Oil Updates – crude heads for weekly gains as Ukraine war intensifies
Updated 22 November 2024
Reuters
LONDON: Oil prices inched lower on Friday, but were on track for a weekly rise of nearly 4 percent, as an intensifying war in Ukraine returned a geopolitical risk premium to oil markets.
Brent crude futures fell 65 cents, or 0.88 percent, to $73.58 a barrel by 4:12 p.m. Saudi time. US West Texas Intermediate crude futures fell by 66 cents, or 0.94 percent, to $69.44 per barrel.
Pressuring prices on Friday, eurozone business activity took a surprisingly sharp turn for the worse this month as the bloc’s dominant services industry contracted and manufacturing sank deeper into recession.
Kazakhstan’s largest oilfield, Tengiz, is scheduled to return to full production in early December, Russian news agency Interfax reported on Friday, while elsewhere Kazakhstan’s energy ministry said it plans to produce 90 million tonnes of oil in 2025, up from 88 million tonnes in 2024.
Both contracts are set for gains of nearly 4 percent this week, as Moscow steps up its Ukraine offensive after Britain and the United States allowed Kyiv to strike deeper into Russia with their missiles.
“The Russia-Ukraine escalation has raised geopolitical tensions beyond levels seen during the year-long conflict between Israel and Iran-backed militants,” Saxo Bank analyst Ole Hansen said on Friday.
He added that rising refinery margins and an incoming cold snap had also supported distillate refinery profit margins, and wider oil prices, this week.
The Kremlin said on Friday that a strike on Ukraine using a newly developed hypersonic ballistic missile was a message to the West that Moscow will respond harshly to any “reckless” Western actions in support of Ukraine.
Ukraine has used drones to target Russian oil infrastructure, for instance in June, when it used long-range attack drones to strike four Russian refineries.
“What the market fears is accidental destruction in any part of oil, gas and refining that not only causes long-term damage but accelerates a war spiral,” said PVM analyst John Evans.
Also supporting prices this week, China announced policy measures on Thursday to boost trade, including support for energy product imports, amid worries over US President-elect Donald Trump’s threats to impose tariffs.
China’s crude oil imports are set to rebound in November, according to analysts, traders and ship tracking data.
Saudi multi-billion-dollar corporations are driving strategic investments in startup ecosystem
Kingdom’s corporations aligning with Vision 2030, say experts
Aramco Ventures, stc’s tali ventures exemplify dual approach
Updated 59 min 5 sec ago
Nour El-Shaeri
RIYADH: Saudi Arabia’s corporate venture capital arms are playing a pivotal role in driving innovation and advancing economic diversification by aligning their investment strategies with both national and corporate objectives.
Between 2020 and the third quarter of 2024, corporate investors accounted for 27 percent of the 1,361 unique investors in the Middle East and North Africa region, deploying approximately $380 million, according to a report by MAGNiTT.
Saudi Arabia saw the highest ratio, with CVC’s making up 30 percent of local unique investors.
Funds such as Aramco Ventures and stc’s tali ventures exemplify this dual-purpose approach. By leveraging their resources and expertise, these CVCs are fostering startups that align with the Kingdom’s Vision 2030 agenda while simultaneously advancing the strategic and operational goals of their parent companies.
According to Stephane Ulcakar, associate director and head of corporate and government financial services at Arthur D. Little, these funds stand out due to their scale and strategic scope.
“Aramco Ventures recently secured an additional $4 billion in funding, raising its total capital to $7 billion,” Ulcakar noted in an interview with Arab News, adding that stc has also collaborated with global players like SoftBank and the Saudi Public Investment Fund to broaden its reach.
This alignment extends to specific investment sectors. In an interview with Arab News, Arjun Singh, partner and global head of fintech at ADL, explained: “These arms — and their affiliated funds — are not just looking for the next big thing but also for startups that can integrate seamlessly into their parent companies’ operations.”
Stc’s tali ventures prioritizes fintech, artificial intelligence, and blockchain, reflecting both the nation’s and its parent company’s ambitions to champion Saudi Arabia’s digital economy.
stc Group, tali ventures, and Cohere announced a strategic collaboration in February. File
Similarly, Aramco’s Wa’ed Ventures focuses on startups that advance the Kingdom’s digital transformation while complementing Aramco’s strategic objectives.
Beyond funding, Saudi CVCs bring a distinct set of advantages to startups by leveraging industry expertise, supply chain networks, and expansive ecosystems.
Ulcakar highlighted the role of national initiatives such as the PIF’s National Development Strategy in addressing supply chain gaps and reshaping logistics.
Startups backed by these CVCs gain access to infrastructure and pilot programs within large ecosystems, which help refine their offerings.
“Certain well-known national players have partnered with startups to integrate advanced technologies into their supply chain operations, testing solutions like automation and predictive analytics,” Ulcakar stated.
Singh emphasized how this approach accelerates innovation, particularly in regulated industries like fintech and healthcare.
“Startups backed by corporate investors show stronger performance, as these partnerships can significantly accelerate regulatory approval processes and market entry,” he said.
Saudi National Bank’s venture capital arm is an example of an organization enabling fintech startups to scale efficiently by offering regulatory navigation support and access to a large customer base, he added.
“The Saudi VC market is undoubtedly burgeoning, with abundant demand for bankable capital and distinct funding and technical advantages brought by various players on the supply side,” Ulcakar said.
The market’s maturation is evident, with funding reaching $987 million in 2022, and CVCs accounting for 32 percent of all deals — a significant rise from less than 15 percent in 2018.
This growth is not limited to Aramco and stc — banks including SNB Capital, Riyad Bank and SAB are emerging as key players, further diversifying the funding landscape.
Additionally, Saudi Venture Capital continues to act as a catalyst for the ecosystem, having deployed over SR3.4 billion ($905.7 million) through direct and indirect investments.
This has propelled Saudi Arabia to capture the highest share of total VC funding in the MENA region, reaching 54 percent in the first half of 2024, up from 38 percent during the same period in 2023.
The Kingdom’s VC ecosystem is marked by a collaborative dynamic between corporate and traditional VCs.
Singh highlighted that “87 percent of CVC-backed deals in 2022-23 included traditional VC participation.”
This high rate of co-investment reflects a complementary relationship, where both types of investors contribute to building a more sophisticated, institutionalized ecosystem.
Singh noted that this coordinated evolution spans multiple sectors and is essential to creating a sustainable innovation landscape aligned with Saudi Arabia’s Vision 2030.
Looking ahead, the key question is how this ecosystem will consolidate further, potentially positioning the Kingdom as a global private capital hub.
“The diversity of approaches — from direct CVC arms to partnerships with established VC firms — demonstrates the market’s growing maturity and suggests a sustainable growth trajectory,” Ulcakar stated.
This progress is a critical component of the Kingdom’s strategy to establish itself as a leader in technology and innovation.
In sectors such as energy and logistics, Saudi Arabia’s CVCs are playing a pivotal role in driving innovation.
Ulcakar explained that the Kingdom is leveraging its global footprint to balance present needs with future aspirations.
Investments in fossil fuel infrastructure, for example, are complemented by efforts to localize electric vehicle technologies and pioneer nuclear fusion projects. These investments often blend incremental improvements with disruptive technologies, creating a dual pathway for transformation.
CVC arms are distinctive in their dual mandate to achieve financial returns while pursuing strategic objectives for their parent companies.
This dual focus shapes their investment and risk management philosophies, setting them apart from independent venture capital firms.
Singh said: “Unlike traditional VCs, which prioritize financial exits and short-term gains, Saudi CVCs often adopt a longer-term, patient capital strategy.”
This approach allows them to align their investments with their parent companies’ strategic goals, even if such opportunities involve higher initial risks or extended timelines.
For instance, Aramco Ventures invests in clean energy and carbon capture technologies, aligning with the parent company’s energy transition and sustainability goals.
These investments represent long-term bets with strategic implications, demonstrating a willingness to prioritize alignment with corporate objectives over immediate financial returns.
Similarly, tali ventures focuses on digital innovation while reinforcing stc’s leadership in telecommunications and digital services.
By investing in startups, tali ventures not only targets financial returns but also strengthens stc’s digital payments ecosystem, creating synergies that benefit the parent company’s broader ambitions.
Singh highlighted this dual approach as a key differentiator, noting that these capabilities enable Saudi Arabia CVCs to pursue opportunities that might otherwise be deemed too risky by independent VCs.
Ulcakar emphasized the nuanced nature of this approach. “The ability to generate both financial and strategic returns represents a unique advantage and a complex challenge in this growth market. There is no one-size-fits-all answer,” he said.
Ulcakar also noted that Saudi Arabia is one of the few growth markets that has successfully financed its own development, with investor preferences gradually evolving.
“We observe a gradual shift toward prioritizing financial returns over strategic ones, aligning with the Kingdom’s evolving investment goals,” he added.
Oil Updates — crude set for biggest weekly drop since Oct on tariff uncertainty, supply gains
US tariff suspension for Mexico, Canada provides temporary reprieve
But trade war risks and OPEC+ supply increase weigh on market
Updated 07 March 2025
Reuters
NEW DELHI: Oil prices were little changed on Friday but were set for their biggest weekly decline since October as the uncertainty around US tariff policy is creating concerns about demand growth at the same time major producers are set to increase output.
Brent futures rose 17 cents, or 0.24 percent, to $69.63 a barrel by 6:15 a.m. Saudi time. US West Texas Intermediate futures rose 12 cents, or 0.18 percent, to $66.48 a barrel.
However, for the week Brent is down 4.9 percent, set for its biggest weekly decline since the week of Oct. 14. WTI is set to drop 4.8 percent, also its biggest weekly fall since that week.
Markets, including oil, have been whipsawed by fluctuating trade policy in the US, the world’s biggest oil consumer.
“It looks like the financial markets are in full panic mode, no longer easily pacified by Trump’s one-month postponements and exemptions on import tariffs,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.
“That leaves crude stuck around four-month lows, albeit vulnerable to further slides,” she added.
On Thursday, US President Donald Trump suspended the 25 percent tariffs he had imposed on most goods from Canada and Mexico until April 2, although steel and aluminum tariffs would still go into effect on March 12 as scheduled.
The amended order does not fully cover Canadian energy products, which are under a separate 10 percent levy.
The tariffs themselves are considered a drag on economic growth and therefore oil demand growth. But the uncertainty over the policy is also slowing business decisions, which is also impacting the economy.
“The risks to oil prices remain tilted to the downside with new supply from OPEC+ and non-OPEC producers expected to push the market well into an oversupply,” Fitch’s research unit, BMI, said in a note.
Brent prices on Wednesday fell to their lowest since December 2021 after US crude inventories rose and in the wake of the decision by the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to increase their output quotas.
The group said on Monday that it had decided to proceed with a planned April output increase, adding 138,000 barrels per day to the market.
Some of the downward momentum in prices has eased as the US is looking at steps to halt exports from key OPEC producer Iran.
“We are going to shut down Iran’s oil sector and drone manufacturing capabilities,” US Treasury Secretary Scott Bessent said in his first major speech to Wall Street executives.
Reuters reported on Thursday that Trump is considering a plan to inspect Iranian oil tankers at sea using an accord aimed at weapons of mass destruction, according to sources, part of the US president’s “maximum pressure” to drive Iranian oil exports down to zero.
In speech to Congress, Trump reassures investors that new visa scheme would not tax foreign assets
Taxing foreign assets was a concern despite big enthusiasm for new scheme, pundits had told Arab News
“This move certainly removes a significant barrier for Saudi and Gulf investors who were previously wary of US residency due to FATCA’s global tax implications,” Al-Ansari tells Arab News.
Updated 07 March 2025
Miguel Hadchity
RIYADH: President Donald Trump assured that investors entering the US under the newly introduced $5 million “Gold Card” visa program will not be subject to taxes on their foreign assets.
This assurance comes as Trump and his administration seek to attract high-net-worth individuals from around the world by offering a direct pathway to US residency and citizenship.
Addressing Congress on March 4, Trump outlined the program’s structure. “They (investors) won’t have to pay tax from where they came, the money that they’ve made, you wouldn’t want to do that. But they have to pay tax (in the US) and create jobs,” he said.
His remarks came as a reassurance to prospective investors who may have been concerned about the Foreign Account Tax Compliance Act, which has deterred some wealthy individuals from seeking US residency due to global taxation concerns.
Now that the president has cleared that doubt and reassured investors that their assets abroad won’t be taxed, Salman Al-Ansari, a geopolitical analyst and former US investor, emphasized that the Gold Card exemption is a game-changer.
“This move certainly removes a significant barrier for Saudi and Gulf investors who were previously wary of US residency due to FATCA’s global tax implications,” he told Arab News in an interview.
Al-Ansari added that this exemption “is a clear indication that his administration is responsive to global investor concerns.”
Salman Al-Ansari. Supplied
However, he noted that despite this strong incentive, long-term concerns about possible changes in US tax policy are likely to remain. “Investors in the region understand that tax policies can change with different administrations, so some may still approach with caution, opting for structures that offer flexibility in case future regulations become less favorable,” Al-Ansari added.
The new initiative will replace the existing EB-5 visa program, which was originally designed to grant permanent residency to investors who contributed at least $1 million to a US business that created or sustained at least 10 jobs for American workers.
Trump emphasized to Congress that the initiative would address talent retention by allowing investors to fund and support highly skilled graduates from top US universities, preventing them from being forced to leave the country.
The US faces stiff competition from other nations with established golden visa programs, particularly Gulf nations like Saudi Arabia, which have successfully attracted high-net-worth individuals through similar initiatives.
On whether Saudi investors will become more selective about US investments due to domestic taxation under the Gold Card visa, Al-Ansari noted: “The exemption of foreign assets is a strong incentive, but the fact that income generated within the US is still taxable means that Saudi investors will likely be more strategic in their choices.”
He added: “They may favor sectors that offer higher tax efficiencies, such as real estate, energy, or industries benefiting from tax incentives.”
However, Al-Ansari said that as long as the US provides a stable business environment and competitive opportunities, taxation within the country is a reasonable tradeoff.
“The key factor for Saudi investors will be the ease of doing business and whether the Gold Card visa comes with additional facilitations that make investments more attractive beyond the tax benefits,” he concluded.
By structuring the Gold Card visa to exempt foreign assets from US taxation, Trump’s administration is positioning the program as an attractive alternative to other golden visa schemes worldwide.
Investors from the Gulf, who have already benefited from similar residency programs in their home countries, may now see the US as an increasingly viable destination for expanding their businesses and securing long-term financial stability.
As highlighted in a previous report by Arab News, the initiative is being closely watched due to its potential to attract substantial foreign capital, especially from countries like Saudi Arabia, the UAE, and Qatar.
Despite global competition from established golden visa programs, the US remains an appealing destination for investors, due to its business environment, talent pool, and real estate opportunities.
With the added benefit of no taxation on foreign assets, the Gold Card program is seen as a highly attractive option for investors looking to expand their businesses and secure long-term financial stability in the US.
Direct flights from Stuttgart to Jeddah to begin later this year
Updated 06 March 2025
REEM WALID
RIYADH: Direct flights from Stuttgart, Germany, to Jeddah, will begin in the second half of 2025 and operate twice a week, the Saudi Air Connectivity Program has announced.
Inaugurated in collaboration with the Saudi Tourism Authority and Jeddah Airports Co., the route is set to utilize an A321neo aircraft with a capacity of 224 seats, according to the Kingdom’s press agency.
This move aims to increase the capacity of travelers and visitors from Europe to Saudi Arabia, aligning with the government’s aviation goal of transporting 330 million passengers across over 250 destinations, as well as 4.5 million tonnes of air cargo, by 2030.
Majid Khan, CEO of ACP, said the collaboration with German low-cost carrier Eurowings — a wholly owned subsidiary of the Lufthansa Group — is advancing well in enhancing air connections between Saudi Arabia and Europe.
He further expressed confidence in forming a long-term partnership with the airline to broaden the network of flight routes in the future, offering travelers new opportunities to experience the Kingdom’s historical and cultural sites.
This falls in line with ACP’s goal to boost tourism in Saudi Arabia by enhancing air connectivity between the Kingdom and international destinations, broadening existing flight routes, and establishing connections to new global markets.
As the driving force behind the National Tourism Strategy and Saudi aviation strategy, ACP promotes collaboration and partnerships between crucial public and private sector players in the tourism and aviation sectors. Its objective is to enhance the Kingdom’s status as a premier global hub for air travel connectivity.
Jordan’s move to ease residency rules will attract investment, say experts
Updated 07 March 2025
Nadin Hassan
RIYADH: Jordan’s recent move to ease residency requirements for foreign investors is set to drive capital inflows, particularly into real estate, according to industry experts.
A recent decision by the country’s Cabinet will reduce financial barriers for foreign residents and property owners seeking to renew their residency, the Jordan News Agency, also known as Petra, has reported.
Among the key amendments, the government scrapped a 10,000 Jordanian dinar ($14,100) deposit requirement for foreign property owners who have lived in Jordan for more than two years.
Meanwhile, non-property owners applying for a five-year residency will see their required deposit halved to 10,000 dinar.
The changes mark a significant shift in Jordan’s investment strategy, aligning with regional trends that leverage residency incentives to attract long-term foreign capital. The policy adjustments are expected to stimulate real estate activity, benefiting adjacent industries such as construction, legal services, and financial consultancy.
According to Petra, Ali Murad, chairman of the Jordanian-European Business Association stated that the decision is a crucial economic measure that will inject liquidity into the local market and strengthen the real estate sector.
“Shifting residency requirements from bank deposits to property ownership will incentivize foreign investors to purchase real estate, boosting demand for construction and commercial projects,” Petra reported him saying.
Other experts believe that Jordan’s revised policy could make it a more competitive destination for international buyers looking for investment opportunities beyond traditional financial markets.
Fadi Al-Majali, chairman of the Jordanian Expat Business Association said that removing the deposit hold requirement for property owners enhances the attractiveness of real estate investment in the country, Petra reported.
The statement went on to say that Al-Majali believes “these amendments will encourage more foreign investors to acquire properties, thereby increasing market demand and supporting the continued development of the real estate and construction sectors.”
Iraqi investors, who have historically played a key role in Jordan’s property market, are also expected to benefit.
Majid Al-Saadi, chairman of the Iraqi Business Council in Amman, welcomed the policy shift according to the Jordan News Agency, emphasizing that it allows investors to allocate more capital into Jordan’s retail, healthcare, and education sectors.
While the new measures are expected to drive investment in the near term, experts argue that Jordan could further enhance its appeal by adopting long-term residency programs similar to the UAE’s “golden visa” initiative.
Gulf states have successfully used such programs to attract high-net-worth individuals, professionals, and entrepreneurs, creating a stable foreign investor base.
