Aramco chief optimistic about second-half of 2020 as China gasoline and diesel demand accelerates

IHS Markit Vice Chairman Daniel Yergin and Saudi Aramco CEO Amin Nasser. (Screengrab)
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Updated 30 June 2020

Aramco chief optimistic about second-half of 2020 as China gasoline and diesel demand accelerates

  • Amin Nasser: I’m very optimistic about the second half of this year. We see it in China today – it’s (oil demand) almost at 90 percent
  • Amin Nasser: I think we are much better prepared now. All countries, all medical establishments are much better prepared. We learned a lot during the first wave

LONDON: Saudi Aramco CEO Amin Nasser expects oil demand to rebound in the second-half of the year as more countries ease travel restrictions. 
He made the disclosure during an interview with IHS Markit Vice Chairman Daniel Yergin.
“The worst is behind us,” said Nasser. “I’m very optimistic about the second half of this year. We see it in China today – it’s almost at 90 percent. In gasoline it’s around 95 percent in China. Gasoline and diesel are picking up to pre-COVID levels. Jet fuel is still lagging in terms of less air travel. More countries will start opening up. So, we see that reflected in the demand on crude.”
The oil executive said that the pace of recovery would depend on whether there was a second wave of the COVID-19 coronavirus but that the experience of countries in dealing with the pandemic had made them better prepared for any recurrence.
“I think we are much better prepared now. All countries, all medical establishments are much better prepared. We learned a lot during the first wave,” he said.
He made his remarks as OPEC oil output drops to its lowest in two decades.
OPEC pumped 22.62 million barrels per day (bpd) on average in June, according to a Reuters survey published on Tuesday. That was a decline of about 1.92 million bpd from May.

The OPEC+ group which includes OPEC as well as Russia and some other producers, agreed to cut about 10 percent of global oil output from May 1.
The cuts have helped to support an oil price which dropped to as low as $16 in April, representing a 21-year low.
Now analysts expect the oil price to settle around $40-a-barrel this year according to the latest Reuters poll.
Nasser said that Aramco’s localized supply chain helped to mitigate against the impact of supply interruptions during lockdowns.
“We have seen a lot of plants and factories and suppliers that support Saudi Aramco from Europe, including China and other places – they had to shut down because of the lockdown. That impacted us for a while. But because of the optimum level of inventory that we have . . . a lot of things are being manufactured in the Kingdom – it helped us a lot.”


Saudi Arabia’s 6-point plan to jumpstart global economy

Updated 07 July 2020

Saudi Arabia’s 6-point plan to jumpstart global economy

  • Policy recommendations to G20 aim to counter effects of pandemic

DUBAI: Saudi Arabia, in its capacity as president of the G20 group of nations, has unveiled a six-point business plan to jump start the global economy out of the recession brought on by the COVID-19 pandemic.

Yousef Al-Benyan, the chairman of the B20 business group within the G20, told a webinar from Riyadh that the response to the pandemic -— including the injection of $5 trillion into the global economy — had been “reassuring.”

But he warned that the leading economies of the world had to continue to work together to mitigate the effects of global lockdowns and to address the possibility of a “second wave” of the disease.

“Cooperation and collaboration between governments, global governance institutions and businesses is vital for an effective and timely resolution of this multi-dimensional contagion transcending borders,” Al-Benyan said.

“The B20 is strongly of the view there is no alternative to global cooperation, collaboration and consensus to tide over a multi-dimensional and systemic crisis,” he added.

The six-point plan, contained in a special report to the G20 leadership with input from 750 global business leaders, sets out a series of policy recommendations to counter the effects of the disease which threaten to spark the deepest economic recession in nearly a century.

The document advocates policies to build health resilience, safeguard human capital, and prevent financial instability.

It also promotes measures to free up global supply chains, revive productive economic sectors, and digitize the world economy “responsibly and inclusively.”

In a media question-and-answer session to launch the report, Al-Benyan said that among the top priorities for business leaders were the search for a vaccine against the virus that has killed more than half-a-million people around the world, and the need to reopen global trade routes slammed shut by economic lockdowns.

He said that the G20 response had been speedy and proactive, especially in comparison with the global financial crisis of 2009, but he said that more needed to be done, especially to face the possibility that the disease might surge again. “Now is not the time to celebrate,” he warned.

“Multilateral institutions and mechanisms must be positively leveraged by governments to serve their societies and must be enhanced wherever necessary during and after the pandemic,” he said, highlighting the role of the World Health Organization, the UN and the International Monetary Fund, which have come under attack from some world leaders during the pandemic.

Al-Benyan said that policy responses to the pandemic had been “designed according to each country’s requirements.”

Separately, the governor of the Saudi Arabian Monetary Authority said that it was “too early” to say if the Kingdom’s economy would experience a sharp “V-shape” recovery from pandemic recession.