Saudi Arabia, Oman to strengthen financial ties with new agreement

Saudi Arabia, Oman to strengthen financial ties with new agreement
Oman’s non-oil exports to Saudi Arabia have more than doubled since 2020, surpassing 1 billion Omani rials ($2.6 billion) by the end of 2023. Shutterstock
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Updated 13 January 2025
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Saudi Arabia, Oman to strengthen financial ties with new agreement

Saudi Arabia, Oman to strengthen financial ties with new agreement
  • Saudi Minister of Finance Mohammed Al-Jadaan and his Omani counterpart, Sultan Al-Habsi, signed deal to enhance cooperation in financial affairs
  • Areement underscores commitment of Riyadh and Muscat to collaborate on advancing shared financial sector goals

JEDDAH: Saudi Arabia and Oman are set to strengthen financial ties with a new agreement aimed at enhancing cooperation and facilitating the exchange of information and expertise. 

The deal, signed during the board of governors’ retreat of the Islamic Development Bank Group in the city of Madinah, aims to improve financial policies, governance in the public sector, and joint coordination on regional and international issues. 

Saudi Minister of Finance Mohammed Al-Jadaan and his Omani counterpart, Sultan Al-Habsi, signed a memorandum of understanding to enhance cooperation in financial affairs between the two countries, according to a statement from the Saudi Finance Ministry. 

This comes as Oman’s non-oil exports to Saudi Arabia have more than doubled since 2020, surpassing 1 billion Omani rials ($2.6 billion) by the end of 2023, according to Oman’s National Center for Statistics and Information. Non-oil imports from Saudi Arabia also grew, reaching 1.84 billion rials in the same period. 

Al-Jadaan said “this MoU represents a significant step in the ongoing efforts to deepen financial collaboration between the two brotherly nations,” 

He added: “it will pave the way for the exchange of financial expertise, the promotion of knowledge-sharing, and the fostering of closer economic ties.” 

Al-Habsi underscored the importance of the MoU as “a cornerstone for enhancing bilateral relations.” 

He said that “it will facilitate the exchange of financial information and expertise while strengthening coordination between Saudi Arabia and Oman on regional and international financial issues of mutual interest.” 

The agreement underscores the commitment of Riyadh and Muscat to collaborate on advancing shared financial sector goals, further strengthening the ties between the two nations, the release added. 

In October 2024, the two countries signed a deal to enhance economic and planning cooperation, focusing on medium and long-term strategies, monetary policies, and economic studies. 

The five-year agreement was finalized by Saudi Minister of Economy and Planning Faisal Al-Ibrahim and Omani Minister of Economy Said bin Mohammed Al-Saqri. 

Earlier in April 2024, another MoU was signed during a meeting between Al-Habsi and Sultan bin Abdulrahman Al-Marshad, the CEO of the Saudi Fund for Development. 

The agreement centered on joint development projects, including initiatives in infrastructure, higher education, vocational training, and key industries, including mining, transportation, communications, and energy. 


Saudi Arabia explores partnership opportunities with India’s TATA Group in multiple sectors

Saudi Arabia explores partnership opportunities with India’s TATA Group in multiple sectors
Updated 9 sec ago
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Saudi Arabia explores partnership opportunities with India’s TATA Group in multiple sectors

Saudi Arabia explores partnership opportunities with India’s TATA Group in multiple sectors

RIYADH: Saudi Arabia is exploring collaboration opportunities with India’s largest business conglomerate TATA Group in multiple sectors, including military, aviation, and electronics. 

According to a Saudi Press Agency report, the Kingdom’s Minister of Industry and Mineral Resources, Bandar Alkhorayef, met with officials of the group’s affiliates, TATA Defense, TATA Electronics Limited, and TATA Steel, where he discussed cooperation avenues. 

During the meeting, the Saudi minister outlined the economic diversification goals of the Vision 2030 program and highlighted investment opportunities in the country’s industrial sector.

The Indian conglomerate’s affiliate TATA Motors is already operating in Saudi Arabia, with the automobile manufacturer celebrating its 30th anniversary in the Kingdom in November. 

India and Saudi Arabia share a strong trade and bilateral relationship, and according to the latest report by the General Authority for Statistics, India was the second favorite destination for the Kingdom’s non-oil exports in November, with outbound shipments to the Asian nation amounting to SR2.52 billion ($670 million) — a rise of 19.43 percent compared to the previous month. 

During the meeting with Alkhorayef, Sukaran Singh, CEO of Tata Defense, showcased the company’s products, including military aircraft and vehicles. 

He also highlighted the firm’s expertise in designing, building, and operating military factories. 

TV Narendran, CEO of Tata Steel, showcased the company’s expertise in exporting materials in the construction, automotive, and supply chain sectors across various international markets. 

SPA added that Tata Electronics and Saudi Arabia’s National Industrial Development Center also discussed potential collaboration opportunities to foster the development of the semiconductor industry within the Kingdom. 

Alkhorayef’s visit to India had already seen a new deal prior to the latest meeting, with the countries agreeing to strengthen cooperation in the critical minerals sector on Feb. 4. 

The Saudi official and Indian Minister of Coal and Mines G. Kishan Reddy discussed building a resilient mineral supply chain to reduce import dependency and promoting joint ventures in the critical minerals sector to support the energy transition journey. 

Alkhorayef began his visit to India on Feb. 3, leading a high-level delegation from the industry ministry and the Local Content and Government Procurement Authority. The meeting aimed to enhance industrial collaboration with India and attract high-value investments.

Earlier this month, Saudi Arabia’s Deputy Minister of Finance for International Relations Khalid Bawazier met with Suhel Ajaz Khan, ambassador of India to the Kingdom, where they discussed bilateral relations and other issues of common interest. 


Saudi Aramco raises March oil prices for Asia

Saudi Aramco raises March oil prices for Asia
Updated 1 min 52 sec ago
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Saudi Aramco raises March oil prices for Asia

Saudi Aramco raises March oil prices for Asia

RIYADH: Saudi Aramco has significantly raised its crude oil prices for Asian customers in March, reaching their highest levels in over a year.

This price hike comes as a result of rising benchmark prices, driven by increased demand from China and India, as well as supply disruptions due to US sanctions on Russian oil.

According to an official statement, the official selling price for the benchmark Arab Light crude has been increased by $2.40 per barrel. For March, the price for Asian buyers has been set at $3.90 per barrel above the regional benchmark.

Other grades also saw price hikes, with the OSP for Arab Extra Light and Super Light increasing by $2.40 and $2.10 per barrel, respectively. The OSP for Arab Medium crude was raised by $2.50 per barrel, while the price for Arab Heavy crude went up by $2.60 per barrel.

For North America, Aramco has set the March OSP for Arab Light crude at $3.80 per barrel above the Argus Sour Crude Index.

Earlier this week, OPEC+ members reaffirmed their commitment to maintaining stability in the global oil market through production cuts. The 58th Joint Ministerial Monitoring Committee session, conducted via videoconference, reviewed crude oil production data for November and December 2024 and highlighted strong compliance by both OPEC and non-OPEC countries involved in the Declaration of Cooperation.

The committee reiterated its commitment to the DoC, which is set to extend through the end of 2026. It also commended Kazakhstan and Iraq for their improved compliance, including voluntary production adjustments.

OPEC also welcomed renewed pledges from overproducing countries to fully comply with production targets.

Saudi Aramco produces five grades of crude oil: Super Light, Arab Light, Arab Extra Light, Arab Medium, and Arab Heavy. These grades are differentiated by their density. Super Light has a density greater than 40, Arab Extra Light ranges from 36 to 40, Arab Light falls between 32 and 36, Arab Medium is between 29 and 32, and Arab Heavy has a density of less than 29.

Saudi Aramco typically releases its crude OSPs around the 5th of each month, setting the price trend for other major producers, including Iran, Kuwait, and Iraq. These price benchmarks affect approximately 9 million barrels per day of crude oil shipments to Asia.


Saudi bank lending hits record $788bn as corporate loans surge

Saudi bank lending hits record $788bn as corporate loans surge
Updated 40 min 12 sec ago
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Saudi bank lending hits record $788bn as corporate loans surge

Saudi bank lending hits record $788bn as corporate loans surge

RIYADH: Saudi Arabia’s bank loans surged to SR2.96 trillion ($788 billion) in December, marking a 14.39 percent year-on-year increase, according to official data.

Figures from the Saudi Central Bank, also known as SAMA, revealed that corporate loans were the main driver, rising 18.6 percent to SR1.6 trillion.

This marks the highest annual growth for corporate loans among the lending activity data available in SAMA’s reporting since 2021.

Real estate activities dominated corporate lending, accounting for 21 percent of the total and rising by 33 percent to SR333.34 billion. This marks an increase from an 18.7 percent share in the same period last year.

Wholesale and retail trade accounted for 12.51 percent of corporate lending, reaching SR198.87 billion with an annual growth rate of 10.94 percent.

The manufacturing sector, a key component of Vision 2030’s economic diversification goals, represented an 11.51 percent share at SR182.95 billion.

Electricity, gas, and water supplies contributed 11.51 percent to the total corporate share, growing significantly by nearly 29.12 percent to reach SR182.94 billion.

Professional, scientific, and technical activities, though holding a smaller 0.51 percent share of corporate credit, witnessed the most significant surge, with a 40.76 percent annual growth rate to SR8.12 billion.

Financial and insurance activities loans followed real estate with the third-highest growth rate, increasing by 31 percent to SR136.6 billion.

On the personal loans side, which includes various financing options for individuals, the sector grew 9.87 percent annually to SR1.37 trillion. This expansion underscores the continued confidence in consumer lending and the Kingdom’s economic diversification strategies.

Saudi banks are significantly increasing their lending to the real estate sector, driven by strong demand, regulatory backing, and growing opportunities for public-private partnerships and foreign investment.

This expansion is occurring alongside a shift in monetary policy as interest rates begin to decline in line with the US Federal Reserve’s approach, creating a more favorable lending environment.

Industry experts at the Real Estate Future Forum highlighted the importance of real estate financing for financial institutions, with Ibrahim Al-Alwan, managing director and partner at Watheeq Financial Services, emphasizing that banks now hold substantial real estate portfolios, requiring effective regulation, risk management, and investment tools to optimize growth.

Structured financing solutions, such as securitization and real estate investment funds, also play a key role in attracting institutional and foreign investors.

Joe Jabbour, managing director and partner at Boston Consulting Group, highlighted that many investment structures currently in development are designed with foreign investors in mind, reflecting the sector’s international appeal.

The recent decision by Saudi Arabia’s Capital Market Authority to allow foreign investment in listed firms that own real estate in Makkah and Madinah further underscores efforts to expand capital inflows into the sector.

At the same time, major projects are reshaping the Kingdom’s real estate market, with the Public Investment Fund spearheading nine developments in the Asir region, four of which are already underway.

The region is also seeing rapid growth in hospitality infrastructure, with thousands of approved hotel rooms under development. As Saudi Arabia advances its Vision 2030 agenda, innovations such as AI-driven property solutions and 3D-printed construction are expected to further transform the sector.

The loan-to-deposit ratio in Saudi banks increased to 83.24 percent in December compared to 80.7 percent in the same period last year, according to SAMA data.

The LDR is a key indicator used by banks to measure the proportion of loans granted compared to the deposits they hold. In this case, even though the demand for loans has increased at a faster pace than deposit growth, the ratio has stayed below the regulatory limit of 90 percent.


Qatar’s inflation slows to 0.24%

Qatar’s inflation slows to 0.24%
Updated 06 February 2025
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Qatar’s inflation slows to 0.24%

Qatar’s inflation slows to 0.24%

RIYADH: Qatar’s annual inflation rate eased to 0.24 percent in December, marking a slowdown from the 0.95 percent recorded in the previous month, according to the Consumer Price Index data.

The latest figures released by the National Planning Council revealed that the December figure represents the second-lowest inflation rate of the year, following the 0.22 percent recorded in July, while January posted the highest rate at 2.99 percent.

Qatar’s inflation rate in December remained lower than that of its regional peers. Saudi Arabia recorded 1.9 percent, the lowest among G20 nations but higher than Qatar, while Oman’s 0.4 percent rate in September was still above Qatar’s latest figure.

On a month-on-month basis, the general CPI rose by 0.87 percent in December, reaching 110.24 points compared to 109.29 in November. The price rise was driven by increases in several sectors, though declines in key categories helped keep overall inflation subdued.

Compared to November, five major categories saw price increases in December. The recreation and culture sector saw the highest rise at 8.84 percent, followed by restaurants and hotels at 1.50 percent.

Clothing and footwear rose by 0.66 percent, education by 0.55 percent, and furniture and household equipment by 0.16 percent. 

Meanwhile, declines were recorded in four key sectors. Food and beverages saw a decrease of 2.11 percent, while housing, water, electricity, and other fuels fell 0.83 percent. 

Transport prices fell by 0.65 percent, and miscellaneous goods and services saw a slight decline of 0.23 percent. Three sectors — tobacco, health, and communication — remained unchanged compared to the previous month. 

Over a 12-month period, prices increased across multiple sectors. The miscellaneous goods and services category recorded the largest increase at 6.56 percent, followed by communication at 4.44 percent and recreation and culture at 2.54 percent.

Moreover, restaurants and hotels saw an increase of 2.32 percent, education at 1.69 percent, transport at 1.38 percent, and clothing and footwear at 0.55 percent. 

At the same time, four major sectors experienced annual price declines. Housing, water, electricity, and other fuels dropped by 4.23 percent, while food and beverages decreased by 1.05 percent. 

Furniture and household equipment saw a 1.51 percent decline, and health services recorded a 1.01 percent decrease. The tobacco sector saw no price changes on a year-on-year basis. 

Qatar’s average inflation rate for the full year 2024 stood at 1.13 percent, marking a continued downward trend from 2.85 percent in 2023 and 5 percent in 2022.

The CPI, excluding housing, water, electricity, and other fuels, reached 115.32 points in December, representing a 1.24 percent monthly increase from November and a 1.23 percent year-on-year rise.


Oil Updates — crude little changed as Trump policies continue to drag on prices

Oil Updates — crude little changed as Trump policies continue to drag on prices
Updated 06 February 2025
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Oil Updates — crude little changed as Trump policies continue to drag on prices

Oil Updates — crude little changed as Trump policies continue to drag on prices

LONDON: Oil prices edged up in Asian trading on Thursday after Saudi Arabia’s state oil company sharply raised March oil prices, but the increase was barely a blip on the biggest slide in benchmark Brent prices in nearly three months the previous day.

Brent crude futures rose 15 cents to $74.76 a barrel by 10:40 a.m. Saudi time. US West Texas Intermediate crude was up 20 cents to $71.23 a barrel.

Oil prices had fallen more than 2 percent on Wednesday as a large build in US crude and gasoline stockpiles signalled weaker demand, and as investors weighed the implications of a new round of US-China trade tariffs, including duties on energy products.

Prices have plunged about 10 percent from the 2025 highs on Jan. 15, five days before Donald Trump took over as US President. Analysts expect markets to be volatile in the coming weeks.

“We can expect significant volatility in pricing over the coming weeks and months as markets scramble to weigh the impact of Trump’s new policy positions, not least regarding tariff measures,” analysts from BMI said in a note on Thursday.

A sharp increase in prices for Asian buyers by Saudi Aramco, the world’s leading oil exporter, managed to stem Wednesday’s sell-off.

“After the overnight sell-off and the Saudi news, there is likely to be some buying from traders covering shorts ahead of a strong band of support in the $70/68 region,” said Tony Sycamore, market analyst with IG.

The US last month imposed aggressive new sanctions on Russia’s oil trade, targeting the “shadow vessels” understood to be utilized to evade trade blockades. Since assuming office, Trump has imposed tariffs on China, although they fell short of his campaign threats.

Beijing in response had announced tariffs on imports of US oil, liquefied natural gas and coal on Tuesday, but China’s purchases from the US are relatively modest, blunting the impact of the new measures.

“While some tariff measures could put upward pressure on oil prices, the net impact will likely be bearish, given their potentially adverse effects on the global economy and Trump’s proven willingness to offer carve-outs for energy (to limit impacts to supply),” BMI said.