Global oil demand set to slow amid progressing energy transition: IEA

Global oil demand set to slow amid progressing energy transition: IEA
Lower oil demand in the coming years will ease market strains, according to IEA.
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Updated 12 June 2024
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Global oil demand set to slow amid progressing energy transition: IEA

Global oil demand set to slow amid progressing energy transition: IEA

RIYADH: Global oil demand growth is expected to slow in the coming years as the world continues its energy transition journey, according to a new analysis.

In its latest report, the International Energy Agency said that the world will witness an oil demand growth of 1 million barrels per day in 2024, a projection that contradicts the forecast of the Organization of the Petroleum Exporting Countries. 

On June 11, OPEC said that oil demand globally would rise by 2.25 million bpd in 2024, driven by growth in markets like China, India, the Middle East, and Latin America. 

In its analysis, IEA noted that lower oil demand in the coming years will ease market strains and push spare capacity toward levels unseen outside of the COVID-19 crisis. 

“As the pandemic rebound loses steam, clean energy transitions advance, and the structure of China’s economy shifts, growth in global oil demand is slowing down and set to reach its peak by 2030. This year, we expect demand to rise by around 1 million barrels per day,” said Fatih Birol, executive director of IEA. 

Birol noted that oil companies should prepare to navigate the changes currently occurring in the energy sector. 

“This report’s projections, based on the latest data, show a major supply surplus emerging this decade, suggesting that oil companies may want to make sure their business strategies and plans are prepared for the changes taking place,” added Birol. 

The report also highlighted that surging sales of electric vehicles and the substitution of oil with renewables or gas in the power sector will significantly curb oil use in road transport and electricity generation.




Consumption of liquefied petroleum gas is set to grow, according to the IEA. Shutterstock

Emerging economies to drive oil demand in coming years

According to the report, global oil demand, which includes biofuels, averaged just over 102 million bpd in 2023 and will level off near 106 million bpd toward the end of this decade.

“Despite the slowdown in growth, global oil demand is still forecast to be 3.2 million bpd higher in 2030 than in 2023 unless stronger policy measures are implemented or changes in behavior take hold,” noted the energy think tank. 

The agency said that the increase is set to be driven by emerging economies in Asia — especially higher oil use for transport in India — and greater use of jet fuel and feedstocks from the booming petrochemicals industry, notably in China. 

Moreover, consumption of naphtha, liquefied petroleum gas and ethane will climb by 3.7 million bpd between 2023 and 2030, driven by growth in LPG use for clean cooking.

However, oil demand in advanced economies is expected to continue its decades-long decline, falling from close to 46 million bpd in 2023 to less than 43 million bpd by 2030. 

“Apart from during the pandemic, the last time oil demand from advanced economies was that low was in 1991,” IEA added. 

According to the report, producers outside of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, will lead the expansion of global production capacity to meet this anticipated demand primarily in emerging economies, accounting for three-quarters of the expected increase to 2030.

“The US alone is poised to account for 2.1 million bpd of non-OPEC+ gains, while Argentina, Brazil, Canada and Guyana contribute a further 2.7 million bpd. The report’s forecast finds that as the flow of approved projects fizzles out toward the end of this decade, capacity growth slows and then stalls among the leading non-OPEC+ producers,” the report said. 

It added: “However if companies continue to approve additional projects already on the drawing board, a further 1.3 million barrels per day of non-OPEC+ capacity could become operational by 2030.” 




OPEC is more optimistic about oil demand growth. Shutterstock

An outlook of refining capacity

The report highlighted that global refining capacity is on track to expand by 3.3 million bpd between 2023 and 2030, well below historical trends.

IEA added that this growth should be sufficient to meet the demand for refined oil products during this period, given a concurrent surge in the supply of non-refined fuels such as biofuels and natural gas liquids. 

The energy agency further pointed out that refiners will need to progressively modify their product output to meet divergent trends for distillates as gasoline demand falls amid an increase in the market share of electric vehicles while jet fuel consumption rises. 

According to IEA, non-refined fuel products are set to capture more than 75 percent of the projected demand growth over the 2023-2030 period. 

“This significant rise in non-refinery product supplies will add pressure on operating rates and refinery profitability, especially in mature demand centers. That raises the prospect of further capacity closures by the end of the decade,” said the report. 

It added: “Capacity growth will remain concentrated in Asia, most notably in China and India, but post‑2027, there are signs of expansions slowing.” 

OPEC confident about oil demand growth

Amid IEA’s projected slowdown in oil demand growth, OPEC is optimistic about the future, and the producers’ alliance believes its forecast is more accurate. 

Speaking at the International Economic Forum in St. Petersburg on June 6, Haitham Al-Ghais, secretary-general of OPEC, said that the world will witness continued oil demand growth in the coming years. 

“Last year, OPEC’s forecast for oil demand was the best. And all those who criticized OPEC’s forecast kept adjusting their number throughout the year,” said Al-Ghais. 

He also made it clear that energy sources of all kinds are necessary for the future, and efforts should be taken to reduce emissions. 

“By 2030, we have a statistical projection that 600 million people will move to new cities, as a part of urbanization. This puts everything into context. We need all sources of energy. We should not discriminate any sources of energy. The focus should be on tackling emissions,” said Al-Ghais. 


Saudi Arabia surpasses $1bn sukuk milestone with May issuance

Saudi Arabia surpasses $1bn sukuk milestone with May issuance
Updated 20 May 2025
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Saudi Arabia surpasses $1bn sukuk milestone with May issuance

Saudi Arabia surpasses $1bn sukuk milestone with May issuance

RIYADH: Saudi Arabia’s National Debt Management Center has surpassed the $1 billion threshold in its latest sukuk issuance, raising SR4.08 billion ($1.08 billion) in May through riyal-denominated offerings.

This marks a 9.09 percent increase from April and reflects a significant 54.5 percent rise compared to March, when SR2.64 billion was raised.

The May issuance continues the Kingdom’s strong momentum in the domestic debt market, following SR3.72 billion raised in January and SR3.07 billion in February. The consistent monthly issuances highlight growing investor interest in Shariah-compliant fixed-income instruments, as global financial markets adjust to a higher interest rate environment.

Sukuk, the Islamic equivalent of bonds, are structured to comply with Shariah principles, which prohibit interest-based transactions.

Instead, investors receive returns derived from partial ownership in tangible assets or investment activities, aligning with Islamic finance ethics.

According to the NDMC, the May offering was divided into four tranches. The first tranche amounted to SR489 million and is set to mature in 2029. The second was valued at SR1.004 billion and will mature in 2032. The third tranche, totaling SR1.28 billion, is due in 2036, while the largest portion of the issuance, worth SR1.3 billion, will mature in 2039.

Saudi Arabia’s debt market has seen rapid growth in recent years, as domestic and international investors seek diversification and stable returns. A report released in April by the Kuwait Financial Center, also known as Markaz, noted that Saudi Arabia led the Gulf Cooperation Council’s debt market in the first quarter of 2025. The Kingdom accounted for 60.2 percent of all primary debt issuances in the region, raising $31.01 billion across 41 offerings.

In a broader outlook, S&P Global highlighted Saudi Arabia’s expanding non-oil economy and robust sukuk activity as key drivers of growth for the global Islamic finance sector.

The credit rating agency forecast global sukuk issuance could reach between $190 billion and $200 billion in 2025, with foreign-currency issuances potentially totaling up to $80 billion, assuming stable market conditions.

Furthermore, a December 2024 report by Kamco Invest projected that Saudi Arabia will lead the GCC in bond maturities over the next five years. Between 2025 and 2029, approximately $168 billion in Saudi bonds are expected to mature, underscoring the Kingdom’s dominant position in the region’s debt landscape.


Closing Bell: Saudi main index closes in green at 11,438

Closing Bell: Saudi main index closes in green at 11,438
Updated 20 May 2025
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Closing Bell: Saudi main index closes in green at 11,438

Closing Bell: Saudi main index closes in green at 11,438
  • MSCI Tadawul Index increased by 0.40 points, to close at 1,460.79
  • Parallel market Nomu rose 28.91 points, to end at 27,528.56

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Tuesday, gaining 32.90 points, or 0.29 percent, to close at 11,438.18.

The total trading turnover of the benchmark index was SR4.85 billion ($1.29 billion), as 132 of the listed stocks advanced, while only 106 retreated.

The MSCI Tadawul Index increased by 0.40 points, or 5.86 percent, to close at 1,460.79.

The Kingdom’s parallel market Nomu rose, gaining 28.91 points, or 0.11 percent, to end at 27,528.56. This comes as 31 of the listed stocks advanced, while 42 retreated.

The best-performing stock was MBC Group Co., with its share price surging by 6.01 percent to SR45.

Other top performers included National Gypsum Co., which saw its share price rise by 4.49 percent to SR21.42, and Zamil Industrial Investment Co., which saw a 4.19 percent increase to SR46.05.

The worst performer of the day was Etihad Atheeb Telecommunication Co., whose share price fell by 4.55 percent to SR100.80.

Saudia Dairy and Foodstuff Co. and CHUBB Arabia Cooperative Insurance Co. also saw declines, with their shares dropping by 2.66 percent and 2.53 percent to SR285 and SR36.60, respectively.

On the announcements front, Alinma Bank has confirmed the commencement of its offering of US dollar-denominated Sustainable Additional Tier 1 Capital Certificates under its Additional Tier 1 Capital Certificate Issuance Program. 

The offering, which began on May 20, is directed at eligible investors in the Kingdom and internationally, according to a Tadawul statement. The certificates, with a minimum subscription of $200,000, are perpetual and callable after 5.5 years, with terms and pricing subject to market conditions. 

The statement added that the certificates will be listed on the London Stock Exchange’s International Securities Market.

In today’s trading session, ALINMA’s share price traded 0.55 percent higher on the main market to reach SR27.55.

Moreover, Asas Makeen Real Estate Development and Investment Co. continued receiving subscription requests for 1 million ordinary shares, equivalent to 10 percent of its capital, at a price of SR80 per share. The offering, approved by the Capital Market Authority, runs from May 19 to 25 on the Nomu parallel market. The company aims to expand its investor base and attract capital to support sustainable growth, with its managed projects exceeding SR3.75 billion in value. 

Meanwhile, Al-Khozama Investment Co. is accepting subscription requests for 422,400 ordinary shares, which is equivalent to 10.71 percent of its shares on Nomu until May 22, priced between SR99 and SR107 per share. The offering targets qualified investors and supports the company’s long-term expansion in Saudi Arabia’s hospitality and food and beverage sector. 


Saudi Arabia’s EV push signals long-term investment strategy: Alkhorayef

Saudi Arabia’s EV push signals long-term investment strategy: Alkhorayef
Updated 20 May 2025
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Saudi Arabia’s EV push signals long-term investment strategy: Alkhorayef

Saudi Arabia’s EV push signals long-term investment strategy: Alkhorayef
  • Minister of Industry and Mineral Resources was speaking during a panel discussion at the Qatar Economic Forum
  • He highlighted mining as a strategic sector, saying the Kingdom has significantly reformed its regulatory framework

RIYADH: Saudi Arabia’s investment in electric vehicles reflects how the Kingdom is shaping its future through strategic, long-term bets, according to a senior minister.  

Speaking during a panel discussion at the Qatar Economic Forum in Doha, Minister of Industry and Mineral Resources Bandar Alkhorayef stated that Saudi Arabia’s push toward EV manufacturing demonstrates the Kingdom’s commitment to shaping a modern and sustainable economy. 

His comments come as Saudi Arabia ramps up efforts to position itself as a regional hub for automotive manufacturing, particularly in electric vehicles. Backed by the Public Investment Fund, the Kingdom has invested in ventures such as US-based Lucid Motors, which is building a production facility in King Abdullah Economic City.  

As part of its broader diversification drive, Saudi Arabia aims to produce over 300,000 vehicles annually by 2030. 

“Betting on EVs is also showing you how we think as a country. We are investing in the future,” he said.  

He added: “Automotive is a sector that we have been waiting to attract for many years, that our vision is a great enabler that brought the sector to Saudi. We are the largest country exporting cars with no local manufacturing, and I think it's the right move.”  

Alkhorayef emphasized that the Kingdom’s economic transformation under Vision 2030 centers on diversification, with mining and industrial development playing a key role in that shift.  

“In our vision — Saudi Vision 2030 — diversification of our economy is key, and definitely mining and industry are both areas where we can see great opportunities,” he said.  

Discussing the Kingdom’s execution capabilities, the minister said Saudi Arabia has mastered “the art of execution,” stressing that successful implementation of plans, not just strategy, is what builds investor confidence.  

He highlighted mining as a strategic sector, noting that the country has significantly reformed its regulatory framework.  

“We have been able to introduce, I would claim, one of the best — if not the best — mining investment laws globally… We have been able to reduce the licensing time from the global average of three to five years to six months,” Alkhorayef said.   

Touching on global mineral demand, he said: “We are actually in a race with time to ensure that we have the right quantities of minerals and metals to satisfy the global need in energy transition, in automation, in technology, and in defense.” 

The minister pointed to the Future Minerals Forum hosted by the Kingdom as a critical platform to address such challenges, uniting governments, private sector players, and financial institutions to improve exploration, refining, and supply chain resilience.  

On supply chains and national resilience, Alkhorayef explained that Saudi Arabia’s localization strategy goes beyond national security.  

“It is really capturing a new value. Today in manufacturing, scale is becoming less important because of new technologies that are being introduced,” he said. 

Alkhorayef continued: “Today in manufacturing, in mining, and in many of the sectors we intend to build in Saudi, are all built on new technologies. How can we ensure that while we are growing our economy, we are creating the right jobs for our people?” 

Addressing the role of governments in enabling private sector growth, Alkhorayef stressed the need for proactive governance.  

“Without government really helping the private sector to capture different value, it would be very hard to see the growth in the private sector,” he said, stressing the importance of infrastructure, regulation, and digital security in encouraging investment. 

He concluded by highlighting the Kingdom’s export achievements: “Last year is a great demonstration of the growth we have done. 2024 was the record high export of Saudi Arabia. Non-oil export — we grew from 16 percent contribution in non-oil export to 25 percent contribution to our GDP in non-oil export. The non-oil, non-petrochemical growth of exports was 9 percent last year,” he said.  


Saudi capital market institutions see 29.6% revenue growth in 2024

Saudi capital market institutions see 29.6% revenue growth in 2024
Updated 20 May 2025
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Saudi capital market institutions see 29.6% revenue growth in 2024

Saudi capital market institutions see 29.6% revenue growth in 2024
  • Number of licensed institutions increased to 186
  • CMA report highlights sector’s alignment with Vision 2030’s Financial Sector Development Program

RIYADH: Capital market institutions in Saudi Arabia posted a strong financial performance in 2024, with revenues surging by 29.6 percent to SR17 billion ($4.5 billion) and profits rising 39.3 percent to SR8.8 billion, according to the Capital Market Authority’s annual report.

The number of licensed institutions expanded to 186, reflecting both increased operational capacity and rising demand for services across the sector.

This solid performance was supported by a series of regulatory reforms introduced by the CMA throughout the year. Key updates included amendments to the Capital Market Institutions Regulations, the Investment Account Instructions, and the Implementing Regulation of the Companies Law for Listed Joint Stock Companies.

The authority also launched new guidelines for the Offering of Real Estate Contributions Certificates, establishing a regulatory framework to facilitate the registration and issuance of these investment instruments.

The report highlights the sector’s alignment with Vision 2030’s Financial Sector Development Program, which aims to strengthen financial institutions’ roles in supporting private sector growth and national economic diversification.

The growth in the number of licensed entities — and their improved financial results — signals a more resilient financial ecosystem capable of backing major national projects and private enterprise.

Investor protection remained a priority. In 2024, the CMA resolved 121 cases, awarding over SR389 million in compensation to 921 affected investors. The average litigation period dropped from 5.5 months in 2023 to 4.4 months, marking a significant improvement in dispute resolution efficiency.

Enforcement activity also intensified, with 171 violators receiving enforceable decisions and 45 enforcement requests actively pursued.

CMA Chairman Mohammed El-Kuwaiz said that the authority’s strategic plan for 2024-26 centers on enhancing the capital market’s ability to finance growth, strengthening institutional governance, and safeguarding investor rights.

He noted that the plan was shaped through stakeholder engagement and a comprehensive market analysis, in line with the broader Vision 2030 agenda.


Strong fiscal frameworks position Saudi Arabia to weather oil price swings, says minister

Strong fiscal frameworks position Saudi Arabia to weather oil price swings, says minister
Updated 20 May 2025
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Strong fiscal frameworks position Saudi Arabia to weather oil price swings, says minister

Strong fiscal frameworks position Saudi Arabia to weather oil price swings, says minister
  • Minister of economy and planning said Kingdom has built resilient economic structures to adapt to multiple oil price scenarios
  • Faisal Alibrahim said the Saudi budgets are no longer driven by oil

RIYADH: Saudi Arabia is well-prepared to handle fluctuations in global oil prices, thanks to its strong fiscal planning frameworks, according to the Kingdom’s Minister of Economy and Planning, Faisal Alibrahim.

Speaking at the Qatar Economic Forum during a panel discussion titled “The Geoeconomics of Growth: Finance & Economy Minister Outlook,” Alibrahim said Saudi Arabia has built resilient economic structures designed to adapt to multiple oil price scenarios.

The comments come as oil-producing nations continue to navigate price volatility amid shifting global demand and energy transition efforts.

“We’re always ready for scenarios, multiple scenarios, and we have the buffers. We have the long-term fiscal planning and medium-term frameworks that help us adjust depending on what scenario actually plays out,” the minister said. 

The world’s largest oil exporter is accelerating its economic diversification under the Vision 2030 reform agenda. Non-oil exports surged to a record $137 billion in 2024 — a 113 percent increase since the initiative was launched in 2016.

According to data from the Ministry of Finance, non-oil revenues accounted for 43.1 percent of total government income in the first quarter of 2025, representing a 2.06 percent increase compared to the same period last year.

Alibrahim noted that the Saudi budgets are no longer driven by oil. “Today, they’re driven by our priorities,” he added. “On the energy markets and oil, we’ve always been solving for long-term market stability that guarantees that investments will continue to flow to provide the right kind of supply that the global economy needs, and of course, as part of that is OPEC+ discipline.” 

The minister noted that Gulf Cooperation Council countries, including Saudi Arabia, are prioritizing long-term growth over short-term gains. “We’re always thinking about not the next 12 months, but a longer-term horizon, and that’s what most of the GCC countries are doing as well,” he added.   

Alibrahim also underscored Saudi Arabia’s commitment to Vision 2030 and beyond, stating that Gulf nations are undergoing similar transformations. “What we’re undertaking in Vision 2030 and beyond Vision 2030 is a long-term, big-picture plan that is all about restructuring the Saudi economy,” he said.   

Highlighting the region’s economic progress, the minister pointed out that non-oil economies in the GCC grew by 3.7 percent in 2024 — nearly double the global growth rate. “There’s an acknowledgement that we’ve been for a while operating below our potential,” he said, emphasizing the increasing opportunities from economic restructuring.   

On foreign investment, Alibrahim described it as a “long-term game,” with Saudi Arabia targeting FDI inflows worth 5.7 percent of the gross domestic product by 2030. The Kingdom has implemented over 900 reforms to improve its business environment, he noted. 

Alibrahim also referenced recent geopolitical developments, including US President Donald Trump’s recent visit to Riyadh — part of a broader push for regional dialogue.

“We saw President Trump in Riyadh last week. We saw the result of dialogue, what it led to, including lifting the sanctions on Syria,” he said, signaling growing momentum for economic reintegration. 

On May 13, Trump began his four-day trip to the Middle East, his first major international visit of his second term. His first stop was Saudi Arabia, where he secured a $600 billion investment commitment from the Kingdom. During his speech at the Saudi-US Investment Forum, Trump announced the lifting of US sanctions on Syria following talks with Crown Prince Mohammed bin Salman. 

The discussion shifted to Syria’s role in regional stability, with Turkish Finance Minister Mehmet Simsek stating: “Having a stable, peaceful, and prospering Syria on its own is a huge gain for the region.” Qatar’s Finance Minister Ali bin Ahmed Al-Kuwari echoed this sentiment, emphasizing the importance of Syria’s economic recovery for regional prosperity.   

Aibrahim also addressed Saudi Arabia’s international engagements, including recent diplomatic efforts with the US and China, stressing the need for stronger global economic ties. “It’s in the interest of both (the US and China) that we remain strong partners,” he said.