Oil jumps 4 percent as EU proposes ban on Russian oil

Oil jumps 4 percent as EU proposes ban on Russian oil
The Commission’s measures include phasing out supplies of Russian crude within six months and refined products by end-2022. Shutterstock
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Updated 04 May 2022

Oil jumps 4 percent as EU proposes ban on Russian oil

Oil jumps 4 percent as EU proposes ban on Russian oil

Oil prices jumped on Wednesday as the European Union, the world’s largest trading bloc, spelled out plans to phase out imports of Russian oil, offsetting demand worries in top importer China.

Brent crude futures rose $3.99, or 3.8 percent, to $108.96 a barrel by 1121 GMT. West Texas Intermediate crude futures rose $4.05, or 4 percent, to $106.46 a barrel.

European Commission President Ursula von der Leyen on Wednesday proposed a phased oil embargo on Russia over its war in Ukraine, as well as sanctioning Russia’s top bank, in a bid to deepen Moscow’s isolation.

The Commission’s measures include phasing out supplies of Russian crude within six months and refined products by end-2022, von der Leyen said. She also pledged to minimize the impact on European economies.

Hungary and Slovakia, however, will be able to continue buying Russian crude oil until the end of 2023 under existing contracts, an EU source told Reuters on Wednesday.

“Russian oil is now ‘bad oil’,” SEB chief commodities analyst Bjarne Schieldrop said.

“This energy war of ‘good oil’ versus ‘bad oil’ has just started,” he added.

Investors are also waiting for an announcement from the US Federal Reserve on Wednesday.

It is expected to intensify efforts to bring down high inflation by raising interest rates and reducing its balance sheet.

In the United States, crude and fuel stocks fell last week, according to market sources citing American Petroleum Institute figures. Crude stocks fell by 3.5 million barrels for the week ended April 29, they said.

This was more than an expected 800,000-barrel drop estimated in a Reuters poll.

US government data on stocks is due on Wednesday.

Oil prices fell more than 2 percent on Tuesday on demand worries stemming from China’s prolonged COVID-19 lockdowns that have curtailed travel plans during the Labour Day holiday season.

The global manufacturing purchasing managers index contracted in April for the first time since June 2020, with China’s lockdowns a key contributor, Caroline Bain, chief commodities economist at Capital Economics said in a note.

The Organization of the Petroleum Exporting Countries and their allies on Thursday are expected to stick to their policy for another monthly production increase. 


Gradual energy transition holds the key to a sustainable future

Gradual energy transition holds the key to a sustainable future
Updated 01 April 2023

Gradual energy transition holds the key to a sustainable future

Gradual energy transition holds the key to a sustainable future
  • COP28 will help shine the spotlight on the region’s ambitious decarbonization goals

RIYADH: Concerns about energy security and the need to accelerate decarbonization seem to be growing with 2023 rolling on, as geopolitical issues that came to the fore last year show no sign of abating.

Amid the ongoing energy crisis catalyzed by these tensions, countries are realizing the necessity to embrace renewables as dependence on traditional energy imports could be impacted due to various factors including the internal affairs of energy exporting nations.

Even though energy transition is very much necessary to warrant a better future, a sudden transformation to renewables is expected to do more harm than good, especially considering the fact that the energy crisis has been battering the world’s poorest countries for several years.

“The IEA estimates that some 75 million people who recently gained access to electricity are likely to lose the ability to pay for it, meaning that for the first time since we started tracking it, the total number of people worldwide without electricity access has started to rise,” Abdullah Al-Abri, a consultant at the International Energy Agency told Arab News.

He added: “To solve the issue of the energy crisis in the poorest nations, the global community needs to invest more in sustainable energy solutions and provide competitive capital and expertise.”

The vitality of a gradual energy transition

Experts believe that a gradual energy transition, where both renewables and traditional sources operate, hand-in-glove could be the solution to smoothen the journey toward sustainability.

“There will be a transition period when investment in both fossil fuel and renewables must continue concurrently, without losing sight of the fact that renewables are the future of global energy,” Ian Harfield, managing director of ENGIE Energy Solutions, Gulf Cooperation Council, told Arab News. 

There will be a transition period when investment in both fossil fuel and renewables must continue concurrently, without losing sight of the fact that renewables are the future of global energy.

Ian Harfield, Managing director of ENGIE Energy Solutions, Gulf Cooperation Council

He added: “To fortify energy systems against extreme weather, we need to diversify the renewable energy mix, incorporating hydroelectric, solar, wind and green hydrogen, and large-scale storage systems.”

Manish Laligam, managing director, of the Middle East Region of Protiviti Member Firm, shares identical views and said: “To satisfy the pledges under the Paris Climate Accord, developing countries where energy consumption is increasing faster than the rest of the globe are considering a combination of gas and renewable energy sources.”

Earlier in March, Francesco La Camera, director-general of the International Renewable Energy Agency, told Arab News divestment from fossil fuels must be a gradual process.

“We have to understand that the old system, the one that is centralized and based on fossil fuels, cannot shut down in a day,” La Camera told Katie Jensen, host of the Arab News program “Frankly Speaking.”

“There will be a slow decline of oil and gas. And to maintain a smooth decline of oil and gas, we need some investment again in oil and gas. If not, there will be a disruption.”

Al-Abri opined that it is necessary to develop climate-resilient fossil fuels to ensure a smooth energy transition.

“The question is not about fossil fuels versus new energies – the matter is more of how to develop fossil fuels that are climate resilient while ensuring that new energies are also developed to mutually satisfy the growing demand and climate agenda,” said Al-Abri.

Meanwhile, experts believe that the ongoing geopolitical tensions including the Ukraine conflict are expected to accelerate the energy transition journey. 

COP28 will help shine the spotlight on the region’s ambitious decarbonization goals. (AP)

“Geopolitical tensions have only underscored the critical need for renewable energy — green energy sources are more resilient to global disruptions. International efforts are then needed to set benchmarks, share insights, and promote industry best practices,” noted Harfield.

In January, during the World Economic Forum, Fatih Birol, executive director of the International Energy Agency, warned the world is going through an unprecedented energy crisis.

“Our world has never seen an energy crisis of this depth and of this complexity. The biggest driver of renewable energy growth today is energy security,” Birol said.

COP28 holds crucial significance

Amid all these sustainability efforts and ongoing energy transition, the UN Climate Change Conference, also known as COP28,  is set to be held in Dubai from Nov. 30 to Dec. 12 this year.

The upcoming conference is expected to have a crucial significance in the energy transition journey as countries in the Middle East and North Africa region — spearheaded by Saudi Arabia — are playing a crucial role in turning the earth green with their net-zero targets.

“COP28 will help shine the spotlight on the region’s ambitious decarbonization goals, most aligned with national socioeconomic visions,” said Harfield.

Laligam opined that COP28 will accelerate the region’s plans to achieve a clean economy, driven by renewable energy sources, technology developments, and climate-smart solutions. 

HIGHLIGHT

Amid the ongoing energy crisis catalyzed by these tensions, countries are realizing the necessity to embrace renewables as dependence on traditional energy imports could be impacted due to various factors including the internal affairs of energy exporting nations.

“Many Middle Eastern countries have developed the Hydrogen Leadership Roadmap to position their nation as top hydrogen suppliers by fostering low-carbon sectors. Across the past two years, numerous solar, wind, and battery storage projects have been started across the Middle East,” Laligam added.

In March, Issam Abu Suleiman, regional director of the Gulf Cooperation Council at the World Bank, said COP28 will provide an opportunity to move to an economic path of green growth which could ultimately diversify the economy while making a positive impact on the climate.

Abu Suleiman further added that the conference is expected to provide chances to push toward green technology and carbon sequestration investments, which are crucial for the world to achieve net-zero emissions by 2050.

This year’s COP is also expected to include oil and gas companies in discussions, as without their contribution, it will be difficult to achieve a sustainable future.

During a recent exclusive interview with Arab News, Fahad Alajlan, president of the King Abdullah Petroleum Studies and Research Center, also reiterated this view and said that an inclusive approach is required to smoothen the energy transition journey.

“In the past, oil and gas companies have been excluded from discussions. If we look at emissions today, more than 50 percent comes from the energy sector. So, it is very important that we involve oil and gas companies in this discussion, to become part of the solution rather than demonizing and excluding them,” said Alajlan.

Al-Abri said that COP28 would play a key role, not just in the MENA region, but the entire world.

“To the region, I think COP28 could shed light on how producer economies are working to address the climate agenda through the energy transition, de-emissionization practices, and the incorporation of innovation and solution integration. COP28 could also be instrumental to the world as I think the hydrogen and new energies agenda would be more emphasized and opportunity for cross-learnings on how to establish the low-emission industrial clusters,” noted Al-Abri.

As the biggest oil-producing nations in the Middle East are spearheading the energy transition globally, the world will witness more monumental milestones in this journey, which will ensure that the future is green.


Saudi Arabia and UAE leading the MENA region in becoming AI hub

Saudi Arabia and UAE leading the MENA region in becoming AI hub
Updated 01 April 2023

Saudi Arabia and UAE leading the MENA region in becoming AI hub

Saudi Arabia and UAE leading the MENA region in becoming AI hub
  • Market for the advanced technology in the region will witness a compound annual growth rate of 47.8 percent

RIYADH: The artificial intelligence market in the Middle East and North Africa region is expected to grow from $500 million in 2020 to $8.4 billion by 2026, according to a new report.

The findings by firm Research and Markets suggests that the market for the advanced technology in the region will witness a compound annual growth rate of 47.8 percent, with Saudi Arabia and the UAE leading from the front.

According to the report, the value of the artificial intelligence market in the UAE alone will reach $1.9 billion by 2026, representing 36.2 percent growth.

Business leaders in the Middle East region also consider AI crucial in the coming years for their operational growth. According to a study conducted by global consultancy firm Proviti Middle East, more than 80 percent of CEOs in the region believe the technology is critical to the future of their businesses, and over 70 percent of them are investing in the booming sector. 

Understanding the potential of AI, Saudi Arabia is heavily investing in the industry, as the Kingdom’s sovereign wealth fund announced in 2019 a $500 billion investment in AI and other emerging technologies over the next decade.

The Kingdom has also launched several initiatives, including the establishment of the Saudi Arabian Data and Artificial Intelligence Authority and the National Data Management Office, to accelerate the implementation of AI in the Kingdom’s various sectors.

The UAE is also boosting its involvement in the technology, and has launched the National Artificial Intelligence Strategy 2031, with its focus on attracting talent for jobs of the future, funding research and innovation hubs, and developing appropriate infrastructure and data ecosystems along with a balanced legislative environment.

As nations and companies across the world steadily embrace AI, a recent report from investment bank Goldman Sachs suggested it could take the place of 300 million full-time jobs around the world. 

FASTFACT

Understanding the potential of AI, Saudi Arabia is heavily investing in the industry, as the Kingdom’s sovereign wealth fund announced in 2019 a $500 billion investment in AI and other emerging technologies over the next decade.

The report predicted that administrative and legal sectors will be at the highest risk, with 46 percent of administrative jobs and 44 percent of legal positions at risk of replacement by AI.

According to the report, physically intensive jobs are expected to face less risk, with construction facing a 6 percent threat, whereas maintenance is at 4 percent threat.

“The combination of significant labor cost savings, new job creation, and a productivity boost for non-displaced workers raises the possibility of a labor productivity boom like those that followed the emergence of earlier general-purpose technologies like the electric motor and personal computer,” stated the bank in a note titled The Potentially Large Effects of Artificial Intelligence on Economic Growth.

The Goldman Sachs report, however, added that technological advances which initially replace workers will create employment growth in the long term.

“Although the impact of AI on the labor market is likely to be significant, most jobs and industries are only partially exposed to automation and are thus more likely to be complemented rather than substituted by AI,” said the report.

Goldman Sachs further pointed out that the roll out of AI could boost labor productivity, and push global growth up by 7 percent year-on-year over a 10-year period.


Saudi Arabia’s palm.hr takes the first step in regional expansion

Saudi Arabia’s palm.hr takes the first step in regional expansion
Updated 01 April 2023

Saudi Arabia’s palm.hr takes the first step in regional expansion

Saudi Arabia’s palm.hr takes the first step in regional expansion
  • Company to have a fully established team in Egypt and UAE by three months

CAIRO: Saudi-based human resources and employee experience platform palm.hr is taking its first steps in regional expansion with one foot already in Egypt and the UAE.

Founded in 2019 by Richard Schrems, Christoph Czichna and Dragan Nikolic, the service provides businesses with a portal to streamline work experiences for all teams including operations such as onboarding, vacation tracking, payroll, and offboarding.

In an interview with Arab News, Schrems, who is also the CEO, said the company will have a fully established team in Egypt and the UAE in just three months.

“We are already serving our first customers in UAE and Egypt and things are in motion to have teams in both countries within the next three months. Additionally, we are looking to offer our services to companies based across all Gulf Cooperation Council countries by the end of the year,” Schrems said.

The company has positioned itself as a regional provider of HR technology services with a mission to transform the space and allow businesses to better manage their most important asset – human resources.

Schrems described palm.hr’s business strategy as comprising three main pillars. The first is the software’s high configurability and flexibility that makes it easier to apply it to different business structures.

The second is a HR Tech Stack that is scattered across many different tools and solutions.

“We therefore are working on building the most integrated HR software in the market to merge all that information to be the single source of truth of any company’s people data. We have successfully integrated with many Saudi Government Solutions such as GOSI, Mudad and Muqeem,” he added.

The third pillar pinpoints the overload of communication tools used by companies, such as WhatsApp, email, calls, Slack, or meetings. The company provides a centralized communication hub for the organization to stay on top of all tickets and tasks. 

Richard Schrems, Christoph Czichna and Dragan Nikolic founded palm.hr. (Supplied)

“Simply put, we proudly serve small and medium, growing and innovative companies that want to be people-centric organizations. Our focus currently lies on serving Saudi-based small and medium enterprises, however, throughout the year we will be offering our services across the GCC and beyond,” Schrems added.

He stated that the firm’s human centric approach gives it a competitive edge in the market where palm.hr focuses on supporting HR managers and employees through its platform.

“Many solutions were created to digitize processes; ours, however, aims to create a seamless experience for not only HR managers but just as much for their employees. That is why we have focused on not only creating a great desktop experience but combined it with intuitive and powerful mobile apps,” Schrems said.

“Both as a software and as an organization we focus on solving all the problems related to HR and work — for every stakeholder of any organization across Saudi Arabia and beyond,” he added.

Schrems stated that the level of support received from the Saudi government has been “astounding,” adding: “Every single government organization we dealt with has welcomed and supported us with open arms, which has helped us become the thriving company we are today.”

Schrems explained that the HR space still holds huge opportunities as millions of organizations are set to ride the wave of digitalization in the next couple of years.

Besides regional expansion, the company has aggressive goals in terms of product development and hiring.

Our platform will soon leverage business data to highlight Saudization achievements whether it is organization-wide or for specific professions.

Richard Schrems, palm.hr founder and CEO

Schrems added that the company is hiring talent across all functions, with its team of 70 set to double in size in the next 12 months.

“We also believe that HR tech and fintech will diverge in the future, and we will be offering financial services through partners on our platform,” he stated.

“Besides this, we are also building a dynamic content library to support customers and employees with all the insights they need about the Kingdom’s labor laws, employment and career development. We believe this will help nurture and support local talent, while attracting the best international professionals to choose to live and work in Saudi Arabia,” he added.

The company is doubling down on its product development efforts to ensure the solution is a perfect fit for clients, which means increasing more strategic HR modules and integrating artificial intelligence.

palm.hr currently stands on solid ground after it raised $5 million in a pre-series A funding round co-led by Speedinvest and RAED Ventures with participation from Wamda Capital.

Schrems stated that the company will focus on growing its presence in Saudi Arabia, Egypt and the UAE, and will thrive to raise another funding round within 12 to 18 months.

“At palm.hr, we want to make sure companies have the tools they need to remain compliant with Saudi nationalization and labor laws. Our platform will soon leverage business data to highlight Saudization achievements whether it is organization-wide or for specific professions,” Schrems said.


Former US secretary of treasury calls for bipartisan legislation to ensure safety of depositors

Former US secretary of treasury calls for bipartisan legislation to ensure safety of depositors
Updated 01 April 2023

Former US secretary of treasury calls for bipartisan legislation to ensure safety of depositors

Former US secretary of treasury calls for bipartisan legislation to ensure safety of depositors
  • During the event, Steven Mnuchin discussed responsibilities, solutions after Silicon Valley Bank collapse

MIAMI: Former US Secretary of Treasury Steven T. Mnuchin has called for greater clarity and bipartisan legislation after the collapse of the Silicon Valley Bank.

“We don’t know if there’s another bank failure whether the government will or won’t guarantee all the depositors,” Mnuchin said at the Future Investment Finance forum in Miami.

“You could be a well-run midsize or regional bank today and you’re at a complete disadvantage because people are moving money to the money center panic. So, I think we need bipartisan legislation.”

“We shouldn’t have unlimited insurance, but we now need clarity because it’s unfair,” he said.

Talking about the recent collapse of SVB and the shockwaves experienced throughout the banking industry, Mnuchin explained that compared to the 2008 financial crisis, which “was about credit, a much more complicated issue to work through,” this event was a result of many missteps that could have been avoided.

“This banking crisis is all about interest rate risk, and this is simple, basic risk management 101.”

During the panel, Mnuchin discussed several key points about recent events in the sector, including the potential risk of a financial crisis caused by the Fed’s interest rate hikes and how this would impact the economy.

“The problem is most of the people we have in the financial markets in the US have never seen, quote, high-interest rates,” he said.

“Most people have been used to interest rates, short-term interest rates between zero and 2 percent. So you know, 4 percent, 5 percent is high on a relative basis.

“The economy is going to adjust pretty significantly. But as I said earlier, this is risk management 101 that a lot of people just got used to having low-interest rates forever.”

The discussion also covered the relationship between the US and China, including the need for better communication and coexistence.

“China is the second largest economy in the world. We have a responsibility to figure out how we deal with China in a proactive way,” Mnuchin said.

He added that although there were “legitimate national security issues with China, there’s a whole bunch of things that we should be doing with China, and we need to figure out how to coexist in the proper way.”


Saudi Arabia, Miami share similarities in quality of life standards experts tell FII Priority

Saudi Arabia and Miami have a lot in common when it comes to quality of life and business opportunities, experts said
Saudi Arabia and Miami have a lot in common when it comes to quality of life and business opportunities, experts said
Updated 31 March 2023

Saudi Arabia, Miami share similarities in quality of life standards experts tell FII Priority

Saudi Arabia and Miami have a lot in common when it comes to quality of life and business opportunities, experts said
  • Kingdom made quality of life a priority in Saudi Vision 2030
  • Cities should invest in arts and culture, panelists say

MIAMI: Saudi Arabia and Miami have a lot in common when it comes to quality of life and business opportunities, experts said at the FII Priority conference in Miami on Thursday.

Both cities have, in the last few years, they said, promoted better living standards for their citizens through socio-economic policies.

“Miami had this incredibly welcoming spirit. It was set up for success from the top down,” said Jeff Zalaznick, restaurateur and managing partner of hospitality company Major Food Group. “I’ve really gotten to understand — with Vision 2030 and the things that they (Saudi Arabia) are looking for — that there are a lot of similarities between the quality of life and business (policies) in Miami and what’s happening in Saudi Arabia.”

The Kingdom made quality of life a priority in Saudi Vision 2030 and is one of the few countries in the world to have a minister dedicated to improving quality of life for its residents.

“Everything we do is based on quality of life. It is so important to the crown prince that he set up its own ministry,” said Jerry Inzerillo, group CEO of Diriyah Gate Development Authority, adding that “positivity and optimism” are the “fuel of that country.”

In the latest World Happiness Report, Saudi Arabia was ranked No. 2 in the Arab World, and 30th in the world.

Barry Sternlight, chairman and CEO of Starwood Capital Group, pointed out that cities that have not not invest in their citizens’ quality of life have seen their population decline.

“I think that quality of life is driving market share,” he said. “It’s driving the success of cities that are focused on improving the lives of their citizens.”

Sternlight observed that the parameters individuals use to determine quality of life are evolving and are no longer entirely centered on economic concerns.

“People are looking for meaning and purpose, and whether it’s sustainable development,” he said.

Sternlight added that people consider art and culture to be key aspects of quality of life in cities and emphasized that having museums, galleries, and artistic offerings as part of the fabric of a city is essential to its success.

The CEO of real estate development firm Daccra, Craig Robins, said that building an ecosystem around art and culture is crucial and should include supporting artists, small galleries, and other related businesses.

He cited Miami Design District as an example, and explained that since its launch in the early 2000s, the neighborhood has become a center of creativity and a thriving hub for culture and business — not only for Miami but the world.

“The goal was to create a sense of community that people would really love — something that was different, and something that could be a resource for all,” Robins said.