Qatar’s exit from OPEC will have ‘no major impact’ on oil prices

A liquid natural gas tanker being loaded in northern Qatar. The Arab nation, which has been under a trade embargo by a group of Arab states, announced on Monday that it would switch its focus to gas production. (AP Photo)
Updated 04 December 2018
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Qatar’s exit from OPEC will have ‘no major impact’ on oil prices

  • Qatar produces around 600,000 barrels of crude oil per day compared with the near 10 million barrels a day produced by Saudi Arabia
  • Qatar is the 11th-largest producer out of 15 members in OPEC and accounts for less than 2 percent of the oil group’s output

LONDON: Qatar’s decision to exit OPEC next month is unlikely to have a significant impact on the oil group’s structure or on short-term oil prices, according to analysts.
The Gulf country announced on Monday it would leave OPEC from Jan. 1 2019. It plans to attend the next meeting of the group due to take place in Vienna on Dec. 6.
The move is viewed as “symbolic” and reflects deepening regional divisions, market commentators said. Qatar has been under a trade embargo imposed by a Saudi Arabia-led group of Arab states since last June, following accusations that the country was fueling regional instability and funding terrorism.
“Qatar’s decision to exit OPEC will have no major impact on the cartel’s decision-making process, oil output or oil prices in the short term,” said Abhishek Kumar, senior energy analyst at Interfax Energy in London.
“Qatar is one of OPEC’s smallest oil producers, and its upstream strategy has revolved around natural gas production,” he said.

 

Qatar produces around 600,000 barrels of crude oil per day compared with the near 10 million barrels a day produced by Saudi Arabia, according to data from 2017. Qatar is the 11th-largest producer out of 15 members in OPEC and accounts for less than 2 percent of the oil group’s output.
“The move is highly symbolic — Qatar has been a member of OPEC since 1961. But we doubt that it will have a major bearing on global energy markets,” read a note from Jason Tuvey, senior emerging markets economist at Capital Economics on Monday.
Rejecting suggestions the decision was politically motivated, Qatar’s energy ministry said on Monday that it wanted to focus more on gas production.
“In the next few months we will be announcing several major projects. Our goal in this strategy was to remain focused on our core business and activities to enhance Qatar’s international standing as the world’s leading natural gas producer,” the ministry said.
Analysts said that the departure could have implications for regional politics. “Although Qatar has dismissed suggestions that its exit from OPEC was driven by geopolitics, the move could deepen tensions in the Middle East,” said Kumar.
“Qatar leaving OPEC can be seen as Saudis consolidating their influence within the cartel. Meanwhile, Iran’s economy is set to face further headwinds because of sanctions imposed by the US, which has the potential to ratchet up tensions in the Middle East,” he said.
Ehsan Khoman, head of MENA research and strategy at MUFG, based in Dubai, questioned the timing of the exit and suggested Qatar might look to increase oil production just as the oil cartel is due to cut production.
“More importantly is the timing of Qatar’s withdrawal — just three days before OPEC meets in Vienna to finalize the production cuts. This suggests that Qatar may have an agenda to raise production while others in OPEC are curbing production, although Qatar’s oil output has been steady in recent years with limited prospects of increases — given maturing fields,” he said in a research note.
OPEC is due to announce cuts to oil production this week in Vienna in an effort to stabilize the market and counter a potential glut in supply. This could push up Brent oil prices to the mid-$60 per barrel level, Khoman said.
Qatar’s economy has been fairly resilient in the face of the embargo, said analysts. “The economy has defied the expectations of some analysts that the blockade would lead to recession,” said Tuvey.

FASTFACTS

Qatar has been a member of OPEC since 1961.


Saudi Aramco maintains propane, butane prices for December

Updated 15 sec ago
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Saudi Aramco maintains propane, butane prices for December

RIYADH: The Saudi Arabian Oil Co., also known as Saudi Aramco, kept its December contract prices unchanged month on month at $635 per tonne, according to an official statement

The company also maintained butane prices for the month at $630 per tonne.

Propane and butane are types of liquefied petroleum gas with different boiling points. LPG is commonly used as a fuel for vehicles, heating, and as a feedstock for various petrochemicals.

Aramco’s OSPs for LPG are used as a benchmark for contracts supplying the product from the Middle East to the Asia-Pacific region.

In winter, the demand for propane rises significantly due to its use in heating homes, which can lead to higher prices if supply struggles to keep up.

Such fluctuations are a normal part of the market and are expected during colder months. The increase in prices reflects the basic economic principle of supply and demand, with higher demand resulting in higher costs.


Mawani, Lloyd’s Register ink deal to streamline maritime operations

Updated 12 min 41 sec ago
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Mawani, Lloyd’s Register ink deal to streamline maritime operations

RIYADH: The Saudi Ports Authority has signed an agreement with the UK’s Lloyd’s Register to unify and streamline operational and maritime procedures across Saudi ports.

The deal is set to enhance efficiency by developing comprehensive manuals and guidelines, including quality and environmental procedure manuals that align with International Organization for Standardization standards, the Saudi Press Agency reported.

The collaboration aligns with Mawani’s efforts to improve operational excellence at ports and strengthen Saudi Arabia’s connectivity with global markets, thus boosting national exports. As part of the partnership, the Saudi Ports Authority aims to double the container throughput capacity at its ports, from 20 million containers to over 40 million.

This goal is part of Saudi Arabia’s broader vision to modernize its logistics infrastructure under the National Transport and Logistics Strategy, which targets increasing the sector's contribution to gross domestic from 6 percent to 10 percent.

The deal also seeks to define clear responsibilities through a code of good practices, ensuring compliance with updated International Maritime Organization agreements.

Additionally, the partnership will help secure international certifications such as ISO 9001:2015 for quality management and ISO 14001:2015 for environmental management, further enhancing operational efficiency, customer satisfaction, and sustainability practices.

As part of the cooperation, comprehensive training programs will be offered to port employees, including courses on ISO standards, maritime certifications, and the latest inspection and safety protocols. Digital solutions and cutting-edge technologies will also be integrated to support sustainable operations and improve overall port competence.

Lloyd’s Register, a renowned maritime classification society established over 260 years ago, is one of the most prestigious organizations in the global maritime sector. The company operates in 81 offices worldwide and serves over 40,000 clients across the maritime and logistics industries.

 


Aramco launches global innovation award for robotics excellence at WRO 2024

Updated 20 min 30 sec ago
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Aramco launches global innovation award for robotics excellence at WRO 2024

Aramco has partnered with the Aston Martin Aramco Formula One® Team and World Robot Olympiad to launch the Aramco Innovation Award, a new global honor recognizing excellence in robotics design and technology.

The award aims to inspire and reward young innovators who excel in creativity, problem-solving, critical thinking and technical skills.

The first Aramco Innovation Award will be presented at the 2024 World Robot Olympiad international final, which will take place from Nov. 28-30 in İzmir, Turkiye.

It will be given to the winning team of the future innovators category (senior age group). More than 5,500 teams and 15,000 students from around the world will compete for the award.

At the international final, 48 teams from 45 countries are eligible to win.

The prize includes an exclusive Aston Martin Aramco Formula One® Team Innovation Experience, which features a tour of the AMR Technology Campus in Silverstone, the home of British motorsport.

Khalid A. Al-Zamil, Aramco vice president of public affairs, said: “We’re excited to launch the Aramco Innovation Award as part of our dedication to developing future science, technology, engineering and math innovators. By partnering with Aston Martin Aramco Formula One® Team and World Robot Olympiad, we aim to inspire young minds to explore new possibilities in robotics and encourage the next generation of STEM careers.”

Luca Furbatto, engineering director, Aston Martin Aramco Formula One® Team, said: “We are thrilled to work with our partner Aramco to offer this insightful tour of our technology campus in Silverstone to the winners of the Aramco Innovation Award. It allows students the chance to see how a Formula One® team operates, and we expect it will help to inspire the next generation of designers and engineers through STEM opportunities.”

The Aramco Innovation Award celebrates young innovators who use robotics to address real-world challenges. By recognizing these achievements, Aramco and its partners are investing in future technology leaders who will help to shape the technologies of tomorrow’s world.

Claus Ditlev Christensen, secretary general of WRO, said: “Introducing the Aramco Innovation Award at this year’s WRO international final represents our ongoing mission to inspire young innovators. This collaboration with Aramco and Aston Martin Aramco Formula One® Team gives students an extraordinary chance to experience the latest technology. We believe these future leaders have the potential to drive the next wave of advancements in robotics.”


Saudi Arabia strengthens cybersecurity leadership at Black Hat MENA

Updated 33 min 30 sec ago
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Saudi Arabia strengthens cybersecurity leadership at Black Hat MENA

RIYADH: Saudi Arabia reinforced its commitment to cybersecurity by hosting the Black Hat Middle East and Africa conference and exhibition this week. The event, held from Nov. 26-28, highlighted the Kingdom’s efforts to advance digital security and technological innovation as part of its broader Vision 2030 goals.

Organized by the Saudi Federation for Cybersecurity, Programming, and Drones in partnership with Tahaluf, Informa Global, and the Events Investment Fund, Black Hat MENA brought together global experts to discuss critical cybersecurity issues and share insights on protecting digital infrastructures, the Saudi Press Agency reported.

One day before the gathering, Mutab Al-Qunai, CEO of the Saudi Federation for Cybersecurity, told SPA that the event aims to foster innovation and collaboration in digital safety

The conference included a series of technical sessions and workshops centered on the role of cybersecurity in safeguarding emerging technologies. The Kingdom’s efforts to cultivate local talent and align with international cybersecurity standards were key themes. Notably, the event featured a drone challenge zone, aimed at engaging Saudi youth in drone technology and the cybersecurity challenges it presents.

Experts such as Nikhil Shrivastava, an Indian security researcher, and Bianca Lewis, founder of Girls Who Hack, contributed to discussions on the evolving landscape of cybersecurity threats and solutions.

Black Hat MENA also featured five national pavilions, with representatives from the US, Canada, India, Egypt, and Pakistan, alongside 43 exhibitors. The event hosted over 300 speakers, 450 exhibitors, and 350 workshops covering a wide array of cybersecurity topics.

The Activity Zone, sponsored by Haboob, presented cybersecurity challenges with prizes totaling more than SR2 million ($532,000). These included tests on smart home security, medical device hacking, and infrastructure vulnerabilities. The Capture the Flag tournament also took place, awarding SR790,000 in prizes, including SR90,000 for Saudi teams.

Faisal Al-Khamisi, chairman of the Saudi Federation for Cybersecurity, emphasized that hosting Black Hat MENA aligns with Saudi Arabia’s goal to lead in cybersecurity. He said the event demonstrated the Kingdom’s commitment to innovation, collaboration, and developing the cybersecurity skills necessary to protect the digital future.

Saudi Arabia’s efforts to strengthen its cybersecurity infrastructure and cultivate talent position the Kingdom as a growing hub for technological innovation in the region.


FMCG and tech drive UAE spending to $3.7bn in Q3 2024

Updated 28 November 2024
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FMCG and tech drive UAE spending to $3.7bn in Q3 2024

RIYADH: UAE consumer spending saw robust growth in the third quarter of 2024, with total expenditures reaching $3.7 billion across fast-moving consumer goods, technology, and durable products, new data showed. 

This represents a 4.8 percent year-on-year increase, reflecting the market’s resilience and evolving consumer habits, according to the latest NielsenIQ Retail Spend Barometer, powered by GfK intelligence. The index provides quarterly insights into UAE spending across FMCG and technical consumer goods. 

The FMCG sector spearheaded growth, achieving $2.1 billion in sales during the third quarter, a 6.4 percent rise compared to the same period in 2023. Meanwhile, the technology and durable goods sector contributed $1.5 billion, marking a 2.5 percent year-on-year increase.   

Strong back-to-school sales  

The quarter’s performance was bolstered by back-to-school promotions, the expansion of convenience retail, and the ongoing rise of digital shopping platforms. QuickCommerce services and online grocery delivery gained traction, especially among younger, tech-savvy consumers. 

David Cantatore, retail lead NIQ Middle East, said: “In the third quarter 2024, we’ve witnessed sustained growth in UAE’s retail landscape, with strong consumer spending driven by targeted promotions and increased demand in both FMCG and tech sectors.” 

He added: “The growth of new communities is fueling convenience retail, while online grocery shopping is reshaping the landscape, especially among younger and busy professionals. This digital evolution demonstrates the market’s appetite to adapt and thrive in response to changing consumer preferences.”   

FMCG outpaces tech   

The FMCG sector demonstrated a strong recovery, with year-on-year growth rising from 3.2 percent in the third quarter of 2023 to 6.4 percent a year later. This resurgence followed a notable slowdown earlier in the year, when growth declined from 9.4 percent in the first quarter of 2023 to 3.5 percent in the corresponding period of 2024. 

In contrast, the tech and durable goods sector faced a significant slowdown, as growth dropped from 7.7 percent in the third quarter of 2023 to 2.5 percent in 2024. However, back-to-school promotions and new product launches, such as the Samsung Galaxy S24, helped sustain consumer interest.  

Retail evolution  

The rise of new residential communities across the UAE has driven the expansion of convenience retail, encouraging more frequent but smaller shopping trips. This trend aligns with an increasing preference for sustainable and healthier products, supported by the rapid adoption of digital grocery platforms. 

“The positive growth we’re seeing across both sectors reflects the UAE’s dynamic retail environment and strong consumer confidence,” Cantatore said. 

He added: “As we continue to witness the evolution of shopping behaviors and the rise of digital solutions, the retail sector remains well-positioned for sustained growth and innovation.” 

Digital trade in the UAE is expected to grow at an annual rate of 12.3 percent between 2023 and 2028, fueled by the increasing adoption of “buy now, pay later” models and advanced fintech systems. 

A joint report released in May by the Ministry of Economy and the Abu Dhabi Chamber of Commerce highlighted that over 40 percent of UAE consumers rely on innovative payment solutions, underscoring the nation’s rapid shift toward digital commerce.