Oil Prices Edge Higher as Supply Risks Mount

FILE PHOTO: A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk//File Photo
FILE PHOTO: A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk//File Photo
TT

Oil Prices Edge Higher as Supply Risks Mount

FILE PHOTO: A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk//File Photo
FILE PHOTO: A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk//File Photo

Oil prices rose in early Asian trading hours on Friday, setting up a third straight weekly jump, as concerns about supply problems from escalating geopolitical tensions and weather-related disruptions offset signs of weak demand.
Brent crude futures for August settlement, which expire on Friday, rose 15 cents, or 0.2% to $86.54 a barrel by 0020 GMT. The Brent contract for September was also up 0.2% at $85.44 a barrel.
US West Texas Intermediate crude futures for August delivery rose 24 cents, or 0.3%, to $81.98 a barrel.
Oil prices have shrugged off signs of weak demand in the United States, the biggest oil consuming nation, and rallied higher as cross-border strains between Israel and Lebanon's Hezbollah escalated. A widening war in the Middle East could draw in countries like Iran, one of the top oil exporters in the region.
The French foreign ministry expressed concern over the situation in Lebanon on Thursday, while Türkiye earlier said it stands in solidarity with Lebanon and called on regional governments' support.
Oil supplies have also come under pressure from weather-related disruptions which could worsen in the coming weeks. Heavy rains have caused Ecuador's production to decline by 100,000 barrels a day over the past week, FGE Energy said on Friday.
The US Gulf Coast, home to a bulk of the country's energy and export infrastructure, could also be hit by adverse weather in the coming days with the US National Hurricane Center tracking at least one weather system that could become a cyclone and headed towards the region.
Brent and WTI futures have gained 1.5% so far on a weekly basis.
On the demand front, rising US crude stockpiles and weak gasoline consumption has kept a ceiling above oil prices. Government data this week showed an unexpected jump in crude inventories in the country as fuel demand weakened.
However, expectations of record travel over the July 4th weekend in the US could lift gasoline demand and help draw stockpiles.



China Eyes Electric Vehicle Manufacturing Opportunities in Saudi Arabia

Chinese ambassador to Saudi Arabia (Asharq Al-Awsat)
Chinese ambassador to Saudi Arabia (Asharq Al-Awsat)
TT

China Eyes Electric Vehicle Manufacturing Opportunities in Saudi Arabia

Chinese ambassador to Saudi Arabia (Asharq Al-Awsat)
Chinese ambassador to Saudi Arabia (Asharq Al-Awsat)

China’s ambassador to Saudi Arabia, Chang Hua, expressed Beijing’s hopes to strengthen its partnership with the kingdom, especially in electric vehicle production and other industries.
Speaking to Asharq Al-Awsat, Hua condemned violations of Lebanon’s sovereignty and the targeting of civilians.
He called for immediate action to reduce tensions and prevent further escalation in the region.
“China is deeply shocked by the high civilian casualties from the conflict between Israel and Lebanon,” Hua said, urging the international community to work on calming the situation.
He emphasized that, no matter how things unfold, “China will always stand for justice and remain committed to peace and stability in the Middle East. We are ready to work with all parties to promote peace in the region.”
China’s Economic Growth
Hua highlighted China’s rise from a $30 billion economy to a $17.8 trillion one, making it the world’s second-largest economy and a leader in trade and industry.
He reiterated China’s goal to maintain high-level openness, push for high-quality economic development, and promote a multipolar world with fair global governance and inclusive economic globalization.
Saudi-China Relations
Hua described the partnership between Saudi Arabia and China as entering a new phase of deep development, congratulating Saudi Arabia on its 94th National Day.
He noted that Chinese Premier Li Qiang’s recent visit to Saudi Arabia has boosted bilateral relations and strengthened the comprehensive strategic partnership, driving it towards a more stable and prosperous future.
The ambassador stressed the need to expand trade and investment between the two countries and highlighted the upcoming “Saudi-Chinese Cultural Year 2025” as a key event.
Hua also pointed out that Saudi Crown Prince Mohammed bin Salman values the strong and historic relationship between the two nations.
The Crown Prince looks forward to further aligning Saudi Vision 2030 with China’s Belt and Road Initiative, expanding cooperation in energy, investment, and culture.
Hua noted that China is Saudi Arabia’s largest trading partner, with bilateral trade exceeding $100 billion in the past two years. He also mentioned the recent currency swap agreement between the two countries, which has helped boost trade and investment.
New Developments in Saudi-China Relations
According to Hua, the cooperation between the two nations has grown significantly, particularly in the automotive, renewable energy, and tourism sectors.
In 2023, Saudi imports of Chinese cars reached $4.12 billion, driven by companies like Changan, Geely, MG, Chery, Great Wall, Hongqi, GAC, and BYD, which have opened branches in the kingdom.
Discussions are ongoing about building local manufacturing plants. China exported 4.91 million vehicles in 2023, making it the largest car exporter globally for the first time, including 1.203 million electric vehicles, a 77.6% increase from the previous year.
Hua noted that Saudi Vision 2030 aims for electric vehicles to account for at least 30% of all cars in Riyadh by 2030, and he expressed optimism about enhancing collaboration in automotive manufacturing.
Chinese companies are also increasingly involved in Saudi Arabia’s renewable energy sector. They are working on multiple solar projects, including the Al Shuaibah photovoltaic plant, the largest of its kind in the world, with a capacity of 2.6 gigawatts.
In July 2023, the Renewable Energy Localization Company (RELC), backed by the Saudi Public Investment Fund, signed agreements with three Chinese firms—Envision Technology Group, Jinko Solar, and TCL Zhonghuan—to establish joint ventures for high-efficiency solar cell production in Saudi Arabia.
These projects will focus on producing solar components, helping Saudi Arabia achieve its goal of sourcing 75% of renewable energy project components locally by 2030.
Hua also highlighted the increasing exchange of visits between citizens of both countries. In September 2023, China and Saudi Arabia signed a memorandum of understanding to facilitate group tourism, making the kingdom an official destination for Chinese tour groups.
Several Chinese travel agencies have begun offering packages to Saudi Arabia, and direct flights between the two countries are increasing. Saudi Airlines has expanded its routes, operating numerous weekly flights between Beijing, Shanghai, Shenzhen, Riyadh, and Jeddah.