Oil Updates — crude heads for first monthly drop since November as economic uncertainty weighs
Updated 28 February 2025
Reuters
NEW DELHI: Oil prices eased on Friday, heading for their first monthly drop since November, as uncertainty over global economic growth and fuel demand from Washington’s tariff threats and further signs of a US economic slowdown outweighed supply concerns.
The more active May Brent crude futures slipped 31 cents, or 0.4 percent, to $73.26 a barrel by 6:48 a.m. Saudi time, while US West Texas Intermediate crude futures were at $70.04 a barrel, down 31 cents, or 0.4 percent. Front-month Brent that expires later on Friday traded at $73.69, down 35 cents, or 0.5 percent.
Both benchmarks are on track to post their first monthly decline in three months.
A long list of factors including economic slowdown fears in the US, tariffs, OPEC+ plans to increase supply in April and hopes of peace in Ukraine are curbing investors’ risk appetite and depressing prices, IG market analyst Tony Sycamore said.
“The only counter arguments are the price has already fallen a lot,” he said, adding that WTI is well supported between $65 and $70 a barrel based on technical charts.
US President Donald Trump on Thursday said his proposed 25 percent tariffs on Mexican and Canadian goods will take effect on March 4, along with an extra 10 percent duty on Chinese imports.
Economists at Fitch’s BMI research unit said market participants are struggling to gauge the impact of the flood of energy-related policy announcements made by the Trump administration this month.
“Those weighing on the downside, notably US tariff measures, are currently winning out,” BMI said in a note.
Also weighing on investor sentiment, data showed US jobless claims jumped more than expected in the previous week, while another government report reiterated that economic growth slowed in the fourth quarter.
Still, oil prices climbed more than 2 percent on Thursday as supply concerns resurfaced after Trump revoked a license granted to US oil major Chevron to operate in Venezuela.
The cancelation of the license could lead to the negotiation of a fresh agreement between the US producer and state company PDVSA to export crude to destinations other than the United States, sources close to the talks said.
OPEC+ is debating whether to raise oil output in April as planned or freeze it as its members struggle to read the global supply picture because of fresh US sanctions on Venezuela, Iran and Russia, eight OPEC+ sources said.
Saudi Arabia’s non-oil exports to China surge 70% as trade ties deepen: GASTAT
Updated 28 February 2025
Nirmal Narayanan
RIYADH: Saudi Arabia’s non-oil exports to China reached SR3.68 billion ($980 million) in December, representing a rise of 69.58 percent compared to the previous month, the latest official data showed.
According to the General Authority for Statistics, the Kingdom exported plastic and rubber goods valued at SR1.12 billion, followed by chemical products at SR1.11 billion and transport parts at SR1.02 billion.
Non-oil shipments from Saudi Arabia to China amounted to SR2.17 billion in November, while the amount was SR2.35 billion in October and SR1.73 billion in September.
The strong flow of the Kingdom’s non-oil goods to the Asian country underlines the strengthening bilateral relations between both nations, with Saudi Arabia being the largest trading partner of China in the Middle East since 2001.
China and Saudi Arabia are strategic partners in various other sectors such as energy and finance, as well as the Belt and Road Initiative.
The rise in non-oil exports also signifies the progress of Saudi Arabia’s economic diversification journey, as the Kingdom is on a path to reduce its decades-long reliance on oil revenues.
Affirming the growth of Saudi Arabia’s non-oil private sector, the Kingdom’s Purchasing Managers’ Index reached 60.5 in January, the highest level in 10 years, and the top among the Middle East nations, according to the Riyad Bank Saudi Arabia PMI survey compiled by S&P Global.
In the UAE, the PMI stood at 55 in January, while it was 53.4 in Kuwait, 50.2 in Qatar and 50.7 in Egypt.
Any PMI readings above 50 indicate growth of the non-oil private sector, while readings below the number signal contraction.
Chinese President Xi Jinping with Saudi Arabia’s Crown Prince Mohammed bin Salman in December 2022. File
UAE the favorite destination for Saudi non-oil goods
According to the GASTAT report, Saudi Arabia’s Arab neighbor UAE was the top destination for the Kingdom’s non-oil exports, with outbound shipments to the Emirates reaching SR6.46 billion in December, representing a decline of 9.90 percent compared to the previous month.
The authority revealed that the Kingdom exported machinery and mechanical appliances worth SR3.15 billion in December, while outbound shipments of transport parts amounted to SR1.32 billion.
In December, Saudi Arabia also exported chemical products valued at SR426.8 million to the UAE, followed by plastic and rubber goods worth SR320.2 million.
India was the third favorite destination for Saudi Arabia’s non-oil goods in December, with exports to the Asian nation reaching SR1.86 billion, marking a decline of 26 percent compared to the previous month.
Other top destinations for Saudi Arabia’s non-energy goods were the US, with a value of SR1.64 billion, Bahrain at SR1.19 billion and Turkiye at SR902.7 million.
In December, the Kingdom also exported non-hydrocarbon products to Egypt valued at SR888 million, while outbound shipments to Belgium stood at SR826.7 million and Kuwait at SR703.7 million.
Overall, Saudi Arabia’s non-oil exports stood at SR29.45 billion in December, representing an 18.1 percent rise compared to the same month in 2023.
In November, Saudi Arabia’s Minister of Economy and Planning Faisal Al-Ibrahim revealed that non-oil activities account for 52 percent of the Kingdom’s gross domestic product.
The minister added that the Kingdom’s non-oil economy has been growing at 20 percent since the launch of the Vision 2030.
In December, Saudi Arabia exported non-energy goods worth SR19.33 million via sea, while outbound shipments through land and air totaled SR5.38 billion and SR4.73 billion, respectively.
According to GASTAT, Jeddah Islamic Sea Port was the main exit point for Saudi Arabia’s non-hydrocarbon products with goods valued at SR3.92 billion.
King Fahad Industrial Sea Port in Jubail handled goods worth SR3.65 billion, followed by Ras Tanura Sea Port, which processed outbound shipments amounting to SR2.03 billion.
In terms of exit points via land, Al-Batha Port handled goods valued at SR2.04 billion, while products worth SR671.5 million passed through Al-Hadithah Port.
Among airports, King Khalid International Airport in Riyadh handled outbound shipments worth SR2.46 billion in December, followed by King Abdulaziz International Airport at SR2.09 billion.
Overall merchandise exports
Despite the rise in non-oil outbound shipments, Saudi Arabia’s overall merchandise exports decreased by 2.8 percent to reach SR94.29 billion in December compared to the same month of the previous year, driven by oil production cuts as mandated by OPEC.
The share of oil exports from total outbound goods also decreased from 74.3 percent in December 2023 to 68.8 percent during the same month in 2024.
Saudi Arabia’s merchandise exports to the Gulf Cooperation Council countries amounted to SR13.68 billion in the final month of 2024, representing a rise of 6.04 percent compared to December 2023.
Exports to Asian non-Arab non-Islamic countries stood at SR49.39 billion in December, followed by outbound shipments to North America at SR4.73 billion, South America at SR1.47 billion and the EU at SR8.73 billion.
In December, Saudi Arabia’s overall merchandise exports to China amounted to SR12.25 billion, followed by South Korea at SR9.80 billion, Japan at SR9.71 billion and India at SR9.11 billion.
Imports up
According to GASTAT, Saudi Arabia’s overall imports witnessed a 27.1 percent year-on-year rise in December, reaching SR79.03 billion, while the surplus of trade balance decreased by 56.1 percent, reaching SR15.26 billion.
The authority revealed that the Kingdom welcomed goods valued at SR18.60 billion from China, led by mechanical appliances and electrical equipment valued at SR7.73 billion.
Saudi Arabia also imported transport products from China worth SR2.60 billion, followed by base metal products at SR2.04 billion and textiles valued at SR1.06 billion.
In December, imports from the US amounted to SR7.17 billion, while inbound shipments from the UAE and India were valued at SR4.30 billion and SR3.81 billion, respectively.
Saudi Arabia also imported goods worth SR3.75 billion from Germany and SR3.60 billion from Japan.
Italian imports to Saudi Arabia in December amounted to SR3.19 billion, while inbound shipments from the UK totaled SR3.03 billion.
GASTAT revealed that inbound shipments valued at SR45.72 billion reached the Kingdom via sea, while imports amounting to SR9.46 billion and SR23.85 billion came via land and air, respectively.
King Abdulaziz Sea Port in Dammam was the leading entry point for imports in December, with the facility handling goods valued at SR22.01 billion, or 27.8 percent of total inbound shipments.
According to the report, Jeddah Islamic Sea Port handled inbound shipments valued at SR15.41 billion, followed by the King Abdullah Sea Port at SR1.35 billion and King Fahd International Sea Port at SR1.20 billion.
Through land, Al-Batha Port and Riyadh Dry Port processed incoming goods valued at SR4.10 billion and SR2.84 billion, respectively.
Through air, King Khalid International Airport in Riyadh welcomed inbound shipments worth SR11.62 billion in December.
King Abdulaziz International Airport and King Fahad International Airport also handled imports valued at SR7.07 billion and SR4.55 billion, respectively.
Can Saudi Arabia conquer global uncertainty and become a financial giant?
Kingdom has to continue reform initiatives, experts tell Arab News
Expanding financial markets, diversification, digital transformation
Updated 28 February 2025
Miguel Hadchity
RIYADH: Saudi Arabia’s financial markets are on a sharp upward trajectory despite challenging global economic trends, experts have told Arab News.
Market volatility across the world — as seen by the S&P 500 dropping below 6,000 on Wednesday — together with US President Donald Trump’s policies prompting oil market uncertainty, and continuing supply chain disruptions, are increasing investment risks.
However, the Kingdom’s economic resilience, backed by Vision 2030’s diversification efforts and strong regulatory reforms, has helped Saudi Arabia mitigate these challenges.
In 2024, the economy rebounded with a 1.3 percent growth, driven by a 4.6 percent increase in non-oil activities, despite a decline in oil activities.
Saudi Arabia’s financial ecosystem is poised for even greater growth, but the key question remains: Can it continue to solidify its position as a global financial hub in such an unpredictable environment?
Vikas Papriwal, leader of FTI Consulting Middle East and Africa, told Arab News the Kingdom is very much in charge of its own destiny in this regard.
“The key to future-proofing against oil market volatility and maintaining leadership in the global energy industry is for Saudi Arabia to continue to place significant emphasis on researching, developing, and innovating in the space of renewable and sustainable energy and be leaders in the global energy transition,” he said.
Vikas Papriwal, leader of FTI Consulting Middle East and Africa. Supplied
Saudi Arabia’s progress can also be seen in its extensive regulatory reforms. The country has worked hard to ensure that its financial markets align with international best practices, providing greater transparency, stability, and ease of access for investors.
“Reforms that can fortify the Kingdom’s position as a financial powerhouse include further easing processes for operating and starting businesses, particularly through legal and tax reforms,” said Papriwal.
Rezwan Shafique, principal of financial services at Arthur D. Little, told Arab News that those reforms are just the starting line, emphasizing that the path toward becoming a powerhouse is now underway.
“Government and regulatory reforms, such as Companies Law, CMA (Capital Market Authority) strategic plans, and MISA (Ministry of Investment) guidelines, have laid the groundwork by improving corporate transparency, stability, and predictability. The Kingdom is now in a phase to communicate opportunities to global players,” Shafique added.
He noted that Saudi Arabia has already made progress in this area, highlighting that the country’s share in the MSCI Emerging Markets Index has risen to 4 percent from 2.7 percent in 2019. He also pointed out that foreign ownership in the Saudi Exchange has increased 25-fold over the past five years, reaching $100 billion, signaling expanding opportunities for global investors.
“Gaining traction on new listings and becoming a multi-jurisdictional player should be a key focus. A number of factors will need to converge, including Saudi Arabia actively forging ties between itself, China, Singapore, and African nations through strategic partnerships,” he said.
Indeed, Saudi Arabia’s ambition to lead the region in financial services is evident. Over the past few years, its exchange, Tadawul, has made tremendous strides, earning a spot among the top 10 global stock markets.
Its market capitalization reached $2.9 trillion as of late 2024, with the Kingdom continuing to attract significant foreign investments, especially in light of the world’s largest initial public offering — Aramco’s listing in 2019, which raised over $25 billion.
“Tadawul’s inclusion in major global indices like MSCI and FTSE has increased foreign investor participation, while the size and scale of recent initial public offerings have showcased the Kingdom’s ability to attract significant global capital,” said Serkan Teker, financial services partner at Deloitte Middle East.
He added that to rival global giants such as Wall Street and London, Saudi Arabia must continue evolving its capital markets by enhancing liquidity, diversifying sector representation, and improving transparency.
Teker also highlighted how the banking sector has been a significant driver of the Kingdom’s non-oil gross domestic product expansion. It posted an “impressive annual growth of almost 11 percent between 2018 and the beginning of 2023, maintaining strong asset quality with non-performing loans gradually declining since the first shock waves of the COVID-19 pandemic.”
Beyond the financial sector, Saudi Arabia’s broader economic strategy also focuses on creating new business environments and fostering innovation to attract foreign investors.
Teker said: “The Kingdom could also look into creating new free zones and specialized economic zones for key areas of strategic focus, such as healthcare, biotech, and information and communications technology. Additionally, continued investment in transformative urban projects that allow KSA to act as a central hub for commerce and hospitality will further strengthen its position on the global stage.”
The Deloitte partner went on to explain that Saudi Arabia’s rapid advancements in artificial intelligence, fintech, and digital banking are transforming the country into a global innovation hub. And he cited regulatory initiatives including the FinTech Sandbox and the adoption of Open Banking as helping the Kingdom become a magnet for tech startups and international investors.
He added that initiatives such as digital-only banks and AI-driven solutions in finance and healthcare are positioning Saudi Arabia at the forefront of cutting-edge financial technology.
The Kingdom’s fintech market, in particular, has experienced exponential growth — up 25 percent in 2024 according to the Saudi Central Bank — reflecting the increasing importance of digital transformation to the economy.
“Saudi Arabia is making significant investments in AI and related infrastructure, including a $40 billion tech fund and targeted investments in AI companies and startups. The launch of the Saudi Artificial Intelligence Authority is expected to accelerate innovation across key industries such as healthcare, finance, and manufacturing,” FTI Consulting’s Papriwal added.
Tadawul, however, is not without its challenges. Geopolitical instability in the Middle East remains a persistent concern, and the volatility of global markets — particularly oil price fluctuations — continues to affect the broader economy.
“Tadawul needs to evolve in two ways: first, from a domestic exchange to multi-regional, and second, toward a technology company enabling financial services firms to develop and execute investment strategies,” said Arthur D. Little’s Shafique.
Looking ahead, Saudi Arabia’s ability to expand its financial markets, further diversify its economy, and continue its digital transformation will be crucial in maintaining its upward trajectory.
Rezwan Shafique, principal of financial services at Arthur D. Little. Supplied
The Kingdom is already focusing on innovation, sustainable finance, and digital platforms as part of its broader Vision 2030 agenda. This vision positions Saudi Arabia not only as a regional player but also as a leader in global financial markets.
Teker emphasized that Saudi Arabia can strengthen its claim as a global financial powerhouse by expanding digital and financial inclusion through digital banking solutions and financial literacy programs would help reach underserved segments of the population.
Additionally, he highlighted the importance of deepening capital market reforms, introducing advanced financial instruments, and attracting foreign participation to enhance liquidity and diversify investment options.
Teker also explained that by leveraging regulatory frameworks, fostering partnerships between banks and fintech firms, and attracting international digital players, Saudi Arabia can establish itself as a global fintech hub and strengthen its position in the rapidly evolving financial services sector.
“We believe some of these forward-looking actions, aligned with Vision 2030’s ambitious goals, can further propel Saudi Arabia into global financial leadership while driving inclusive and sustainable economic growth,” he said.
Over 1,300 Saudi industrial licenses awarded in 2024, attracting $13.3bn investment, latest figures show
Updated 27 February 2025
MOHAMMED AL-KINANI
JEDDAH: More than 44,000 new jobs are expected in Saudi Arabia after the Kingdom issued 1,346 industry licenses in 2024, an official report has revealed.
The Ministry of Industry and Mineral Resources announced that the permits have also helped attract investments worth over SR50 billion ($13.3 billion), driving economic growth and diversification.
The ministry added that the jobs figure is based on a report by its National Industrial and Mining Information Center, which analyzes key sector changes.
The issuance of the permits aligns with Saudi Arabia’s National Industrial Strategy, launched by Crown Prince Mohammed bin Salman in October 2022, that aims to drive sector growth and increase the number of factories in the Kingdom to about 36,000 by 2035.
The strategy focuses on 12 sub-sectors, targeting more than 800 investment opportunities worth SR1 trillion, striving toward tripling the industrial gross domestic product.
The analysis by the ministry also shows that 1,075 factories began production in 2024, with investments exceeding SR48 billion and a workforce of about 39,000 employees.
The issuance of permits aligns with the Kingdom’s National Industrial Development and Logistics Program, which was launched in 2019 to support the industrial sector and drive sustainable development.
It also furthers the ministry’s goal of strengthening the industry and diversifying the economy under Vision 2030.
NIDLP aims to position Saudi Arabia as an international leader in energy, mining, logistics, and industry. Key components include improving regulations, investing in renewable energy, and boosting local content through initiatives like “Made in Saudi,” all supporting the goal of enhancing industrial capacity and global competitiveness.
In February 2024, the Ministry of Industry reported a 10 percent year-on-year increase in operational factories for 2023, totaling an investment of approximately SR1.5 trillion.
The body also revealed that 1,379 industrial licenses were issued in 2023, attracting investments exceeding SR81 billion. Additionally, production commenced in 1,058 factories during the same period, with total financial commitments reaching SR45 billion.
Closing Bell: Saudi main index ends week in red; Nomu gains
Updated 27 February 2025
Nirmal Narayanan
RIYADH: Saudi Arabia’s Tadawul All Share Index ended the week in the red, as it shed 120.75 points or 0.99 percent to close at 12,111.90 on Thursday.
The total trading turnover of the benchmark index was SR8.32 billion ($2.22 billion), with 69 stocks advancing and 172 retreating.
Nomu, Saudi Arabia’s parallel market, gained 118.24 points to close at 31,404.47.
The MSCI Tadawul Index, however, shed 17.71 points to 1,514.81.
The best-performing stock on the main index was Alkhorayef Water and Power Technologies Co. The firm’s share price increased by 4.48 percent to SR163.20.
The share price of Saudi Paper Manufacturing Co. rose by 2.65 percent to SR65.90.
Banan Real Estate Co. also saw its share price increasing by 2.56 percent to SR6.82.
Conversely, the share price of Mobile Telecommunication Co. Saudi Arabia, also known as Zain KSA declined by 4.57 percent to SR10.86.
On the announcements front, Arabian Pipes Co. reported a net profit of SR168.18 million in 2024, representing a rise of 27.3 percent compared to the previous year.
In a Tadawul statement, the firm attributed the rise in profit to improved sales volumes and new project awards to support the company’s production levels.
The share price of Arabian Pipes Co. declined by 2.51 percent to SR11.64.
The Company for Cooperative Insurance, also known as Tawuniya, said that it witnessed a net profit of SR1.02 billion in 2024, marking a 65.8 percent rise compared to 2023.
According to a Tadawul statement, insurance revenues of the company rose by 19.7 percent year on year in 2024 reaching SR18.27 billion.
Tawuniya’s share price increased by 1.83 percent to SR144.60.
National Gas and Industrialization Co. revealed that its net profit for 2024 reached SR248.7 million, representing a rise of 9.41 percent compared to 2023.
According to a Tadawul statement, the increase in net profits was driven by growth on higher gas sales which went up by SR365 million due to the rise in gas prices and volume.
National Gas and Industrialization Co.’s share price decreased by 1.52 percent to SR103.40.
Conversely, the net profit of Gulf Insurance Group fell to SR98.19 million in 2024, representing a decline of 23.6 percent compared to the previous year.
The group’s share price dropped by 1.54 percent to SR28.85.
Saudi Arabia strengthens halal leadership with 13 new deals at Makkah forum
Updated 27 February 2025
Mohammed Al-Kinani
JEDDAH: Saudi Arabia saw the signing of 13 agreements at a special event in Makkah, boosting its halal industry leadership by expanding investment, strengthening certification standards, and enhancing food production.
Announced during the second edition of the Makkah Halal Forum, held from Feb. 25 to 27, the deals included partnerships between the Halal Products Development Co., a subsidiary of the Public Investment Fund, and Al-Watania Poultry, Golden Chicken Farms Co., and Ajlan & Bros Holding Group.
The Islamic Chamber of Commerce and Development also signed agreements with Brazil’s Fambras Halal, Thailand’s Halal Science Center, and Slovenia’s KulinWorld to enhance global certification and research in the industry.
Additionally, the Saudi Authority for Industrial Cities and Technology Zones, or MODON, secured deals with First Milling Co. and Ghitha Alzad Food Industries to strengthen halal food production infrastructure.
Held under the theme “Sustainable Development through Halal” and inaugurated by Saudi Commerce Minister Majid Al-Kassabi, the forum aligns with the Kingdom’s Vision 2030 goals of economic diversification and private sector expansion.
As the birthplace of Islam, the Kingdom has long been a trusted source of halal products and is leveraging its influence to lead the $7 trillion global halal market, which is projected to reach $10 trillion by 2030.
Muslim consumer spending on halal-certified products is estimated at $207 billion, according to the American Halal Foundation, underscoring the sector’s economic potential.
With participation from over 150 companies across 15 countries, the forum has become a key platform for driving innovation, enhancing standards, and reinforcing Saudi Arabia’s role as a central hub in the international halal economy.
The agreements signed during the forum support business development and economic growth across various sectors. They establish a framework for halal sciences, contribute to the advancement of scientific and educational materials, and reinforce the forum’s global standing.
Serving as a global gathering for industry leaders, the forum facilitated collaboration on innovations and best practices in the halal sector, with a focus on sustainability and development. As a platform for business partnerships and investment, it reinforced Saudi Arabia’s position in the global halal economy.
