RIYADH: Oil prices fell by more than $2 a barrel on Wednesday as the Group of Seven nations looked at a price cap on Russian oil above where the crude grade is currently trading.
Brent crude futures fell $2.61, or 2.95 percent, to $85.75 a barrel at 03.55 p.m Saudi time, while US West Texas Intermediate crude futures were down $2.15, or 2.66 percent, at $79.38 a barrel.
G7 nations are looking at a price cap on Russian seaborne oil in the range of $65-70/bbl, Reuters reported quoting a European official on Wednesday.
US says G7 should soon unveil price cap level on Russian oil
The Group of Seven nations should soon announce the price cap on Russian oil exports and the coalition will probably adjust the level a few times a year rather than monthly, Reuters reported quoting a senior US Treasury official.
The G7, including the US, along with the EU and Australia are slated to implement the price cap on sea-borne exports of Russian oil on Dec. 5, as part of sanctions intended to punish Moscow for its invasion of Ukraine.
The aim of the unprecedented price cap mechanism is to reduce Russia’s petroleum revenues funding its war machine while maintaining flows of its oil to global markets to prevent price spikes. A cap on exports of Russian oil products is slated to begin on Feb. 5.
The Treasury official told reporters that the EU is consulting with members on the price cap.
“Our hope is that they will finish that consultation relatively soon and put us in a position where our entire coalition can announce a price,” the official said.
A decision on the price cap level could come as soon as Wednesday or Thursday after a meeting of EU ambassadors, a source familiar with the discussion said.
The G7 price cap would allow companies to provide services including insurance, shipping and financing on Russian oil imports to coalition members, so long as the purchase of that petroleum is under the price cap.
The official said Washington does not expect Russia to retaliate by withholding oil exports, as Putin has warned would happen. Such a move could send global oil prices higher, but risks damaging Russian oil fields.
“We have no reason to expect that they would do that because, ultimately, it’s not in their interest,” the Treasury official said.
Oil theft cost Nigeria $2 billion: report
Nigeria lost more than $2 billion to oil theft during the first eight months of this year, an investigation by the country’s Senate found on Tuesday.
Large-scale theft from Nigeria’s pipelines has throttled exports, forced some companies to shut in production, crippled the country’s finances and knocked the country off its position as Africa’s top oil producer.
An ad hoc committee of the Senate, Nigeria’s upper house of parliament, undertook an investigation into the impact of the theft.
Its findings were presented to the Senate in a report that found only 66 percent of the country’s oil production could be “effectively guaranteed.”
The other 33 percent, it said, was affected by theft and lost production “due to the third party easy access on land terrain.”
“The country has lost over $2 Billion to oil theft between January and August 2022, which lost revenue ordinarily would have supported the country, fiscal deficits and budget implementation,” the report said.
State-owned oil company NNPC Ltd. has said production is starting to improve after Nigeria’s coordinated interventions, including contracts with companies owned by former militants, to crack down on theft.
Kuwait Airways plans to expand its network with 20 new routes in 2023
Updated 8 sec ago
RIYADH: Kuwait Airways plans to launch 20 new destinations in 2023, including a number of new cities to its winter schedule, as the airlines moves towards diversifying its network around the world, revealed the company’s top official.
"The company is preparing accurate studies on the feasibility of these markets and destinations, as well as the extent of customer demand for them,” said Shorouk Al-Awadhi, director of Distribution and Network Planning at Kuwait Airways.
The airline will operate its flights, starting in June to Budapest in Hungary with two flights per week to Malaga in Spain, three flights per week to Sarajevo in Bosnia, and two flights per week to Mykonos in Greece.
She revealed that this is in addition to their flights to Athens in Greece with one flight per week to Vienna in Austria, three flights per week to Nice in France, and two flights per week to Antalya in Turkey.
Operations to Trabzon in Turkey will include three flights per week to Bodrum in Turkey, three flights per week to Sharm El Sheikh in Egypt, and three flights per week to Salalah in Oman.
“The company will also operate its flights to Izmir in Turkey from April with three flights per week on Tuesdays, Thursdays, and Sundays, and will be launching its flights to Alexandria in Egypt starting from March with three flights per week on Mondays, Fridays, and Sundays,” she explained.
This comes as Kuwait Airways has included a number of new cities to its winter schedule, commencing from October, such as Barcelona in Spain, Berlin in Germany, Abha, Al-Ula, Taif and Al-Qassim in Saudi Arabia.
Saudi energy minister warns sanctions could result in energy shortages
Updated 10 min 9 sec ago
RIYADH: Saudi Energy Minister Prince Abdulaziz bin Salman warned on Saturday Western sanctions against Russia could result in a shortage of energy supplies in future.
In answer to a question over how trade measures would affect the energy market, Prince Abdulaziz told an industry conference in Riyadh: "All of those so-called sanctions, embargoes, lack of investments, they will convolute into one thing and one thing only, a lack of energy supplies of all kinds when they are most needed."
The prince also said Saudi Arabia was working to send liquefied petroleum gas to Ukraine. LPG is most commonly used as a cooking fuel and in heating.
The EU has imposed a series of sanctions against Russia, reducing Russian energy exports, and other Western powers have also imposed measures as they seek to further limit Moscow's ability to fund its war in Ukraine.
Asked what lessons had been learnt from energy market dynamics in 2022, Prince Abdulaziz said the most important one was for the rest of the world to "trust OPEC+".
"We are a responsible group of countries, we do take policy issues relevant to energy and oil markets in a total silo and we don't engage ourselves in political issues," the prince said.
OPEC+, an alliance that includes members of the Organization of the Petroleum Exporting Countries and others including Russia, agreed last year to cut its production target by 2 million barrels per day, about 2 percent of world demand, from November until the end of 2023 to support the market.
An OPEC+ panel that met last Wednesday endorsed the decision and the main message throughout the meeting was that the group would stay the course until the end of the agreement.
Prince Abdulaziz further reiterated that the Kingdom will remain cautious about raising oil production, even as several prominent analysts say rising demand will soon trigger a jump in prices, Bloomberg reported.
“I will believe it when I see it and then take action,” he added.
The minister said OPEC+ had been proved correct with its decision in October to cut output by 2 million barrels a day.
“If people had trusted us then, we wouldn’t have undergone the trepidations that happened,” he said, referring to a spike in prices to almost $100 a barrel after OPEC+ announced its move.
Business confidence hits 2-year high in Saudi Arabia as PMI climbs 58.2 in January
Updated 05 February 2023
RIYADH: Saudi Arabia’s Purchasing Managers’ Index touched 58.2 in January 2023, the second-highest since September 2021, as the Kingdom steadily diversifies its economy in line with the goals outlined in Vision 2030, according to a report.
The latest Riyad Bank Saudi Arabia Purchasing Managers Index report, formerly the S&P Global Saudi Arabia PMI, noted that the confidence among non-oil private sector firms in the Kingdom climbed to a two-year high in January.
In December, the Kingdom’s PMI stood at 56.9, while in November, the index hit 58.5, the highest in the last 16 months.
According to the index, released by S&P Global, readings above the 50-mark show growth, while those below 50 signal contraction.
“Saudi Arabia is continuing its strong performance and outperformed the global economic trends for activity and demand. The non-oil sector is starting this year with a strong headline growth at 58.2 in January, recording the second highest growth since September 2021,” said Naif Al-Ghaith PhD, Chief Economist at Riyad Bank.
He added: “This growth confirms the Saudi position as the fastest-growing economy among the Group of 20 countries despite economic headwinds.”
Mideast’s share of renewables in energy mix to double by 2030: SAEE chairman
Region plays crucial role as it continues supplying hydrocarbons as the world enters a new energy system
Updated 05 February 2023
Reina Takla & Nirmal Narayanan
RIYADH: Saudi Arabia is committed to driving energy transition using renewables but not at the cost of traditional fuels as the world needs adequate supply to meet its demand, according to a top official of a Saudi energy body.
In an exclusive interview with Arab News, the Saudi Association of Energy Economics Chairman Majeed Al-Moneef said that the Kingdom, and the Middle East region as a whole, will be at the forefront of both traditional and renewable energy sources, as it steadily progresses in achieving sustainable goals.
“We will follow the world trend in increasing the share of renewables in our energy mix. But that will not be done by sacrificing our oil and gas sectors, but along with the development of our oil and gas sectors,” said Al-Moneef.
The chairman of SAEE which works toward building capabilities in energy economics said the Middle East region is playing a crucial role in the energy transition journey, as it continues supplying hydrocarbons which are pivotal as the world enters a new energy system.
“We have the Saudi Green Initiative and Middle East Green Initiative. So, we are an important player in traditional energy sources and renewable energy sources. We will be in the forefront of both.”
He further pointed out that countries in the Middle East region are now heavily investing simultaneously in traditional fuels like oil and gas and renewable energy sources including hydrogen.
Al-Moneef expects that the share of renewables in the energy mix in almost all regional countries will double or triple by 2030.
Talking about Saudi Arabia’s Vision 2030, the SAEE chairman said a massive socioeconomic and institutional transformation is taking place across all sectors including energy as the objective is to diversify the economy. “We have got new energy resources like renewables, hydrogen, carbon sequestration and carbon management. They are the sectors of tomorrow. So, we are investing in future energy.”
This comes as Saudi Arabia is leapfrogging in sustainable energy generation while setting a net-zero target for 2060.
Al-Moneef pointed out that the region’s financial institutions including corporates, government financing, and multi-regional financing institutions have a crucial role to play in renewable energy projects to achieve sustainable goals within the stipulated timeline.
IAEE International Conference
SAEE which works toward facilitating dialogue among various stakeholders is hosting the International Conference of the International Association for Energy Economics for the first time in the Middle East and North Africa region in Riyadh with the King Abdullah Petroleum Studies and Research Center.
Al-Moneef sounded confident that the IAEE conference which begins on Feb. 4 will witness a record number of participants.
“This conference will have the largest registration in the history of energy economic conferences. This is the first time that such a conference is being held in the region. So, this is a testament to the importance of Saudi Arabia and the region in the global energy sector,” he said.
Al-Moneef revealed that regional universities will present scientific papers during the event, and added that events like these hold significance as “they will accelerate the participation of more regional research institutions, individuals and students in the energy sector.”
He disclosed that they had two major meetings involving all the universities in Saudi Arabia to encourage them to submit papers. “We tried to have a wide representation of the region. So, we have good numbers. As a matter of fact, something close to 40 percent of papers is from Saudi Arabia and the region.”
The SAEE chairman pointed out that the purpose of the conference is to encourage research in energy economics in the region. “That was our main goal. The field of energy economics is of crucial importance to the region, and we should have more researchers in the research institutions, individuals, and students who are engaged in that subject matter.”
He revealed that the conference will hold special plenary sessions on investment and trade in the energy sector, “as the conflict in Ukraine has changed the trade flows of oil and gas globally.”
Al-Moneef further pointed out that Saudi Arabia and the region as a whole will host more similar events related to energy economics in the future.
“As a matter of fact, one of the outcomes of this conference will be to have annual regional conferences in the Middle East. So, one of the outcomes will be to institutionalize a MENA Middle Easy symposium to be held every year,” he said.
Al-Moneef noted that Saudi Arabia will be on the organizing committee for the MENA Energy Economics conference that will be held every year, and the Kingdom will make sure that researchers from the institutions in the nation will participate in these upcoming events.
Talking about the necessity to ramp up power generation and increase the efficiency of energy usage, Al-Moneef stressed that sufficient investments are needed to elevate efficiency “so that the production process will be clean, and efficient with the least cost possible.”
He also highlighted that international and regional cooperation is very crucial to ensure the growing power demand in the future.
Al-Moneef who had served in multiple high-profile positions including the Secretary General of the Supreme Economic Council of Saudi Arabia, Governor of Saudi Arabia in the Board of Governors of OPEC, stressed the need to create a common grid that will solve power-generating issues. "It will allow countries with power scarcity to secure help from nations that produce excess power.”
He added that a common energy market will be soon materialized in the Middle East region, supported by a proper regulatory framework.
According to him, promoting regional cooperation in the energy field is the key to a new Middle East. “And we have to improve the transportation lines.”
For Al-Moneef, what the region needs is the proper regulatory framework. “Europe has done it. They have put in place the regulatory framework to see to it that there is a common energy market. We can have someday a common Middle East energy market. We are capable of doing it,” he signed off.
LONDON: Saudi Arabia and the Gulf region have seen a significant shift in the concept of city building with modernized infrastructure plans taking into account ways to improve people’s lives and experiences as opposed to “purely a functional response,” according to a UK-based architecture expert.
“It’s all about how can you create a terrific sense of being in a city and having a great experience,” said Daniel Hajjar, managing principal for Europe and the Middle East at HOK — a global architecture and engineering firm.
“Particularly in Saudi Arabia, you’re seeing a lot more use of those types of facilities, because there’s a lot more encouragement to sort of knock down both physical and figurative walls within the Kingdom. And I think that’s a very good thing, as it’s only a matter of time before you will begin to see, and you’re already seeing it, much more engagement from Saudis in their own country,” he told Arab News in a recent exclusive interview.
HOK, which has been engaged with the Kingdom since the 1970s, has designed several iconic projects, including the 80-story PIF Tower, which is the tallest of the five structures that make up the financial plaza of the King Abdullah Financial District and symbolizes “the dawn of a new era of financial leadership” within the Saudi capital.
A lot of the architecture that is being produced, within Riyadh and perhaps within the Najd area in particular, this whole aspect of Salmani architecture or Salmani expression, seeking an expression that is genuine for the region.
Daniel Hajjar, HOK managing principal for Europe and the Middle East
The US-based firm, which was founded in 1955 in Missouri, began to officially expand its footprint in the Middle East in the early 1980s, and the first major project where the company brought a lot of its talent to complex designs was in Saudi Arabia. It was King Khalid Airport, King Saud University and King Fahd University of Petroleum and Minerals in Dhahran that changed the way it operated as a firm, Hajjar explained.
“Those were sort of the first two institutes of higher education within the Kingdom that really propelled Saudi on the international stage that they began developing this fundamental infrastructure, and as a result, HOK was instrumental in delivering that, as well as the airport,” he said.
The company also developed other high-profile projects, among them King Abdullah University of Science and Technology and King Abdullah Petroleum Studies and Research Center in Saudi Arabia. Others included the National Assembly building and the Central Bank headquarters in Kuwait, Abu Dhabi National Oil Company corporate headquarters, Dubai Marina, and the masterplan for Dubai Expo 2020.
Hajjar said that the Kingdom’s projects have always challenged the company to develop the way they work, and have invested heavily in technology to deliver massive and complex Lead in Energy and Environmental Design Platinum projects within months, and the first of their kind in the region.
Focus on future generations
Saudi Vision 2030 “is incredibly ambitious, and because of that, it raises the bar significantly in terms of what is it that’s going to drive that economy, post-oil, or post-hydrocarbon, because that is going to happen, and this diversification of the economy,” he said.
HOK, which has been engaged with the Kingdom since the 1970s, has designed several iconic projects, including the 80-story PIF Tower, which is the tallest of the five structures that make up the financial plaza of the King Abdullah Financial District and symbolizes ‘the dawn of a new era of financial leadership’ within the Saudi capital.
“Those master plans that are being done now are not necessarily for the generation today, but they’re for future generations to use, and master plans, by their very nature change and evolve over time. So as a result, we believe that setting a framework in place where you have the ability to engage people along the journey is incredibly important, because … they’re part of that evolution (and) it is part of their genetic DNA, if you will, but within the country,” Hajjar said.
When designing projects, Hajjar said it was important to ensure they had cultural or physical relevance, and to interpret natural and heritage aspects into a modern form.
“A lot of the architecture that is being produced, within Riyadh and perhaps within the Najd area in particular, this whole aspect of Salmani architecture or Salmani expression, seeking an expression that is genuine for the region, as opposed to looking at something in a pastiche manner.
“So as a result, you’re beginning to see much more authentic architecture, without copying the past, and look at a modern interpretation of those historic principles behind the architecture has a tremendously valuable proposition.”
Comparing Riyadh and Jeddah, he said that they were two totally different cities because they grew based on different parameters when they were established.
“If you look at Jeddah and the way the Al-Balad part of Jeddah has sort of grown out further from the original port, and then if you look at Riyadh as being the capital of the Kingdom, very much different in terms of the approach to city building between the two of them, and it doesn’t mean that one’s necessarily better than the other.
“Because there wasn’t as much of an economic boom in Jeddah, it sort of boomed and then it slowed down and then they didn’t simply just build. I think Riyadh now is looking at the various initiatives, in terms of greening Riyadh, public art, and creating that level of richness, while Jeddah has had international art exhibits along the Corniche,” he said.
These also differ from new developments such as the NEOM megacity project or Diriyah Gate, which is the birthplace of the first Saudi state and now everything is leveraging off that historic core as they begin to build out from there, he said.
The big challenge with Saudi Arabia is it is so geographically diverse from one region to the next, so how do you begin bringing those cultures together within the Kingdom and ensure “the richness that occurs in one region should be introduced to the richness from another in order to create this fantastic mosaic that is the Kingdom of Saudi Arabia,” he said.
Another major challenge is the future of transportation, and there will be a strong focus on linking cities together within the Kingdom and the Gulf region and cutting down on air travel carbon footprint.
“The irony behind all of this is pre-World War I, there was a railway in the Kingdom, and now there is no railway. So I think you’re going to begin seeing a lot of that, particularly GCC-wide (and) it’s going to serve the function of transporting commodities and everything else, but at the same time, they have the ability to encourage people to travel by rail and I think that will come,” he said.
Cities mature when they begin introducing large-scale infrastructure projects that help people live in it, and a decade in terms of the city’s life is not a very long time at all, Hajjar said, as the Vision 2030 target ambitions rapidly approach.
“Ultimately, a city has a continuum to it,” he said, “because when a city stops to develop and stops challenging itself, it slowly begins to lose meaning to people within the city. You have to continually reinvent the city, bring new things into the city, and have people engaged in different ways.”