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Oil Prices Drop as Prospect of Additional Supply Offset Mideast Fears

Oil Prices Drop as Prospect of Additional Supply Offset Mideast Fears
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Oil Prices Drop as Prospect of Additional Supply Offset Mideast Fears

Oil Prices Drop as Prospect of Additional Supply Offset Mideast Fears

Oil prices slid by more than 2% on Tuesday as a stronger supply outlook and tepid global demand growth outweighed fears over escalating conflict in the Middle East and its impact on crude exports from the region.

Brent crude futures were down $1.49, or 2.08%, at $70.21 a barrel by 0840 GMT. US West Texas Intermediate crude futures lost $1.55, or 2.27%, to $66.62, Reuters reported.

A panel of top ministers from the OPEC+ producer group meets on Oct. 2 to review the market, with no policy changes expected. OPEC+, comprising the Organizations of the Petroleum Exporting Countries (OPEC) plus allies including Russia, is scheduled to raise output by 180,000 barrels per day (bpd) in December.

The possibility of Libyan oil output recovering also weighed on the market. Libya's eastern-based parliament agreed on Monday to approve the nomination of a new central bank governor, which could help to end a crisis that drastically reduced the country's oil output.

"The idea of returning Libyan crude and the forthcoming trimming of voluntary cuts by OPEC+ in December serves as interference for those contemplating reduced oil stocks in the US and improving cracks," said John Evans, analyst at oil broker PVM.

In China, manufacturing activity shrank sharply in September, a private sector survey showed on Monday.

Analysts say a slew of stimulus measures over the past week are likely to be enough to bring China's 2024 growth back to about 5% after several months of below-forecast data cast doubts over that target, though the longer-term outlook remains little changed.

Israel began ground incursions in Lebanon on Tuesday, with its military saying troops had begun raids against Hezbollah targets in the border area.

"Worries that Iran will be drawn into action against Israel have helped support prices, but current rhetoric from Iran suggests they are not keen on an escalation beyond their proxies in Yemen, Lebanon and Palestine," said Panmure Gordon analyst Ashley Kelty.

In the United States, crude oil and fuel stockpiles were expected to have fallen by about 2.1 million barrels in the week to Sept. 27, a preliminary Reuters poll showed on Monday.
The poll was conducted ahead of a report from the American Petroleum Institute industry group due at 2030 GMT on Tuesday.

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Saudi Arabia Aims for Global Carbon Market Share Equal to Regional Emissions

Riham ElGizy, CEO of Voluntary Carbon Market.
Riham ElGizy, CEO of Voluntary Carbon Market.
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Saudi Arabia Aims for Global Carbon Market Share Equal to Regional Emissions

Riham ElGizy, CEO of Voluntary Carbon Market.
Riham ElGizy, CEO of Voluntary Carbon Market.

Riham ElGizy, CEO of Voluntary Carbon Market (VCM), a Saudi company which is the first of its kind in the MENA region, said the company currently holds about 1.3% of the global carbon trading market.

In exclusive remarks to Asharq Al-Awsat during the Portfolio Egypt 2024 conference in Cairo on Monday, ElGizy predicted that by 2030, the company’s carbon trading volume could reach 100 million tons, making it one of the largest carbon markets worldwide.

“We aim to achieve a market share that matches the region’s carbon emissions,” she said.

Since 2013, global carbon emissions have exceeded 35 billion tons each year, with growth slowing in recent years. In 2021, Arab countries emitted over 2 billion tons of carbon dioxide, representing 5.45% of global emissions, according to European Union statistics.

The VCM enables companies, governments, and individuals to buy and sell credits that represent reductions in carbon dioxide emissions.

These credits can offset emissions that cannot be reduced through other methods, such as improving energy efficiency or using renewable energy sources. This market is increasingly viewed as an effective way to address climate change.

ElGizy announced that the company has increased the region’s carbon trading share from zero to 1.3% of the global market. This growth is attributed to two recent auctions held by the company.

Last year, around 200 million tons of carbon emissions were removed globally, equivalent to emissions from a country like Spain. ElGizy projected that the market’s trade value could reach $100 billion by 2030 and $250 billion by 2050.

According to the World Bank, carbon pricing revenues reached a record $104 billion in 2023.

In October 2022, the VCM held its first auction, selling about 1.4 million metric tons of carbon credits. The second auction in June 2023 sold around 2.2 million tons.

ElGizy announced plans for a third auction in November, expected to feature 2.5 to 3 million metric tons of carbon credits, coinciding with the launch of a new carbon trading platform at COP29 in Baku, Azerbaijan.

She emphasized that several Saudi and regional companies would participate in this auction, noting its significant size and impact. For perspective, she explained that the first auction's 1.4 million tons represented emissions from 250,000 family cars each year.

Looking ahead, ElGizy expects the company’s carbon trading volume to reach 100 million tons by 2030, positioning it among the largest carbon markets globally. She also highlighted the need for trade to shift from the Global North to the Global South and expressed a goal for Saudi Arabia to lead in regional carbon markets.