LAUNCESTON, Australia: Chinese oil demand this year is virtually certain to miss forecasts by the International Energy Agency and the country’s top producer.
Implied crude demand fell 5.1 percent to about 9.94 million barrels per day (bpd) in November from the same month a year earlier, but was 1.5 percent higher than in October and was also the most in five months.
However, the November figures take implied demand for the first 11 months of the year to about 9.76 million bpd, a gain of only 2.1 percent over the same period in 2012.
This is substantially below the IEA’s forecast for total demand of 10.19 million bpd in 2013 contained in the agency’s monthly report published Dec. 11.
It is also below the 10.28 million bpd forecast in January by top state oil company China National Petroleum Corp. (CNPC).
Implied demand is calculated by adding net fuel imports to refinery throughput, but excludes changes in commercial and strategic inventories.
Inventories changes in volume terms aren’t disclosed by the authorities, although percentage changes for commercial stockpiles are reported monthly.
These have been declining in recent months, with refined product inventories dropping 6.08 percent in October from September, the fourth monthly decline.
Commercial crude inventories also declined 1.84 percent in October from a month earlier, but they had risen 10 percent over the prior two months.
But even if inventories are falling, they aren’t declining by enough to explain the difference between the implied demand and the forecasts by the IEA and CNPC.
It appears that demand growth in China has failed to live up to expectations, most likely because of weaker-than-expected economic growth in the middle of the year, the gradual shift to a more consumer-led economy and improving efficiencies.
Even a strong month of imports in December won’t be enough to lift overall implied oil demand to above 10 million bpd.
It appears that December’s imports will be around 5.65 million bpd, based on calculations by Thomson Reuters Oil Analytics.
This is higher than the 5.57 million bpd imports have averaged in the first 11 months of the year, but not dramatically so.
If domestic oil output is assumed to have held steady at the 4.15 million bpd it has averaged in the first 10 months of 2013, this means roughly 9.8 million bpd will be available for refining, excluding any draws on, or builds of, inventories.
Net fuel imports averaged about 226,000 bpd for the first 11 months, and assuming this is maintained for December, it implies that oil demand will be just over 10 million bpd for the month.
This is certainly stronger than the 9.76 million bpd average for the first 11 months, but will still keep the figure for the whole year below 10 million bpd, probably somewhere in the region of 9.8 million bpd.
This is roughly 400,000 bpd below the IEA’s forecast and 480,000 bpd short of CNPC’s.
If 2013 implied demand does come in around 9.8 million bpd, it would be only 1.4 percent higher than the 9.66 million bpd recorded for 2012, when demand rose 4.5 percent from the prior year, the slowest growth rate since 2008.
It would also provide a lower starting point for 2014 forecasts, meaning the IEA’s 10.57 million bpd estimate for demand next year would likely start off being optimistic.
What the numbers show is that oil demand growth in China is slowing, a trend that is likely to continue.
Instead of expanding at more than half the pace of economic growth as in the recent past, it seems likely that oil demand will increase at something closer to a quarter or third of gross domestic product growth.
This is a sign that the authorities’ plans to move China to a more consumer-led economy may be bearing some fruit, at least from an oil demand perspective.
It also means that global oil markets may have to factor in slower demand growth in China, which will have ramifications for the overall outlook, given that the IEA forecasts that the country will account for just under one-third of the total increase in world demand.
— Clyde Russell is a Reuters market analyst. The views expressed are his own.
China oil demand growth to miss forecasts
China oil demand growth to miss forecasts
Closing Bell: Saudi main index slips to close at 10,714
- Parallel market Nomu shed 214.39 points to close at 26,458.24
- MSCI Tadawul Index declined by 1.14% to 1,378.44
RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Tuesday, as it shed 153.22 points or 1.41 percent to close at 10,713.82.
The total trading turnover of the benchmark index was SR4.97 billion ($1.32 billion), with 20 of the listed stocks advancing and 228 declining.
Saudi Arabia’s parallel market Nomu also shed 214.39 points to close at 26,458.24.
The MSCI Tadawul Index declined by 1.14 percent to 1,378.44.
The best-performing stock on the main market was Saudi Research and Media Group. The company’s share price increased by 6.88 percent to SR170.80.
The share price of SABIC Agri-Nutrients Co. advanced by 4.82 percent to SR108.80.
Zamil Industrial Investment Co. also saw its stock price climb by 4.71 percent to SR40.
Conversely, the stock price of media giant MBC Group Co. dropped by 6.56 percent to SR33.45.
On the announcements front, Tadawul, in a statement, said that shares of Saudi low-cost air carrier flynas will begin trading on the main market under the symbol 4264 from June 18.
The daily and static fluctuation limits for the company’s stocks will be set at 30 percent and 10 percent, respectively, during the first three days of trading.
On June 17, Saudi National Bank announced the issuance of US dollar-denominated Tier 2 debt instruments through a special purpose vehicle, targeting qualified investors both inside and outside the Kingdom.
The financial institution added that the final issuance value and offering terms will be determined based on market conditions, according to a Tadawul statement.
The minimum subscription value is $200,000, with a 10-year maturity period.
The debt instruments will be listed on the London Stock Exchange’s International Securities Market.
The share price of SNB edged up by 0.58 percent to SR34.50.
Advance International Co. for Communication and Information Technology announced that it completed the offering and subscription of SR-denominated Murabaha sukuk valued at SR6 million.
Murabaha sukuk is a financial instrument based on Islamic finance principles, offering an interest-free investment option.
In a Tadawul statement, AICTEC said that the offering aims to strengthen the company’s working capital as well as support capital expansions.
The stock price of AICTEC rose by 3.57 percent to SR2.90.
IsDB Group partners with Turkiye to drive green industrial growth
- Initiative supports Turkiye’s 2053 net-zero emissions target
JEDDAH: The Islamic Development Bank Group has partnered with Turkiye’s Ministry of Industry and Technology to advance sustainable manufacturing and infrastructure as part of a broader push to modernize the country’s industrial zones and accelerate its green transition.
The initiative supports Turkiye’s 2053 net-zero emissions target and aligns with the 12th National Development Plan (2024–28) and the 2030 Industry and Technology Strategy.
According to the Saudi Press Agency, the project aims to cluster industrial enterprises within designated zones, reducing environmental impact and promoting climate-conscious development.
While Turkiye has committed to peak emissions by 2038 and reach net zero by 2053, independent assessments question the feasibility of this goal.
Climate Action Tracker has rated the strategy as “poor,” citing a lack of ambition and transparency, and warning that the 15-year window to net zero is overly compressed.
Still, some subsectors—such as cement, iron and steel, aluminum, and fertilizers—have set clearer reduction targets, although they remain exceptions, CAT notes.
Walid Abdelwahab, director of the IsDB Group’s regional hub in Turkiye, described the project as “a vital step in fulfilling the IsDB’s commitment to supporting sustainable industrial transformation, enhancing economic resilience, and promoting climate-conscious development.”
A multidisciplinary team from IsDB’s Jeddah headquarters and Ankara office has been working closely with various government bodies and industrial zone authorities. Discussions have focused on collecting data, identifying challenges, and shaping the project in line with national investment and climate resilience goals.
According to SPA, the initiative will also address key areas such as wastewater management, improved water use efficiency, and green infrastructure, laying the groundwork for long-term sustainable industrial growth.
Energy security is not a luxury but key to inclusive growth, says Saudi minister
- Al-Jadaan warned the absence of reliable energy access undermines critical sectors
- He underscored the far-reaching consequences of energy poverty
RIYADH: Energy security is not a luxury but “a fundamental pillar for achieving development and inclusive growth,” said Saudi Arabia’s Finance Minister Mohammed Al-Jadaan.
Delivering the opening remarks at the OPEC Fund for International Development Forum 2025 in Vienna, Al-Jadaan warned that the absence of reliable energy access undermines critical sectors, including healthcare, education, productivity, and food and water systems.
“With rising geopolitical tensions, market volatility, and surging global energy demand, it has never been more urgent to achieve a more secure and diversified energy landscape,” Al-Jadaan said.
He added: “This requires a strategic push to diversify energy sources, scale up investment in clean technologies, and adopt innovative financing solutions to accelerate energy access and strengthen long-term energy security.”
Four-point reform plan
Al-Jadaan outlined four policy recommendations for multilateral development banks aimed at boosting global energy resilience. He stressed the need to support all energy sources without bias and cautioned against emissions policies that exclude major energy contributors.
He said such policies risk destabilizing markets and disproportionately impact developing economies and vulnerable populations.
His second recommendation focused on expanding concessional financing to underserved regions. The minister praised the World Bank’s “Mission 300” initiative, which aims to provide energy access to 300 million people in Africa, and acknowledged the contributions of the Islamic Development Bank and the OPEC Fund.
Al-Jadaan also commended Saudi Arabia’s Forward7 Clean Fuel Solutions for Food initiative under the Middle East Green Initiative, which promotes clean fuel deployment globally. The program has partnered with institutions including the OPEC Fund, the World Bank, the Islamic Development Bank, and the International Islamic Trade Finance Corp.
De-risking and innovation
Al-Jadaan’s third point emphasized the need to de-risk investments in the energy sector to encourage private sector involvement.
He cited mechanisms such as partial risk guarantees, political risk insurance, and blended finance structures as essential tools to mitigate risks and enhance the feasibility of energy projects, particularly in low-income and high-risk countries.
“These tools help mitigate expected risks and enhance the bankability of energy projects, especially in low-income and high-risk countries,” the minister said.
In his final point, Al-Jadaan called for stronger investment in technologies such as carbon capture and sustainable hydrocarbon applications to reduce emissions and maintain supply during the transition to net-zero.
He underscored the far-reaching consequences of energy poverty, including economic instability, forced migration, and increased humanitarian pressures.
Al-Jadaan reaffirmed the Kingdom’s aim to generate 50 percent of electricity from renewables by 2030 and achieve net-zero emissions by 2060. These goals are being pursued under the Circular Carbon Economy framework.
“In the Kingdom of Saudi Arabia, we are working with everyone to enhance energy security and eliminate energy poverty, while continuing efforts to combat climate change,” he said.
Development crisis warning
OPEC Fund President Abdulhamid Al-Khalifa also addressed the forum, warning of a worsening global development gap.
He said the world is facing what the UN secretary-general has described as a “development emergency,” pointing out that only 18 percent of Sustainable Development Goals have made measurable progress since their inception in 2015.
“Developing countries face a $4 trillion annual funding gap, worsened by rising debt servicing costs that are draining resources from essential services,” Al-Khalifa said.
To address this, he said the OPEC Fund is ramping up efforts and leveraging momentum from previous forums. Among its recent actions, the fund has joined the “Mission 300” initiative to expand energy access.
It has also deployed $1 billion as part of its food security action plan, committed an additional $2 billion to support food supply chains in partner countries, and allocated $1 billion to combat desertification under the Arab Coordination Group's $10 billion Riyadh Global Drought Resilience Partnership.
New trade facility
Al-Khalifa also announced the launch of the OPEC Fund Trade Facility Initiative, a program designed to mobilize billions of dollars in support through 2030.
The facility aims to help countries secure strategic imports, address trade-related liquidity gaps, and strengthen resilience against external economic shocks.
“This is a direct response to an urgent need, and a reflection of our commitments to stand by our partners when it matters most,” he said.
Al-Khalifa emphasized the growing strain on trade as a development cornerstone, citing disrupted supply chains, rising costs, and foreign exchange volatility that are affecting the most vulnerable communities.
Project milestones
In 2024, the OPEC Fund committed $2.3 billion to 70 projects across the globe — a 35 percent increase compared to the previous year.
These projects connected 300,000 households to electricity, built over 500 km of roads, and supported 75,000 farmers and 35,000 women.
As the Arab Coordination Group marks its 50th anniversary this year, Al-Khalifa noted the significance of this milestone, saying the OPEC Fund is honored to stand alongside other member institutions in celebrating five decades of collaborative development efforts.
“We know from experience, when partners align their resources, expertise, and approaches, the results are transformative,” he said.
Both Al-Jadaan and Al-Khalifa stressed that global cooperation and innovation are critical to overcoming current challenges and advancing toward a future of inclusive and sustainable development.
Saudi Arabia, Panama sign air transport agreement to strengthen global connectivity
- Deal signed during 55th edition of Paris Air Show
- It reflects Kingdom’s broader efforts to expand its global aviation footprint
RIYADH: Saudi Arabia and Panama have signed a bilateral air services agreement to enhance air connectivity between the two countries and expand access to global aviation markets.
The deal was signed during the 55th edition of the Paris Air Show by Abdulaziz Al-Duailej, president of the General Authority of Civil Aviation, and establishes a regulatory framework for safe, efficient, and fair air services, according to the Saudi Press Agency.
The new agreement complements the 1944 Chicago Convention on International Civil Aviation, the legal foundation for global air travel. It includes provisions on traffic rights, airline designation, and licensing, as well as the enforcement of international safety and security standards.
It is also designed to promote fair competition and support the long-term commercial interests of national carriers in both countries.
The deal aims to serve the common economic interests of national carriers and enhance their participation in the air transport market by applying modern market-entry models and supporting all forms of air traffic, SPA reported.
It reflects the Kingdom’s broader efforts to expand its global aviation footprint in line with Vision 2030. As part of its National Aviation Strategy, the country is building international partnerships, strengthening regulatory frameworks, and increasing air connectivity to link to 250 global destinations and transport 330 million passengers annually by 2030.
“The organization’s participation aims to highlight the role of the civil aviation sector in the Kingdom as an important driver of the national economy, the promising investment opportunities it offers, and to learn more about the latest innovative global technologies in the sector,” the report added.
Saudi Arabia, represented by GACA, concluded its participation at the Paris Air Show with a wider range of strategic announcements aimed at bolstering its aviation sector. Key outcomes included a memorandum of understanding with Airbus on environmental sustainability and aviation safety, a leasing deal for 77 new aircraft by Avilease, and Riyadh Air’s order for 50 Airbus A350-1000 jets, increasing its future fleet to 182 aircraft in line with Vision 2030’s goal of positioning Riyadh as a global air hub.
The Saudi delegation was led by Saleh Al-Jasser, minister of transport and logistic services and chairman of GACA, accompanied by GACA president and senior executives from across the Kingdom’s aviation ecosystem. Their participation focused on strengthening partnerships with leading aerospace companies, attracting investment into the Saudi aviation sector, and advancing bilateral cooperation.
During the show, Al-Jasser and the delegation toured various pavilions showcasing innovations in advanced air mobility, aerospace, sustainability, and smart manufacturing.
They observed emerging solutions featuring high levels of automation and digitization across both commercial and military aircraft.
In addition to the MoU with Airbus, the show saw key commercial signings. Avilease, a Public Investment Fund-owned leasing firm, agreed to purchase 77 new-generation aircraft, including A350 freighters and A320 narrow-body jets. Riyadh Air confirmed an order for 50 A350-1000 aircraft, part of its plan to turn Riyadh into a global aviation hub.
A separate agreement was signed between Cluster 2 Airports Co. and Airbus to explore collaboration opportunities in training, development, and investment.
Al-Duailej also met with several global aviation leaders, including Damien Caze, director general of the French Civil Aviation Authority; Arjan Meijer, CEO of Embraer; and Bahrain’s Minister of Transportation and Telecommunications Sheikh Abdulla Al-Khalifa, to discuss regional cooperation.
The Kingdom’s presence at the Paris Air Show underscored its commitment to civil aviation as a driver of economic growth, innovation, and international connectivity. The event is one of the world’s most prominent in the aerospace industry, attracting thousands of participants and showcasing the latest in aviation, defense, and space technologies.
SIC, Investindustrial forge alliance to drive Saudi industrial expansion
- Deal aims to catalyze new industrial investments in the Kingdom
RIYADH: SIDF Investment Co., the financial arm of the Saudi Industrial Development Fund, has entered into a strategic partnership with European private equity firm Investindustrial, marking its first international private equity commitment.
The agreement is aimed at catalyzing new industrial investments in the Kingdom by localizing advanced manufacturing and integrating Saudi small and medium-sized enterprises into Investindustrial’s global value chains.
The partnership is a significant milestone for SIC as it broadens its international engagement and supports Saudi Arabia’s Vision 2030 objectives. These include attracting institutional capital, localizing industrial expertise, and contributing to the National Industrial Strategy, which targets increasing the number of factories to 36,000 by 2035.
The announcement follows a previous agreement in March between SIC and Ashmore Investment Saudi Arabia to launch a private closed-end industrial fund. The SR400 million ($106.6 million) initiative — the first of its kind in the Kingdom — is managed by a global asset manager and aims to support a wide array of industrial assets. That move laid the foundation for SIC’s private equity strategy to stimulate domestic investment and expand global partnerships.
“This agreement represents a new chapter for SIC,” said Fahad Al-Naeem, CEO of SIC. “By partnering with Investindustrial, we’re bridging global reach, operational depth, and industry specialization into our ecosystem, positioning Saudi Arabia as the platform for regional and international manufacturing growth.”
The targeted sectors include machinery and equipment, automation, medical devices, and sustainable consumer products, with an emphasis on local value creation and industrial innovation.
This move comes as the Kingdom ramps up efforts to strengthen its industrial base and draw international investment into strategic sectors. In April, Saudi Arabia’s Industrial Production Index rose 3.1 percent year on year, led by gains in manufacturing and mining. Manufacturing activity alone climbed 7.4 percent annually, with a 0.5 percent uptick month on month.
Adding to this momentum, the government launched the Standard Incentives for the Industrial Sector program in May, offering up to 35 percent financing on initial capital expenditure per project, capped at SR50 million. The initiative supports facility development and operations over a seven-year term.
“SIC will utilize its local market expertise to pave the way for global manufacturers to establish a footprint in Saudi Arabia and connect with international supply chains, benefiting from the Kingdom’s competitive position,” Al-Naeem added.
Investindustrial, which has raised €17 billion and operates across eight global offices, focuses on mid-market companies with a mission to drive sustainable value creation and support global expansion.
“The Kingdom of Saudi Arabia has emerged as a key strategic growth region for Investindustrial’s portfolio companies,” said Andrea Bonomi, chairman of Investindustrial.
“Many of our investments align closely with the goals of Saudi Arabia’s Vision 2030, fostering strong and natural synergies for long-term value creation,” Bonomi added.
The signing ceremony was attended by Prince Sultan bin Khaled, vice chairman of SIC, and Italy’s Ambassador to Saudi Arabia, Carlo Baldocci, reflecting the high-level support backing the agreement.
The deal further advances SIC’s role as a gateway for institutional-grade industrial investment into Saudi Arabia, reinforcing its mandate to help build a globally competitive and resilient manufacturing sector.
