G7 joins EU on $60-per-barrel price cap on Russian oil

An oil tanker is moored at the Sheskharis complex, part of Chernomortransneft JSC, a subsidiary of Transneft PJSC, in Novorossiysk, Russia, Tuesday, Oct. 11, 2022, one of the largest facilities for oil and petroleum products in southern Russia.  (AP)
An oil tanker is moored at the Sheskharis complex, part of Chernomortransneft JSC, a subsidiary of Transneft PJSC, in Novorossiysk, Russia, Tuesday, Oct. 11, 2022, one of the largest facilities for oil and petroleum products in southern Russia. (AP)
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Updated 03 December 2022
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G7 joins EU on $60-per-barrel price cap on Russian oil

G7 joins EU on $60-per-barrel price cap on Russian oil
  • US Treasury Secretary Janet Yellen said in a statement that the agreement will help restrict Putin’s “primary source of revenue for his illegal war in Ukraine while simultaneously preserving the stability of global energy supplies”

WASHINGTON: The Group of Seven nations and Australia joined the European Union on Friday in adopting a $60-per-barrel price cap on Russian oil, a key step as Western sanctions aim to reorder the global oil market to prevent price spikes and starve President Vladimir Putin of funding for his war in Ukraine.
Europe needed to set the discounted price that other nations will pay by Monday, when an EU embargo on Russian oil shipped by sea and a ban on insurance for those supplies take effect. The price cap, which was led by the G7 wealthy democracies, aims to prevent a sudden loss of Russian oil to the world that could lead to a new surge in energy prices and further fuel inflation.
US Treasury Secretary Janet Yellen said in a statement that the agreement will help restrict Putin’s “primary source of revenue for his illegal war in Ukraine while simultaneously preserving the stability of global energy supplies.”
The agreement comes after a last-minute flurry of negotiations. Poland long held up an EU agreement, seeking to set the cap as low as possible. Following more than 24 hours of deliberations, when other EU nations had signaled they would back the deal, Warsaw finally relented late Friday.
A joint G-7 coalition statement released Friday states that the group is “prepared to review and adjust the maximum price as appropriate,” taking into account market developments and potential impacts on coalition members and low and middle-income countries.
“Crippling Russia’s energy revenues is at the core of stopping Russia’s war machine,” Estonian Prime Minister Kaja Kallas said, adding that she was happy the cap was pushed down a few extra dollars from earlier proposals. She said every dollar the cap was reduced amounted to $2 billion less for Russia’s war chest.
“It is no secret that we wanted the price to be lower,” Kallas added, highlighting the differences within the EU. “A price between 30-40 dollars is what would substantially hurt Russia. However, this is the best compromise we could get.”
The $60 figure sets the cap near the current price of Russia’s crude, which recently fell below $60 a barrel. Some criticize that as not low enough to cut into one of Russia’s main sources of income. It is still a big discount to international benchmark Brent, which slid to $85.48 a barrel Friday, but could be high enough for Moscow to keep selling even while rejecting the idea of a cap.
There is a big risk to the global oil market of losing large amounts of crude from the world’s No. 2 producer. It could drive up gasoline prices for drivers worldwide, which has stirred political turmoil for US President Joe Biden and leaders in other nations. Europe is already mired in an energy crisis, with governments facing protests over the soaring cost of living, while developing nations are even more vulnerable to shifts in energy costs.
But the West has faced increasing pressure to target one of Russia’s main moneymakers — oil — to slash the funds flowing into Putin’s war chest and hurt Russia’s economy as the war in Ukraine drags into a ninth month. The costs of oil and natural gas spiked after demand rebounded from the pandemic and then the invasion of Ukraine unsettled energy markets, feeding Russia’s coffers.
US National Security Council spokesman John Kirby told reporters Friday that “the cap itself will have the desired effect on limiting Mr. Putin’s ability to profit off of oil sales and limit his ability to continue to use that money to fund his war machine.”
More uncertainty is ahead, however. COVID-19 restrictions in China and a slowing global economy could mean less thirst for oil. That is what OPEC and allied oil-producing countries, including Russia, pointed to in cutting back supplies to the world in October. The OPEC+ alliance is scheduled to meet again Sunday.
That competes with the EU embargo that could take more oil supplies off the market, raising fears of a supply squeeze and higher prices. Russia exports roughly 5 million barrels of oil a day.
Putin has said he would not sell oil under a price cap and would retaliate against nations that implement the measure. However, Russia has already rerouted much of its supply to India, China and other Asian countries at discounted prices because Western customers have avoided it even before the EU embargo.
Most insurers are located in the EU or the United Kingdom and could be required to participate in the price cap.
Russia also could sell oil off the books by using “dark fleet” tankers with obscure ownership. Oil could be transferred from one ship to another and mixed with oil of similar quality to disguise its origin.
Even under those circumstances, the cap would make it “more costly, time-consuming and cumbersome” for Russia to sell oil around the restrictions, said Maria Shagina, a sanctions expert at the International Institute for Strategic Studies in Berlin.
Robin Brooks, chief economist at the Institute of International Finance in Washington, said the price cap should have been implemented when oil was hovering around $120 per barrel this summer.
“Since then, obviously oil prices have fallen and global recession is a real thing,” he said. “The reality is that it is unlikely to be binding given where oil prices are now.”
European leaders touted their work on the price cap, a brainchild of Yellen.
“The EU agreement on an oil price cap, coordinated with G7 and others, will reduce Russia’s revenues significantly,” said Ursula von der Leyen, president of the European Commission, the EU’s executive arm. “It will help us stabilize global energy prices, benefiting emerging economies around the world.”
 

 


Saudi Arabia to spearhead green development vision with forum during COP28

Saudi Arabia to spearhead green development vision with forum during COP28
Updated 8 sec ago
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Saudi Arabia to spearhead green development vision with forum during COP28

Saudi Arabia to spearhead green development vision with forum during COP28
  • Saudi Green Initiative Forum to gather influential figures, climate experts and thought leaders to present their insights and recommendations for tackling climate change

RIYADH: Saudi Arabia is committing itself to a sustainable and green future through a variety of initiatives, with one of the most high-profile set to be held at the upcoming climate conference in Dubai.

Alongside the UN’s COP28 summit, the Kingdom will host the third edition of the Saudi Green Initiative Forum on Dec. 4 to highlight its dedication to build a greener future at a time of multibillion dollar giga-projects.

The event will gather influential figures, climate experts and thought leaders to present their insights and recommendations for tackling climate change.

It will also offer a platform to showcase the ambitions and achievements thus far of the SGI, launched in 2021 by Crown Prince Mohammed bin Salman.

Established under the Vision 2030 initiative, SGI is an ambitious national plan focused on combating climate change, protecting the environment for future generations and improving the quality of life in the Kingdom.

It unites all the efforts towards Saudi Arabia’s mission of achieving net zero emissions by 2050 through the creation of a circular carbon economy. The Kingdom has also pledged to reduce carbon emissions by 278 million tons annually by 2030.

To achieve such aims, the Kingdom has committed itself to “greening,” which involves the development of an integrated system of conservation and afforestation strategies for the country’s various natural landscapes.

According to the website of King Abdullah University of Science and Technology, greening is set to “increase Saudi Arabia’s reliance on clean energy, offset carbon emissions, and protect the environment. It aims to improve quality of life and protect future generations.”

By 2030 Saudi Arabia plans to plant 600 million trees, restore 3.8 million hectares of land and champion biodiversity conservation as part of its 10-billion-tree initiative.

Additionally, as part of this greening initiative, SGI aims to develop an integrated system of conservation and afforestation strategies targeted at the Kingdom's diverse natural landscapes.

The task of overseeing the realization of the greening project has been entrusted to the National Center for Vegetation Cover Development and Combating Desertification.

“The NCVC is dedicated to expanding vegetation cover, combating desertification, conserving natural resources and biodiversity, safeguarding plant genetic resources, and pioneering the innovative solutions that address our environmental challenges,” Khaled bin Abdullah Al-Abdulkader, the organization’s CEO, told Arab News.

“We collaborate with all sectors including public, private, non-profit and the community to deliver sustainable outcomes,” he said, adding: “The NCVC has developed the strategic roadmap to guide the delivery of 10 billion trees for Saudi Arabia under the SGI. We are now moving from ambition to action, and we invite all innovators, entrepreneurs, scientists and interested parties to join us in our efforts.”

The Kingdom is the world’s second-largest major oil producer after the US. It has committed to driving the Middle East Green Initiative by seeking to unify stakeholders across the region to mitigate the impact of climate change on the region and meet global climate targets.

There are challenges, however, in achieving SGI’s ambitious targets due to Saudi Arabia’s arid landscape. It lacks rivers, lakes and regular rainfall and relies on dozens of facilities to transform water from the Gulf and Red Sea for its residents and the environment.

Saudi Arabia is also the largest country in the world without running surface water and has one of the highest rates of water consumption on the planet.

It has long been crucial and of national importance for the Kingdom to find new sources of potable water to support its growing population, and now it has to reach the targets set out in SGI.

“We will not use any desalination water for plantation,” Ahmad Al-Anazi, who leads the implementation of the National Environment Strategy and an advisor at the Ministry of Environment, Water, and Agriculture, told Arab News. “We will concentrate on using what they call renewable water for plantations.

The greening initiative, states Alanazi, offers the opportunity to retrieve more drinking water.

“We are responsible for enhancing the vegetation capital of the country overall,” he said, adding: “We are employing specialists to study all possible ways to plant trees and increase vegetation.”

“It’s not only a matter of planting trees,” Alanazi explained, adding: “It is also about how we then sustain the trees for the long term. This is a crucial aspect of sustainability, and we are conducting multiple studies on how to do this in this environment.”

Alanazi told Arab News that numerous experts are helping them achieve the Middle East Green Initiative to plant an additional 40 billion trees across the region.

According to SGI targets, the 10 billion trees earmarked for Saudi Arabia would help to rehabilitate 40 million hectares of land, improve air quality, restore vital ecological functions and reduce sandstorms.

Alanazi said two phases are involved in achieving the goals of the masterplan, with the first set to take place from 2024 to 2040.

“In this phase most of our focus will be on planting in nature, or what we call a natural based solution,” he said, adding: “This phase aims to plant 400 million trees in 3.8 hectares. The second phase is more comprehensive and aggressive and includes all domains and will be set forth from 2030.”

Further wins for Saudi Arabia’s green initiative were announced in early November when a consortium of clean energy leaders – Masdar, EDF Renewables and Nesma Company – announced the signing of a Power Purchase Agreement with the Saudi Power Procurement Company to develop the 1,100 megawatts Al Henakiyah solar power plant.

When operational, the $1 billion project is expected to power more than 190 thousand homes per year and displace more than 1.8 million tons of carbon dioxide annually.

“As Nesma’s flagship renewables business, Nesma Renewable Energy is intrinsic to our commitment to proactively support the clean energy and sustainability goals of Saudi Vision 2030,” Faisal Al-Turki, president of Nesma Group, said in a statement.

He added: “The Al Henakiyah Solar Project is a resounding endorsement of our position at the forefront of the renewables industry in Saudi Arabia.

“As an industry, we are on an ambitious journey together, and one that will ultimately establish Saudi Arabia as a true global leader in renewable energy generation. This project represents a significant milestone on our way to achieving this.”

The upcoming SGI forum during COP28 offers an opportunity to further address global climate issues while focusing on the Kingdom’s own aims, hurdles and achievements towards its climate goals.


Japan, Saudi agree on investment cooperation

Japan, Saudi agree on investment cooperation
Updated 29 November 2023
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Japan, Saudi agree on investment cooperation

Japan, Saudi agree on investment cooperation
  • Saudi-Japan Vision 2030 consists of projects that involve both the public and private sectors
  • Iwata exchanged views with Mubarak on further expanding and deepening the cooperative relationship

TOKYO: State Minister of Economy, Trade and Industry Iwata Kazuchika has held a meeting with Saudi Arabia’s Assistant Minister of Investment Ibrahim Al Mubarak in Tokyo that covered future cooperation and Saudi-Japan Vision 2030.
The two ministers agreed on deepening the economic relationship between Japan and Saudi Arabia, the Ministry of Economy, Trade and Industry reported.
Saudi-Japan Vision 2030, established in 2017, provided the two countries with a strong direction for their strategic partnership, and in the ensuing years many cooperative projects have been undertaken in a range of fields, such as business and culture, the ministry said.
Saudi-Japan Vision 2030 consists of projects that involve both the public and private sectors and contribute to the growth strategies of both countries.
Iwata exchanged views with Mubarak on further expanding and deepening the cooperative relationship based on this vision in fields such as startups and health care.
The talks followed visits to Saudi Arabia by Prime Minister Kishida Fumio in July of this year and Minister of Economy, Trade, and Industry Nishimura Yasutoshi at the end of last year.


Saudi Arabia reaffirms commitment to support UNIDO

Saudi Arabia reaffirms commitment to support UNIDO
Updated 29 November 2023
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Saudi Arabia reaffirms commitment to support UNIDO

Saudi Arabia reaffirms commitment to support UNIDO

RIYADH: Saudi Arabia is committed to supporting the UN Industrial Development Organization in achieving its goals, according to the minister of industry and mineral resources.

During his engagement at the General Conference of UNIDO held in Vienna, Austria, Bandar Alkhorayef affirmed the Kingdom’s commitment to supporting UNIDO, as reported by El-Ekhbariya.

This assurance reflects the Kingdom’s belief in UNIDO’s importance and global standing, acknowledging its pivotal role in supporting industrial development plans. 

This aligns with the region’s aspirations in the field of industrial development, securing global supply chains, and becoming a partner for various countries in manufacturing, exporting, transportation, and logistical services.

Alkhorayef highlighted the Kingdom’s recent successes in the mining sector, starting with the discovery of vast natural resources estimated at around SR5 trillion ($1.35 trillion), including gold, silver, copper, zinc, phosphate, bauxite, and other industrial minerals.

These successes also involve strategic plans for exploiting these resources, issuing a mining investment system to provide a suitable environment for mining companies, and encouraging investment in this sector. 

The minister explained that Saudi Arabia, through its membership in UNIDO, has worked to enhance collaborative efforts and increase cooperation on issues of global concern, such as sustainable energy, carbon removal in industry, and circular economy. 

Saudi Arabia is determined to develop this collaboration in line with the goals outlined in Vision 2030 and related strategies.

In alignment with the region’s recognition of the wealth inherent in the capabilities of its citizens, efforts have been made to develop and nurture talents and human resources. 

This includes the launch of the Crown Prince’s Human Capability Development Program, a key initiative under Vision 2030 aimed at enhancing the national and global competitiveness of human capabilities, enabling citizens to learn and continuously develop. 

Furthermore, the establishment of the Research and Development and Innovation Authority aims to position the Kingdom as a global leader in innovation, fostering a progressive culture and developing highly skilled researchers to transform testing results into economically valuable industrial products for society.

Alkhorayef added that reforms empowering women have contributed to qualitative leaps reflected in several local and global indicators. 

Women now constitute 34 percent of the workforce in the Kingdom, and the industrial sector has witnessed a 93 percent increase in women’s participation over the past three years. 


Saudi Arabia aims for 525 active fintech entities by 2030

Saudi Arabia aims for 525 active fintech entities by 2030
Updated 29 November 2023
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Saudi Arabia aims for 525 active fintech entities by 2030

Saudi Arabia aims for 525 active fintech entities by 2030

RIYADH: Saudi Arabia has set a target to achieve 525 active financial technology entities by 2030, marking a significant milestone in the strategic development plan for the financial sector, according to a top official. 

Speaking at the Jazan Investment Forum, Faisal Al-Khathlan, the director general of project management for the Financial Sector Development Program, emphasized the pivotal role of fintech in the broader vision for the sector. 

In a panel discussion on enhancing the investment and development environment in the Jazan region, he highlighted that “Financial technology is one of the pillars of the strategic plan for the development of the financial sector.” 

Al-Khathlan outlined various services and programs offered by Saudi fintech, encompassing consulting services, workshops, and initiatives aimed at accelerating growth in the sector.  

The target of 525 active fintech entities reflects Saudi Arabia’s commitment to driving innovation and technological advancement in the financial landscape.  

“Perhaps one of the current strategic objectives in the financial sector development program is to empower financial institutions to support the private sector and expand potential supply channels, especially in the field of financial technology,” he added.  

Discussing the role of Small and Medium Enterprises, Al-Khathlan emphasized the significance of the General Authority for Small and Medium Enterprises and the SME Bank.  

“The percentage of SMEs from the total loans granted is now 8.5 percent, and we aspire to reach 11 percent by the year 2025,” he added.  

Khalid Al-Dhaher, deputy governor of the Saudi Central Bank for supervision and technology, emphasized significant investments in building the infrastructure for financial transactions.  

Saad Al-Shahrani, deputy minister for economic affairs and investment studies, underscored the Kingdom’s attractiveness to investors, with diverse wealth in oil and non-oil resources.  

Highlighting the potential, he said: “The Jazan region has promising sectors that should operate effectively. It is ready, but it requires the necessary resources.”
Ali Arishi, professor of regional planning at Jazan University, emphasized the need for a comprehensive strategy with administrative capabilities, financial resources, and technical competence to unleash the full potential of the Jazan region.  

In a nod to global collaboration in the field of financial technology, Al-Khathlan revealed: “In terms of capacity building in the field of financial technology, one of the initiatives resulting from the financial technology strategy is the development of Arabic-language content in this field.”  

This initiative, developed in collaboration with Hong Kong University, marks the first Arabic-language content in financial technology, according to Al-Khathlan.  

The Jazan Investment Forum aims to showcase the investment climate in the region, promote investment opportunities, and facilitate discussions on strengths and challenges in the business environment.  

The initiative also seeks to generate implementable recommendations for overcoming obstacles and fostering economic growth in Jazan. 


Jazan poised to become a regional center for African trade

Jazan poised to become a regional center for African trade
Updated 29 November 2023
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Jazan poised to become a regional center for African trade

Jazan poised to become a regional center for African trade

RIYADH: Saudi Arabia’s Jazan region is set to become a center for African trade, according to an adviser to the minister of industry and mineral resources.

Speaking at a panel titled during the Jazan Investment Forum 2023, Saleh Al-Solami explained that the Kingdom’s industries have the capacity to hold a larger share in African markets.

This falls in line with the Kingdom’s strategic decision to develop the region as a special economic zone catering to the logistics industry.

“The size of the economy in Africa — the volume of demand and imports — exceeds $400 billion, so there is great scope for Saudi industries to hold a larger share in African markets,” Al-Solami said.

 “The Jazan region will be a major regional center and an outlet for neighboring demand markets,” he added.

 Al-Solami also explained how the Jazan region will have a major role due to its ability to link areas that provide raw materials to Africa and benefit from the manufacturing capabilities in the Kingdom, add value to the value chain, and re-export to the targeted markets, in addition to the local market.

 Also speaking during the same session, Majed Al-Shathry, vice president, acting industrial cities operation at MODON,  shed light on the infrastructure in the Jazan Industrial City

 “The Jazan Industrial City has an area of 39 million sq. meters, of which 3 million sq. meters are already developed,” Al-Shathry noted.

 “It includes 62 industrial contracts, of which 24 are productive industrial facilities and the rest are under construction and in the preparation stages to start production. It also includes eight existing ready-made factories, and 10 factories currently in construction is in progress, and we expect it to be ready within 2 to 3 months,” he emphasized.

Taking place on Wednesday, the Jazan Investment Forum 2023, held under the patronage of Crown Prince Mohammed bin Salman, aims to introduce economic advantages in the logistics and agriculture sectors.   

In addition, the event will shed light on the environmental and climatic diversity of the region, particularly Farasan Island, according to the Saudi Press Agency.