Category: Saudi Arabia

Saudi Arabia’s crude oil exports fell by 278,000 barrels per day in August, despite historically high wellhead production, while volumes of shipped refined oil products rose to a record high, official data showed on Sunday. The OPEC heavyweight shipped 6.998 million bpd in August, down from 7.276 million bpd in July, figures published by the Joint Organisations Data Initiative (JODI) showed. The world’s biggest crude exporter trimmed its production by around 100,000 bpd in August pumping 10.265 million bpd, but still maintained high output levels in line with a strategy of defending market share. Monthly export figures are provided by Riyadh and other members of the Organization of the Petroleum Exporting Countries (OPEC) to JODI, which published them on its website. Saudi Arabia burns higher crude volumes to generate power for air conditioning during the hot summer months. It has also been feeding more crude to domestic refineries as […]

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National Industrialization Co. dropped the most in almost two months after the Saudi Arabian holding company known as Tasnee posted a third-straight quarterly loss. The stock retreated 8.2 percent to 13.18 riyals at the close as about 9.1 million shares traded, more than five times the three-month daily average. Tasnee on Monday posted a 296.3 million-riyal ($79 million) loss for the third quarter, compared with a profit of 243.7 million riyals a year earlier. The average of four analyst estimates compiled by Bloomberg was for a 62.5 million-riyal profit. “The reported loss is attributable to lower average sales prices and lower sales volumes," Tasnee said in a statement to the Saudi bourse. Brent crude, a benchmark for half the world’s oil, has tumbled more than 40 percent in the last 12 months, placing pressure on the economy in Saudi Arabia, OPEC’s biggest oil producer. Tasnee joins a list of […]

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The latest IMF Article IV consultation report on Saudi Arabia was published on 9 September 2015. http://www.imf.org/external/country/sau/ Extract: Government spending has increased substantially in recent years. Consequently, the breakeven oil price rose to $106 a barrel in 2014 from $69 a barrel in 2010. As a result, with the large decline in oil prices, the fiscal deficit has increased sharply and is likely to remain high over the medium-term. These deficits will rapidly erode the fiscal buffers (in the form of government deposits and low public debt) that have been built over the past decade. http://www.imf.org/external/pubs/ft/scr/2015/cr15251.pdf Let’s put this into some graphs. We start with the fiscal deficit first, then look at the external balance. Expenditure Fig1: Expenditure, Budgetary Central Government Operations During the period of high oil prices until 2014, expenditure grew by 9-15% pa. In early 2015, King Salman disbursed a bonus of 50 bn Riyal to […]

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Saudi Arabia has traditionally had a lock on Asian oil markets. In Japan, Korea and Taiwan, the kingdom’s barrels make up about one third of crude oil imports . In China, that position is now under threat from Russia. Russia has shrugged off Western sanctions over Ukraine and enjoyed a plunge in production costs thanks to the ruble’s slide against the greenback. It briefly surpassed Saudi as China’s leading crude supplier in May and will strengthen its position over the next decade as it builds a second pipeline to the country, according to BMI Research : Saudi Arabia isn’t about to take the challenge lying down. State-owned Saudi Aramco is looking at multi-billion-dollar deals to buy marketing, refining and retail assets from China’s CNPC, Bloomberg News reported earlier this month. It’s already receiving record quantities of crude at its leased storage tanks on Japan’s Okinawa archipelago. Sabic, the world’s […]

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Saudi Arabia is delaying payments to government contractors as the slump in oil prices pushes the country into a deficit for the first time since 2009, according to three people with knowledge of the matter. Companies working on infrastructure projects have been waiting six months or more for payments as the government seeks to preserve cash, the people said, asking not to be identified as the information is private. Delays have increased this year and the government has also been seeking to cut prices on contracts, the people said. Saudi Arabia is tackling the slump in crude, which accounts for about 80 percent of revenue, by tapping foreign reserves, cutting spending and selling bonds. Net foreign assets fell by about $82 billion at the end of August after reaching an all-time high last year. The country has raised 55 billion riyals ($15 billion) from debt issuance this year. The […]

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Saudi Kayan Petrochemical Co. declined the most since December after announcing a loss in the third quarter as production, sales and prices all fell. The chemicals company part-owned by Saudi Basic Industries Corp. retreated 9.5 percent to 9.20 riyals at the close in Riyadh, leading a slide in the Tadawul All Share Index. About 21 million shares were traded, more than two-and-a-half times the three-month daily average, according to data compiled by Bloomberg. Kayan reported a 13.81 million-riyal ($3.6 million) loss for the third quarter, compared with a 66.91 million-riyal profit a year earlier. The mean of three analyst estimates compiled by Bloomberg was for a profit of 45 million riyals. The loss was due to a decrease in production, sales and average selling prices, Kayan said in a statement to the Saudi bourse on Thursday. Brent crude, a benchmark for half the world’s oil, has tumbled more than […]

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From global majors such as Shell and Total to more modest Polish energy firms, oil refiners in Europe are cutting their longstanding use of Russian crude in favor of Saudi grades as the world’s top exporters fight for market share. Russia has for years been muscling in on Asian markets where Saudi Arabia was once the unchallenged dominant supplier. But now Riyadh is retaliating in Moscow’s backyard of Europe with aggressive price discounting. This has nothing to do with Western sanctions imposed on Russia over Ukraine, which apply to energy industry equipment but not to oil or gas itself. Instead it is a commercial battle for customers as both exporters ramp up their output despite weak world oil prices. This is likely to complicate further a dialogue between Moscow and the OPEC exporters’ group on tackling the global oil glut, with joint production cuts already looking elusive. Trading sources […]

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Harvard University history professor Niall Ferguson said “a lot is going wrong” in Saudi Arabia and its fiscal position is a “total mess.” “The big question, for example, that hovers over the world oil market is the stability of the Saudi regime ,” Ferguson said Tuesday in an interview on Bloomberg Television. “And if you do follow that, which I do, you start to get nervous because a lot is going wrong in that country.” Niall Ferguson Saudi Arabia is ordering a series of cost-cutting measures as the slide in oil prices weighs on the kingdom’s budget, two people with knowledge of the matter said last week. With oil accounting for about 90 percent of revenue in the Arab world’s largest economy, a drop of more than 40 percent in crude prices in the past 12 months has combined with wars in Yemen and Syria to pressure Saudi Arabia’s […]

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Saudi King Salman, 79, in Riyadh on Tuesday. (Kenzo Tribouillard/Agence France-Presse via Getty Images) An internal political storm is roiling Saudi Arabia, as the crown prince and his deputy jockey for power under an aging King Salman — while some other members of the royal family agitate on behalf of a third senior prince who they claim would have wider family support. For the secretive oil kingdom, whose internal debates are usually opaque to outsiders, the recent strife has been unusually open. The tension between Crown Prince Mohammed bin Nayef and his deputy, Mohammed bin Salman (the king’s son), is gossiped about across the Arab world. Dissenters from the royal family have begun circulating open letters that have drawn tens of thousands of readers online. Succession worries were in the background in early September when Salman, 79, visited Washington , accompanied by son Mohammed bin Salman , 30. U.S. […]

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