Oil Updates — Crude up on supply concerns; China’s crude demand rebounds 

Oil Updates — Crude up on supply concerns; China’s crude demand rebounds 
China’s crude oil demand rebounds as refiners prepare to ramp up output. (Shutterstock)
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Updated 22 September 2022

Oil Updates — Crude up on supply concerns; China’s crude demand rebounds 

Oil Updates — Crude up on supply concerns; China’s crude demand rebounds 

RIYADH: Oil rebounded on Thursday after sliding 1 percent in the previous session as concerns over tight supplies heading into winter eclipsed fears of a global recession.

Brent crude futures rose 50 cents, or 0.6 percent, to $90.33 per barrel by 0319 GMT, recouping their losses in early Asia trade. US West Texas Intermediate crude rose 45 cents to $83.39.

China’s crude oil demand rebounds 

At least three Chinese state oil refineries and a privately run mega refiner are considering increasing runs by up to 10 percent in October from September, eyeing stronger demand and a possible surge in fourth-quarter fuel exports, Reuters reported citing people familiar with the matter.

Chinese refiners are expecting Beijing to release up to 15 million tons worth of oil products export quotas for the rest of the year to support the no. 2 economy’s sagging exports. Such a move would signal a reversal in China’s oil products export policy, add to global supplies and depress fuel prices.

An official with a state refinery said his plant is eyeing a 10 percent hike in runs from September to about 240,000 barrels per day. “We’re raising runs next month in preparation for a possible opening in exports, though nobody has a clear idea how big the opening would be,” the official said.

A second official with another state refinery said his plant is also planning about an 8 percent hike in throughput next month, but added that the plan had been driven by firmer domestic margins. A third state refinery expects to restart a 60,000-bpd crude unit next month after maintenance, one of the sources said.

China’s single largest refinery Zhejiang Petrochemical Corp, which is capable of processing 800,000 bpd of crude, is aiming to ramp up runs in the coming months from the current levels of 700,000-750,000 bpd, according to two sources familiar with its operations.

A ZPC representative confirmed the firm is considering a run increase due to signs of economic recovery, but declined to elaborate further.

Repsol to begin turnaround at Tarragona oil refinery

Spanish energy giant Repsol is investing €100 million to reduce emissions at its 186,000 bpd Tarragona refinery in Spain, which begins two months of maintenance at the end of the week.

The distillation and hydrotreating fuel units will stop simultaneously on Sept. 23, while the remaining areas of the Tarragona complex, such as the chemical plants, will continue to operate normally, Repsol said.

Repsol has dubbed the project “the most important turnaround ever carried out at the refinery.”

The work is designed to improve the energy efficiency of the complex’s facilities and prevent the emissions of 32,500 tons of carbon dioxide each year.

Repsol aims to be a net zero emissions company by 2050.

Norway’s August gas output exceeds forecast, oil lags

Norway’s crude oil output in August missed the official forecast, while gas output exceeded expectations, preliminary data from the Norwegian Petroleum Directorate showed on Wednesday.

Crude oil output rose to 1.77 million bpd in August from 1.64 million bpd in July, compared to a forecast of 1.83 million bpd, the NPD said.

Natural gas production in August averaged 332.8 million cubic meters per day, down from 350.6 mcm per day in July but 4.5 percent above forecast, NPD said.

The full-month gas output fell to 10.8 billion cubic meters from 10.9 bcm in July, the agency said. 

(With input from Reuters)

Pentagon splits $9 billion cloud contract between 4 firms

Pentagon splits $9 billion cloud contract between 4 firms
Updated 21 min 44 sec ago

Pentagon splits $9 billion cloud contract between 4 firms

Pentagon splits $9 billion cloud contract between 4 firms

WASHINGTON: Google, Oracle, Microsoft and Amazon will share in the Pentagon’s $9 billion contract to build its cloud computing network, a year after accusations of politicization over the previously announced contract and a protracted legal battle resulted in the military starting over in its award process.
The Joint Warfighter Cloud Capability is envisioned to provide access to unclassified, secret and top-secret data to military personnel all over the globe. It is anticipated to serve as a backbone for the Pentagon’s modern war operations, which will rely heavily on unmanned aircraft and space communications satellites, but will still need a way to quickly get the intelligence from those platforms to troops on the ground.
The contract will be awarded in parts, with a total estimated completion date of June 2028, the Pentagon said in a statement.
Competition is intense to snap up big corporate and government cloud contracts — awards to build global computing networks where information is stored, shared and secured over the Internet instead of on local computer systems. The Pentagon’s award is seen as one of the most coveted because it’s a stamp of approval in a market where ensuring a client’s data security is important.
“It’s the most important cloud deal to come out of the Beltway,” said analyst Daniel Ives, who monitors the cloud industry for Wedbush Securities. “It’s about the Pentagon as a reference customer. It says significant accolades about what they think about that vendor, and that’s the best reference customer you could have in that world.”
Last July, the Pentagon announced it was canceling its previous cloud computing award, then named JEDI. At the time, the Pentagon said that due to delays in proceeding with the contract, technology had changed to the extent that the old contract, which was awarded to Microsoft, no longer met DOD’s needs.
It did not mention the legal challenges behind those delays, which had come from Amazon, the losing bidder. Amazon had questioned whether former President Donald Trump’s administration had steered the contract toward Microsoft due to Trump’s adversarial relationship with Amazon’s chief executive officer at the time, Jeff Bezos.
In July when the cancelation was announced, the Pentagon’s chief information officer, John Sherman, said it was “likely” both Amazon and Microsoft would get some portion of the business in a new award.
A report by the Pentagon’s inspector general did not find evidence of improper influence, but it said it could not determine the extent of administration interactions with Pentagon decision-makers because the White House would not allow unfettered access to witnesses.
Forrester analyst Devin Dickerson said awarding the contract to four companies instead of one shows a “multicloud strategy” that could improve the Pentagon’s bargaining position with major cloud providers and make it easier for individual offices within the Defense Department to acquire cloud technologies and services.

Saudi finances are in good shape, says central bank’s governor

Saudi finances are in good shape, says central bank’s governor
Updated 5 sec ago

Saudi finances are in good shape, says central bank’s governor

Saudi finances are in good shape, says central bank’s governor
  • The Saudi Central Bank will continue to manage its foreign-exchange reserves based on ‘balanced investment policies,’ Fahad Almubarak added
  • Finance Minister Mohammed Al-Jadaan said a predicted SR16 billion surplus reflects shrewd past investments by the Kingdom in its oil and gas sector

RIYADH: Monetary conditions in Saudi Arabia are reassuring, thanks to prudent monetary policies, and the country’s banking sector continues to enjoy good levels of liquidity, the governor of the Saudi Central Bank said on Wednesday.

Fahad Almubarak said the bank would continue to manage its foreign-exchange reserves based on “balanced investment policies.”

He added: “Despite the exceptional circumstances in the Kingdom and the world, the Saudi economy … has proven a high ability to withstand shocks. Monetary conditions in the Kingdom are reassuring as a result of the central bank’s prudent monetary policy.”

Almubarak commended the banking sector for “its financial solvency, operational efficiency, good liquidity, and ability to face current challenges.”

His comments followed the approval of the state budget for the coming fiscal year, which forecasts a surplus of SR16 billion ($4.3 billion) and gross domestic product growth of 3.1 percent, the finance ministry said.

During a media briefing in Riyadh on Wednesday, Saudi Finance Minister Mohammed Al-Jadaan said the predicted surplus reflects prior investments the Kingdom made in its oil and gas sector, as well as growth in non-oil sectors as officials implement the country’s Vision 2030 agenda for economic diversification.

“We invested a lot of money when people did not,” he said, according to AFP. “We are not celebrating the surplus; for us it’s not really big news, it’s something that we expected. We’ve been working … to curtail our spending, to increase our non-oil revenues.”

He added that “difficult decisions” that were taken are unlikely to be reversed based on a surplus this year and the expected surplus next year.

“The last thing we want is actually to change policies in haste,” he said.

The surplus will be distributed during the first quarter of 2023, with the bulk of it being used to increase the Kingdom’s reserves, Al-Jadaan said. Some will go to the National Development Fund and some “may be” transferred to the sovereign wealth fund, he added. He also said that the 2023 budget forecasts SR259 billion of military spending, according to Reuters.

“We listened to the blessing of the Custodian of the Two Holy Mosques of announcing the budget in the cabinet session, which took into account the rapid growth that the Kingdom has been witnessing and the achievement of many targets under the Kingdom’s Vision 2030,” he said in comments broadcast on Al-Ekhbariya TV.

(With Reuters and AFP)

Electric vehicles emerge as key driver of Saudi-China climate-change fight

Electric vehicles emerge as key driver of Saudi-China climate-change fight
Updated 08 December 2022

Electric vehicles emerge as key driver of Saudi-China climate-change fight

Electric vehicles emerge as key driver of Saudi-China climate-change fight
  • China is the world’s largest market for EVs, accounting for 53 percent of the global share 
  • Saudi Arabia has launched its own EV brand, Ceer, and owns a stake in US maker Lucid

RIYADH: China and Saudi Arabia are two of the energy powerhouses of the world and, as such, the world’s gaze turns to them in discussions around climate change.

While much of the focus is on the Kingdom’s oil production, or Beijing’s coal-mining activities, the two nations are only just starting to get recognition for their shared vision for decarbonization via electric vehicles.

This is an area of shared enthusiasm, and one where Saudi Arabia and China can further work together to lead innovation and implementation.

For its part, Saudi Arabia has handed the EV industry a prominent role in its economic diversification plan known as Vision 2030.

Tesla cars at a charging station in Beijing, main, and, below, a Lucid luxury electric vehicle on display. (AFP)

The world’s largest oil exporter has identified the sector as one on the cusp of a boom as the globe moves away from fossil fuels, and is investing not just in overseas firms, but also in homegrown products.

The overseas backing takes the form of the US-firm Lucid. In 2018, the Public Investment Fund poured $1billion into the company and now has a 60 percent stake. The investment prompted Lucid to announce in February 2022, that it would build its first international vehicle assembly plant in King Abdullah Economic City, north of Jeddah. 
To further underline its commitment to the sector, the Saudi government struck a deal with Lucid to buy up to 100,000 EVs over a 10-year period.

It is not just Lucid that will be producing EVs in the Kingdom. In October, Crown Prince Mohammed bin Salman unveiled Saudi Arabia’s own EV brand: Ceer.

Lithium batteries for electric vehicles on the inspection line at a factory in Nanjing in China’s eastern Jiangsu province. (AFP)

Like Lucid, this company will produce vehicles from a plant in KAEC, with construction on the $69 million facility due to begin in early 2023.

Ceer is a joint venture with FoxConn — the Taiwan-based firm that is the largest private sector employer in China — and will further cement the ties between Saudi Arabia and the economies of the Far East.

Ceer will license component technology from BMW to design and build vehicles, including sedans and sport utility vehicles, in the Kingdom while Foxconn will develop the electrical architecture of the vehicles, resulting in a portfolio of products that will lead in infotainment, connectivity and autonomous driving technologies.

Of course, the Kingdom is not turning itself into one of the leading EV producers in the world just to appease its domestic market. Exporting these vehicles is a key part of not just Saudi Arabia’s economic diversification strategy but in reducing global emissions.

Penetrating the Chinese market could prove a challenge. Beijing has been encouraging its citizens to switch to EVs by offering subsidies for purchases. This has helped China become the largest market for EVs, accounting for 53 percent of the global share.

US-based Lucid is planning to build its first overseas vehicle assembly plant north of Jeddah. (AFP)

The Chinese government forecasts that EVs will account for 50 percent of all new car sales in the country by 2035, suggesting the appetite for such vehicles will continue to be high.

Yet while firms such as Tesla are doing well in the market — selling 83,135 cars in September in what was its best month for sales in the country — China has a thriving production sector, meaning the reliance on imports is low.

However, as is the case in many countries, one of the main barriers for mass take-up of EVs is higher purchase price than for petrol vehicles.

Saudi Arabia could find itself in a position to use its growing EV production hub being built just north of Jeddah to make affordable vehicles for what is the largest market in the world.

Should it crack that nut, the Kingdom’s Vision 2030 goal of raising non-oil exports to 50 percent of GDP looks eminently reachable.

DP World Logistics opens 6,000 sq. m warehouse in Dubai’s Jebel Ali Free Zone

DP World Logistics opens 6,000 sq. m warehouse in Dubai’s Jebel Ali Free Zone
Updated 08 December 2022

DP World Logistics opens 6,000 sq. m warehouse in Dubai’s Jebel Ali Free Zone

DP World Logistics opens 6,000 sq. m warehouse in Dubai’s Jebel Ali Free Zone
  • The company said the storage facility has a monthly capacity of 6,000 twenty-foot equivalent units

DUBAI: DP World Logistics in Dubai has opened a 6,000-square-meter high-end warehouse offering new storage solutions at Jebel Ali Free Zone, the Emirates News Agency reported.

The facility has 12,500 pallet positions and can accommodate cargo up to 18 meters high using Very Narrow Aisle racking systems, the company said, and a monthly capacity of 6,000 twenty-foot equivalent units.

DP World Logistics highlighted its advantageous location in what it described as one of the world’s fastest-developing regions and said that it is able to leverage the capabilities and cutting-edge IT platforms of its parent company, DP World, to ensure goods are stored, distributed and delivered efficiently through a multimodal transportation model that combines port, shipping line, sea freight, air freight and trucking solutions.

The company said it offers container freight station operations, warehousing and supply chain solutions, and freight-forwarding operations from six facilities in Jebel Ali and its assets include extensive yard operations, cross-dock warehousing, and cold storage and cool storage solutions.

“As part of DP World, a global smart-trade enabler, DP World Logistics is continually on a journey of business transformation, with new product innovations and developments,” said Abdulla bin Damithan, the CEO of DP World UAE and Jafza.

“Our shared commitment to improve end-to-end logistics performance in moving cargo around the world, underpinned by innovations in logistics-led solutions, has maximized opportunities for our customers over the years.

“The new CFS 2 warehouse is yet another step in supporting our customers better, helping them explore varied business opportunities and move forward with tremendous growth potential in the region. As a reliable, trustworthy and time-bound logistics partner, we will continue creating a complete end-to-end logistics trade journey from and to high-growth markets for our clients.”

Saudi-Chinese cooperation scales new heights with each passing year

Saudi-Chinese cooperation scales new heights with each passing year
Updated 08 December 2022

Saudi-Chinese cooperation scales new heights with each passing year

Saudi-Chinese cooperation scales new heights with each passing year
  • 2022 turned out to be the year when Sino-Saudi collaborative projects in various fields truly prospered
  • China seeking to bolster its energy ties with the Gulf countries to secure adequate oil supply

RIYADH: Saudi-Chinese ties have prospered in 2022 amid the high cooperation efforts between the countries across various fields, including aviation, energy, tourism, artificial intelligence, technology and more.

On Nov.27, Saudi Arabia’s deputy foreign minister met with the Chinese ambassador to the Kingdom in Riyadh, Saudi Press Agency reported.

During the meeting, Waleed Al-Khuraiji and Chen Weiqing reviewed bilateral relations and ways of enhancing them to serve common interests. They also discussed issues of common interest.


Earlier this year, in October, Saudi Arabia and China signed a memorandum of understanding to boost the number of flights and stations between the two countries. 

The MoU also aims to promote air traffic growth further and bolster cooperation in the air transport sector field between both countries, Zawya reported.


In September, the regional organization Arab League announced the first of its kind Arab-China summit to be hosted by Saudi Arabia in December, reflecting a milestone in the strategic collaboration between Arab countries and the Asian giant.

According to Hong Kong-based newspaper South China Morning Post, Beijing is seeking to bolster its energy ties with the Gulf countries to secure sufficient supply.


In September, the Saudi Tourism Authority and Shanghai-based financial firm UnionPay signed an MoU to boost the number of Chinese visitors to Saudi Arabia.

Under the agreement, the Chinese state-owned financial services company will facilitate payment operations within the Kingdom for UnionPay card holders, the Saudi Press Agency reported.  


As part of Saudi-Chinese cultural cooperation, King Abdulaziz Public Library signed an MoU and collaboration with the Bayt El-Hekma Chinese Group in April.

The agreement aims to enhance cooperation between Saudi Arabia and China in different cultural, knowledge, and language fields of interest to both sides.

It also includes exchanging publication services and cultural visits between the two countries, besides holding scientific meetings and specialized exhibitions and activating cultural commonalities through forums.  

Artificial Intelligence

In March, Riyadh-based aerospace company TAQNIA and solution provider TAQNIA ETS signed an MoU with Chinese aerospace firm Star Vision to elevate the space sector’s supply chain and work hand in hand on artificial intelligence applications and technologies.

Under the MoU, all parties will participate in collaborative research and work together to facilitate the development of top-notch space technologies, satellites, and geospatial products, trade publication Times Aerospace reported.

The MoU aims to introduce localized services and products that align with the Kingdom and the region’s strategic space and geospatial industry.


In March, Saudi Advanced Communications and Electronics Systems Co., ACES, partnered with China Electronics Technology Group to manufacture unmanned aerial vehicle payload systems in the Kingdom.

Under the partnership, China Electronics Technology Group, the state-owned defense conglomerate specializing in dual-use electronics, aims to aid ACES in establishing a research and development center and manufacturing team for various types of unmanned aerial vehicle payload systems.  


In March, a Saudi Arabian Oil Co. unit signed an initial agreement with China Petroleum & Chemical Corp., known as Sinopec, for potential downstream collaboration in China.  

The subsidiary, Saudi Aramco Asia Company Ltd., and Sinopec aim to support Fujian Refining and Petrochemical Co. in conducting a feasibility study into the optimization and expansion of capacity, according to a statement.  

Building & Construction

In January, Saudi Aramco and the China Building Materials Academy announced plans to launch a new Nonmetallic Excellence and Innovation Center collaboratively.

Also referred to as NEXCEL, the new center will be based in Beijing and advance the use of nonmetallic materials in the building and construction sector.