Symbiotic relationship between Japan and KSA goes beyond oil

Saudi Aramco stores oil in three main locations: Rotterdam in the Netherlands for the European market; Sidi Kerir in Egypt for the Mediterranean market; and since early 2011, Okinawa in Japan for the Asia-Pacific market. (AFP)
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Updated 14 January 2020

Symbiotic relationship between Japan and KSA goes beyond oil

  • Saudi Arabia supplies Japan with liquefied petroleum gas (LPG), which is a mixture of propane and butane used for cooking and as a transport fuel. It is also an important feedstock for the petrochemical industry
  • In response to a major earthquake in Japan in 2011, the Saudi government donated products equivalent to $20 million through Saudi Aramco

Japan is the world’s fourth-largest crude oil importer, at an average of around 3 million barrels per day. It imports a third of its crude oil from Saudi Arabia. Japan has for decades been the largest crude oil market in Asia for the Kingdom.
Saudi Aramco stores oil in three main locations: Rotterdam in the Netherlands for the European market; Sidi Kerir in Egypt for the Mediterranean market; and since early 2011, Okinawa in Japan for the Asia-Pacific market.
Saudi Aramco has stored crude in Okinawa for commercial purposes in exchange for prioritizing supply to Japan in the event of an emergency. This is extremely important for Japan’s energy security, specially during escalating geopolitical tensions.               
Saudi Aramco started by storing around 4 million barrels of crude oil in the Okinawa facilities. In 2016, the company and Japan agreed on a 2-million-barrel expansion of the crude storage capacity in Okinawa. In return, Japan continued to get a priority claim on the stockpiles in case of an emergency.
Later, it was agreed to raise the storage capacity in Okinawa to 8.2 million barrels. In December 2019, Japan renewed its deal with Saudi Aramco for crude oil storage in Okinawa for another three years.
The Kingdom also supplies Japan with liquefied petroleum gas (LPG), which is a mixture of propane and butane used for cooking and as a transport fuel. It is also an important feedstock for the petrochemical industry.
In response to a major earthquake in Japan in 2011, the Saudi government donated products equivalent to $20 million through Saudi Aramco. The two countries agreed to establish the Saudi LPG Emergency Relief Fund within the Japan Gas Association to distribute aid to the region affected by the earthquake.

 


Dubai rents may be bottoming out as ‘green shoots’ appear

Updated 20 January 2020

Dubai rents may be bottoming out as ‘green shoots’ appear

  • An estimated 45,000 homes were completed in Dubai in 2019 according to Chesterton estimates

LONDON: Confidence may be returning to Dubai property despite a bloated market for off-plan homes, according to a report from Chestertons, the real estate broker.

Although apartment and villa sales prices were down 2 percent and 3 percent respectively in the fourth quarter of 2019 compared to the previous quarter, rental rates are stabilizing.

But supply issues continue to represent the biggest challenge facing the market, with 45,000 new units completed in 2019 and that expected to double this year.

“The Dubai residential market in Q4 2019 is alluding to a more positive outlook for 2020 thanks to the slowdown of sales price declines and the leveling of rental rates,” said Chris Hobden, of Chestertons MENA. “This does, however, have to be tempered by the volume of new units scheduled for delivery in 2020, which makes the short-term recovery of prices in the emirate unlikely.”

In the rental market, no movement was witnessed in the fourth quarter with the market supported by a draft law which would fix rental rates for three years upon the signing of a contract. 

“To ensure high occupancy in 2020, landlords will have to be realistic in the face of tough market conditions. The incentives previously offered to tenants, such as rent-free periods, multiple cheques and short-term leases, will continue, with an increase in tenant demand for monthly direct debit payments also likely” added Hobden.