OPEC bullish on post-pandemic recovery; warns investment shortfall could hit economic comeback

OPEC bullish on post-pandemic recovery; warns investment shortfall could hit economic comeback
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Updated 29 September 2021

OPEC bullish on post-pandemic recovery; warns investment shortfall could hit economic comeback

OPEC bullish on post-pandemic recovery; warns investment shortfall could hit economic comeback

LONDON: The Organization of the Petroleum-Exporting Countries has warned a lack of investment in new oil and gas supplies could lead to tighter supplies and price rises which could derail the fledgling post-pandemic global recovery.

The warning, published in the World Oil Outlook 2021 report released this afternoon, comes amid a sharp rebound in global demand for energy that has already led to a supply crunch and a surge in prices.

The report said the shift toward cleaner fuels and the impact of the COVID-19 pandemic has seen oil and gas investment fall around 30 percent last year.

"Cumulative investment requirements in the oil sector amount to $11.8 trillion in 2021–2045. Of this, 80% or $9.2 trillion, is directed towards the upstream, the bulk of which is in North America, as US tight oil, in particular, drives medium-term non-OPEC supply growth," OPEC said.

OPEC warned that without necessary investment the potential for further volatility and a future energy shortfall would hang over the global recovery.

Gas prices in Europe and Asia are at or near record highs, while those in the United States are at seven-year peaks. Coal prices are at record levels and Brent breached $80 per barrel, its highest level in three years.

While the report was relatively bullish about the wider post pandemic economic recovery, it warned the risk for oil demand over the medium-term is “skewed to the downside”, and added “worries persist about the pace and trajectory of this recovery”.

The report cited concerns about the spread of COVID-19 variants, inflationary pressures, and the ability of central banks to unwind the massive quantitative easing programmes that continue to underpin the current rebound.

OPEC forecast world oil demand will rise to reach a level similar to before the pandemic at 104.4 mb/d by 2026.

However, it added that almost 80% of this incremental demand will materialize within the first three years (2021–2023), primarily as part of the recovery process from the COVID-19 crisis.

OECD oil demand is expected to rise by almost 4 mb/d in the period to 2026, but OPEC added that this increase will not be sufficient to return to pre-COVID-19 demand levels.

Non-OECD demand, driven by increasing populations and growing economies in Asia, Africa and the Middle East, is expected to rise by almost 10 mb/d over the medium-term.  

 

China and Japan and the wider Asia-Pacific region, which is largely supplied by the Middle East, will see an increase in imports from around 23.5 mb/d in 2019 prior to the pandemic, to almost 30 mb/d by 2045.

Middle East exports to the region are forecast to increase  to above 19.5 mb/d by 2045, around 4.8 mb/d higher than levels in 2019.

Overall, OPEC forecast world energy demand will increase by 28% between 2020 and 2045, driven by an expected doubling in size of the global economy and population expansion.  

The report said all energies would see growth except for coal.

Renewables is forecast to enjoy the largest growth, followed by gas, but oil is expected to retain its number one position in the energy mix.

On the eve of COP26, which takes place in Glasgow in the United Kingdom four weeks, OPEC warned that tackling climate change should not increase energy poverty in developing countries.

The report said that amid the wider greening of the global economy, the UN’s Sustainable Development Goals have committed to ensuring access to affordable, reliable, sustainable and modern energy for everyone - a clear reference to the continuing role of oil and gas in the transition to cleaner energy.

The International Energy Agency (IEA) has called on investors to stop funding new fossil fuel projects to reach net zero emissions by mid-century. However, even the IEA’s sustainable development scenario states that oil and gas will account for 46% of the global energy mix in 2040.


Egypt aiming to triple exports to Africa by 2025, says minister

Egypt aiming to triple exports to Africa by 2025, says minister
Updated 11 sec ago

Egypt aiming to triple exports to Africa by 2025, says minister

Egypt aiming to triple exports to Africa by 2025, says minister

RIYADH: Egypt is planning to increase exports to Africa from $5 billion a year to up to $15 billion over the next four years, Egyptian Minister of Planning and Economic Development Hala Al-Saeed has said.

The minister said in an interview with Asharq that Egypt is working on a strategy to increase total global exports to $100 billion annually.

Al-Saeed also said that her country is currently studying the needs of the African markets from outside the continent and focusing on Egypt's export-distinct sectors of engineering, textiles, pharmaceuticals and agricultural crops.

These supported Egypt's export growth during the third quarter of 2021.

Egypt is contributing to promoting commercial ties between Common Market for Eastern and Southern Africa member states.

This requires studying competitive factors for competitive commodity prices, including the cost of transportation and trade-supporting logistics networks, the minister said.


Higher taxes threaten NYC status as global business hub: Goldman Sachs


Higher taxes threaten NYC status as global business hub: Goldman Sachs

Updated 2 min 41 sec ago

Higher taxes threaten NYC status as global business hub: Goldman Sachs


Higher taxes threaten NYC status as global business hub: Goldman Sachs


RIYADH: David Solomon, CEO of Goldman Sachs, has warned New York City leaders that higher taxes will make the city less attractive to businesses and their employees.

“New York is not going away” but cautioned that “it’s also not guaranteed for any urban center that you have a permanent place in the world,” the Financial Times quoted him as saying.

Talking to the newspaper on the sidelines of the Global Banking Summit, Solomon said COVID-19 has moved the city’s residents toward lower-tax states, as New Yorkers pay some of the highest tax rates in the US.

The top personal income tax rate for state residents would rise further to 66.2 percent under the latest version of President Joe Biden’s Build Back Better legislation.

“New York has to be aware that there are good choices, and it’s got to make sure it keeps itself super-attractive,” Solomon said. “At the end of the day, incentives matter, taxes matter, cost of living matters,” he added.


300-fold hike in mobile data traffic over 10 years: Ericsson

300-fold hike in mobile data traffic over 10 years: Ericsson
Updated 41 min 9 sec ago

300-fold hike in mobile data traffic over 10 years: Ericsson

300-fold hike in mobile data traffic over 10 years: Ericsson

RIYADH: The telecommunication company Ericsson revealed an almost 300-fold increase in mobile data traffic over the past ten years in its November mobility report. 

The report examines the key trends that shaped the last decade and reveals its forecasts toward 2027. 

Mobile network data traffic increased by 42 percent year-on-year in the third quarter of 2021. 

5G mobile is expected to reach around 660 million subscriptions by the end of 2021, with a stronger demand in China and North America due to declining prices of compatible devices.  

The forecasts show that 5G is predicted to amount to around 50 percent of global mobile subscriptions by 2027, carrying 62 percent of the worldwide smartphone traffic. 

“When we look ahead to 2027, mobile networks will be more integral than ever to how we interact, live and work,” Ericsson’s Executive Vice President and Head of Networks Fredrik Jejdling said. 

“Our latest Ericsson Mobility Report shows that the pace of change is accelerating, with technology playing a crucial role,” he added.


NADEC consortium completes Second Milling Company acquisition

NADEC consortium completes Second Milling Company acquisition
Image: Shutterstock
Updated 58 min 33 sec ago

NADEC consortium completes Second Milling Company acquisition

NADEC consortium completes Second Milling Company acquisition
  • All assets of the Second Milling Company were transferred to the Food Security Holding Company

RIYADH: The National Agricultural Development Company, NADEC completed the acquisition of Second Milling Company in Riyadh.

NADEC was part of a consortium with Olam International Group, Al Rajhi International Investment Company Ajlan & Bros Company, according to a bourse filing,

All assets of the Second Milling Company were transferred to the Food Security Holding Company, a limited liability company, the company said in a statement on the Saudi Stock Exchange.

This comes as the Kingdom is accelerating plans to privatize key infrastructure.


NADEC owns a 10 percent minority stake with liability in an agreement governing its purchase of specific products from the Second Milling Company.

NADEC will also provide management, marketing and support services to the Second Milling Company.


Egyptian fintech Raseedi raises $850k in pre-Series A round

Egyptian fintech Raseedi raises $850k in pre-Series A round
Updated 01 December 2021

Egyptian fintech Raseedi raises $850k in pre-Series A round

Egyptian fintech Raseedi raises $850k in pre-Series A round

RIYADH: Raseedi has secured $850,000 in a pre-Series A round from the Japanese venture capital firm Samurai Incubate and an European investor, Wamda reported. 

The Cairo-based fintech, founded in 2018, helps dual SIM smartphone users in Egypt to optimize their telecom spending through its mobile app. 

“We’ve always been a super lean tech startup. We only spend on people and tech, never on assets or operations. Our goal is to create this daily product that relies completely on technology with zero dependency on any on-ground operation,” Raseedi’s co-founder and Chief Operations Officer Samuel Samy said. 

“It’s been going great for us with 13,000 reviews of 4.3 stars on the Google Play store, yet the bigger challenge comes with our next scaling milestone, 100 million monthly visits from 1m monthly active users,” he added.