Quick action by OPEC+ stabilized oil markets during the coronavirus crisis, says IEF chief Joseph McMonigle

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Updated 02 March 2021
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Quick action by OPEC+ stabilized oil markets during the coronavirus crisis, says IEF chief Joseph McMonigle

  • Secretary general of the International Energy Forum was interviewed on the Arab News video show Frankly Speaking
  • McMonigle discussed rising oil prices, looming investment crunch and the fight against climate change among other big issues

DUBAI: Saudi Arabia and Russia have been commended by one of the thought leaders of the global energy industry for playing a “responsible, leadership role” via the OPEC+ alliance in stabilizing oil markets during the coronavirus pandemic.

Joseph McMonigle, secretary general of the International Energy Forum (IEF), the world’s biggest forum for energy policymakers, also spoke of the looming investment crunch in the oil industry and the crucial role that technology will play in the global battle against climate change.

He was interviewed on Frankly Speaking, the Arab News video show in which leading policymakers and business executives give their candid opinion on some of the big issues of the day.

McMonigle took over at the IEF last year after two decades’ experience in the global energy business, including a stint as adviser to the White House administration of George W. Bush.

“OPEC+ has been quite responsible in stabilizing oil markets during the pandemic, and of course like every other producer it had to adjust its demand lower, but really they took a leadership role right out of the box,” he said.

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The Kingdom, alongside Russia, played a crucial role in limiting excess supply of crude onto fragile markets at the height of the crisis last year, when oil demand fell by 30 per cent and global crude prices plunged into negative territory in some markets.

“Really only due to their quick action were prices able to stabilize during the summer,” McMonigle said. “I think if we just said ‘Let’s wait and just see how market forces affect everything,’ I think it would have been a much more painful transition period.”

Nevertheless, he believes Saudi Arabia and OPEC do not want to see oil prices soaring too fast as the world recovers from the pandemic.

According to him, producers in the region and worldwide are conscious of the risks to economic growth from a “supercycle” in energy prices that some analysts have predicted.

“I don’t think that OPEC and the producers here in the region are necessarily so thrilled with supercycle type prices,” McMonigle said.

“I think they recognize, from the last time this happened, that it wasn’t good for the global economy, and I think they’ve realized now that healthy customers and a healthy global economy is the best for their industry and the best for the energy market.”

His comments came as crude oil prices hit new post-pandemic highs, with Brent crude, the global benchmark, up 20 per cent over the past month to stand at around $66 per barrel.

Some analysts have forecast the Brent will reach $75 in the summer, and could even spike to $100 as demand soars on economic recovery prospects and vaccines are rolled out across the world.

But with OPEC+ just days away from a crucial meeting to decide oil supply levels, McMonigle warned that lack of investment last year as prices plummeted could come back to bite the global industry.

“There’s not much we’re going to be able to do about demand returning faster and stronger than estimated but we can do something on the supply side, and that’s really going to take this investment that we talked about,” he said.

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“If we’re in a full recovery at the end of the year from the pandemic I think you’re going to see demand be stronger and faster than forecasted, and so if you combine that with the investment crisis, I think the outlook for higher oil prices is quite good.”

The role of the IEF is to encourage dialogue and consultation between energy producers and consumers, and its work has been thrown into sharp relief by the pandemic energy crisis, as well as its effect on accelerating energy transition away from hydrocarbons.

“We have a much more diverse membership and so our agenda is expanded outside of just fossil fuels and we’re very involved in the energy transition and the role of natural gas and obviously paying very close attention to renewables,” McMonigle said.

The new emphasis on renewables — like solar, wind and nuclear energy sources — has struck a chord in Saudi Arabia, which has put in place some $10 billion worth of investment in the sector and announced plans to produce half its electricity from renewable sources by 2030.

But McMonigle also emphasized the role hydrocarbons still have to play in the global energy mix and the importance of innovative technology to mitigate the effect of harmful emissions.

“I think it’s important to recognize that wind and solar energy alone can’t really help us meet our climate goals,” he said. “We really need a shift now by governments and industry to invest more in clean energy R&D, technology and innovation, with a goal to reduce greenhouse gas emissions.

At a recent meeting of the IEF with European Union energy policymakers, Prince Abdul Aziz bin Salman, the energy minister of Saudi Arabia, underlined the Kingdom’s commitment to renewable sources, and to the use of hydrogen as a fuel of the future.

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“Hydrogen is a very hot and trending topic now and I think that’s because the EU has recognized intellectually that wind and solar just can’t do it alone, and we’re not going to just go off of fossil fuels. We need a replacement and so that’s why I think they’re investing so much in hydrogen, and Saudi Arabia is getting very involved in it,” McMonigle said.

Saudi Arabia has backed the framework of the Circular Carbon Economy (CCE) as a strategy to mitigate and remove the harmful emissions that cause global warming, and that framework was endorsed by G20 leaders at last year’s summit under the Saudi presidency.

McMonigle said that the key to CCE was investment in new technology. “Up until now really it’s just been the US, maybe also the UK, Norway and Australia that have invested in it, but if Saudi Arabia is going to get behind it in a big way that’s really going to advance the technology - not just on this but on the other technologies that will help us solve our climate crisis,” he said.

One crucial technology aspect is the direct capture of carbon from the air, which is a focus of significant Saudi energy research.

The effects of climate change and extreme weather conditions were recently demonstrated in the US, where the Texas electricity network was overwhelmed by severe low temperatures that also seriously affected the state’s oil industry.

Some experts have blamed the Texas policy of renewable investment for the crisis, but McMonigle disagreed.

“Certainly, renewable energy was affected, but natural gas generation was also affected as well. I think it’s a lot more complicated than just pointing out one or two fuel sources,” he said, highlighting the once-in-a-century nature of the Texas storm and the state’s unique regulatory structure as contributory factors.

Some critics of the hydrocarbon industry predict that the rise of electric vehicles (EV) will, in the long term, contribute to the decline of petrol cars and “peak” oil demand, encouraged by environmental legislation in some countries.

“There’s tremendous momentum behind EVs. Last year there were 2.3 million EVs sold globally — that's about one in every 40 cars sold was an electric vehicle or hybrid. These numbers are only going to grow and some forecasts suggest that global EV sales will make up more than 50 per cent in most vehicles segments by the year 2035,” McMonigle said.

But that does not necessarily mean the imminent end of oil as the main global energy source, he insisted.

“Fossil fuel and hydrocarbon demand is going to continue out to 2040 and maybe some of it gets affected by EVs. But you still have jet fuel, you still have diesel, you have petrochemicals that are driving a lot of the growth,” he said.

“The point here is that you know oil is going to be a dominant energy source for the foreseeable future.”

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Twitter: @frankkanedubai

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UAE shares end higher as outcome of US-China trade talks awaited

Updated 09 June 2025
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UAE shares end higher as outcome of US-China trade talks awaited

LONDON: Stock markets in the UAE ended higher on Monday, in step with Asian peers, as investors awaited the outcome of US-China trade talks in London in the hope that a deal could boost the global economic outlook.

Top US and Chinese officials will sit down in London on Monday for talks aimed at defusing the high-stakes trade dispute between the two super powers that has widened to export controls over goods and components critical to global supply chains.

Dubai’s benchmark index hit its highest levels since 2008 and settled up 1 percent, with almost all sectors in positive territory.

Tolls operator Salik Company gained 2.3 percent and Deyaar Development surged 14.6 percent.

In Abu Dhabi, the index was up for a third straight session and gained 0.1 percent, lifted by a 1.6 percent rise in blue-chip developer Aldar Properties and a 1.8 percent advance in Abu Dhabi’s flagship energy firm Abu Dhabi National Energy Company.

Most stock markets in the Gulf and Egypt including Saudi, Qatar, Kuwait are closed on Monday due to a public holiday.


Saudi commercial bank profits jump 16% in April, topping $2bn before zakat, tax

Updated 09 June 2025
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Saudi commercial bank profits jump 16% in April, topping $2bn before zakat, tax

  • Year-to-date earnings reached SR32.97 billion, an annual rise of 20%
  • Banks getting balance sheets ready for next investment wave

RIYADH: Saudi Arabia’s banking sector extended its winning streak in April, posting SR7.77 billion ($2.07 billion) in pre-zakat and tax profits, a 16 percent increase compared to the same month last year.

According to the Saudi Central Bank, also known as SAMA, this brought year-to-date earnings to SR32.97 billion, an annual rise of 20 percent, keeping the Kingdom firmly on course for another record-breaking period.

The sustained momentum is attributed to a robust mix of state spending on giga-projects, resilient consumer demand, and still-elevated interest rates.

Financing volumes continue to climb, driven primarily by corporate borrowers across a growing range of industries, including manufacturing, utilities, insurance, and private education. 

Speaking at the inaugural 24 Fintech conference in September, Finance Minister Mohammed Al-Jadaan said the Kingdom had licensed 224 fintech firms by the second quarter of 2024. File/SPA

Contractors are also racing to secure long-term credit for giga-projects such as NEOM, Diriyah, and the Jafurah gas field.

A wider Gulf picture

Strong as those local figures are, the broader region is also gaining momentum. A Kamco Invest report released in May showed that Gulf banks collectively earned a record $15.6 billion in the first quarter of 2025, an 8.6 percent increase from a year earlier.

Financial institutions in the UAE posted the largest absolute increase, adding $639.6 million, while Saudi lenders recorded the fastest annual growth at 17.2 percent.

Kamco added that fee income is rising, costs are under control, and loan-loss provisions fell sharply during the period, cushioning a small dip in net interest income.

Investor appetite is visible in market valuations. Forbes Middle East’s “30 Most Valuable Banks 2025” March list includes 10 Saudi lenders with a combined market cap of about $269 billion— roughly one-third of the entire ranking.

Al Rajhi Bank led the pack at $105.6 billion, with Saudi National Bank following at $54.7 billion.

Contractors are racing to secure long-term credit for giga-projects such as NEOM, Diriyah, and the Jafurah gas field. NEOM

Global Finance named Saudi Awwal Bank the Kingdom’s best lender in its May “World’s Best Banks in the Middle East 2025” release, highlighting its HSBC-backed mobile app upgrades, Visa Direct payments, and one-stop small and medium-sized enterprises lending platform.

Cleaning the books and raising cash

Banks are also getting balance sheets ready for the next investment wave.

Bloomberg reported in March that lenders are exploring sales of older non-performing loans to specialist investors to free up capital for upcoming mega project drawdowns.

They’re also tapping capital markets. By June, they had issued over $5.6 billion in Additional Tier-1 bonds, already a full-year record and the world’s second-largest AT1 issuance in 2025, according to Bloomberg.

The spree includes Al Rajhi Bank’s $1.25 billion deal in April, Banque Saudi Fransi’s $650 million perpetual at 6.375 percent in May, Saudi Awwal Bank’s $650 million inaugural issue, and Alinma Bank’s $500 million of sustainable sukuk, all heavily oversubscribed.

Saudi National Bank was ranked in the Forbes Middle East’s “30 Most Valuable Banks 2025” March list. Shutterstock

By tapping eager investors now, while margins remain healthy and global demand for Gulf paper is strong, lenders are bulking up capital buffers and keeping loan-to-deposit ratios in check. That leaves them better prepared to fund the fast-rising credit needs of projects like NEOM and Diriyah without tripping liquidity alarms later in the year.

Fintech role

Fintech is reshaping Saudi banking from the ground up. The Saudi Central Bank’s Open Banking Framework — most recently updated in September to cover payment-initiation services — sets common technical rules that let lenders and start-ups plug their systems together safely and at speed.

Speaking at the inaugural 24 Fintech conference in September, Finance Minister Mohammed Al-Jadaan revealed that the Kingdom had licensed 224 fintech firms by the second quarter of 2024, up from fewer than 100 just three years earlier.

One of the newest players is Riyadh-based Stitch, which closed a $10 million seed round on May 28. The company offers a single set of application-programming interfaces that lets banks, fintechs and even non-financial brands bolt on real-time payments and open-banking functions far faster than older systems.

Early adopters already include Lulu Exchange and point-of-sale platform Foodics. The founders say the fresh cash will go toward doubling the engineering team and expanding the product suite.

Saudi Arabia’s sustained momentum is attributed to a robust mix of state spending on giga-projects, resilient consumer demand, and still-elevated interest rates. File/AFP

Looking ahead

Riyad Capital’s first-quarter preview, released in April, expects another double-digit profit rise this year, about SR19 billion for the listed banks it tracks, as loan growth stays strong and rate cuts arrive slowly.

S&P Global, in its Saudi Arabia Banking Sector Outlook 2025 report, says a 10 percent increase in lending should outweigh a 20- to 30-basis-point dip in margins, keeping sector returns on assets near 2.1 percent to 2.2 percent.

Funding is the main watchpoint. Moody’s shifted its system outlook to stable on Feb. 25, saying strong credit growth is tightening liquidity, but capital buffers remain solid.

For now, asset-quality risks remain low. S&P expects non-performing loans to edge up to just 1.7 percent by the end of 2025, while loan-loss provisions are projected to stay around 50 to 60 basis points. Banks’ total capital ratios, hovering near 19 percent, provide a solid buffer to absorb potential shocks from falling oil prices or rising private-sector leverage.

Saudi lenders are still the region’s earnings workhorse. Profits are rising, market values are high, and fresh money — from bond buyers to venture capitalists — is flowing in. If they can keep gathering deposits quickly enough to fund a fast-growing loan book, the Kingdom’s banks look set to stay ahead of their Gulf neighbors in both profit and ambition well into next year.


Saudi carrier flynas to expand operations across 4 hubs, official says 

Updated 09 June 2025
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Saudi carrier flynas to expand operations across 4 hubs, official says 

  • Hubs include Riyadh, Jeddah, Madinah, and Dammam as part of growth plan
  • Carrier expanded its summer schedule, launching four new international destinations

RIYADH: Saudi Arabia’s low-cost carrier flynas is set to expand operations across its four main hubs — Riyadh, Jeddah, Madinah, and Dammam — as part of an ambitious growth plan, according to a top official. 

In an interview with Al-Eqtisadiah, Waleed Ahmed, the company’s official spokesperson, said that flynas holds the largest aircraft order in the Kingdom and one of the biggest in the Middle East, with a total of 280 aircraft set to be received. 

This follows a major deal signed in July with Airbus to acquire 160 new aircraft, including 30 wide-body A330neo and 130 single-aisle jets across A320neo, A321neo, and A321LR models. 

The airline has seen a sharp rise in passenger traffic, with volumes climbing from around 11 million in 2023 to more than 14.7 million in 2024, reflecting the low-cost carrier’s rapid expansion in line with Saudi Arabia’s push to position itself as a leading global hub for tourism and business. 

“These numbers reinforce the company’s role in supporting Vision 2030, which aims to increase the number of passengers to 330 million and attract more than 150 million international passengers by that year.” Ahmed said, as quoted by Al-Eqtisadiah. 

He also highlighted that, as part of its ambitious strategic plan, flynas has expanded its summer schedule by launching four new destinations for the first time: Krakow in Poland, Geneva in Switzerland, Milan in Italy, and Rize in Turkiye, in addition to its usual summer routes. 

Last week, flynas finalized its initial public offering at SR80 ($21) per share — the top of its indicated price range — following strong demand from both institutional and retail investors. 

The pricing values the airline at an estimated market capitalization of SR13.6 billion at listing. 

The offering followed the company’s announcement last month of its intention to float 30 percent of its share capital on the Saudi Exchange, making flynas the first airline in the Kingdom to go public and the first Gulf airline IPO in nearly two decades. 

In line with its ongoing fleet expansion, flynas recently took delivery of its fourth Airbus A320neo of 2025, bringing the total number of A320neo aircraft in its all-Airbus fleet to 57. The current fleet includes 63 aircraft — 57 A320neo, four A320ceo, and two A330neo wide-body jets.


Al-Habtoor Group chairman to lead high-level delegation to Syria, exploring investment opportunities

Updated 09 June 2025
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Al-Habtoor Group chairman to lead high-level delegation to Syria, exploring investment opportunities

  • Group said visit reflects its ongoing strategy to explore new cooperation with Syrian government
  • Khalaf Al-Habtoor to visit Syria in coming days

RIYADH: The head of Dubai conglomerate Al-Habtoor Group is set to visit Syria with a delegation of senior executives to discuss potential investments and partnerships with the new government.

According to a statement, the visit reflects the group’s ongoing strategy to explore new avenues of cooperation with the Syrian government and to assess potential investment opportunities across multiple sectors. 

It added that the trip stems from “a firm belief” in Syria’s ability to recover its strength and regional standing and the importance of public-private partnerships in the country’s rebuilding phase.

The move comes as Syria’s transitional government, led by President Ahmed Al-Sharaa, pushes economic reforms to attract foreign investment, including privatizations, relaxed trade policies, and major infrastructure deals. 

Speaking ahead of the trip, the group’s Chairman Khalaf Ahmad Al-Habtoor said: “Syria is a country rich in culture, history, and capable people. We believe in its future potential and are eager to play a role in its revival through meaningful projects that generate employment.”  

He added: “We look to Syria with great confidence. Its people possess the energy and resilience needed to shape a strong and prosperous future. As an Arab group with deep regional roots, we consider it both a moral and economic responsibility to stand as a partner in rebuilding stable and thriving societies.”

Al-Habtoor Group, a UAE-based multinational with a strong presence in the hospitality, real estate, and automotive industries, has a history of large-scale investments in the Middle East. The move follows the organization’s recent withdrawal from Lebanon, where it cited instability as a barrier to business.


Jordan’s foreign exchange reserves hold steady at $22.76bn in May

Updated 09 June 2025
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Jordan’s foreign exchange reserves hold steady at $22.76bn in May

  • Gold holdings at the end of May were valued at $7.76 billion
  • Qatar Central Bank recorded a 3.6% increase in its foreign currency reserves and liquidity

RIYADH: Jordan’s foreign exchange reserves remained largely unchanged in May, standing at $22.76 billion, as per new data released by the Central Bank of Jordan. 

The slight month-on-month dip — about 0.2 percent from April — reflects broad stability in the Kingdom’s external buffers. 

Jordan’s foreign exchange figures are broadly in line with trends observed across other Middle East and North African countries. 

The Qatar Central Bank recorded a 3.6 percent increase in its foreign currency reserves and liquidity, reaching 258.135 billion Qatari riyals ($70.9 billion) in May, up from 249.165 billion riyals in May 2024. 

Jordan’s long-term foreign-currency issuer default rating was affirmed at “BB-” with a stable outlook by Fitch Ratings. File/AFP

Egypt’s foreign exchange reserves rose to $48.525 billion by the end of May, compared to $48.144 billion in April, marking an increase of $381 million. 

“The Central Bank of Jordan stated in a statement today that its total foreign reserves are sufficient to cover the country’s imports of goods and services for approximately nine months,” the Qatar News Agency reported. 

The central bank also reported that gold holdings at the end of May were valued at $7.76 billion, totaling 2.345 million ounces, underscoring the role of bullion in Jordan’s reserve composition. 

“It added that the presence of comfortable levels of foreign reserves enhances the ability to influence exchange rates, provides a stable economic environment, and enhances the confidence of foreign creditors and investors,” the QNA report stated, citing the Jordan Central Bank. 

The Central Bank of Jordan said its total foreign reserves are sufficient to cover the country’s imports of goods and services for approximately nine months. File/AFP

In May, Jordan’s long-term foreign-currency issuer default rating was affirmed at “BB-” with a stable outlook by Fitch Ratings, citing the country’s macroeconomic stability and progress on fiscal and economic reforms. 

The US-based credit rating agency noted that the rating and stable outlook also reflect Jordan’s resilient financing sources — including a liquid banking sector, a robust public pension fund, and sustained international support. 

Despite the stable outlook, Jordan’s credit rating remains below that of several other countries in the region. In February, Fitch affirmed Saudi Arabia’s IDR at “A+” with a stable outlook, while the UAE was rated “AA-.” 

Fitch said the ratings are constrained by high government debt, moderate growth, risks from domestic and regional politics, as well as current account deficits and net external debt levels that exceed those of rating peers. 

Jordan’s foreign exchange figures are broadly in line with trends observed across other Middle East and North African countries. Central Bank of Jordan

A “BB” rating indicates elevated vulnerability to default risk, particularly in the event of adverse shifts in business or economic conditions. However, it also suggests some degree of financial or operational flexibility in meeting commitments. 

Fitch also noted that Jordan’s government remains committed to advancing its three-pillar reform agenda — spanning economic, public administration, and political sectors — despite external pressures. 

The agency added that the pace of reforms will continue to be shaped by the need to preserve social stability, resistance from vested interests, and institutional capacity limitations.