Startup valuation adjustment reflects dynamic period of growth in KSA, VCs say

Startup valuation adjustment reflects dynamic period of growth in KSA, VCs say
Saudi Arabia led the MENA region in venture capital funding during the first half of 2024, with a total of $412 million. (AFP)
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Updated 03 November 2024
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Startup valuation adjustment reflects dynamic period of growth in KSA, VCs say

Startup valuation adjustment reflects dynamic period of growth in KSA, VCs say

RIYADH: Saudi Arabia’s startup ecosystem is undergoing a remarkable transformation, driven by increasingly attractive valuations and a surge in early-stage investment activity.

The Kingdom is establishing itself as a leader in venture capital funding across the Middle East and North Africa region, with government-backed initiatives, economic reforms, and digital transformation playing pivotal roles.

As valuations – once inflated by significant capital inflows – adjust to more reasonable levels, early-stage rounds are becoming particularly appealing to both regional and international investors.

In the first half of the year, 84 percent of total transactions in Saudi Arabia came from early-stage investments, a rise from 82 percent on the previous 12 months, with series A transactions increasing to 14 percent from 10 percent, according to venture data platform MAGNiTT.

The current state of valuations

In an interview with Arab News, Tushar Singhvi, deputy CEO at Crescent Enterprises, said that the current state of valuations in Saudi Arabia reflects a “dynamic period of growth.”

He acknowledged that while some valuations had become “excessively high” due to the substantial influx of venture capital, they have since moderated, offering more “reasonable levels,” which in turn create “attractive opportunities for investors.”

The executive added: “Although some valuations might still appear inflated, the strong underlying fundamentals and significant growth potential of these businesses justify these prices.”




Tushar Singhvi, deputy CEO at Crescent Enterprises. (Supplied)

Saudi Arabia led the MENA region in venture capital funding during the first half of 2024, with a total of $412 million, Singhvi highlighted.

“Additionally, foreign investments in Saudi Arabia rose by 12 percent year-on-year to $640 billion by the end of 2023, highlighting sustained investor confidence,” he added.

In agreement, Bundeep Singh Rangar, CEO of Fineqia and managing partner of Glass Ventures, emphasized that Saudi Arabia’s startup ecosystem is showing resilience.

“While the broader MENA region has seen a decline in venture capital funding, Saudi Arabia’s ecosystem remains resilient,” he said, noting that even with a slight year-on-year dip in funding, investor confidence remains high, particularly in sectors like fintech and e-commerce.

Rangar explained that the maturation of the Saudi startup ecosystem is increasingly aligning with “global standards,” making the valuations justifiable as the market sentiment continues to strengthen.

Underlying factors

Several key factors have driven investors’ increased interest in early-stage rounds in Saudi Arabia. Singhvi points to the Kingdom’s “vast market potential” supported by Vision 2030, which has catalyzed a wave of innovation and entrepreneurship.

Significant government support, such as initiatives from Monsha’at and the Public Investment Fund, have played a crucial role, while infrastructure spending has created new opportunities across multiple sectors.

“The ongoing digital transformation in the Kingdom has further enhanced its attractiveness,” Singhvi remarked, adding that digitally enabled businesses are well-positioned to capture the growth opportunities emerging from this transformation.




Bundeep Singh Rangar, CEO of Fineqia and managing partner of Glass Ventures. (Suppied)

Rangar also highlights the impact of Vision 2030, noting that the government’s proactive efforts, including initiatives like the LEAP conference where billions are being invested in tech, are creating fertile ground for early-stage investments.

He said: “The growing demand for technology-driven solutions in sectors like fintech, coupled with an 83 percent year-on-year rise in non-mega funding, makes early-stage investments particularly attractive to both local and international investors.”

Singhvi also stated that investor participation has grown significantly, with Saudi Arabia accounting for 54 percent of MENA’s total venture capital funding in the first half of the year, up from 38 percent in 2023.

Valuations and M&A

One significant outcome of these more attractive valuations is the potential for increased mergers and acquisitions activity within Saudi Arabia’s startup ecosystem.

Singhvi predicts “unprecedented growth” in the M&A market, noting that Saudi Arabia led the Middle East in M&A activity in the first quarter of 2024 and is projected to reach a transaction value of $4.8 billion by year-end.

“The startup sector is expected to see similar positive activity, with more realistic valuations making them more appealing to potential investors,” he remarked.

Rangar concurs, explaining that as valuations become more aligned with market norms, mature startups are likely to consolidate their positions and scale via strategic acquisitions.

He cited RasMal’s recent acquisition of UAE’s Pentugram as an example of how favorable valuations can facilitate cross-border deals that strengthen the regional influence of Saudi startups.

Future outlook

The trend of appealing early-stage rounds is likely to continue, according to both Singhvi and Rangar.

Singhvi emphasized that Saudi Arabia’s commitment to Vision 2030 creates a “stable and supportive environment for startups,” particularly in key sectors like fintech, e-commerce, health tech, ed tech, and renewable energy, which are expected to continue attracting significant investment.

He pointed to the Kingdom’s economic stability and the net inflow of foreign direct investments, worth $3.49 billion in the last quarter of 2023, as further reinforcing investor confidence.

Rangar also pointed out that rising investor participation – up 16 percent in the first half of 2024 – reflects a robust appetite for early-stage investments and suggests this trend will persist, supported by continued government backing and the availability of capital.

Optimism amongst investors

Positivity about the future of Saudi Arabia’s startup ecosystem is shared widely among investors, according to both Singhvi and Rangar.

“There is strong optimism about the future of the Saudi startup ecosystem among investors,” Singhvi said, highlighting the growing sophistication of the ecosystem.

The rise of corporate venture capital, with large corporations investing in startups for innovation, has been a major factor, offering funds, mentorship, and industry expertise.

The increasing alignment of valuations with market fundamentals is further contributing to this optimism.

“Investors are particularly encouraged by the growth potential in sectors like fintech, e-commerce, and digital transformation, which are expected to continue attracting significant capital,” Rangar added, noting that Saudi startups’ resilience amid regional challenges reinforces this positive outlook.

Saudi Arabia’s leading position

Comparatively, Saudi Arabia is surpassing other MENA markets such as the UAE and Egypt in terms of venture capital funding.

“It has more than 8,400 startups, of which two have already become unicorns – startups with a valuation exceeding $1 billion – namely stc pay and Tamara. While the UAE remains a strong competitor with a higher number of transactions, the gap in funding between the two has widened, with Saudi Arabia securing a larger share of the region’s total funding,” Rangar said.

“The Kingdom’s focus on high-growth sectors and the support from initiatives like the Saudi Unicorns program have positioned it as a rising star in the global startup ecosystem, setting it apart from its regional counterparts,” he added.

Crescent Enterprises, for its part, sees the Saudi market as a hub of significant opportunity. Singhvi explained that the firm is actively exploring investment opportunities across sectors and has already established a strong presence in the Kingdom.

Companies like Gulftainer Group, which manages terminals in Jubail, and Momentum Logistics, which operates a logistics hub in Dammam, are part of Crescent’s portfolio.

He also mentioned several portfolio companies that already have significant presence in Saudi Arabia, such as Kitopi, a cloud-based smart kitchen operator, and Transcorp, a temperature-controlled last-mile delivery service provider.

Looking ahead, Singhvi said: “We aim to deepen our presence in Saudi Arabia by investing in innovative startups and established businesses that align with our vision of sustainable growth and development.”

He mentioned that portfolio startups like BreakBread, a digital marketplace, and FreshToHome, a food tech company, are also planning to expand their operations into Saudi Arabia, signaling further growth potential.


Youth empowerment takes center stage at COP16   

Youth empowerment takes center stage at COP16   
Updated 06 December 2024
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Youth empowerment takes center stage at COP16   

Youth empowerment takes center stage at COP16   
  • COP16 has highlighted innovative youth-led initiatives and addressed the systemic challenges faced by young leaders in advancing sustainable land management
  • COP16 has also provided a platform for young leaders from across the globe to share their solutions to land degradation

RIYADH: Youth empowerment has emerged as a focal point at the UN Convention to Combat Desertification conference.

COP16 has highlighted innovative youth-led initiatives and addressed the systemic challenges faced by young leaders in advancing sustainable land management. 

The conference, which began on Dec. 2, aligns with Saudi Arabia’s Vision 2030 and the Kingdom’s commitment to engaging its youth in tackling climate challenges. Key discussions have underscored the importance of integrating young voices into policy-making and decision-making processes. 

Catalysts for change 

Among the most pressing topics discussed at COP16 is the need to give young people a seat at the decision-making table.

Speaking during the lead-up to the conference, Catarina Lorenzo, a 16-year-old youth climate champion, made a passionate case for including younger generations in the shaping of solutions to the environmental crises they will inherit.

“When we bring children to the table, we also bring the voice of nature,” she explained. “Effective actions have to be made now. We want to join in the negotiation spaces, and beyond that we want to be taken seriously.” 

This urgency was echoed by Jorge Leyva of the International Forestry Students’ Association, who said that while young voices were increasingly visible at global forums, their influence on actual policy decisions remained limited.

“We are the next generation, and we are not going to wait,” he said. “If we don’t have a seat at the table now, how will we know what comes next?” Leyva emphasized the frustration felt by many young leaders, who are often relegated to observation roles rather than being involved in substantive discussions. 

Youth empowerment 

As COP16’s host nation, Saudi Arabia has highlighted its commitment to empowering young people through initiatives such as the Green Saudi Initiative, which have mobilized thousands of young Saudis in afforestation and land restoration projects. 

“Saudi Arabia is leading by example in integrating young people into the heart of its sustainability efforts,” said Ibrahim Thiaw, executive secretary of the UNCCD. “Empowering youth is essential for achieving sustainable land management. Their voices bring fresh perspectives and the drive to innovate that is indispensable for addressing the challenges we face today.” 

Among the initiatives highlighted was a project by young Saudis that uses drones to plant seeds in degraded areas, blending technology with traditional land restoration techniques.  

Youth-led initiatives  

COP16 has also provided a platform for young leaders from across the globe to share their solutions to land degradation.

Lorenzo highlighted the unique knowledge children and youth bring to the discussion. “Children are often the most vulnerable to the impacts of climate change, from floods to loss of education opportunities,” she explained. “We are the best people to talk about the impact we receive and what our communities need.” 

These perspectives are not only vital but also often transformative. From using social media to raise awareness about local environmental challenges to leveraging indigenous knowledge in land management, youth-led projects have demonstrated the power of combining grassroots activism with innovative technologies. 

Despite the successes, COP16 participants have pointed out significant barriers to youth involvement. Lorenzo highlighted the lack of financial support for youth-led projects, noting that only 2 percent of global philanthropic funding directly benefited children and youth.

“This needs to change,” she said. 

Leyva added that young leaders often felt dismissed by older decision-makers: “They think that because we are students or maybe so young, we don’t have the knowledge to contribute. But we have a different perspective — one rooted in today’s realities and challenges, which older generations may not fully grasp.” 

To address these gaps, COP16 has introduced measures to boost youth participation, including mentorship programs to develop technical expertise in sustainable land management and commitments to integrate youth perspectives into policy frameworks. 

International collaboration  

The conference has also facilitated cross-border knowledge sharing, with young representatives from Africa, Asia and Latin America discussing their approaches to combating land degradation. 

Delegates from Burkina Faso, for example, shared how combining traditional agricultural practices with modern tools has helped build drought resilience. 

“When we share our experiences and knowledge across borders, we create a stronger foundation for sustainable action,” said one delegate. 

Driving tangible outcomes

In addition to its national programs, Saudi Arabia has taken a leadership role in the region by promoting youth engagement in environmental sustainability. The Kingdom’s National Afforestation Project, which aims to plant 10 billion trees, has actively involved young people in both planning and implementation. 

Saudi youth delegates expressed pride in their country’s efforts and, as COP16 progresses, the focus on youth empowerment remains a key theme. For young leaders like Lorenzo and Leyva, the event represents a vital opportunity to amplify their voices and push for tangible outcomes. However, they emphasize that their participation must lead to action, not just recognition. 

“Negotiators clap for our speeches,” Lorenzo noted, “but when it comes time to create resolutions, our input is often overlooked. That has to change.”  

By providing a platform for young leaders to connect with global stakeholders and share their ideas, COP16 has taken an important step toward fostering intergenerational collaboration. 

While significant challenges remain, the initiatives and discussions shown so far demonstrate a clear path toward building a more resilient and sustainable world — led, in part, by the energy and creativity of youth. 


Saudi Arabia’s real estate loans hit $226bn, fueled by retail and corporate demand 

Saudi Arabia’s real estate loans hit $226bn, fueled by retail and corporate demand 
Updated 06 December 2024
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Saudi Arabia’s real estate loans hit $226bn, fueled by retail and corporate demand 

Saudi Arabia’s real estate loans hit $226bn, fueled by retail and corporate demand 

RIYADH: Saudi banks’ real estate loans surged to a record SR846.48 billion ($225.73 billion) in the third quarter of 2024, marking a 13.29 percent annual increase, official data showed. 

Data from the Saudi Central Bank, also known as SAMA, indicated that this growth was driven by both retail and corporate lending, with corporate loans experiencing a 22 percent increase to reach SR189.6 billion.  

Lending to individuals made up the lion’s share, accounting for 78 percent of the total at SR656.88 billion, reflecting an annual growth rate of 11.02 percent. 

Real estate loans now comprise 29.67 percent of Saudi banks’ total loan portfolio, which stood at SR2.85 trillion by the end of the third quarter.  

The sector’s unprecedented expansion is underpinned by government-backed initiatives under Vision 2030, which aim to diversify the economy and address the Kingdom’s growing housing demand.  

A pivotal regulatory milestone came in 2018, when the Saudi Central Bank increased the maximum loan-to-value ratio for first-time homebuyers from 85 percent to 90 percent. 

This strategic move was designed to stimulate mortgage lending, making homeownership more accessible to Saudi citizens while aligning with the Kingdom’s broader economic reform plans.  

By enabling more citizens to secure financing for their first homes, the initiative directly supported the national housing strategy, which aims to boost homeownership rates and expand housing options across the country. 

SAMA emphasized maintaining financial stability, ensuring that this policy shift would not compromise the resilience of the banking sector or lead to unsustainable lending practices. 

Another factor supporting the real estate sector’s growth is recent monetary easing. After two years of aggressive rate hikes to curb inflation, SAMA lowered interest rates by 50 basis points in September and another 25 basis points in November, mirroring the US Federal Reserve’s monetary policy. 

These cuts have made borrowing cheaper, spurring demand for real estate loans.  

However, this surge in demand has a dual effect. While it boosts credit uptake, it also exerts upward pressure on housing prices, contributing to inflation. 

Saudi Arabia’s annual inflation rate reached 1.9 percent in October, driven primarily by higher housing costs, according to the General Authority for Statistics. 

Despite this rise, the Kingdom’s inflation remains among the lowest in the Middle East, underscoring the efficacy of its economic stabilization strategies and its resilience against global inflationary pressures. 

New retail mortgages highest in 21 months  

Saudi banks issued SR8.14 billion in new residential mortgages in October, marking the highest monthly figure in 21 months and a 20.33 percent increase from October last year. 

The capital, Riyadh, has emerged as a focal point of this surge, fueled by robust population and employment growth that has intensified demand for housing, with new properties struggling to keep pace.  

Of the total residential loans in October, SR4.83 billion, or 59.3 percent, was directed toward purchasing houses, while 35 percent was allocated to apartments and 5.6 percent to land.  

Apartment financing saw the most significant annual growth, surging 47 percent year on year to SR2.86 billion, followed by land financing at 24.8 percent and house loans at 8.37 percent.  

For the third quarter of 2024, the value of new residential mortgages reached SR20.49 billion, reflecting an 11.34 percent increase compared to the same period last year. This growth was largely driven by demand for apartments, with lending in this segment soaring 58.76 percent year-on-year to SR7.25 billion.  

While lending for land rose 19.16 percent to SR1.19 billion during the quarter, loans for houses declined 6.13 percent to SR12.06 billion. 

The increasing prominence of apartment financing highlights a shift in Saudi Arabia’s housing market, reflecting evolving demographics and lifestyle preferences. Apartments appeal to expatriates and smaller families while also addressing affordability concerns.  

According to S&P Global, population growth, averaging 3.3 percent annually through 2027, and a surge in expatriate inflows are fueling demand, particularly in Riyadh. 

This factor, coupled with job opportunities, is outpacing the delivery of new housing units.

According to JLL’s KSA market dynamics report for the first half of 2024, 16,200 units were added in Riyadh and 11,300 in Jeddah during this period, with another 16,000 units expected in both cities by the end of the year. 

However, despite this growth, supply constraints continue to push prices higher. High construction costs and competition with Vision 2030 projects are limiting housing affordability.

Additionally, Saudi Arabia’s real estate market is navigating regulatory changes to attract foreign direct investment. While FDI inflows currently average 2 percent of GDP, they are expected to grow as reforms unfold, including new residency visa options tied to real estate investments, according to S&P Global. 

As mortgage infrastructure matures, spearheaded by entities like the Saudi Real Estate Refinance Co., the market is poised for increased liquidity and growth.

Secondary mortgage market

Saudi Arabia is embarking on a transformative journey to establish a secondary mortgage market, a move set to redefine the Kingdom’s housing and financial sectors.

With two major agreements in place, the country is strategically aligning global expertise with local execution to ensure liquidity in housing finance, boost homeownership, and foster economic diversification in line with Vision 2030.

In a landmark development, the Saudi Real Estate Refinance Co., a subsidiary of the Public Investment Fund, signed a memorandum of understanding with BlackRock, the world’s largest asset manager.

The agreement, finalized during a high-profile visit by Majid Al-Hogail, minister of municipal and rural affairs and housing, to the US, underscores the Kingdom’s commitment to leveraging global expertise to develop its mortgage finance ecosystem.

The partnership with BlackRock is expected to play a pivotal role in creating a functional secondary mortgage market by laying the groundwork for mortgage-backed securities.

BlackRock’s extensive knowledge of global financial markets will be instrumental in structuring these securities, designed to improve market liquidity by enabling banks to sell bundled mortgage loans to investors.

This influx of liquidity is anticipated to reduce borrowing costs for Saudi families, making homeownership more affordable.

Robert Kapito, BlackRock’s president, described the collaboration as a key step in aligning Saudi Arabia’s real estate finance market with international capital markets. He emphasized the potential for this initiative to not only support local housing goals but also attract global investment.

Meanwhile, SRC has also signed a separate agreement with Al-Ahli Bank and the Real Estate Development Fund to operationalize the secondary mortgage market at a local level.

This tripartite partnership focuses on creating and refinancing mortgage portfolios, ensuring the housing finance market has continuous access to funding.

The initiative is also set to fast-track the issuance of mortgage-backed securities in the domestic market, laying a solid foundation for sustainable growth in the sector.

As mortgage origination grows, so does the need for a secondary market to manage liquidity effectively.

SRC CEO Majeed Al-Abduljabbar described the partnership with Al-Ahli Bank as a critical step in addressing these challenges. By enabling banks to securitize mortgages and sell them as MBS, the initiative will enhance liquidity, reduce financing costs, and expand housing options for citizens.

These partnerships come at a pivotal time for the Kingdom, where the housing sector is central to Vision 2030’s objectives of raising homeownership rates to 70 percent and reducing economic reliance on oil revenues.

By integrating the real estate finance sector into global capital markets, Saudi Arabia is not only ensuring affordable housing but also positioning itself as a regional leader in innovative financial solutions.


Saudi Arabia unveils Riyadh Action Agenda to address land restoration, drought 

Saudi Arabia unveils Riyadh Action Agenda to address land restoration, drought 
Updated 06 December 2024
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Saudi Arabia unveils Riyadh Action Agenda to address land restoration, drought 

Saudi Arabia unveils Riyadh Action Agenda to address land restoration, drought 
  • Initiative launched during Agri-Food System Day at COP16 in Riyadh 

RIYADH: Saudi Arabia has introduced the Riyadh Action Agenda, an initiative to unite stakeholders in tackling land degradation, desertification, and drought. 

The announcement was made by Osama Faqeeha, deputy minister for environment at the Ministry of Environment, Water and Agriculture, and advisor to the UNCCD COP16 presidency, during a keynote address at a high-level dialogue on sustainable agri-food systems. 

The agenda will leverage COP16’s momentum over the two-year presidency, engaging diverse stakeholders to drive tangible impact for farmers, indigenous peoples, and other affected groups. 

Speaking during a keynote address, Faqeeha said: “If we are to accelerate land restoration and drought resilience initiatives at the pace and scale required, then it is critical we continue to mobilize and incentivize action long after COP16 in Riyadh ends, reaffirming Saudi Arabia’s leadership in land restoration, and leaving a lasting legacy of global change.”  

The launch took place on Agri-Food System Day, one of seven thematic days at COP16. Agriculture, a leading driver of land degradation, accounts for 23 percent of global greenhouse gas emissions, 80 percent of deforestation, and 70 percent of freshwater use, according to the UNCCD. 

Agri-Food System Day featured discussions on sustainable agricultural practices, with topics including soil health, resilient crops, and private sector involvement in transforming food systems. The day coincided with World Soil Day, which highlights the importance of sustainable soil management. 

“Around 95 percent of our food comes from the soil, and yet we continue to treat it like dirt,” Faqeeha said. “Unsustainable practices are causing significant soil loss annually, worsening global food and water security, and affecting farmers and consumers alike.” 

The UNCCD estimates that by 2050, global crop yields could decline by 10 percent, with worst-hit regions facing a 50 percent drop. Food prices could rise by 30 percent due to shrinking arable land and rising population demands. 

“We do not need to reinvent the wheel to deliver urgent solutions,” Faqeeha added. “Reinvesting harmful agricultural subsidies could immediately support land restoration and reform unsustainable practices.” 

The UNCCD COP16 conference, themed Our Land. Our Future., is being held from Dec. 2-13, 2024, at Boulevard Riyadh World. The event marks the UNCCD’s 30th anniversary and aims to address issues like drought resilience and land tenure. 


Saudi Arabia surpasses Vision 2030 target of 1m volunteers ahead of time

Saudi Arabia surpasses Vision 2030 target of 1m volunteers ahead of time
Updated 05 December 2024
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Saudi Arabia surpasses Vision 2030 target of 1m volunteers ahead of time

Saudi Arabia surpasses Vision 2030 target of 1m volunteers ahead of time

RIYADH: Saudi Arabia has surpassed its Vision 2030 target of 1 million volunteers six years ahead of schedule, according to the CEO of the National Center for Non-Profit Sector.

Speaking to Arab News on the sidelines on the fourth day of COP16, Ahmed Al-Suwailem explained that the Kingdom’s volunteering journey achieved the target just prior to the end of 2024.

This falls in line with promoting the concept of volunteering and community participation in Saudi Arabia.

“Today, we are celebrating the biggest achievement that we did in terms of volunteering. Of course, I will start with my thanks and gratitude to his majesty, the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz, and also his Crown Prince, the Prime Minister, Prince Mohammed bin Salman bin Abdulaziz, for their unbelievable effort and support, for us, and they enabled us to achieve, this amazing target of 1 million volunteers, 1 million per annum,” Al-Suwailem said.

He added: “Absolutely, we have achieved the target earlier than we were supposed to achieve it, or 2030. We achieved it just before the end of 2024. We have achieved 1 million, as I said, per annum. We were supposed to achieve it in 2030.”

He added: “We are going for a further target and we are now reviewing the target again, and we’ll see what we will achieve in 2030.”

With regards to achieving the target, Al-Suwailem said: “We couldn’t achieve that unless we have this amazing, unbelievable, continuous support from our leadership and also with an enablement from our people,” he said.

He added that the public’s volunteer support is evident in their efforts, thoughts, and shared experiences.

“We are trying our best to send our message as the people of Saudi Arabia, that we are global citizens, that we can also do our volunteering internally and internationally,” he added.

The CEO also highlighted how this achievement will support the Kingdom’s Vision 2030, underlining that volunteering will play a key role in helping the company meet the objectives of the Saudi Green Initiative. The undertaking aims to diversify the economy, reduce oil dependency, and promote sustainable development.

He added: “So, this is where we complete each other as governmental entities and also private sector and the nonprofit sector.”

The CEO concluded by saying: “And of course, last but not least, people are the key element for achieving all these targets.”

The Kingdom’s hosting of COP16 reflects its commitment to protecting the planet. In the largest multilateral conference it has ever hosted, Saudi Arabia is mobilizing the world to deliver international cooperation, change, and action that our land so desperately needs.


OPEC+ extends production cuts by three months through March

OPEC+ extends production cuts by three months through March
Updated 05 December 2024
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OPEC+ extends production cuts by three months through March

OPEC+ extends production cuts by three months through March

RIYADH: OPEC+ on Thursday agreed to extend their supply cuts for three months through March to to support market stability.

OPEC+ countries, including Saudi Arabia and Russia, “will extend their additional voluntary adjustments of 2.2 million barrels per day... until the end of March 2025,” the alliance said in a statement.

A virtual meeting was held on the sidelines of the 38th OPEC and non-OPEC Ministerial Meeting.

According to the statement, the meeting welcomed the pledges made by the overproducing countries to achieve full conformity and resubmit their updated compensation schedule to the OPEC Secretariat for the overproduced volumes since January 2024 before the end of December 2024.

The alliance members will extend their additional voluntary adjustments of 2.2 million bpd, that were announced in November 2023, until the end of March 2025 and then the 2.2 million barrels per day adjustments will be gradually phased out on a monthly basis until the end of September 2026. This monthly increase can be paused or reversed subject to market conditions.

OPEC+ members are holding back 5.86 million bpd of output, or about 5.7 percent of global demand, in a series of steps agreed since 2022 to support the market.

The alliance also agreed to allow the UAE to raise output by 300,000 bpd gradually from April until the end of September 2026, instead of the earlier plan to start it in January 2025.

Despite the group’s supply cuts, global oil benchmark Brent crude has mostly stayed in a $70 to $80 per barrel range this year and on Thursday traded near $72 a barrel, having hit a 2024 low below $69 in September.