Saudi energy minister sees no clear results yet from Russia price cap

A view shows the Russian oil producer Gazprom Neft's Moscow oil refinery on the south-eastern outskirts of Moscow on April 28, 2022. (AFP/File)
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Updated 11 December 2022
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Saudi energy minister sees no clear results yet from Russia price cap

  • Group of 7 price cap on Russian seaborne oil came into effect on Dec. 5
  • Russia says won't abide by the measure even if it has to cut its production

RIYADH: Saudi energy minister Prince Abdulaziz bin Salman said on Sunday the impact of European sanctions on Russian crude oil and price cap measures "did not bring clear results yet" and its implementation was still unclear.

The Group of 7 price cap on Russian seaborne oil came into effect on Dec. 5 as the West tries to limit Moscow's ability to finance its war in Ukraine.

Russia has said it would not abide by the measure even if it has to cut its production.

"What is happening now in terms of sanctions and price caps imposed and all of it really did not bring clear results, including measures implemented on Dec. 5, we see a state of uncertainty in implementation," Prince Abdulaziz told a forum held following the country's 2023 budget announcements in Riyadh.




Saudi energy minister Prince Abdulaziz bin Salman says that ‘every OPEC+ member, whether a big or small producer, be a part of decision-making.’ (AFP/File)

Prince Abdulaziz said Russia's reaction and what actions it would take in response to these tools was another aspect that needed to be taken into consideration when looking at the state of play in global markets.

"These tools were created for political purposes and it is not clear yet whether they can achieve these political purposes," he said, referring to the price cap.

Other factors affecting the market going into 2023 include China's COVID-19 policies. The impact on China's economy from easing Covid restrictions still "needs time", he said.

Central banks' actions to tame inflation were also still a factor.

"Central banks are still preoccupied with managing inflation, no matter the cost of these measures and their possible negative impact on global economic growth."

The decision of The Organization of Petroleum Exporting Countries and allies including Russia to cut production by 2 million barrels per day on Oct. 5 was proven to be the correct one when recent developments are taken into consideration, he said.

The alliance last met on Dec. 4 and decided to keep output unchanged amid a weakening economy and uncertainty over how the Russian price cap would affect the market.

Prince Abdulaziz said the alliance would continue to focus on market stability in the year ahead.

He also said he insisted that every OPEC+ alliance member take part in decision-making.

"Group action requires agreement and therefore I continue to insist that every OPEC+ member, whether a big or small producer...be a part of decision-making," Prince Abdulaziz told the forum.

"Consensus has positive implications on the market."


Saudi Cabinet approves land transport system to enhance efficiency, sustainability 

Updated 19 February 2025
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Saudi Cabinet approves land transport system to enhance efficiency, sustainability 

JEDDAH: Saudi Arabia’s Cabinet has approved a comprehensive land transport system aimed at modernizing road networks and integrating advanced technologies to enhance efficiency and sustainability. 

The system, approved at a Cabinet session in Riyadh and chaired by Crown Prince Mohammed bin Salman, is designed to streamline regulations and drive environmentally friendly growth in the industry, the Saudi Press Agency reported. 

It also aligns with global trends toward sustainable and connected transport infrastructure, reinforcing Saudi Arabia’s ambition to lead in logistics and mobility innovation.

With more than 73,000 km of roads, Saudi Arabia ranks among global leaders in terms of connectivity, according to the Transport General Authority. 

Saleh bin Nasser Al-Jasser, minister of transport and logistics services and chairman of the TGA board, said the decision supports the regulation and development of land transport across various sectors, aligning it with the Kingdom’s rapid economic expansion. 

“This includes the adoption of modern technologies in transportation and sustainable mobility, the regulation of transport facilities, the activation of professional and technical qualifications, and the establishment of clear obligations for licensees, along with defining the rights and responsibilities of beneficiaries,” Al-Jasser said. 

The new system, he noted, reflects the leadership’s ongoing support for the transport and logistics sector, reinforcing its role in driving economic growth and investment. 

It is also expected to contribute to the objectives of the National Transport and Logistics Strategy, which seeks to improve mobility, enhance quality of life, and facilitate economic activities with high standards of safety, efficiency, and service delivery. 

Al-Jasser emphasized that the system would create investment opportunities, ensure fair competition, and strengthen the private sector’s role as a key partner in development. 

“This will increase the sector’s contribution to the national economy and further establish the Kingdom as a global leader in integrated transport services, in line with Saudi Arabia’s Vision 2030, helping to build a sustainable and prosperous future,” he said. 

Under the new framework, the TGA will classify key road transport activities, including passenger and cargo transport, and car rentals. Service providers will be required to comply with operational and technical conditions set by regulators, while violations will be subject to penalties. 

The system also introduces stricter rules on foreign cargo truck operations, aiming to regulate entry and enforce compliance with local transport laws. 

Additionally, passenger transport operators will be prohibited from soliciting customers directly, such as calling out to passengers or following them to offer services. 


Brazil adheres to OPEC+ cooperation letter; no output caps

Updated 19 February 2025
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Brazil adheres to OPEC+ cooperation letter; no output caps

SAO PAULO: Brazil has decided to adhere to the declaration of cooperation of the OPEC+ group of oil-producing countries, the local energy ministry said on Tuesday, formalizing a move it had initially announced in 2023.

Brazil is the largest oil producer in South America. Its output hit 4.32 million barrels of oil equivalent per day in 2024, according to the country’s oil regulator.

It will join nations such as Saudi Arabia and Russia in the group’s declaration, but is not expected to take part in its coordinated output caps.

The move shows Brazil’s “growing relevance in the oil and gas market,” the mines and energy ministry said in a statement, adding, however, that the country would “continue to develop its energy policy in line with its own interests.”

“It is important to highlight that the declaration does not include the participation of countries in decisions aimed at cutting oil production,” the ministry said.

Brazil first said it was going to join the OPEC+ cooperation in late 2023, but President Luiz Inacio Lula da Silva reiterated at the time the country had no intention to be a full member, instead acting as an “observer.”

The country on Tuesday has also decided to become a member of the International Renewable Energy Agency (IRENA) and the International Energy Agency (IEA), the government said.


Saudi ACWA Power expands portfolio with $693m acquisitions in Bahrain, Kuwait

Updated 19 February 2025
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Saudi ACWA Power expands portfolio with $693m acquisitions in Bahrain, Kuwait

RIYADH: Saudi utility giant ACWA Power has strengthened its portfolio by acquiring a $693 million stake in power generation and water desalination companies in Bahrain and Kuwait.

The company has secured holdings in four companies after buying the shares held by the regional subsidiary of French utility developer Engie.

The deal includes a 45 percent interest in both the Al-Ezzel and Al-Dur projects as well as a 30 percent holding in the Al-Hidd facility, all situated in Bahrain. 

It also sees ACWA Power acquire an 18 percent stake in Az Zour North in Kuwait.

The move falls in line with ACWA Power’s strategy to be at the forefront of the energy transition by delivering reliable and responsible power, desalinated water, and green hydrogen at low cost in Saudi Arabia and the wider Gulf Cooperation Council and attractive high-growth markets based on a de-risked and contracted business model.

“This acquisition represents a pivotal milestone for ACWA Power, reinforcing our position as global leader in water desalination. We consolidate our presence in Bahrain where we are already a reliable supplier of power and water, and we enter Kuwait, where we recently submitted a bid for a large power and desalination plant,” CEO of ACWA Power Marco Arcelli said. 

“Reinforcing our presence in each country will allow us to further develop our people there and localize our operations more, providing safe and reliable supplies to the local communities and industries,” he added.

ACWA Power will also acquire a portfolio of companies responsible for the operation and maintenance of the four assets, specifically Az Zour North O&M Co., with a 50 percent stake and complete ownership of Al-Ezzel O&M Co.

The deals cover operating capacities of 4.61 gigawatts of gas-fired power generation and 1.11 million cubic meters per day of water desalination facilities, as well as the related operations and maintenance companies in the two countries, according to a statement.

Chief Investment and Development Officer of ACWA Power Thomas Brostrom said: “By making its inaugural entry into the Kuwaiti market through the acquisition of a stake in the Az-Zour North Facility, ACWA Power has achieved a significant milestone in its strategic efforts to expand its presence within the regional energy and water desalination sector.”

The secured contracted revenue streams from the acquired assets align well with the firm’s broader strategy of tripling its assets under management to $250 billion by 2030.


Qatar commits to investing $10bn in India

Updated 19 February 2025
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Qatar commits to investing $10bn in India

NEW DELHI: Qatar has committed to investing $10 billion in India across various sectors, the two nations said in a joint statement on Tuesday, after Qatar’s Emir Sheikh Tamim bin Hamad Al-Thani visited New Delhi.

Indian Prime Minister Narendra Modi said he had a “very productive meeting” with Qatar’s Emir, who was on a two-day visit to New Delhi.

“Trade featured prominently in our talks. We want to increase and diversify India-Qatar trade linkages,” Modi said in a post on X. It was the first such visit by a Qatari Emir to the South Asian nation in 10 years.

According to the statement, Qatar will invest $10 billion in India in infrastructure, technology, manufacturing, food security, logistics, hospitality and other sectors.

The two countries will aim to double their annual trade to $28 billion in the next five years and are exploring the signing of a free trade agreement, the Indian foreign ministry said earlier in the day.

Bilateral trade between the two nations stood at $18.77 billion in the fiscal year that ended in March 2023, mainly comprising liquefied natural gas imports from Qatar.

Qatar accounted for more than 48 percent of India’s LNG imports that year.

The two sides said they would work to enhance bilateral energy cooperation, including mutual investments in energy infrastructure, as well as look at settlement of bilateral trade in their respective currencies. 


Oil Updates — crude gains on US, Russia supply worries; market seeks Ukraine talks clarity

Updated 19 February 2025
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Oil Updates — crude gains on US, Russia supply worries; market seeks Ukraine talks clarity

HOUSTON/SINGAPORE: Oil prices edged up on Wednesday amid worries of oil supply disruptions in the US and Russia, and as markets awaited clarity on the Ukraine peace talks.

Brent crude futures were up 14 cents, or 0.2 percent, at $75.98 a barrel at 7:50 a.m. Saudi time, and possibly set for a third day of gains.

US West Texas Intermediate crude futures for March rose 16 cents, or 0.2 percent, to $72.01, up 1.8 percent from the close on Friday after not settling on Monday because of the Presidents’ Day public holiday. The March contract expires on Thursday and the more active April contract gained 14 cents, or 0.2 percent, to $71.97.

“The psychologically important $70 level appears to have held firm, aided by the Ukrainian drone attack on the Russian oil pumping station and fears that cold weather in the US may curtail supply,” said IG market analyst Tony Sycamore.

“On top of that there is some speculation that OPEC+ may decide to delay its planned supply increase in April,” he said, referring to the Organization of the Petroleum Exporting Countries and allies.

Russia said oil flows through the Caspian Pipeline Consortium, a major route for crude exports from Kazakhstan, were reduced by 30 percent to 40 percent on Tuesday after a Ukrainian drone attack on a pumping station. A 30 percent cut would equate to the loss of 380,000 barrels per day of supply to the market, according to Reuters calculations.

Meanwhile, cold weather threatened US oil supply, with the North Dakota Pipeline Authority estimating that production in the country’s No. 3 producing state would be down by as much as 150,000 bpd.

US President Donald Trump’s administration said on Tuesday it had agreed to hold more talks with Russia on ending the war in Ukraine. A deal could ease or help remove sanctions that have disrupted the flows of Russian oil shipments.

Analysts at Goldman Sachs said a potential Ukraine-Russia peace deal and associated easing in sanctions on Russia is unlikely to significantly raise Russia oil flows.

“We believe that Russia crude oil production is constrained by its OPEC+ 9 million barrels per day production target rather than current sanctions, which are affecting the destination but not the volume of oil exports,” they said in a report.

Israel and Hamas will also begin indirect negotiations on a second stage of the Gaza ceasefire deal, officials said on Tuesday.

However, Trump said on Tuesday he intends to impose auto tariffs “in the neighborhood of 25 percent” and similar duties on semiconductors and pharmaceutical imports.

Tariffs could raise prices for consumer products, weaken the economy and reduce demand for fuel.