SEOUL: South Korea’s purchases of US oil and gas this year will hold to the rapid pace set in 2018, narrowing its trade surplus with the world’s top economy further and bolstering its ties to Washington.
South Korea is expected in January and February to import at least 18 million barrels of crude oil and 900,000 tons of liquefied natural gas (LNG) from the US, according to Refinitiv Eikon.
That is a four-fold increase on oil from a year earlier and a slight drop on LNG, indicating the record US crude and LNG volumes heading into South Korea in 2018 are set to continue, supported by favorable market conditions brought about by rising US oil and gas output.
The jump in South Korea’s US oil and gas imports comes as US President Donald Trump continues to push to reduce trade deficits with major US trading partners. US oil and LNG exports are a key part of this strategy.
“At the moment, the trend (of importing US crude) will stay. The economics for US crude is a little bit better than Middle East and North Sea oil,” said a South Korean refining source who declined to be named due to company policy.
Record US crude oil and LNG volumes flowed into South Korea in 2018, while supplies from the Middle East were tightened amid OPEC-led output cuts and a reimposition of US sanctions on Iran.
The US was South Korea’s sixth-biggest crude supplier last year, its highest ranking ever as it overtook Iran and Russia. It also became South Korea’s third-largest LNG supplier, while South Korea was the top importer of US LNG.
South Korea’s US oil and gas imports more than quadrupled in value to $6.75 billion in 2018 from $1.5 billion in 2017, according to the country’s customs data.
The US oil import value of $4.5 billion alone was more than six times the $725 million taken in US oil in 2017.
“Buying more US oil and gas was part of (Seoul’s) strategy as our wide trade surplus against the US was grounds for revising the Korea-US free trade deal,” said Je Hyun-jung, director at the Korea International Trade Association.
South Korea’s 2018 trade surplus with the US at $13.86 billion was the lowest since 2011, down 22.4 percent from $17.86 billion a year earlier, the customs data showed.
In 2017, Trump threatened to renegotiate or scrap what he called a “horrible” bilateral trade deal that had doubled the US trade deficit with South Korea since 2012.
The two countries agreed to revise the deal last year, with Seoul capping its steel exports to the US to avoid hefty tariffs and giving greater market access to US carmakers. The revision took effect on Jan. 1.
Tilak Doshi, a Singapore-based analyst at consultancy Muse, Stancil & Co, said that improving trade ties between South Korea and the US will also support their shared goal of North Korea’s denuclearization.
South Korea imports almost all of its energy. It is the world’s fifth-largest crude and third-largest LNG importer, typically taking 80 percent of its oil and more than 40 percent of its LNG from the Middle East.
However, in 2018, as US oil flows grew, the Middle East’s share of South Korean crude imports dropped to 73.5 percent, the lowest since 2002.
While it is not certain freight rebates for non-Middle East crude imports — part of South Korea’s diversification push — will continue, higher US crude output and wider discounts for West Texas Intermediate (WTI) will make US oil attractive to South Korean buyers looking for cheaper sources outside their traditional suppliers.
GS Caltex, South Korea’s No. 2 refiner, bought 10 million barrels of US crude, mainly WTI Midland and Mars, for arrival over January-February, said a company spokesman, as US oil has became more price competitive.
South Korea’s hunt for condensate to replace Iranian supplies is also expected to intensify later this year as waivers from US sanctions start to expire in May.
South Korea steps up US oil, gas buys as Mideast supplies tighten
South Korea steps up US oil, gas buys as Mideast supplies tighten
- South Korea is expected in January and February to import at least 18 million barrels of crude oil and 900,000 tons of liquefied natural gas (LNG) from the US
- The jump in South Korea’s US oil and gas imports comes as US President Donald Trump continues to push to reduce trade deficits with major US trading partners
Oil Updates — crude jumps as new US sanctions to curb Russian supply to China, India
SINGAPORE: Oil prices extended gains for a third session on Monday, with Brent rising above $80 a barrel to its highest in more than four months, as wider US sanctions are expected to affect Russian crude exports to top buyers China and India.
Brent crude futures climbed $1.14, or 1.43 percent, to $80.90 a barrel by 10:41 a.m. Saudi time after hitting an intraday high of $81.49, the highest since Aug. 27.
US West Texas Intermediate crude rose $1.20, or 1.57 percent to $77.77 a barrel after touching a high of $78.39, the most since Oct. 8.
Brent and WTI have risen by more than 6 percent since Jan. 8, and both contracts surged after the US Treasury imposed wider sanctions on Russian oil on Friday.
The new sanctions included producers Gazprom Neft and Surgutneftegas, as well as 183 vessels that have shipped Russian oil, targeting the revenue Moscow has used to fund its war with Ukraine.
Russian oil exports will be hurt severely by the new sanctions, pushing China and India, the world’s top and third-largest oil importers respectively, to source more crude from the Middle East, Africa and the Americas, which will boost prices and shipping costs, traders and analysts said.
“Friday’s announcement strengthens our view that the risks to our $70-85 Brent range forecast are skewed to the upside in the short term,” Goldman Sachs analysts said in a note.
“We estimate that the vessels targeted by the new sanctions transported 1.7mb/d of oil in 2024 or 25 percent of Russia’s exports, with the vast majority being crude oil.”
Expectations of tighter supplies have also pushed Brent and WTI monthly spreads to their widest backwardation since the third quarter of 2024. Prompt prices are higher than those in future months in backwardation, indicating tight supply.
RBC Capital Markets analysts said the doubling of tankers sanctioned for moving Russian barrels could serve as a major logistical headwind to crude flows.
Many of the tankers named in the latest sanctions have been used to ship oil to India and China as previous Western sanctions and a price cap imposed by the Group of Seven countries in 2022 shifted trade in Russian oil from Europe to Asia. Some of the ships have also moved oil from Iran, which is also under sanctions.
“The last round of OFAC (US Office of Foreign Assets Control) sanctions targeting Russian oil companies and a very large number of tankers will be consequential in particular for India,” said Harry Tchilinguirian, head of research at Onyx Capital Group.
JPMorgan analysts said Russia had some room to maneuver despite the new sanctions, but it would ultimately need to acquire non-sanctioned tankers or offer crude at or below $60 a barrel to use Western insurance as per the West’s price cap.
Closing Bell: Saudi main index rises to close at 12,126
- Parallel market Nomu gained 12.14 points, or 0.04%, to close at 31,039.53
- MSCI Tadawul Index gained 1.87 points, or 0.12%, to close at 1,512.01
RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Sunday, gaining 29.22 points, or 0.24 percent, to close at 12,126.97.
The total trading turnover of the benchmark index was SR4.26 billion ($1.13 billion), as 140 of the stocks advanced and 91 retreated.
The Kingdom’s parallel market Nomu gained 12.14 points, or 0.04 percent, to close at 31,039.53. This comes as 47 of the listed stocks advanced, while 34 retreated.
The MSCI Tadawul Index gained 1.87 points, or 0.12 percent, to close at 1,512.01.
The best-performing stock of the day was Fitaihi Holding Group, which debuted on the main market on Sunday, with its share price surging 6.15 percent to SR4.66.
Other top performers included Saudi Industrial Investment Group, which saw its share price rise 5.59 percent to SR17.00, and Fawaz Abdulaziz Alhokair Co., whose share price surged 4.88 percent to SR15.46.
Arabian Pipes Co. recorded the biggest decline, with its share price falling 3.62 percent to SR12.24.
Maharah Human Resources Co. followed, with its stock price decreasing 2.75 percent to SR6.73.
Takween Advanced Industries Co. also experienced a drop, with its share price slipping 2.39 percent to SR10.62.
On the announcements front, Banan Real Estate Co. completed the acquisition of a 45 percent stake in Qimam Noshz Real Estate Development Co., with a total capital of SR71 million.
According to a Tadawul statement, the stake is to be divided with Banan Real Estate Co. holding 23 percent, while its subsidiary, Al-Aziziah Investment and Real Estate Development Co., holding 22 percent.
Banan Real Estate Co. closed the session at SR6.80, down 0.88 percent.
Al-Etihad Cooperative Insurance Co. has signed an agreement with AlRajhi Bank to provide bancassurance services and quotations for leased vehicle comprehensive insurance.
A bourse filing revealed that this partnership is part of the “Lease with a Promise to Own” program. The one-year contract’s revenues are projected to exceed 5 percent of the company’s gross written premiums reported in its 2023 annual financial statements. The financial impact of this agreement is expected to reflect in the firm’s performance starting from the first quarter of 2025.
Al-Etihad Cooperative Insurance Co. closed the session at SR17.86, up 0.57 percent.
Scientific and Medical Equipment House Co. announced it has been awarded a project tender by the General Directorate of Health Affairs in Najran Region valued at SR99 million.
According to a Tadawul statement, the project covers the maintenance and repair of medical devices and equipment for several hospitals in the area. The financial impact of the project is anticipated to begin in the second quarter of 2025.
The firm ended the session at SR51.60, marking a 51.60 percent increase.
Saudi Arabia ranks 7th globally in IPO proceeds, leads GCC region
- Kingdom accounted for 42 of the 53 IPOs in the GCC in 2024
- UAE led in terms of proceeds with $6.2 billion
RIYADH: Saudi Arabia led the Gulf Cooperation Council’s initial public offerings market in 2024, earning a global ranking of seventh in total IPO proceeds, according to the latest report from Kamco Invest.
The Kingdom accounted for 42 of the 53 IPOs in the GCC last year, significantly outpacing its regional peers and aligning with expectations to maintain its leadership in the coming year.
The surge in listings highlights Saudi Arabia’s dominant position in the regional capital markets and its role as a key driver of IPO activity across the GCC.
The figure represents a sharp increase from 46 IPOs across the GCC in 2023, underscoring continued investor interest and market dynamism.
GCC issuers collectively raised $12.9 billion in 2024, a 19.8 percent increase from $10.8 billion in 2023, despite global IPO markets experiencing their weakest performance since 2009.
Within the GCC, Saudi companies contributed $4.1 billion, amounting to 31.6 percent of total regional proceeds.
While the UAE led in terms of proceeds with $6.2 billion, its share of GCC IPO proceeds dropped from 56.3 percent in 2023 to 47.8 percent in 2024.
Oman ranked third, with state-backed privatizations raising $2.5 billion, or 19.3 percent of total GCC proceeds.
The majority of Saudi IPOs occurred on the Nomu–Parallel Market, which hosted 28 of the Kingdom’s listings.
The main market recorded 14 IPOs, including standout listings such as Dr. Soliman Abdel Kader Fakeeh Hospital, which was oversubscribed 119 times and garnered orders worth $91 billion.
Other notable listings included Almoosa Health, Miahona Utilities, and Nice One Beauty Digital Marketing.
The strong demand was driven by a local investor base and underscored the resilience of Saudi capital markets despite challenges such as declining oil prices and geopolitical tensions.
The report said that sectors such as health care, materials, and professional services were among the most active in Saudi IPOs, reflecting strong fundamentals and investor confidence in these industries.
Globally, the GCC ranked fourth in IPO proceeds, trailing China, the US, and Japan, demonstrating its growing importance as a financial hub.
Looking ahead to 2025, Saudi Arabia is expected to further dominate, with 31 IPOs in the pipeline, according to Kuwait-based asset management company Kamco Invest.
The Kingdom’s Public Investment Fund is set to play a pivotal role with upcoming listings of Saudi Global Ports, Nupco, and Tabreed District Cooling, among others. Several private companies, including flynas, Tabby, and Ejada Systems, are also preparing IPOs.
Oman plans to privatize up to 30 assets in the coming years, with Asyad Group and Oman Electricity Transmission Co. expected to go public in 2025.
In the UAE, major listings are anticipated from hotel operator FIVE and real estate companies under Dubai Holding, alongside Dubizzle Group and Alpha Data.
Despite external headwinds like geopolitical tensions and rising economic pressures, the GCC IPO market has proven resilient, with a robust pipeline of offerings across various sectors.
Oman’s import price index up 1.1% in Q3 2024
- Largest price hike was recorded in miscellaneous manufactured goods category, which rose by 11%
- Mineral fuels and related materials saw a significant decrease of 22.2%
RIYADH: Oman’s general index of import prices saw an increase of 1.1 percent in the third quarter of 2024 compared to the same period in 2023, according to data from the National Center for Statistics and Information.
The largest price hike was observed in the miscellaneous manufactured goods category, which rose by 11 percent. This was followed by beverages and tobacco (up 6.7 percent), and food and live animals (up 5.7 percent).
Other notable increases included machinery and transport equipment (5.3 percent), chemicals and related materials (4.3 percent), raw materials (4.3 percent), manufactured goods primarily categorized by material (1.6 percent), and vegetable and animal oils, fats, and waxes (0.9 percent).
In contrast, the category of mineral fuels and related materials saw a significant decrease of 22.2 percent.
This increase in import prices aligns with Oman’s overall rise in imports, which grew by 10.8 percent, reaching 8 billion Omani rials ($20.8 billion) by June 2024, up from 7.2 billion rials in the same period of 2023.
Additionally, the general index of import prices declined by 4.8 percent when compared to the second quarter of 2024. This drop was largely due to decreases in the prices of beverages and tobacco (-22.4 percent), mineral fuels and related materials (-11.6 percent), and chemicals and related materials (-10.8 percent).
The miscellaneous manufactured goods category also saw a reduction of 10.2 percent, while machinery and transport equipment dropped by 3.9 percent. However, the raw materials category saw a 32 percent increase, vegetable and animal oils, fats, and waxes rose by 9.2 percent, and food and live animals increased by 3.5 percent.
Lending trend
Oman’s banking sector experienced a 4.2 percent year-on-year growth in the total balance of credit granted by the end of November 2024, reaching 32.2 billion rials.
According to the Central Bank of Oman, credit to the private sector grew by 5.1 percent, totaling 26.8 billion rials during the same period. This growth reflects the central role of the banking sector in providing credit within the Omani economy, especially given the limited access the private sector has to debt capital markets. In 2022, private sector credit represented 55.4 percent of the country’s gross domestic product, a trend consistent with data from the International Monetary Fund.
Further breakdowns of the credit data revealed that the largest share (45.3 percent) of the private sector credit went to individuals, followed closely by non-financial companies at 45.1 percent. The remaining 9.6 percent was divided between financial firms (6.1 percent) and other sectors (3.5 percent).
In terms of deposits, the total balance in Omani banks grew by 10.8 percent, reaching 31.5 billion rials by the end of November. Of this, private sector deposits increased by 9.2 percent, amounting to 20.6 billion rials.
The breakdown of private sector deposits revealed that the individual sector held the largest share at 49.7 percent, followed by the non-financial corporate sector at 30.6 percent, and the financial corporate sector at 17.1 percent. Other sectors accounted for 2.6 percent.
Saudi entertainment authority launches 3rd startup accelerator to drive innovation
- Program offers consulting, mentorship, and international exposure to participating startups
- Initiative runs for 10 months and is designed to foster entrepreneurship
RIYADH: Saudi Arabia’s entertainment sector is set for growth as the General Entertainment Authority launches the third edition of its accelerator program, which will support 32 startups.
The initiative is designed to drive innovation, foster entrepreneurship, and help shape the future of the Kingdom’s entertainment industry, according to the Saudi Press Agency.
The 10-month accelerator program offers participating startups a comprehensive suite of benefits, including mentorship, consulting, co-working spaces, and international exposure.
Each cohort, consisting of 16 companies, will receive 192 hours of expert guidance and two international trips to explore global market trends.
Aligned with Saudi Arabia’s Vision 2030 objectives of economic diversification, the program is set to play a key role in strengthening the entertainment ecosystem. With projections indicating that the sector will generate 450,000 jobs and contribute 4.2 percent to the country’s gross domestic product by 2030, the initiative aims to enhance innovation, attract investment, and position Saudi Arabia as a regional entertainment hub.
The program builds on the success of its previous editions. The first accelerator, launched in 2023, reviewed 260 project registrations and selected 14 startups after a rigorous vetting process. Entrepreneurs benefited from weekly workshops, personalized consulting, and opportunities to connect with investors.
In the second edition, which launched in mid-2023, the GEA expanded its efforts to help startups overcome market challenges and achieve sustainable growth. Tailored programs helped participants navigate the unique obstacles of the entertainment sector, increasing their chances of success.
The GEA’s initiative is part of a broader strategy to support the Kingdom's growing entertainment industry. Through this accelerator, the GEA aims to foster an environment where innovation thrives, businesses grow, and global partnerships are forged.
In addition to the extensive mentorship and training, participants also had access to 56 hours of expert counseling in June 2023, with speakers and consultants from Saudi Arabia’s leading entrepreneurs sharing valuable insights.
The success of the first two accelerators laid the foundation for the third edition, which is expected to continue driving momentum in the entertainment sector as it evolves into a major contributor to Saudi Arabia’s economic transformation.
