DUBAI: Amin Nasser, president and chief executive of Saudi Aramco, expects a continuing improvement in the global oil market after the most difficult time he has ever seen in the energy business.
Nasser, speaking to Energy Intelligence ahead of a conference this week, said the events of the past six months — when oil demand was severely affected by worldwide economic lockdowns — were unlike any other cyclical downturn in crude markets.
“It’s completely different. My generation hasn’t seen anything like this. I don’t think the world has seen anything like this. If you look at the economic impact and what happened across the world, this is clearly significant,” he said.
But he said there were signs that the worst was over, despite the threat of second wave impacts from the COVID-19 pandemic. “At this stage we see the recovery picking up but, of course, this depends on whether there is a vaccine and how soon it will be available, if there is a second wave and how significant. We could see some back and forth, but there are good signs and we’re expecting to see a better market in the fourth quarter and next year,” he said.
In April daily global demand crashed from around 100 million barrels per day (bpd) to between 75 million and 80 million, and West Texas Intermediate crude, the American benchmark, fell briefly to minus $40 a barrel, meaning producers would pay customers to take oil away.
“It is encouraging to see that the worst is over and demand has sharply recovered from those exceptionally low levels. If you look at the forecasts from the International Energy Agency, they show demand recovering to 96 million by the fourth quarter of this year and 99 million toward the end of next year,” Nasser said.
The recovery was especially strong in Asia, he added. “What we see in Asia, especially China, which is our biggest market, is a strong recovery. In China, almost all demand for oil products is back to pre-COVID levels, except for jet fuel.”
Aramco, which listed on the Saudi Arabia stock market last year to become the world’s most valuable oil company, is monitoring its financial position in light of the revenue decline from low prices.
“We have intensified our cost discipline and are focusing on capital flexibility. We are being very prudent when it comes to capital spending, adhering to strict capital discipline. We are looking at all of our projects and stretching some discretionary ones out where necessary, while maintaining our maximum sustained capacity of 12 million bpd. Also, we are continuing to expand our gas portfolio in the Kingdom,” Nasser said.
“A lot of focus is on capital discipline and maximizing value for our shareholders. That’s what we have demonstrated in the first and second quarters, despite difficult conditions, while meeting our commitment when it came to dividends.”
He added that there were opportunities to “squeeze more value” from its existing assets, especially in downstream operations. Some energy experts have suggested Aramco should spin off or refinance assets such as its pipeline business.
“We’re going to do it right and will make sure what’s executed by this organization [the new Corporate Development unit within Aramco] is in line with our longterm view, the strategy of retaining our core businesses in-house and what can be optimized with our partners. This involves a careful review process that will take some time,” Nasser said.
He will be named Energy Executive of the Year 2020 in a ceremony at the conference next week. “Nasser has guided the world’s largest oil company through a period of considerable change and upheaval in Saudi Arabia itself and in global oil markets more generally,” Energy Intelligence said.
Oil recovering from 'worst time in my generation' — Aramco president
https://arab.news/bje24
Oil recovering from 'worst time in my generation' — Aramco president
- Nasser said there were signs that the worst was over, despite the threat of second wave impacts from the COVID-19 pandemic
- He will be named Energy Executive of the Year 2020 in a ceremony at the conference next week
Yemen and Iraq lead call for more crisis finance
BAKU: A group of conflict-affected countries led by Iraq and Yemen is pushing at the COP29 climate talks to double financial aid to more than $20 billion a year to combat the natural disaster and security crises they face.
States mired in conflict or its aftermath have struggled to access private investment, because they are seen as too risky. That means UN funds are even more critical to their people, many of whom have been displaced by war and weather.
In response, the COP29 Azerbaijan presidency on Friday launched launch a new “Network of Climate-vulnerable Countries,” including Iraq, Yemen, Burundi, Chad, Sierra Leone, Somalia and Timor-Leste. They all belong to the g7+, an intergovernmental group of fragile countries that first sent the appeal.
The network aims to advocate as a group with climate finance institutions, build capacity in member states so they can absorb more finance, and create country platforms so investors can more easily find high-impact projects in which to invest, said think tank ODI Global, which helped the countries create the network.
“My hope is it will create a real platform for the countries in need,” said Abdullahi Khalif, chief climate negotiator for Somalia.
Half of UK businesses impacted by Middle East conflict
- British Chambers of Commerce survey shows companies faced increased costs, shipping disruption
LONDON: Half of British businesses say they have been affected by the conflict in the Middle East, according to a survey from the British Chambers of Commerce.
The findings show that on top of the devastating human impact of the fighting in Gaza and Lebanon, the economic repercussions are being felt around the world.
Houthi militants in Yemen began attacking shipping in the Red Sea shortly after the Oct. 7 Hamas attacks sparked Israel’s war on Gaza.
The militants claim they are targeting ships linked to Israel and its allies in solidarity with Palestinians. The result has been a huge reduction in traffic through one of the world’s busiest maritime trade routes.
The BCC said shipping container rates have risen sharply since the conflict began. The cost of shipping a 40-ft (12-meter) container from Shanghai to Rotterdam has risen from just over $1,000 at the start of the conflict to just under $4,000 now. Prices peaked at more than $8,000 in July.
Most shipping companies operating between Asia and Europe have opted to send vessels around the longer Cape Horn route rather than through the Red Sea and Suez Canal.
In the survey of about 650 businesses published this week by the BCC’s Insights Unit, UK firms said the conflict had led to increased costs, shipping disruption and delays, and uncertainty over oil prices.
Half of those asked said the conflict had affected them, compared to just over a quarter in a similar survey in October 2023. This suggests more businesses worldwide have been affected by the fighting the longer it has gone on.
William Bain, the BCC’s head of trade policy, said: “Alongside the grim human impact of the ongoing conflict in the Middle East, the situation continues to have economic reverberations around the world.
“The effect on businesses here in the UK has continued to ratchet up the longer the fighting has continued.
“If the current situation persists, then it becomes more likely that the cost pressures will build further.”
Economists have warned that while the effects on the global economy have so far been largely limited to shipping costs and delays, further escalation could have a much wider impact.
The biggest concern would be a disruption to oil and gas supplies that would lead to a surge in global energy prices, fueling inflation.
COP29 unveils Baku Call initiative to bridge climate finance and peace for vulnerable communities
- Elshad Iskandarov highlighted the 450 million people who live in regions simultaneously impacted by conflict and climate vulnerability
BAKU: The world’s most vulnerable communities stand at the heart of the newly launched “Baku Call on Climate Action for Peace, Relief, and Recovery,” unveiled on Friday at COP29.
The initiative addresses the urgent need to tackle the interconnected challenges of climate change, conflict and humanitarian crises.
Backed by key nations from both the Global North and South — including Egypt, Italy, Germany, Uganda, the UAE and the UK — it introduces the Baku Climate and Peace Action Hub as a platform for driving peace-sensitive climate actions and unlocking vital financial support for affected regions.
Speaking to Arab News, Ambassador Elshad Iskandarov of the COP29 Presidency articulated the stakes clearly, pointing to the 450 million people who live in regions simultaneously impacted by conflict and climate vulnerability.
“These compounded crises not only strain existing resources but also hinder the effective delivery of climate finance,” he said.
The Baku Call seeks to address this by providing a centralized mechanism to coordinate efforts across stakeholders — governments, UN agencies, think tanks and peace-building organizations. “The hub will serve as a unified entry point for vulnerable nations, ensuring streamlined access to climate finance and technical support,” he said.
The initiative builds on established frameworks such as COP27’s Climate Responses for Sustaining Peace and COP28’s Declaration on Climate, Relief, Recovery, and Peace, while adding practical innovations.
Iskandarov highlighted a digital portal in development that will provide a clear overview of existing climate finance mechanisms, application requirements and best practices.
“Imagine a country facing daily challenges of conflict, development and climate impact. Without proper guidance, navigating six to nine funding channels becomes nearly impossible,” he said. The portal aims to close this gap by strengthening national capacities and offering tools to access and manage climate funding effectively.
A central focus of the initiative lies in developing pilot projects tailored to conflict-affected areas, where conventional funding approaches often fall short. “In regions with strong non-state violent actors, we must ensure that funds reach the communities in need without falling into the wrong hands,” Iskandarov said.
To achieve this, the hub will facilitate close collaboration with UN agencies and local communities, designing projects that integrate peacebuilding goals and adhere to stringent oversight standards.
Partnerships have been instrumental in shaping the initiative. The ambassador commended the co-lead nations for their shared commitment to inclusivity and cooperation, noting how countries such as the UAE, Egypt and the UK brought their experiences as prior COP hosts to strengthen the effort.
“This is not about initiative nationalism,” he said. “We’ve drawn lessons from the pandemic, where global unity was key, and applied them to forge a collaborative approach to the climate and peace nexus.”
The Baku Call also seeks to shift the broader narrative around climate and peace. Iskandarov expressed a long-term vision where this intersection is no longer synonymous with crisis and destruction but instead embodies hope and development. “Our ultimate goal is to create a future where the nexus of climate and peace signifies resilience and harmony, not despair,” he said.
Gulf’s record FDI inflows growing the pie for all, says Bahrain’s economic strategy chief
MANAMA: Gulf countries’ success in attracting foreign investments is a win-win for the region, a senior business strategy expert has told Arab News.
In an interview on the second day of the Bahrain International Airshow, Nada Al-Saeed, chief of strategy at the Bahrain Economic Development Board, described the Middle East’s growing ability to attract funding as “fantastic,” noting that it brings greater attention to the region.
In 2023, Saudi Arabia secured foreign direct investment inflows of SR96 billion ($25.6 billion), 16 percent higher than its target amount, while Bahrain received a record $1.7 billion over the same period, marking an 55 percent annual increase.
“When Saudi Arabia or the UAE does very well, it means that we could also benefit from that. I think that we often see the region as very competitive. I like to see it as a very collaborative and I think that everybody could benefit. If the pie gets larger, each individual’s share will also get larger.” she said.
Reflecting on Bahrain’s FDI increase, Al-Saeed said that figure relates to the Economic Development Board’s achievements.
“If we are looking at the foreign direct investments’ statistics and results, we will see Bahrain actually attracted a much larger number than that, but this represents a record number for the EDB,” she said.
Al-Saeed noted that funding secured in 2023 went to investment projects across all of Bahrain’s priority sectors, which include financial services, communication and technology, and manufacturing, as well as logistics and tourism,
“These are the key priority non-oil sectors identified by the government, and they are the focus of the EDB. The board has dedicated teams for each sector to promote and attract investments in these areas,” she said.
She also said that these projects have contributed to job creation in the country, and she expected this investment trend to continue.
Explaining how her organization’s strategy aligns with the country’s economic vision for 2030, Al-Saeed said that the EDB, as the nation’s investment promotion agency, works very closely with a wider ecosystem of stakeholders known as “Team Bahrain.”
This group has tailored its investment promotion strategies to mirror the government’s national economic plans.
“Back in October 2021, the government launched the economic recovery plan where it identified key priority sectors, and the EDB aligned to that in order to ensure that we operate as a cohesive unit, and we are able to attract the right investments that will further stimulate the development and growth of our country,” the chief officer said.
Discussing the unique advantages Bahrain offers, Al-Saeed highlighted the country’s success over the past decades in attracting regional investors that now play a vital role in the nation’s economy.
“If we look at our foreign direct investment statistics, we will see the majority of our foreign investments come from the GCC region, and that is predominantly in the financial services sector, and this is a trend that we have seen since the 70s, where Bahrain managed to attract a lot of regional capital in the financial services sector from Saudi Arabia, Kuwait, the UAE, and others, of course.” she said.
“There are many advantages because we treat GCC investors like Bahrainis when it comes to the processes of establishing business activities,” Al-Saeed added.
In addition, Bahrain has a wide range of incentives that are offered to investors.
One of these is the work of the country's labor fund, Tamkeen, which offers businesses the opportunity to support hiring local talent, as well as training and upskilling them to meet the needs of those companies.
Al-Saeed highlighted recent regulatory changes aimed at making Bahrain more attractive to global businesses and startups, and emphasized that significant efforts have been made to ensure the state remains both competitive and conducive to investments and business growth.
“Maybe one of the key, or most recent initiatives that is worth highlighting, is the Golden License program that was launched back in April 2023, which aims to provide streamlined services to strategic investment projects that are valued at $50 million or that creates 500 jobs here in Bahrain,” she said.
The chief officer added that through this initiative, projects and companies can benefit from expedited services when it comes to getting approvals, licenses or even access to decision makers.
“This has been very instrumental in terms of ensuring that we provide high-class services to investors,” said Al-Saeed, noting that nine projects have been granted Golden License status since the initiative was launched.
She further said that the total of those projects is valued at $2.4 billion, with investors coming from various sectors and different regional and global countries, including Bahrain.
In response to a question about the role of the aviation sector in the EDB’s investment strategy, Al-Saeed stated that it helps create a conducive investment environment, as it is what connects Bahrain with the rest of the world.
“This is not just in terms of the movement of people but also in transporting goods and service through air cargo. So, it is very important; as we do not target just the market that is within our geographic boundaries, but we aim to serve a much wider area and catchment area,” she said.
Saudi Arabia’s demand for apartments pushes new mortgages over $16bn
RIYADH: Banks in Saudi Arabia granted SR60.92 billion ($16.24 billion) in residential mortgages in the first nine months of 2024, an annual rise of 4.88 percent.
The data was released by the Saudi Central Bank, also known as SAMA, and it showed the bulk of the loans — constituting 64 percent or SR38.85 billion — was allocated for house purchases.
This segment did witness a 3.38 percent dip year on year, with its proportion of total loans shrinking from the 69 percent seen during the same period of 2023.
Demand for apartments surged, capturing 31 percent of total mortgages, up from 25 percent a year ago, as this category of lending reached SR18.6 billion.
This shift represents a 26.8 percent growth, underscoring the increasing preference for apartment ownership amid urbanization and demographic changes.
Additionally, loans for land purchases showed a promising trajectory, achieving an annual growth rate of 8.26 percent and amounting to SR3.5 billion, which signals a sustained interest in land investment across the Kingdom.
The rise in new residential bank loans across Saudi Arabia is being driven by a blend of population growth, evolving mortgage policies, and increasing interest in apartment living.
According to a recent report from online real estate platform Sakan, the Kingdom’s population surged by four million over the past five years, with demand for housing climbing in response.
While this trend fuels the broader housing market, apartments have become a prominent focus, reflecting changing demographics and affordability needs.
The growth of the expatriate population, which expanded from 9.9 million in 2010 to 13.4 million in 2022 and now makes up over 40 percent of the population, also adds pressure on the rental market, particularly in major cities.
The government’s push for greater home ownership through buyer-friendly mortgage policies is helping fuel this apartment demand.
Favorable mortgage options and the recent introduction of the Premium Residency Visa, often dubbed the “Saudi Green Card,” allow foreign investors to enter the market with purchases over SR4 million, fostering interest in upscale residential investments.
Additionally, the value proposition of apartments is clear, as with SR1 million, buyers can access apartment sizes that vary by city — for instance, around 131 sq. meters in North Riyadh to a more spacious 333 sq. meters in Dammam, according to the report.
Saudi Arabia’s liberalized foreign ownership policies and affordable mortgage terms further boost demand, particularly for apartments in desirable areas.
The high rental yields offered by apartments in Saudi Arabia also attract investors, with two- and three-bedroom apartments in Riyadh delivering yields of 9 to 10 percent, and even higher returns in Jeddah, where a two-bedroom unit yields 11.7 percent.
These returns are notably higher than apartment yields in neighboring Gulf cities, where they average between 5 to 6 percent in Dubai, Abu Dhabi, and Doha.
High rental yields not only make apartments attractive as long-term investments but also help offset rising property costs, driving both end-users and investors to favor this category in a market characterized by shifting residential preferences.
According to the report, the surge is also driven by the rapid evolution of real estate technology.
Platforms like Sakan are reshaping the real estate landscape by enhancing transparency, streamlining property transactions, and providing data-driven insights for buyers and investors alike.
Leveraging local knowledge and international expertise, these platforms are supporting the sector’s growth by simplifying access to property listings, improving market transparency, and facilitating faster transaction times.
As property technology continues to integrate into the Saudi market, it is poised to play a pivotal role in sustaining the momentum of residential lending and meeting the needs of a tech-savvy, expanding population.
