Fearing Russian gas shut-off, France’s industry turns to oil
Top executives say they are preparing for possible blackouts
Updated 11 July 2022
Reuters
AIX-EN-PROVENCE, France: France’s energy-intensive companies are speeding up contingency plans and converting their gas boilers to run on oil as they seek to avoid disruption in the event any further reduction in Russian gas supplies leads to power outages.
Gathered over the weekend at a business and economics conference in southern France, several top executives said they were preparing for possible blackouts.
“What we’ve done is we’ve converted our boilers, so they’re capable of running on gas or oil, and we can even switch to coal if we need to,” said Florent Menegaux, the boss of Michelin, one of the world’s leading tiremakers.
“The aim is to avoid having to shut down a plant in case we face a shortage,” he added, saying that while a gas shortage in Europe was likely, oil would still be available as an alternative.
It takes days to start up tire production at a manufacturing plant, Menegaux said, making it essential to maintain a steady energy supply.
Russia in June reduced flows through the Nord Stream 1 pipeline, its main route for shipping gas into western Europe, to 40 percent of capacity. Politicians and industry are concerned there will be further supply constraints linked to Russia’s invasion of Ukraine, which Moscow describes as a “special military operation.”
Across Europe, industry has been resorting to more polluting fuel than gas as it gives precedence to tackling the cost to the economy of business disruption and surging energy prices, rather than longer-term targets to switch to zero carbon fuel.
French Finance Minister Bruno Le Maire told the top corporate executives attending the conference it would be irresponsible not to prepare for shortages.
“Let’s prepare for a cut-off of Russian gas,” he told them. “Today it’s the most likely scenario.”
France, relies on nuclear power for around 70 percent of its electricity, meaning it is far less directly dependendent on Russian gas than neighboring Germany.
However, the state-controlled electricity producer EDF is struggling to meet France’s needs because of outages at its aging power plants, increasing the strain on the rest of the energy sector.
Energy production at 29 of its 56 nuclear reactors has been halted by inspections and repairs.
The French government is checking company-by-company which ones depend on an uninterrupted energy supply.
It has also sought to reduce the impact of a surge in energy prices by capping retail gas and power prices until the end of the year, which has helped to keep French inflation among the lowest in Europe.
A chairman of another large industrial company, who asked not to be named, said on the sidelines of the conference he believed all big businesses were looking at a switch to oil.
Automaker Stellantis is weighing options to produce its own energy in case of an energy crunch, Chief Executive Carlos Tavares said at a French factory last month.
These include building its own energy plant or investing in an existing one to secure part of the production.
Poland’s former Energy Minister Michal Kurtyka, whose country relies on coal for 70 percent of its energy, told executives at the conference that Europe was headed for a “perfect storm” this winter.
M&A deals in Saudi Arabia rise in sign of foreign investor confidence: Marsh
Updated 28 March 2025
Dayan Abou Tine
RIYADH: Mergers and acquisitions in Saudi Arabia recorded a 55 percent annual rise in 2024 as deal value hit $9.6 billion, fueled by foreign investors and key sector activity.
According to Marsh’s Transactional Risk Insurance report, 59 M&A transactions closed in the Kingdom, with 25 percent of deal activity concentrated in the industrial sector, 20 percent in technology, and 14 percent in consumer and retail — all areas aligned with the country’s Vision 2030 economic transformation strategy.
This helped to fuel an increase in transactional risk insurance across the Gulf Cooperation Council region, with demand climbing 78 percent, the analysis showed.
The robust M&A industry throughout the Middle East and North Africa in 2024 was in contrast to trends in other regions, with a report released by GlobalData in December showing such transactions — as well as those involving private equity and venture financing — recording an annual fall of 8.7 percent during the first 11 months of the year.
In an interview with Arab News, Luke Sutton, head of transactional risk for the Middle East and Africa at Marsh, said: “Foreign investors accounted for 32 percent of Saudi Arabia’s $9.6 billion in M&A activity, including several deals involving consortiums of local and international buyers.”
He added: “The most active non-Saudi acquirers were from the US, UAE, and UK, with 25 percent of inbound investment concentrated in tech, 15 percent business services, 15 percent industrials, 10 percent energy and natural resources, and 10 percent transportation.”
Across the wider GCC, inbound investment accounted for 25 percent of all insured M&A transactions, reflecting a growing presence of foreign buyers in regional dealmaking.
“Saudi Arabia is a market with very significant and well-hedged M&A potential; and government-sponsored capital expenditure is expected to bring opportunities to market as the country focuses on diversification,” Sutton said.
He also highlighted the effect of recent regulatory changes, noting that efforts to boost foreign direct investment have opened up Saudi Arabia to global buyers.
“Warranty and indemnity is a staple feature of M&A transactions in the US, Europe, and Asia. So it is natural that those buyers have imported this trend into the Saudi market,” he said.
CaptionLuke Sutton, head of transactional risk for the Middle East and Africa at Marsh. Supplied
According to the expert, the Saudi Insurance Authority’s approval of W&I insurance for the Kingdom’s incorporated buyers is also expected to significantly increase domestic adoption.
Sutton said that transactional risk insurance not only reduces risk, but also plays a key role in expediting deal execution. By covering potential post-sale liabilities, W&I insurance allows parties to avoid lengthy negotiations over indemnities.
When asked if insurance helps speed up closure, he replied: “Yes — very significantly. Buyers and sellers — and their legal advisers — can focus on other facets of the transaction, knowing that the insurance market can back-stop seller representations and indemnities.”
According to Sutton, as Saudi Arabia pursues diversification, warranty and indemnity insurance is increasingly used to manage deal risks — giving buyers protection from hidden issues and sellers a clean, liability-free exit.
As part of Vision 2030, Saudi Arabia has made attracting foreign investment a national priority.
Reforms such as 100 percent foreign ownership in select sectors, streamlined licensing procedures, and a new law that places local and foreign companies under a unified regulatory framework are aimed at boosting the Kingdom’s global competitiveness and reducing its dependence on oil revenue.
The launch of special economic zones, privatization of state assets, and incentives for international companies to establish regional headquarters in Riyadh have all contributed to rising foreign direct investment flows.
Saudi Arabia is targeting an increase in annual FDI from $26 billion in 2023 to $100 billion by 2030. This openness has coincided with the region’s rise as a global investment hub, largely driven by sovereign wealth funds.
The Public Investment Fund, alongside other major Gulf sovereign wealth funds, is no longer just a passive investor, but a key player in cross-border M&A, frequently taking controlling stakes and co-leading big-ticket international transactions.
M&A insurance activity in the GCC
Marsh reported that it had placed more than $550 million in insurance capacity for insured transactions in Saudi Arabia and the UAE, representing a total deal value of $2.25 billion, with a median deal size of $450 million.
SWFs were instrumental in driving deal activity, according to the firm, with 2024 marking the highest level of global deal making by these organizations in more than a decade.
While insured deals still leaned toward the domestic, Marsh noted a growing shift. The investment mix is evolving toward a 50/50 split between domestic and inbound capital, fueled by international partnerships and increased foreign participation in strategic sectors.
The rising presence of private equity funds has also influenced the demand for risk insurance. Their focus on clean exits and post-deal protection has made W&I insurance an increasingly standard part of deal structuring.
“While historically many deals were completed without insurance due to limited insurer appetite and perceived high costs; in the last two years, there has been a significant increase in requests for quotes on deals within GCC,” said Nirav Modi, private equity and mergers and acquisition services practice leader at Marsh.
Regionally, while the total number of M&A deals in the Middle East and Africa fell 13 percent in 2024, deal value jumped 42 percent to $33 billion, as investors prioritized larger, more strategic transactions, according to the report.
Saudi Arabia played a major role in this growth, particularly through infrastructure and public-private partnership initiatives under Vision 2030.
These trends have been matched by a notable evolution in the region’s insurance landscape, as market capacity and competition have grown in response.
According to the report, the number of insurers underwriting deals rose from five in 2021 to nearly 15 in 2024, resulting in broader coverage options and a sharp decline in premiums. Marsh reported a mean premium rate of just over 1.3 percent, down more than 60 percent from three years ago.
Strategic sponsors, including SWF-backed corporates, made up 66 percent of insured buyers, highlighting the role of institutional investors in driving deal flow and relying on insurance to manage complex transactional risks.
As global M&A rebounds in 2025, Saudi Arabia is expected to remain a top destination for international capital, particularly in clean energy, logistics, digital infrastructure, and advanced manufacturing.
With continued regulatory support and a strong push for diversification, M&A insurance is poised to play a pivotal role in facilitating secure, high-value transactions across the Kingdom.
Aramco CEO among business leaders urged by China’s Xi to protect trade as Trump tariffs loom
China's Xi met with foreign CEOs in Beijing
Around 40 executives joined the meeting
Updated 28 March 2025
Reuters Arab News
BEIJING: China’s President Xi Jinping urged a gathering of multinational CEOs on Friday to protect global industry and supply chains, as Beijing seeks to assuage foreign firms’ concerns over the Chinese economy’s health amid threats of more US tariffs.
Beijing is battling to dispel fears that a renewed trade war with US President Donald Trump will further pinch growth in the world’s second-largest economy, which has been struggling to recover since the pandemic.
Longstanding unease over China’s tightening regulations, abrupt crackdowns on foreign firms, and an uneven playing field favoring state-owned Chinese companies are also sapping business sentiment.
“We need to work together to maintain the stability of global industry and supply chains, which is an important guarantee for the healthy development of the world economy,” Xi told the business leaders, who included the bosses of AstraZeneca, FedEx, Saudi Aramco, Standard Chartered and Toyota.
Around 40 executives joined the meeting, the majority of whom represented the pharmaceuticals sector. The meeting ran for just over 90 minutes and seven companies were invited to speak, a source with direct knowledge of its planning said.
“The CEOs I spoke with, and I spoke with a lot of them, felt it was worth it,” said Sean Stein, president of the US-China Business Council and one of the meeting’s attendees. “Not only did the president acknowledge various challenges facing companies and industry, in many cases he pledged the government would take action.”
The executives sat in a horseshoe formation, with Mercedes-Benz CEO Ola Kallenius and FedEx’s Raj Subramaniam sitting directly across from Xi.
HSBC CEO Georges Elhedery, SK Hynix boss Kwak Noh-jung, Saudi Aramco president and CEO Amin Nasser, and chair of Hitachi Toshiaki Higashihara also sat in the first row.
“This meeting is a big illustration of business diplomacy. Now there is not just dialogue between bodies, WTO entities and states, but diplomacy being led by companies that are not just representing themselves, but also their sectors,” said Frank Bournois, VP and dean of the China Europe International Business School in Shanghai, adding that its success would depend on future actions and not just words.
The frequency of meetings between foreign executives and high-level Chinese officials has picked up over the past month, after official data showed foreign direct investment plummeted 27.1 percent year-on-year in local currency terms in 2024.
That marked the biggest drop in FDI since the 2008 global financial crisis.
“Foreign enterprises contribute one-third of China’s imports and exports, one-quarter of industrial added value and one-seventh of tax revenue, creating more than 30 million jobs,” Xi said.
“In recent years, foreign investment in China has also been interfered with by geopolitical factors ... I often say that blowing out other people’s lights does not make you brighter.”
Trump has renewed his trade war with China since taking office and has announced a wave of fresh “reciprocal” tariffs to take effect on April 2, targeting countries with trade barriers on US products, which could include China.
He imposed 20 percent tariffs on Chinese exports this month, prompting China to retaliate with additional duties on American agricultural products.
“The essence of China-US economic and trade relations is mutually beneficial and win-win,” Xi told the meeting.
The Chinese leader last year singled out American business leaders for an audience after the China Development Forum, but USCBC’s Stein said such meetings were unlikely to become a routine fixture at the annual business summit, which this year ran from March 23-24.
“China’s messaging is that it isn’t an annual event and that businesses shouldn’t expect it to be.”
Oil Updates — crude set to rise for 3rd week on Venezuela, Iran pressure
Updated 28 March 2025
Reuters
LONDON: Oil prices were set for a third weekly gain on Friday as the US ramped up pressure on Venezuela and Iran, though worries over whether Washington’s tariff war could curb demand weighed on markets.
Brent crude futures were up 8 cents, 0.1 percent, at $74.11 a barrel at 12:49 p.m. Saudi time, marking the eighth straight days of gains, its longest such streak since May 2022.
US West Texas Intermediate crude futures were up 5 cents, also 0.1 percent, to $69.97 a barrel.
Both contracts have gained about 2.5 percent so far this week. They are up around 7 percent since hitting multi-month lows in early March.
The main driver of the price rally has been the shifting landscape of global oil sanctions, BMI analysts wrote in a market commentary.
US President Donald Trump on Monday announced new 25 percent tariffs on potential buyers of Venezuelan crude, days after US sanctions targeting China’s imports from Iran.
The order compounded uncertainty for buyers and saw trade of Venezuelan oil to top buyer China stall. Elsewhere, sources said India’s Reliance Industries, operator of the world’s biggest refining complex, will halt Venezuelan oil imports.
“The potential loss of Venezuelan crude exports to the market due to secondary tariffs and the possibility of the same being imposed on Iranian barrels has caused an apparent tightness in crude supply,” said June Goh, a senior oil analyst at Sparta Commodities.
Oil was also underpinned by signs of better demand in the United States, the world’s top oil consumer, as the country’s crude stocks fell more than anticipated.
Data from the Energy Information Administration showed US crude inventories fell by 3.3 million barrels to 433.6 million barrels in the week ended March 21, compared with analysts’ expectations in a Reuters poll for a 956,000-barrel draw.
Some downward pressure came as oil mirrored broader risk asset sell-offs on Friday, as the latest tariff salvo from Trump stoked investor worries of an all-out trade war.
As a result, analysts don’t expect sharp gains in oil prices to be sustained in the current environment.
“While the market is suffering under extreme uncertainties, we are holding to our forecast for Brent crude to average $76 per barrel in 2025, down from $80 per barrel in 2024,” the BMI analysts wrote.
UAE unveils new dirham symbol and digital currency
Updated 27 March 2025
Arab News
RIYADH: The Central Bank of the UAE on Thursday introduced a new symbol for the nation’s currency, both in its physical and digital forms, marking a significant step in reinforcing the UAE’s status as a leading global financial center.
According to the Emirates News Agency or WAM, the newly unveiled dirham symbol draws inspiration from the English letter “D” and features two horizontal lines that represent financial stability. The design is also a nod to the UAE flag, symbolizing national pride and resilience.
This symbol will serve as a global representation of the dirham, promoting the UAE’s currency across international markets.
The launch of the symbol coincides with the UAE’s adoption of the FX Global Code, which positions the CBUAE as the first central bank in the Arab region to join this important framework.
The FX Global Code is renowned for promoting best practices and ethical standards within the foreign exchange market, and this step further enhances the UAE’s commitment to integrity and transparency in financial dealings.
Alongside the physical dirham symbol, the CBUAE is advancing the issuance and circulation of the digital dirham, a core initiative of the Financial Infrastructure Transformation Program launched in 2023.
The digital dirham will feature a circular design, incorporating the UAE flag’s colors, which reinforces the nation’s sense of pride and modernity in the evolving financial landscape.
Khaled Mohamed Balama, governor of the CBUAE, expressed his enthusiasm for these transformative steps: “We are proud to unveil today the new symbol for the UAE’s national currency and the design of the digital dirham wallet,” he stated.
“The digital dirham, built on blockchain technology, is expected to enhance financial stability, improve inclusion, increase resilience, and help combat financial crime.”
He further emphasized that the digital dirham is set to drive innovation in the financial sector by enabling the creation of new digital products and services, while lowering costs and expanding access to international markets.
The digital dirham will be made available through licensed financial institutions, including banks, exchange houses, fintech firms, and other financial services providers. It will be legally recognized as a universal payment method, alongside physical currency, creating a seamless experience for both digital and traditional transactions.
Key features of the digital dirham include:
Tokenization: This innovative process will enhance financial inclusion by allowing fractionalized access to digital assets, thereby improving liquidity.
Smart contracts: The digital dirham will facilitate the use of smart contracts, automating the execution of complex transactions, including multi-party agreements and conditional obligations, with instant settlement.
To support the digital currency, the CBUAE has developed a robust and secure platform for its issuance and circulation. This platform includes a user-friendly digital dirham wallet, designed to handle a wide range of financial transactions, including retail and wholesale payments, cross-border transfers, withdrawals, and top-ups. It also ensures ease of access and a convenient user experience, adhering to industry best practices.
As the UAE continues to lead in the digital economy, the digital dirham platform is designed to adapt to emerging financial needs, facilitating innovative solutions and reinforcing the country’s position as a global leader in digital payments.
Saudi Arabia’s job market strengthens as unemployment falls to 7% in Q4 2024
Updated 27 March 2025
MOHAMMED AL-KINANI
JEDDAH: Saudi Arabia’s unemployment rate for nationals in the fourth quarter of 2024 reached 7 percent, marking a decrease of 0.8 percentage points compared to both the previous quarter and the same period last year, official data showed.
The data, released by the General Authority for Statistics, indicate a slight increase in the employment-to-population ratio for nationals, suggesting continued progress in the creation of job opportunities for the Kingdom’s growing workforce.
Although the overall labor force participation rate experienced modest declines, these figures underscore Saudi Arabia’s ongoing efforts to achieve the ambitious goals set forth in Vision 2030, particularly in terms of enhancing job creation and driving economic growth.
The improvement in the labor market is a critical component of Vision 2030, which aims to generate employment opportunities for Saudis while stimulating broader economic development. Strengthening the labor market remains a key pillar of the Kingdom’s long-term socio-economic strategy.
National labor market overview
The Labor Force Survey revealed that the overall unemployment rate for both Saudi nationals and non-Saudis reached 3.5 percent in Q4 2024, showing a decrease of 0.2 percentage points compared to the previous quarter. However, the figure marked a slight increase of 0.1 percentage points from Q4 2023.
The overall labor force participation rate for both Saudis and non-Saudis stood at 66.4 percent, a decrease of 0.2 percentage points from Q3 2024 and a 0.6 percentage point decline year on year.
Meanwhile, the employment-to-population ratio for Saudi nationals rose by 0.1 percentage points to 47.5 percent, reflecting a 1.0 percentage point increase from Q4 2023.
However, the labor force participation rate for Saudis decreased by 0.4 percentage points to 51.1 percent, although this still represented a 0.7 percentage point increase compared to the previous year.
Participation by gender
For Saudi females, the labor force participation rate decreased by 0.2 percentage points to 36 percent. Nevertheless, their employment-to-population ratio improved by 0.5 percentage points to 31.8 percent, and their unemployment rate dropped by 1.7 percentage points to 11.9 percent compared to the previous quarter.
Conversely, Saudi males experienced a 0.7 percentage point decrease in their labor force participation rate, which fell to 66.2 percent. Their employment-to-population ratio also declined, reaching 63.4 percent. However, the unemployment rate for Saudi males decreased to 4.3 percent compared to Q3 2024.
Youth employment trends
In terms of youth employment, GASTAT reported that the employment-to-population ratio for Saudi female youth (aged 15-24) increased by 0.3 percentage points to 13.9 percent in Q4 2024. In contrast, the employment-to-population ratio for Saudi male youth remained steady at 29.7 percent, although their labor force participation rate decreased by 0.8 percentage points to 33.8 percent.
The unemployment rate for Saudi youth also showed improvement, declining by 1.8 percentage points to 12.2 percent compared to the previous quarter.
Employment trends in core working-age group
For Saudis aged 25 to 54 years, key labor market indicators showed a slight increase in the employment-to-population ratio, which rose by 0.1 percentage points to 64.9 percent. However, the labor force participation rate for this group decreased by 0.2 percentage points to 69.2 percent. The unemployment rate in this age group also improved, falling to 6.2 percent compared to the previous quarter.
For Saudis aged 55 and above, labor market indicators for Q4 2024 indicated a decline in both the unemployment rate and labor force participation rate compared to the previous quarter.
Active job search
The GASTAT report highlighted that Saudi job seekers employ various methods in their active job search, with an average of 5.0 methods used per individual. The most common approach was inquiring with friends or relatives about job opportunities, utilized by 86.9 percent of jobseekers. This was followed by directly applying to employers (73.9 percent), and using the national unified employment platform, Jadarat (65.4 percent).
Willingness to work
Further insights into the unemployed Saudi population revealed that 94.1 percent are open to accepting job offers in the private sector. Among the unemployed, 61.9 percent of Saudi females and 45.2 percent of Saudi males are willing to commute for at least one hour. Additionally, 77.5 percent of unemployed Saudi females and 90.7 percent of unemployed Saudi males expressed a willingness to work for eight or more hours per day.
