the same as it is today,” said Dawood Nassif, board director at the state-owned oil company Bahrain Petroleum Company (BAPCO).
With gasoline responsible for up to 45 percent of refinery output and one of the highest profit-margin fuels, a slowdown or fall in demand will have far-reaching implications.
Credit agency Moody’s says that the fast pace of technological development makes accurate predictions difficult, but warned that direct financial effects from falling oil demand, including gasoline, “could be material by the 2020s.”
The changes are so big that the influential International Energy Agency (IEA) plans to revisit its analysis of electric vehicle trends and oil demand.
“The choices made by China and India are obviously most relevant for the possible future peak in passenger car oil demand,” an IEA spokesman told Reuters.
In its current policies scenario, last updated in November 2016, the IEA still expects oil demand from vehicle use to rise until 2040.
It is not just China and India that are changing fast.
Asia’s major carmakers, Japan and South Korea, already sell significant volumes of hybrid vehicles — which operate off gasoline and electricity — while fuel efficiency gains will continue to cut gasoline consumption for standard vehicles.
There will, though, be some major hurdles before a country like India goes mostly electric. High battery costs would push up car prices and a lack of charging stations and other infrastructure in India means carmakers may hesitate to make the necessary investment in the technology.
Asia has long been the main driver of future oil demand thanks to supercharged growth in sales of autos.
China sells more than 2 million new cars a month and is challenging the US as the world’s biggest oil consumer. India now is the world’s third-biggest oil importer, ahead of Japan.
More than a third of the world’s refineries are in Asia, up from just 18 percent in 1990. For refiners, the growth of vehicles that run on electricity and other alternative fuels is a wake-up call. They can tweak the products they make from crude oil to an extent, but still mostly rely on gasoline consumption for revenue.
“Rising pressure on margins and cash flows will potentially lead to stranded assets,” Moody’s warned, using a term for assets that no longer provide an economic return because of changes in the market or regulatory environment. The oil industry is taking note. Royal Dutch Shell said this week that it “is looking into ... the potential to introduce electric vehicle charging points at our retail sites in several countries.”
Oil executives say it is still premature to expect overall oil demand to fall soon. “Our industry will not disappear,” said Abdulaziz Al-Judaimi, senior vice president for downstream at Saudi Aramco, the world’s biggest oil company.
They are envisaging a shift toward producing more petrochemicals like plastics or household chemicals, areas where consumption is soaring.
Saudi Aramco is jointly developing the huge Malaysian RAPID refinery and petrochemical complex with state-owned Petronas and the two said this week they are exploring an expansion of its petrochemical capacity.
Exxon Mobil this week said it would buy a petrochemical plant in Singapore.
Refiners also still see strong oil demand from heavy industry.
“Refiners may shift their focus from gasoline to middle distillates,” said KY Lin of Taiwan’s Formosa Petrochemical, a major Asian refiner. “Gasoil is used widely, including in farming/industrial equipment... and also as a marine fuel.”
New Delhi, Beijing’s plans for electric cars threaten to cut gasoline demand
New Delhi, Beijing’s plans for electric cars threaten to cut gasoline demand
Oil Updates — prices rise on demand outlook strength, weaker US dollar
LONDON: Oil prices rose on Thursday, boosted by a strong outlook for demand in the United States after fuel inventories fell more than expected, and a weaker US dollar.
Brent crude futures rose 43 cents, or 0.6 percent, to stand at $71.21 a barrel by 7:23 a.m. Saudi time, their highest level since March 3. US West Texas Intermediate crude gained 38 cents, or 0.6 percent, to $67.54.
US government data showed a higher-than-expected drawdown last week in distillate inventories, including diesel and heating oil, which fell by 2.8 million barrels, outstripping a drop of 300,000 barrels expected in a Reuters poll.
“US oil demand outlook remains healthy despite lower air travel passenger volumes,” JP Morgan analysts said in a note, adding that reduced US travel activity did not signal broader weakness in demand outlook.
Global oil demand averaged 101.8 million barrels per day, an annual increase of 1.5 million bpd, the analysts said.
US crude inventories, rose 1.7 million barrels, however, exceeding expectations for an increase of 512,000 barrels in an earlier Reuters poll.
A weaker greenback also contributed to oil gains, with the dollar on a downtrend since the end of February.
“Throughout the week, the weakness of the dollar appeared to provide some support for dollar-denominated oil prices,” said Phillip Nova senior market analyst Priyanka Sachdeva.
Oil investors stay hopeful of the prospect of the Federal Reserve easing interest rates by 50 basis points by year’s end, she added.
Global risk premiums rose after Israel launched a new ground operation on Wednesday in Gaza after breaking a ceasefire of nearly two months.
The US kept up airstrikes on Houthi targets in Yemen in retaliation for the group’s attacks on ships in the Red Sea. President Donald Trump has also vowed to hold Iran responsible for future Houthi attacks.
On Wednesday, Ukrainian President Volodymyr Zelensky said a halt to strikes on energy facilities in the war with Russia could come quickly, suggesting both sides were moving closer to a ceasefire that could lead to the easing of sanctions and the return of Russian supply to the market.
Trump’s Middle East envoy, Steve Witkoff, has said another round of talks will be held in Saudi Arabia on Sunday by Russian and US officials aiming to halt the war.
Closing Bell: Saudi main index edges down 0.7% to close at 11,709
RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Wednesday, as it shed 82.97 points or 0.70 percent to close at 11,709.43.
The total trading turnover of the benchmark index was SR4.55 billion ($1.21 billion), with 66 stocks advancing and 174 declining.
The Kingdom’s parallel market, Nomu, also shed 35.29 points to close at 30,683.64. The MSCI Tadawul Index declined by 0.59 percent to 1,484.07.
The best-performing stock on the main market was United International Holding Co. The firm’s share surged by 3.49 percent to SR172.
Conversely, the share price of the Mediterranean and Gulf Insurance and Reinsurance Co. declined by 10 percent to SR20.70.
On the announcements front, several major Saudi companies released their annual financial results for the period ending Dec. 31, 2024, showcasing mixed performances across industries.
Sahara International Petrochemical Co., also known as SIPCHEM, reported a 63.74 percent decrease in net profit, reaching SR462.1 million, compared to SR1.175 billion in the previous year. This decline was primarily due to higher feedstock and raw material costs, a decline in revenue, and decreased zakat expenses during the year.
The company saw a 2.99 percent drop in its share price on Wednesday to settle at SR21.46.
Rabigh Refining and Petrochemical Co. posted a 3.15 percent decrease in net profit, reaching SR4.54 billion, down from SR4.69 billion in the prior year. The company, in a statement to Tadawul, said this decline was due to a one-time expense, lower sales and margins, and higher costs of key feedstock.
Its share price saw a 0.43 percent increase to reach SR6.93.
Meanwhile, Saudi Real Estate Co. saw a significant 218.19 percent increase in net profit to SR215.1 million, up from SR67.7 million in the previous year. The increase was primarily attributed to a 42.64 percent increase in operating profit, a 181 percent increase in the company’s share of profit from an associate and the joint venture, and a 39 percent decrease in zakat expenses recorded during 2024.
Saudi Real Estate Co.’s stock price shed 1.76 percent to reach SR25.75.
The National Shipping Company of Saudi Arabia, or Bahri, reported a 34.46 percent increase in net profit, reaching SR2.169 billion, compared to SR1.613 billion in the previous year. The growth was driven by the improvement of operational performance and global shipping rates in several business units of the group.
The company’s stock price grew 2.33 percent to reach SR30.20.
Saudi Arabia dominates Forbes’ 2025 list of MENA’s most valuable banks
- Financial institutions from the Kingdom made up nearly a third of the total $600.8 billion market capitalization of the listed banks
- Al-Rajhi Bank retained its position as the region’s most valuable bank, leading with a market capitalization of $105.6 billion
RIYADH: Saudi Arabia dominated Forbes’ “30 Most Valuable Banks 2025” ranking, with 10 entries boasting a combined market value of $269 billion.
According to the business-focused media outlet, financial institutions from the Kingdom made up nearly a third of the total $600.8 billion market capitalization of the listed banks.
The UAE followed with seven facilities valued at $153.4 billion, while Qatar contributed six banks worth $76.7 billion. Morocco and Kuwait placed three and two banks on the list, with market values of $23.7 billion and $68.4 billion, respectively.
The Middle East and North Africa region’s banking sector remains resilient and is set for strong growth in 2025, driven by economic diversification, favorable financial conditions, and a projected 3.5 percent economic expansion fueled by infrastructure projects and rising non-oil activity, according to a recent report by Ernst & Young.
In a statement announcing its latest rankings, Forbes said: “This year’s list features banks from seven countries, with 26 entries being Gulf-based. Saudi Arabia represents a third of the list with 10 entries, with an aggregate market value of $269 billion.”
The media firm noted that the total market value of the 30 banks increased by 3.4 percent year over year, rising from $581.1 billion in February 2024 to $600.8 billion as of Jan. 31, 2025.
Al-Rajhi Bank holds the top spot
Al-Rajhi Bank retained its position as the region’s most valuable bank, leading with a market capitalization of $105.6 billion — representing 17.6 percent of the total market value of the 30 banks.
It was followed by Saudi National Bank at $54.7 billion, and the UAE’s First Abu Dhabi Bank, valued at $43.7 billion.
Beyond the top three, Qatar’s QNB Group and Kuwait Finance House ranked fourth and fifth, with market values of $41.2 billion and $38.3 billion, respectively.
They were followed by the UAE’s Emirates NBD Group at $28.9 billion and Kuwait’s National Bank of Kuwait at $27.1 billion.
Other notable banks in the ranking include Abu Dhabi Commercial Bank and Riyad Bank. The list also features banks from Morocco and Oman.
A resilient sector
MENA’s banking sector has shown stability over the past year, supported by higher interest rates and robust oil prices.
According to a Fitch Ratings report published in 2024, the economic environment in the region has sustained liquidity levels, profitability, and strong capital buffers for most Gulf Cooperation Council banks.
Forbes Middle East compiled the ranking based on reported market values of publicly listed banks across the Arab world as of Jan. 31, 2025. Subsidiaries of listed companies were excluded from the ranking, and currency exchange rates were taken as of the same date.
Saudi Arabia grants $97.5m exploration licenses for first mineral belts at Jabal Sayid, Al-Hajjar
- Jabal Sayid and Al-Hajjar cover a combined area of 4,788 sq. km
- Among the successful bidders, Ajlan and Bros-Norin for Mining secured the license for the southern Al-Hajjar site
- Competition saw 14 local and international companies submit bids after passing the pre-qualification stage
JEDDAH: Saudi Arabia has granted exploration licenses worth SR366 million ($97.5 million) to local and international companies for its first mineral belts at Jabal Sayid and Al-Hajjar.
These two sites, covering a combined area of 4,788 sq. km, are part of the Ministry of Industry and Mineral Resources’ efforts to accelerate the exploration and development of the Kingdom’s estimated SR9.3 trillion ($2.48 trillion) in mineral resources.
Among the successful bidders, Ajlan and Bros-Norin for Mining secured the license for the southern Al-Hajjar site.
A consortium consisting of Artar, Gold and Minerals Ltd Co., and Jacaranda, owned by Australian company Hancock Prospecting, won the license for the northern Al-Hajjar site. Vedanta Ltd, a major Indian mining giant, received the first exploration permit for the Jabal Sayid belt, while a second license for the same site went to a consortium of Ajlan & Bros Mining and Zijin Mining, a Chinese mining giant ranked among the world’s top five.
Saudi Arabia is focused on making mining a key pillar of its economy, alongside oil and petrochemicals. The Ministry of Industry and Mineral Resources is working to unlock natural resources to diversify the economy, create jobs, and position the Kingdom as a global mining hub in alignment with Vision 2030.
The competition saw 14 companies, both local and international, submit bids after passing the pre-qualification stage. The submissions were evaluated based on technical expertise, proposed work plans, and social and environmental commitments, according to the Ministry’s statement.
The newly awarded licenses cover two areas within the Jabal Sayid belt, which spans 2,892 sq. km and contains valuable minerals such as copper, zinc, lead, gold, and silver. Additionally, two more licenses were granted for the Al-Hajjar site, covering 1,896 sq. km and rich in natural resources.
The ministry emphasized that the involvement of major international mining companies like Zijin Mining, Hancock Prospecting, and Vedanta Ltd. underscores the growing global interest in Saudi Arabia's mining sector and the opportunities it offers through exploration license competitions.
It also confirmed that the total exploration investment from the winning companies will surpass SR366 million over the next three years, with an extra SR22 million pledged for community development projects near the mining sites, aimed at creating job opportunities for local residents.
Ajlan and Bros-Norin for Mining, which secured the southern Al-Hajjar site, will invest SR209 million in exploration, which includes over 119,000 meters of drilling. Furthermore, they will allocate SR11.2 million for community-focused initiatives, such as building intermediate schools for girls in nearby provinces.
The consortium of Artar, Gold & Minerals Ltd., and Jacaranda will invest more than SR62 million in exploration at the northern Al-Hajjar site, including 52,000 meters of drilling. They will also direct SR4.2 million toward local infrastructure projects.
Vedanta Ltd., the Indian mining giant, has committed SR33 million for exploration at Jabal Sayid 1, covering 22,000 meters of drilling. In addition, they will invest SR3 million in community development projects, focusing on local employment and training programs.
The consortium of Ajlan & Bros Mining and Zijin Mining has pledged approximately SR62 million for exploration at Jabal Sayid 2, including 51,000 meters of drilling. They will also allocate SR4 million for community initiatives, particularly aimed at developing road infrastructure in the surrounding area.
In line with these efforts, the Ministry of Industry and Mineral Resources has launched the second phase of the Mining Exploration Enablement Program, in collaboration with the Ministry of Investment, to mitigate risks for companies during the early stages of mining exploration.
The Kingdom also offers incentives under the mining investment system, such as allowing foreign companies to fully own operations and providing up to 75 percent funding for capital costs through the Saudi Industrial Development Fund.
During the fourth edition of the Future Minerals Forum, held in January, the Ministry of Industry announced the offering of 50,000 sq. km of mineralized belts containing gold, copper, and zinc.
This initiative is part of the ministry’s efforts to enhance exploration and create an attractive investment environment for local and international mining companies. Applications for these opportunities can be submitted through the Taadeen platform.
Egypt, India reaffirm $12bn trade target during ministerial meeting
- Minister of Investment and Foreign Trade Hassan El-Khatib emphasized Egypt’s commitment to attracting more Indian investments
- Push positions India as Egypt’s sixth-largest trading partner
RIYADH: Egypt and India have reaffirmed their commitment to tripling bilateral trade from $4.2 billion in 2024 to $12 billion within five years, reinforcing a target set last year during a joint meeting.
The pledge came during a trip to India by Egypt’s Minister of Investment and Foreign Trade Hassan El-Khatib, when he met with the Asian country’s Commerce and Industry Minister Piyush Goyal.
The push builds on a record $7.26 billion in bilateral trade during the 2021-22 financial year — a 75 percent rise from the previous year — positioning India as Egypt’s sixth-largest trading partner, according to the North African country’s Central Agency for Public Mobilization and Statistics.
Trade fell to $4.6 billion between April 2023 and February 2024, largely due to the Israel-Hamas conflict and Houthi disruptions to Suez Canal traffic.
El-Khatib emphasized Egypt’s commitment to attracting more Indian investments in key sectors such as renewable energy, chemicals, and automotive manufacturing, as well as pharmaceuticals, textiles, and information and communication technology.
“Al-Khatib also highlighted the expected surge in Indian investments in Egypt in the coming period, especially in light of the major investment agreements concluded by Indian companies in the energy sector, including the signing of two agreements for the production of green hydrogen and green ammonia in Egypt with an investment cost of up to $12 billion, in addition to other Indian investments in various sectors,” an official release stated.
The minister added that his country is ready to provide all necessary support and facilitation for Indian investors, highlighting Egypt’s efforts to create a favorable business climate by improving infrastructure, developing new ports, and enhancing existing facilities, including the Suez Canal Economic Zone.
El-Khatib also underscored India’s growing presence in other industries within the Egyptian market.
During the discussions, the minister extended an official invitation to Goyal to visit Egypt in 2025 to further strengthen bilateral economic ties and explore additional collaboration opportunities.
“Goyal confirmed the ministry’s commitment to taking the necessary measures to facilitate the entry of Egyptian products into the Indian market, particularly agricultural exports,” the release added.
The meeting also covered preparations for an upcoming visit by an Indian business delegation, led by the Asian country’s Ministry of Commerce and Industry and the Confederation of Indian Industry, to discuss the nation’s proposed industrial area in the Suez Canal Economic Zone.
