WEEKLY ENERGY RECAP: OPEC+ working tirelessly to drain crude product glut

WEEKLY ENERGY RECAP: OPEC+ working tirelessly to drain crude product glut
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Updated 07 March 2021

WEEKLY ENERGY RECAP: OPEC+ working tirelessly to drain crude product glut

WEEKLY ENERGY RECAP: OPEC+ working tirelessly to drain crude product glut
  • OPEC+ took the market by surprise when it decided to roll over its quota

Oil prices have escalated to the highest levels since October 2018. The Brent crude price is shyly approaching the vital $70 per barrel mark and closed the week at $69.36 per barrel. West Texas Intermediate (WTI) closed the week at $66.09 per barrel.

Though global oil markets had anticipated an output increase from OPEC+, claiming the market can absorb 1 to 2 million additional barrels per day (bpd), OPEC+ took the market by surprise when it decided to roll over its quota, given the still-fragile global oil demand recovery. The move is not about OPEC+ protecting the current price levels that have exceeded the pre-pandemic levels, it is not about refusing to bring more oil production online, it is not about dismissing any concerns about inflation and market overheating. The current oil price levels
are not at astronomical high levels to add inflationary pressure to the global economy as it emerges from the pandemic. Many market participants were expecting that OPEC+ would restore as much as 1.5 million barrels a day of output in April. However, they were only looking at the tip of the iceberg, focusing on high fuel demand in India, depleting global inventories, the rollout of vaccine programs
and the financial stimulus packages that helped to improve market sentiment.

Many analysts had not taken into account the fact that global oil inventories remain well above the five-year average. Or, most importantly, the upcoming spring refineries maintenance season in Asia during the second quarter will further dampen crude oil supply.

On top of that, there has been a massive drop in the US refinery utilization rate, which has seen oil inventories jump by 21.6
million barrels. 

All these bearish developments make oil demand recovery uncertain in the short-term. Despite the fact that oil prices have rallied by about 30 percent since the start of 2021, OPEC+ producers are working tirelessly to drain the glut that built up during the pandemic last year.

• Faisal Faeq is an energy and oil marketing adviser. He was formerly with OPEC and Saudi Aramco. Twitter:@faisalfaeq


World leaders, environmentalists welcome Saudi Green Initiative

World leaders, environmentalists welcome Saudi Green Initiative
Updated 58 min 5 sec ago

World leaders, environmentalists welcome Saudi Green Initiative

World leaders, environmentalists welcome Saudi Green Initiative

CAIRO: The Saudi Green Initiative launched by Crown Prince Mohammed bin Salman was widely welcomed by world leaders and leading environmentalists.
The SGI aims to eliminate 278 million tons of carbon dioxide emissions per year by 2030, up from a previous target of 130 million tons. The crown prince said the SGI initiative would involve investments of over SR700 billion ($190 billion) in that time period.

In a video message played at the forum on Saturday, Prince Charles said: “We have already seen great progress, which Saudi and Middle East green initiatives will accelerate.” 
“We now have a dangerously narrow window of opportunity to accelerate climate change action,” the prince of Wales added. 
Boris Johnson tweeted: “Saudi Arabia’s landmark pledge to reach net zero emissions by 2060 is a major step forward.”

Marco Lambertini, director general of WWF International stressed the need to agree on a global goal for nature as “we have for climate — we need to talk about net positive biodiversity.”
“Only 20 percent of the companies within the G20 countries have climate targets,” said Sanda Ojiambo, CEO and executive director of the UN. 
“We are all committed to lowering carbon emissions — each country with its own implementation program,” Tarek El-Molla, Egypt’s minister of petroleum and mineral resources said. 
US climate envoy John Kerry is due to attend a wider Middle East green summit in Riyadh on Monday.

“An initiative of the (Saudi) crown prince, the summit is the first of its kind in the Middle East region,” the Pakistan’s Prime Minister Office said in a statement said.
Imran Khan is visiting Saudi Arabia to attend the launch of “the Middle East Green Initiative Summit” in Riyadh.


SABIC announces carbon neutrality strategy at inaugural Saudi Green Initiative forum

SABIC announces carbon neutrality strategy at inaugural Saudi Green Initiative forum
Updated 23 October 2021

SABIC announces carbon neutrality strategy at inaugural Saudi Green Initiative forum

SABIC announces carbon neutrality strategy at inaugural Saudi Green Initiative forum
  • SABIC and 10 peer companies will work together to share early-stage risks and co-invest in developing and upscaling LCETs

RIYADH: SABIC unveiled its global strategy towards carbon neutrality at the inaugural Saudi Green Initiative in Riyadh on Saturday.

The event was attended by a high-level delegation from the company who joined international heads of state and global leaders of business, finance, and civil society to discuss Saudi Arabia’s vision for tackling environmental challenges.

SABIC chairman, Khalid Hashim Al-Dabbagh, said: “The SGI provides an ambitious framework aimed towards the shared goal of achieving a green future. SABIC is an active contributor to several strategic initiatives announced today, including those geared towards the production of hydrogen, reusing captured carbon, and recycling plastics.”
He added: “At SABIC, we recognize the power of collaboration to improve and protect the quality of life for the next generations. Sustainability is in our DNA and we’re pleased to contribute innovative technologies that will accelerate our journey towards carbon neutrality.”

SABIC’s Vice Chairman and CEO Yousef Al-Benyan joined an industry panel at the event to discuss the scaling up of new technologies and reasserted the company’s global commitment to reduce greenhouse gas emissions and pursue carbon neutrality. 

He said that “SABIC is uniquely contributing to the SGI goals and taking bold actions that support the Kingdom’s ambitions for the circular carbon economy. Our global carbon neutrality strategy reaffirms our commitment to the Paris Agreement goals and the continuous pursuit of solutions that can reduce greenhouse gas emissions.”

He added: “Many countries are competing for position as the world looks to broaden its energy mix and reduce carbon emissions. The foresight of Vision 2030, our abundant renewable resources and the innovative advances made by Saudi Arabian companies are making circularity a reality, placing the Kingdom in pole position to lead the new energy revolution.”

During the session, he outlined SABIC’s key circular innovations and collaborative efforts to transform energy intensive industry towards renewables, and being a founding member of the Low Carbon Emitting Technologies (LCET) initiative with the World Economic Forum. 

In this collaboration, SABIC and 10 peer companies will work together to share early-stage risks and co-invest in developing and upscaling LCETs.

SABIC is also partnering in the development of the world’s first large-scale chemical site to operate on 100 percent renewable power and, in a different project, developing solutions for electrically heated steam cracker furnaces which could reduce emissions by up to 90 percent.

Al-Benyan also highlighted some of the company’s accomplishments including the demonstration of the blue ammonia supply chain and the development of the world’s largest CO2 capture and purification plant. Based in Jubail and operational from 2015, the pioneering facility can process up to 500,000 megatons of CO2 per year into feedstock for industrial processes.

The company’s range of certified renewable polymers are providing an important bridge for the value chain to evolve from a linear to a circular economy and its landmark plastic chemical recycling processes contribute to CO2 reduction by preventing the incineration of plastic waste.


SGI offers immense opportunities in recycling, waste management sectors

SGI offers immense opportunities in recycling, waste management sectors
Updated 23 October 2021

SGI offers immense opportunities in recycling, waste management sectors

SGI offers immense opportunities in recycling, waste management sectors

RIYADH: The Saudi Green Initiative is a great opportunity to create new ways of managing our industries, said Mohammed Alibrahim, Saudi Arabia’s assistant minister for oil and gas.

Speaking at a panel discussed titled “Carbon-intensive industries: Transitioning fast, at scale” held in Riyadh on Saturday, he said the circular carbon economy is at the heart of the initiative.

He said before the launch of the green initiative, the Kingdom already embarked on an ambitious drive to improve energy efficiency in its industrial sector and achieved encouraging results. He said the chemicals, steel, and cement industries in the Kingdom have reduced emissions by about 4 million tonnes per annum.

The assistant minister said the new initiative offers several investment opportunities in recycling and waste management.

For example, he added, SABIC has already built a plant to capture 500,000 tons of carbon dioxide per annum, the gas is then purified and used to produce more chemicals and for many other purposes in different sectors, Alibrahim said.

He said the Saudi Green Initiative and the circle of carbon economy allow us to utilize carbon as a resource rather than looking at it as a problem.

“We have targets to product green hydrogen and blue hydrogen to convert it into blue ammonia, we already shipped ammonia to Japan last year and and we have a plan to expand on that.”

“We don’t want to focus on a certain type of technology.”

Paddy Padmanathan, CEO of ACWA Power, said: “The pathway is ultimately green hydrogen, the real need is energy and even that will be needing electricity, basic ingredient is already available.” 

He called on all stakeholders to create a supporting ecosystem.

“We can really transform industrial consumption when we bring hydrogen costs down to below $2 per kilo and it is achievable.”

Jasper Graf von Hardenberg, co-founder and group CEO of Daystar, US, said: “Saudi Arabia has bigger responsibility, it can become the world No.1 producer of green hydrogen.”

Morten Dyrholm, GSVP for MarCom, Sustainability and Public Affairs, Vestas Wind Systems A/S, Denmark, said: “With this plan Saudi Arabia is placing itself at the center and we want to be part of this journey.”

“As companies we need to take responsibilities with targets of net zero emissions through production.”

“Now with all policies coming up in Saudi Arabia there are signals that the Kingdom is heading to become more sustainable.”


NEOM will be ready to welcome tourists and investors by 2024: CEO

NEOM will be ready to welcome tourists and investors by 2024: CEO
Updated 51 min 16 sec ago

NEOM will be ready to welcome tourists and investors by 2024: CEO

NEOM will be ready to welcome tourists and investors by 2024: CEO

The city of NEOM will be ready by 2024 to receive tourists and investors, the CEO of the project has announced.

“We spent two years transforming the vision into a strategy, as this strategy concerns all sectors of NEOM,” Nadhmi Al-nasr said in an interview with Asharq.

"We finished last year with strategies, then moved on to planning and implementation and now we have entered the implementation phase,” Al-Nasr added.

NEOM is set to is located on the Red Sea coast in the northwest of Saudi Arabia, and is set to be totally powered by renewable energy sources.


Azerbaijan sees oil market stable, OPEC+ current output increase enough

Azerbaijan sees oil market stable, OPEC+ current output increase enough
Updated 55 min 47 sec ago

Azerbaijan sees oil market stable, OPEC+ current output increase enough

Azerbaijan sees oil market stable, OPEC+ current output increase enough

Riyadh: Azerbaijan believes OPEC+ is helping to stabilize the world’s oil market with its cautious decision to increase production by 400,000 barrels per day from November. 

Speaking to Arab News, the country’s energy minister warned that it is gas prices that are more volatile thanks to shortages of the energy source in Europe. 

Parviz Shahbazov said the members of OPEC+ — which includes Azerbaijan — are all in agreement about the restrained oil production rise, despite calls from the US to ramp up output.

He said that the reason “nobody talks about oil issues” is because “there is a balance in the market and this balance has been provided by OPEC+”.

He added: “It can be a little bit higher or lower, it is not so important for producing countries as well as for consuming countries because the most important thing is the stability in the oil market.”

The minister said the issues related to the increasing price of gas might continue past winter. 

“Most probably we will still have this crisis in winter time, I don’t know how severe will it be but as winter is coming and the weather is getting colder — the winter is going to be quite severe in Europe — there can be shortages of gas because gas storages are not filled before the winter season,” said Shahbazov.