LONDON: China is expected to buy more oil from Saudi Arabia and other Gulf producers as it seeks to replace US supply amid a worsening trade war with Washington.
Although China last week omitted US crude from a list of a retaliatory tariffs, analysts told Arab News that the Chinese were cutting forward orders for US oil in case the trade war escalates.
Richard Mallinson, co-founder of London consultancy Energy Aspects, said: “Chinese buyers, anticipating that crude and LNG could go on the list if tensions escalate further, are looking to alternative sources.”
Mallinson said that Chinese buyers wanted to avoid having significant amounts of US oil sitting on tankers in the middle of the ocean, which would be hit with tariffs when unloaded at Chinese ports.
“There is definitely an opportunity for Middle East producers here, and particularly the biggest, Saudi Arabia,” he said.
Andrew Critchlow, head of energy news (EMEA) at S&P Global Platts, told Arab News that there was every likelihood of more demand from China for non-US oil and “Saudi Arabia and other Gulf Cooperation Council countries were the place to get it.”
OPEC already provides 56 percent of China’s oil imports, according to the International Energy Agency (IEA). The US has also been exporting increasing levels to the Asia powerhouse.
A report by the Houston Chronicle on Aug. 13, said that US crude exports to China surged from about 22,000 barrels per day (bpd) in 2016 to almost 400,000 bpd last year and early in 2018, accounting for about 20 percent of all US crude shipments.
This summer, those volumes fell below 200,000 barrels daily, said the report.
Critchlow said that the Kingdom was currently producing about
10.5 million bpd with spare capacity of around 2 million bpd, although the closer you get to that number, the more difficult it was to extract and process, he said.
Russia could also ramp up production, but not as much as KSA, said Critchlow.
“We now have the IEA upping its demand forecast for 2019. They have increased their OPEC barrels estimate by a few hundred thousand barrels a day and by half a million a day by 2019 (for the OPEC 15),”
he said.
But the scope for increased global export potential from the Gulf was also being driven by anticipated tighter supply after the reimposition of US sanctions against Iran later this year.
Still, there was a danger of demand erosion the longer the trade wars continued, and especially if there was further escalation.
Shakil Begg, head of Thomson Reuters oil research in London, warned that by the second half of 2019, global GDP could be cut if world trade levels contracted.
That would lead to a sharp fall in the price of crude, and even herald a US recession that could spill into Europe, he told Arab News.
But Critchlow made the crucial point that the big competition in the oil market today “is to win a bigger share of the Chinese and Asian market, including India.”
He said: “That’s where the battle for market share will take place over the next decade. Also, as Iranian barrels are lost, customers in nations such as China, South Korea, India and Japan will look to the GCC and others to step in.”
US exporters will still be a big force to be reckoned with, he said. The IEA has predicted that the US will overtake KSA and Russia as the largest producer by as early as 2019.
Mallinson said: “At the end of this year and the beginning of next, the market is going to get extremely tight. And the Saudis will have to pump at much higher levels.
“When you’ve got buyers restricted from where they go, it does create alternatives to move upwards,” said Mallinson.
But he warned that if the trade war worsens, it could hobble economic growth.
“These are the two largest economies in the world and it is not good news for them getting into a conflict like this.
“But even with a severe economic slowdown, we still see a tight oil market next year. Iran and sanctions are the biggest driver.”
Mallinson said that there were two other constraints: Underinvestment in capital projects outside the US, and infrastructure bottlenecks
in America.
“Those factors are big enough on the supply side to outweigh the possibility of a sharp slowdown of growth on the demand side,” he said.
Gulf exporters to reap oil dividend as battle for Asia market share heats up
Gulf exporters to reap oil dividend as battle for Asia market share heats up
- Chinese exports to US fall
- IEA ups demand forecast
Saudi Arabia’s Tabuk targets development with over $67m investment deals
JEDDAH: Investment contracts worth SR252 million ($67.2 million) have been signed to boost Saudi Arabia’s Tabuk region, focusing on healthcare, logistics, housing, entertainment, and education to spur economic growth.
The agreements, finalized during a visit by Minister of Municipalities and Housing Majid Al-Hogail, are expected to stimulate the local economy while generating both direct and indirect employment opportunities, the Saudi Press Agency reported.
During his tour to the region, Al-Hogail held discussions with regional investors and business leaders, focusing on expanding opportunities in municipal and housing development.
The minister underscored the government’s commitment to fostering investments that align with the aspirations of Tabuk’s residents and contribute to Vision 2030’s broader economic goals.
The inspection visit included reviews of key infrastructure projects, including road upgrades, traffic system enhancements, and housing developments.
Al-Hogail emphasized the importance of ensuring high-quality services for residents and visitors, stressing that these initiatives are integral to achieving the ministry’s strategic objectives.
He also witnessed the delivery of 533 new housing units to beneficiaries of the Development Housing Program, a key initiative supporting low-income families in Saudi Arabia.
This latest distribution brings the total number of housing units delivered under the program to 2,479, highlighting the government’s commitment to addressing housing needs.
At the start of his tour, Al-Hogail met with municipal leaders and heads of municipalities to discuss progress on ongoing projects, emphasizing the need for continuous improvements in service delivery.
He also visited the Prince Fahd bin Sultan Promenade, where redesigned storefronts inspired by Tabuk’s heritage have transformed the area into a vibrant destination for locals and tourists.
Al-Hogail inaugurated a branch of the Real Estate Developer Services Center, Etmam, which streamlines government services for beneficiaries in one location. He engaged with citizens to gather feedback and suggestions for further enhancing municipal services in the region.
The visit coincided with the announcement by the Ministry of Municipalities and Housing’s investment arm, the National Housing Co., of 11 new residential projects in Khuzam, north of Riyadh. These developments, featuring over 10,000 modern-designed units, are aimed at achieving the Kingdom’s homeownership goals.
This visit is part of a series of inspections the minister is conducting across Saudi Arabia to oversee municipal and housing sector initiatives, review ongoing projects, and ensure their progress aligns with Vision 2030’s transformative goals.
Pakistan Stock Exchange crosses 96,000 to hit record intraday high
- Higher remittances, exports, foreign investment credited for bullish activity, analysts say
- Stock Exchange witnessing bullish trend since government slashed policy rate this month
ISLAMABAD: The Pakistan Stock Exchange on Tuesday surged past 96,000 points to hit a record high in intraday trading, with analysts attributing the rally to a current account surplus in October due to higher remittances, exports and foreign direct investment.
The benchmark KSE-100 index climbed to a record 935.66 points or 0.98 percent to stand at 95,931.33 from the previous close of 94,995.67 points. It touched the 96,036.48 mark for the first time at 2:44pm PST.
Ahsan Mehanti at the Arif Habib Corporation told Arab News potential investors had weighed surging foreign reserves as well as government decisions over reforms for loss-making state-owned enterprises, independent power producers and energy pricing.
“Stocks bullish on reports of current account surplus of $349 million in Oct. 2024 on higher remittances, exports and FDI rising by 32pc to $904m for Jul-Oct. 2024,” he said. “The next triggers could be easing political noise amid protest calls by opposition.”
Pakistan’s external current account recorded a surplus of $349 million in October 2024, marking the third consecutive month of surplus and the highest in this period. The current account reflects a nation’s transactions with the world, encompassing net trade in goods and services, net earnings on cross-border investments and net transfer payments.
A surplus indicates that a country is exporting more than it is importing, thereby strengthening its foreign exchange reserves.
A bullish trend has been observed at the stock market since Pakistan’s central bank cut its key policy rate by 250 basis points, bringing it to 15 percent earlier this month. It’s economic indicators have also steadily improved since securing a 37-month, $7 billion bailout from the International Monetary Fund (IMF) in September.
Before this, the country went through a prolonged economic crisis that drained its foreign exchange reserves and saw its currency weaken amid double-digit inflation.
Last year, Pakistan narrowly avoided a sovereign default by clinching a last-gasp $3 billion IMF bailout deal.
Saudi Arabia’s National Housing Co. launches 11 residential projects in Riyadh’s Khuzam area
JEDDAH: Saudi Arabia’s National Housing Co. has launched 11 projects in Riyadh’s Khuzam area, offering over 10,000 units to meet growing demand for quality housing in the Kingdom.
These developments, including modern designs, are part of NHC’s strategic push to diversify housing supply and address the varied needs of Saudi families.
The projects range from luxurious villas to contemporary apartments, catering to different client needs, according to a press release.
These include Khuzam Park Residence, with units up to 379 sq. meters, and Tala Khuzam, offering units as large as 430 sq. meters. Additionally, the Tala Khuzam project features units as small as 219 sq. meters.
NHC, one of the leading developers of suburban and residential areas in Saudi Arabia, plays an important role in the real estate sector, focusing on improving quality of life and expanding housing supply across the Kingdom.
These efforts are aligned with Vision 2030, which aims to raise homeownership among Saudi families to 70 percent.
The company also announced the Eyal Khuzam project which offers luxury units up to 796 sq. meters, while Jawharat Khuzam 1 boasts units up to 929 sq. meters. The Nafah project offers units up to 600 sq. meters.
Within the Regan compound, which was unveiled at the Cityscape exhibition earlier this month, NHC introduced Rasin Rejan Hills and Ewan Rejan projects, with residential units up to 435 sq. meters. The company said both developments feature high privacy, 24/7 security, and are positioned as ideal living spaces in Khuzam.
Additionally, NHC launched the Azyan Khuzam project, offering units from 200 to 471 sq. meters, and the Jadaya project, with units up to 538 sq. meters. The Ewan Khuzam project includes villas of up to 594 sq. meters.
NHC emphasizes its commitment to maintaining quality standards with thoughtful designs and well-integrated infrastructure, including educational, health care, sports, cultural, and commercial amenities, as well as green spaces.
Over the course of the four-day Cityscape exhibition, NHC signed more than 38 agreements worth over SR5 billion ($1.33 billion) in the supply chain sector.
These agreements, which involve both local and international companies, cover various areas including logistics services, securing essential materials, and localizing industries within the sector.
COP29: Developing countries urge action on climate finance deal
RIYADH: Measures available to manage the rising global temperature are not sufficient, a leading Thai official has told the UN’s climate change conference in Baku.
Speaking at COP29 in Azerbaijan, the Asian country’s Minister of Natural Resources and the Environment, Chalermchai Sri-on, called for decisions to be made on climate financing to help those nations most affected by rising temperatures.
His comments were echoed by other ministers throughout the morning session, which came a day after the UN’s climate chief Simon Stiel told world leaders to “cut the theatrics and get down to business” with regards to agreeing a funding deal for developing countries.
Addressing delegates, Sri-on said: “The first global stocktake significantly showed that our current efforts are still insufficient to control global temperature increase.”
Malaysia’s Minister of Natural Resources and Environmental Sustainability, Nik Nazmi Nik Ahmad, urged developed nations to fulfill their financial responsibilities, ensuring funds are “accessible and impactful.”
Romania’s Minister of the Environment, Waters and Forests, Costel Alexe, called for prioritizing action over political differences, stating: “Failure is not an option for anyone.”
He also emphasized Romania’s focus on private-sector partnerships for decarbonization in energy, transport, and industry.
Diego Pacheco of Bolivia pointed to the responsibility of developed nations, stating: “Our countries are suffering the impacts of climate change, due largely to the historical emissions of developed countries.”
Sophalleth Eang, Cambodia’s minister of environment, reaffirmed Cambodia’s ambitious climate targets, including carbon neutrality by 2050, as outlined in its 2020 updated nationally determined contributions.
Franz Tattenbach, Costa Rica’s minister of environment and energy, expressed optimism in the ripple effects of decarbonization, saying: “We are an ambitious country, and we hope to scale up our ambition. We believe that decarbonization could lead to decarbonization in other countries.”
Austria’s Leonore Gewessler highlighted the need for urgent united action, saying: “It is our collective responsibility to make more progress without further delay.”
Additional leaders addressed the challenges of achieving meaningful climate goals amid global crises.
Burkina Faso’s Roger Baro urged for substantial commitments to protect the environment and develop resilient economies, while Celine Caron-Dagioni of Monaco called for updated contributions aligned with long-term climate goals.
Namibia’s Pohamba Penomwenyo Shifeta stressed the importance of balanced climate financing.
Speakers also showcased national achievements and initiatives. Uruguay’s Robert Bouvier Torterolo highlighted the country’s renewable energy success, with over 95 percent of its electricity derived from sustainable sources. Senegal’s Daouda Ngom emphasized the need for accessible financing to support adaptation plans.
Nigeria’s Balarabe Abbas Lawal detailed investments in renewable energy and afforestation, while Rwanda’s Valentine Uwamariya highlighted the significant economic cost of climate change to her nation and called for “ambitious, balanced, fair, and just outcomes” from the climate change forum.
Jordan wholesale trade price index increases 1.3% in first 9 months of 2024
RIYADH: Jordan’s wholesale trade price index increased by 1.31 percent year-on-year during the first nine months of 2024, driven primarily by higher prices for goods such as agricultural raw materials and tobacco, according to the country’s Department of Statistics.
The index reached 107.97 points, up from 106.40 points in the same period of 2023.
The largest contributor to the increase was the agricultural raw materials, grains, food, beverages, and tobacco category, which saw a rise of 3.35 percent. This was followed by a 1.47 percent increase in the fuel, metals, construction materials, and supplies group.
Other sectors showed more modest growth, including a 0.21 percent rise in machinery, equipment, and supplies, a 0.14 percent increase in textiles, clothing, personal, and household goods, and a slight 0.04 percent increase in motor vehicles, parts, and motorcycles.
In the third quarter of 2024, the wholesale trade price index rose by 1.41 percent year on year, reaching 107.97 points compared to 106.47 points during the same period in 2023.
The rise was driven mainly by a 3.16 percent increase in the agricultural raw materials, grains, food, beverages, and tobacco group, as well as a 2.48 percent rise in the fuel, metals, and construction materials group. Prices for textiles, clothing, personal, and household goods rose by 0.62 percent, while motor vehicles, parts, and motorcycles saw a 0.28 percent decline.
Machinery, equipment, and supplies prices decreased by 0.64 percent. On a quarterly basis, the index increased by 0.11 percent compared to the previous quarter, with the largest gains seen in agricultural raw materials (up 0.82 percent) and textiles, clothing, personal, and household goods (up 0.18 percent).
Jordan’s inflation this year has been shaped by both domestic and global factors. From January to October, the consumer price index rose by 1.56 percent, reaching 110.58 points compared to 108.88 points during the same period in 2023. Key contributors to inflation included an 11.6 percent surge in personal item prices, a 7.34 percent increase in water and sanitation services, as well as higher costs in union dues, rental prices, and tobacco products.
The industrial sector also played a role in driving inflation, with Jordan’s industrial production index rising by 0.48 percent through September. This increase was led by strong growth in the mining sector (up 8.34 percent) and electricity production (up 5.41 percent), while manufacturing output declined by 0.28 percent.
External factors, such as rising global food and energy prices, regional instability, and changes to subsidies and taxes, have contributed to price volatility, affecting wholesale trade and broader economic trends in Jordan.
Tourism, which accounts for about 12 percent of the country’s gross domestic product, has been particularly hard hit by regional conflicts. A report by Reuters noted that visitor numbers to popular sites like Petra have dropped dramatically, from around 4,000 per day to just 400.
