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
Saudi Aramco could tap debt markets again after $5bn bond sale
DUBAI: Saudi Aramco has published a new prospectus for its issuance program of Islamic bonds or sukuk, signalling the state oil major may soon tap the debt markets again after it raised $5 billion from a three-part bond sale this week.
The prospectus, submitted to the London Stock Exchange where the sukuk would be listed, is dated May 30. Aramco has a year to issue sukuk under its terms.
Aramco earlier this week raised $5 billion from a sale of conventional bonds. The borrowing comes after economic uncertainty and rising supply hit crude markets, denting the top oil exporter’s profits.
“Aramco is likely looking to take advantage of a window of relative market calm to issue debt again,” said Zeina Rizk, co-head of fixed income at Amwal Capital Partners.
Aramco in March said it expected to slash its dividend this year by nearly a third as profits and free cash flow decline.
Reuters reported last week that Aramco is exploring potential asset sales to free up funds as it pursues international expansion and weathers lower crude prices.
Citi, HSBC and JPMorgan are the arrangers of the sukuk program and are joined as dealers by First Abu Dhabi Bank, Goldman Sachs, Morgan Stanley, SNB Capital and Standard Chartered.
Digital shift keeps Saudi credit card borrowing above $8bn and just 2% below record level
RIYADH: Credit card loans from Saudi banks posted their second-highest figure on record in the first quarter of 2025, after an annual rise of 12.53 percent.
According to the Saudi Central Bank, also known as SAMA, this borrowing of SR30.66 billion ($8.18 billion) is just 2 percent below the all-time peak recorded at the end of 2024.
SAMA figures also revealed that consumer loans reached SR479.78 billion in what was a 6.41 percent rise during the same period.
The vast majority – over 90 percent – of consumer lending falls into a broad “other” category, which includes debt consolidation, personal family expenses, or any borrowing not classified under the specific purposes.
This indicates that many Saudis take personal loans for a range of needs, from home renovations to weddings, but each of those specific uses is a relatively small slice of the overall figures.
Multiple factors are supporting the rapid growth of the credit card segment. A central driver is the national push toward a cashless society under Vision 2030, which has seen SAMA implementing policies to promote electronic payments and reduce dependence on cash.
This includes expanding point-of-sale infrastructure, mandating that businesses accept electronic payments, and fostering fintech innovation. As a result, 79 percent of all retail transactions in 2024 were electronic, card or digital payments, up from 70 percent the year before, according to an April release by SAMA.
In parallel, banking penetration has expanded, with nearly all bank cards in the Kingdom now enabled for contactless payments. By 2023, 98 percent of in-person card transactions were contactless — up from just 4 percent in 2017— according to Visa executive Andrew Torre, speaking to Arab News in October.
The COVID-19 pandemic accelerated this shift to tapping cards and phones, ingraining cashless habits. With nearly 50 million payment cards in circulation and a decline in ATM usage, the ecosystem is primed for card spending over cash.
Another factor is consumer behavior and economic policy. Strong consumer spending in Saudi Arabia — supported by economic growth and initiatives to boost household income — has encouraged more use of credit for purchases.
Rather than delaying purchases, many consumers are comfortable using credit cards to buy now and pay later, especially with the availability of installment plans.
Additionally, banks and payment networks are actively marketing credit cards with attractive promotions. Cashback deals, reward points, airline miles, and no-fee installment offers are abundant, which incentivizes consumers to use credit cards for both large and small purchases.
The entry of Shariah-compliant credit cards has also played a role. By addressing religious sensitivities, Islamic banks have made credit cards acceptable to a wider customer base that previously avoided interest-based products.
Furthermore, the growth of e-commerce and digital services in Saudi Arabia has naturally increased credit card adoption. Online retailers, food delivery apps, ride-hailing, and travel platforms often work best with card payments, so as these services proliferate, so does card usage.
Consumer loan usage and slower growth trends
Credit cards and personal consumer loans differ fundamentally in structure, usage, and cost. Consumer loans in Saudi Arabia are typically taken as a fixed amount to be repaid in installments over a set term, usually at relatively lower interest or profit rates.
They are often used for significant expenses like buying a car, financing education, or other big-ticket needs, and come with a structured repayment plan that helps borrowers budget effectively.
By contrast, a credit card provides a revolving credit line up to a predefined limit, with no fixed repayment period as long as the borrower makes minimum payments.
Traditional consumer loans, which are often called personal loans, remain much larger in absolute terms than credit card debt in Saudi Arabia, but their growth has been relatively sluggish in recent quarters.
These loans — which exclude mortgages — totaled SR471 billion by the end of 2024, and saw annual growth in the mid-single digits compared to double-digit growth for credit cards.
In early 2024, growth was even slower. In the first quarter, consumer lending was up less than 1 percent year-on-year, and in the second quarter around 2 percent, before accelerating later in the year according to SAMA data.
The uses of consumer loans are generally for big one-time expenditures or needs. The largest defined sub-category is financing for vehicles, which accounted for roughly 2.5 percent to 3 percent of total consumer loans in 2024. Other specific purposes include education loans and loans for furniture and durable goods, and vehicle and private transport means.
The recent slower growth of consumer loans compared to credit cards can be attributed to a number of factors.
High interest rates over 2022 to 2023, as global rates climbed, made borrowing via fixed loans less attractive, potentially dampening demand. By contrast, credit card lines were often already in place and could be tapped without a new loan application.
Another factor is the growing availability of credit card installment plans and Buy Now, Pay Later services, which are increasingly used to cover expenses that previously required personal loans.
With zero-interest installment offers and flexible repayment options — particularly appealing to younger consumers — many now prefer to finance mid-sized purchases through these tools rather than committing to long-term bank loans.
All of this has led to personal loan growth being moderate. Nonetheless, consumer loans did rise in absolute terms, primarily driven by continued needs for cars, education, and other big expenses.
The credit card segment’s growth outpaced consumer loans by a wide margin, highlighting a shift in how Saudis finance their spending toward more flexible, short-term credit and digital payment tools, and slightly away from traditional fixed personal borrowing.
UAE, China, India among top destinations for Saudi Arabia’s non-oil goods: GASTAT
RIYADH: The UAE emerged as the leading destination for Saudi Arabia’s non-oil exports during the first quarter of 2025, with shipments valued at SR21.32 billion ($5.68 billion), marking a 33.91 percent increase compared to the same period last year, according to the latest data from the General Authority for Statistics.
Machinery and mechanical appliances were the most exported items to the UAE, amounting to SR10.19 billion. This was followed by transport equipment worth SR5.16 billion and chemical products totaling SR1.11 billion.
Plastic goods were also significant, with exports to the UAE reaching SR942 million, while precious stones and base metals recorded SR860.8 million and SR848.4 million, respectively.
The increase in non-oil exports aligns with the objectives of the Kingdom’s Vision 2030, which seeks to diversify the economy and reduce dependency on oil revenues. Saudi Minister of Economy and Planning Faisal Alibrahim recently noted that non-oil activities now contribute 53.2 percent to the Kingdom’s gross domestic product.
GASTAT also reported a 9.27 percent rise in Saudi Arabia’s non-oil exports to the UAE compared to the previous quarter, further emphasizing the Kingdom’s economic diversification momentum.
China ranked second among Saudi Arabia’s non-oil export destinations in the first quarter, receiving goods valued at SR6.51 billion — an annual increase of 17.93 percent. Major exports to the Asian country included plastic products worth SR2.58 billion, chemical products totaling SR2.32 billion, and minerals valued at SR533.4 million.
India was another prominent trade partner, with non-oil exports reaching SR5.75 billion in the first quarter, up 14.08 percent from the same period in 2024.
Other key export destinations included Turkiye, which received goods worth SR2.96 billion; Egypt at SR2.56 billion; and the US at SR2.48 billion.
Singapore imported SR2.28 billion worth of goods from Saudi Arabia, while Bahrain received SR2.21 billion, Belgium SR2.11 billion, and Kuwait SR1.97 billion.
Overall, Saudi Arabia’s non-oil exports rose by 13.4 percent year on year in the first quarter, totaling SR80.72 billion.
Key ports played a vital role in this trade activity. King Fahad Industrial Sea Port in Jubail handled the highest volume of outbound non-oil goods, valued at SR9.93 billion. Jeddah Islamic Sea Port followed closely with SR9.76 billion, while Jubail Sea Port and King Abdulaziz Sea Port in Dammam facilitated exports worth SR7.17 billion and SR6.69 billion, respectively.
On land, Al-Batha Port processed SR5.53 billion in exports. Al-Hadithah and Al-Wadiah ports recorded export values of SR2.10 billion and SR1.43 billion, respectively.
Among airports, King Khalid International Airport in Riyadh led with SR8.52 billion worth of non-oil goods exported in the first quarter, an increase of 12.84 percent compared to the previous year.
King Abdulaziz International Airport followed with SR6.16 billion, while King Fahad International Airport in Dammam and Prince Mohammad bin Abdulaziz International Airport in Madinah recorded SR741.8 million and SR4.2 million, respectively.
Merchandise exports
Despite growth in the non-oil sector, overall merchandise exports declined by 3.2 percent year on year in the first quarter, falling to SR285.78 billion. GASTAT attributed this drop to an 8.4 percent decline in oil exports, which caused the share of oil in total exports to decrease from 75.9 percent in the first quarter of 2024 to 71.8 percent in the same period this year.
Asia remained the largest market for Saudi exports, accounting for SR213.14 billion. Europe followed at SR34.51 billion, with Africa and the Americas receiving SR23.19 billion and SR13.80 billion, respectively.
China was the top destination for overall merchandise exports, receiving SR44.91 billion worth of goods — an increase of 3.26 percent compared to the first quarter of 2024. India received SR28.04 billion in goods, followed by Japan with SR26.48 billion, South Korea at SR25.03 billion, and the UAE at SR24.85 billion.
Imports in Q1
Saudi Arabia’s imports also grew during the first quarter, rising by 7.3 percent year on year to SR222.73 billion.
Machinery, mechanical and electrical equipment led imports, totaling SR57.40 billion, followed by transport parts at SR32.56 billion and base metals at SR21.30 billion. Chemical imports stood at SR19.60 billion, while minerals accounted for SR12.12 billion.
Goods imported from Asia were valued at SR128.50 billion, while imports from Europe and the Americas reached SR52.94 billion and SR27.01 billion, respectively. African nations contributed SR12.53 billion in imports, and goods from Oceania were valued at SR1.73 billion.
China remained Saudi Arabia’s largest source of imports, sending goods worth SR59.33 billion.
These included mechanical appliances and electrical equipment valued at SR23.93 billion, transport parts worth SR9.50 billion, base metals at SR6.43 billion, and even works of art and antiques amounting to SR3.19 billion. The US followed with SR17.58 billion in exports to the Kingdom, while India’s exports totaled SR12.27 billion.
Sea routes were the dominant entry channels for imports, accounting for SR113.11 billion. Air and land ports handled SR61.63 billion and SR25.99 billion, respectively. King Abdulaziz Sea Port in Dammam was the leading sea entry point with SR59.97 billion in imports. Jeddah Islamic Sea Port and Ras Tanura port followed with SR47.78 billion and SR8.73 billion.
Over land, Al-Batha Port and Riyadh Dry Port managed goods worth SR10.78 billion and SR8.29 billion, respectively. By air, King Khalid International Airport in Riyadh received imports valued at SR29.96 billion in the first quarter. King Abdulaziz International Airport and King Fahad International Airport handled SR18.60 billion and SR12.39 billion, respectively.
Reflecting continued expansion of the non-oil economy, Saudi Arabia recorded a Purchasing Managers’ Index of 55.6 in April, according to S&P Global and Riyad Bank. This score surpassed those of the UAE at 54 and Kuwait at 54.2, indicating robust growth in non-oil business activity. A PMI reading above 50 signals economic expansion, while a figure below 50 suggests contraction.
Oil Updates — prices head for weekly drop as OPEC+ may discuss larger output hike for July
LONDON, May 30 : Oil prices were flat on Friday and heading for a second consecutive weekly loss, as investors weigh a potentially larger OPEC+ output hike for July, and uncertainty spreads around US tariff policy after the latest courtroom twist.
Brent crude futures fell by 9 cents, or 0.14 percent, to $64.06 a barrel by 3:01 p.m. Saudi time. US West Texas Intermediate crude fell by 15 cents, or 0.25 percent, to $60.79 a barrel.
The Brent July futures contract is due to expire on Friday. The more liquid August contract was trading 19 cents lower, or 0.3 percent, at $63.16 per barrel.
At these levels, the front-month benchmark contracts were headed for weekly losses of a little over 1 percent.
Price moves dipped into negative territory after Reuters reported that OPEC+ may discuss an increase in July output larger than the 411,000 barrels per day (bpd) that the group had made for May and June.
“The oil price would probably only come under greater pressure if the oil-producing countries were to increase their production even more than in previous months or give indications that there will be similarly high production increases in the following months,” Commerzbank analysts said earlier on Friday in a note, published before the news.
The potential hike comes as the global surplus has widened to 2.2 million bpd, likely necessitating a price adjustment to prompt a supply-side response and restore balance, said
JPMorgan analysts in a note, adding they expect prices to remain within the current range before easing into the high $50s by year-end.
US President Donald Trump’s tariffs were expected to remain in effect after a federal appeals court temporarily reinstated them on Thursday, reversing a trade court’s decision a day earlier to put an immediate block on the sweeping duties.
Oil prices were down more than 1 percent on Thursday.
The appeals court’s decision pushed Brent to the bottom of its recent tight range, Investec’s head of commodities Callum Macpherson said.
“The narrow $63-67 per barrel range that has confined Brent for much of this month might be hard to sustain given the uncertainties facing oil markets,” Macpherson said.
Oil prices have lost more than 10 percent since Trump announced his “Liberation Day” tariffs on April 2.
Saudi Aramco to tap bond market amid low gearing at around 5%, CEO says
- Amin Nasser said the oil giant’s gearing ratio, a financial metric that compares a company’s debt to its equity, is currently around 5%
- He reaffirmed the company’s commitment to maintaining high dividends
RIYADH: Saudi Aramco will continue tapping bond markets in the future despite maintaining one of the lowest gearing ratios in the energy industry, according to a top official.
In an interview with Bloomberg, Aramco President and CEO Amin Nasser said the oil giant’s gearing ratio, a financial metric that compares a company’s debt to its equity, is currently around 5 percent. That’s significantly lower than the industry average, where many peers operate with levels between 15 and 20 percent.
“Our gearing today is around 5 percent — still one of the lowest gearing, you know. It’s almost half of the average compared to other energy industry players in the market, and we will continue to tap into that additional bond markets in the future,” Nasser said.
He continued: “But we have a low gearing ratio, which still, as you consider it, is very low compared to any players in the markets.”
The low gearing ratio, which reflects strong financial discipline and limited reliance on debt, is part of what enables Aramco to maintain stability amid market fluctuations.
Gearing is commonly used by analysts and investors to assess a company’s financial leverage, with lower ratios often indicating a stronger balance sheet and reduced financial risk.
In the interview, Nasser also reaffirmed the company’s commitment to maintaining high dividends. “We have a strong balance sheet, and our dividend is one of the highest, the highest globally. We’re expecting to pay dividends that go to the majority shareholder and other shareholders, which is the government, of $85.4 billion this year.”
He said the company benefits from having spare capacity, which allows it to bring more barrels to the market. “For every million barrels, that will have a huge impact on our net income. I would say it will give you a $10 cushion for every million barrels that you put into the market.”
Nasser added: “We have today close to 3 million barrels of spare capacity, so other companies do not have that to cushion any drop in prices. For us, we do have that spare capacity that is healthy, strong, and when you put it, it allows you to increase significantly your net income.”
He emphasized the company’s ability to withstand lower oil prices due to its operational efficiency and robust infrastructure.
“We are the lowest cost producer. Our extraction cost is $3, and it still is $3. And with low extraction cost, healthy balance sheet, and our investment that is continuing to be capturing opportunities that we have,” Nasser said.
