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Saudi Non-Oil Exports Rise 7.5% in August

Riyadh, Saudi Arabia (SPA)
Riyadh, Saudi Arabia (SPA)
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Saudi Non-Oil Exports Rise 7.5% in August

Riyadh, Saudi Arabia (SPA)
Riyadh, Saudi Arabia (SPA)

With Saudi Arabia experiencing significant growth in investments and improvements in logistics infrastructure, non-oil exports rose by 7.5% year-on-year in August, reaching SAR 27.5 billion ($7.3 billion) compared to SAR 25.6 billion ($6.8 billion) in the same period last year.
According to international trade data from the Kingdom’s General Authority for Statistics (GASTAT), total exports in August declined by 9.8%, amounting to SAR 92.8 billion ($24.7 billion), down from SAR 102.9 billion in August of the previous year. This decline was mainly due to a 15.5% drop in oil exports, which fell by SAR 12 billion ($3.2 billion).
Oil Exports
In August, oil exports totaled SAR 65.3 billion ($17.3 billion), a decrease from SAR 77.3 billion in the same period last year. This drop reflects continued production cuts by the OPEC+ alliance. Consequently, oil exports as a share of total exports fell from 75.1% at the end of August last year to 70.3% in August 2024.
Imports and Trade Balance
Imports decreased by 3.9% to SAR 64.8 billion ($17.2 billion), down from SAR 67.4 billion in August 2023. The Saudi trade balance surplus shrank by 21% year-on-year in August 2024 but improved compared to July, rising to SAR 27.99 billion, an increase of over SAR 10 billion from the prior month.
Key Factors
Economic analyst Rowan bin Rabeean linked the rise in Saudi non-oil exports to several factors, primarily improvements in logistics infrastructure and increased investment in non-oil sectors like manufacturing and technology.
Total foreign direct investment (FDI) inflows last year reached approximately SAR 96 billion, surpassing the National Investment Strategy target of SAR 83 billion by 16%, as reported by the Ministry of Investment and the General Authority for Statistics. FDI inflows also represented 2.4% of GDP in 2023, meeting the National Investment Strategy target.
Bin Rabeean explained that the trade surplus declined due to the drop in oil exports amid rising global oil prices, as well as an increase in imports, which had a negative impact. She expects non-oil exports to continue growing in the coming periods, driven by the goals of Vision 2030 to diversify Saudi Arabia’s economy and boost non-oil exports.

 

 

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Oil Slumps More than 4% after Iran Downplays Israeli Strikes

Oil pump jacks work at sunset near Midland, Texas, US, August 21, 2019. REUTERS/Jessica Lutz/File Photo
Oil pump jacks work at sunset near Midland, Texas, US, August 21, 2019. REUTERS/Jessica Lutz/File Photo
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Oil Slumps More than 4% after Iran Downplays Israeli Strikes

Oil pump jacks work at sunset near Midland, Texas, US, August 21, 2019. REUTERS/Jessica Lutz/File Photo
Oil pump jacks work at sunset near Midland, Texas, US, August 21, 2019. REUTERS/Jessica Lutz/File Photo

Oil prices tumbled more than $3 a barrel on Monday after Israel's retaliatory strike on Iran over the weekend bypassed Tehran's oil and nuclear facilities and did not disrupt energy supplies, easing geopolitical tensions in the Middle East.
Both Brent and US West Texas Intermediate crude futures hit their lowest levels since Oct. 1 at the open. By 0750 GMT, Brent was at $72.92 a barrel, down $3.13, or 4.1%, while WTI slipped $3.15, or 4.4%, to $68.63 a barrel, Reuters said.
The benchmarks gained 4% last week in volatile trade as markets priced in uncertainty around the extent of Israel's response to the Iranian missile attack on Oct. 1 and the US election next month.
Scores of Israeli jets completed three waves of strikes before dawn on Saturday against missile factories and other sites near Tehran and in western Iran, in the latest exchange in the escalating conflict between the Middle Eastern rivals.
The geopolitical risk premium that had built in oil prices in anticipation of Israel's retaliatory attack came off, analysts said.
"The more limited nature of the strikes, including avoiding oil infrastructure, have raised hopes for a de-escalatory pathway, which has seen the risk premium come off a few dollars a barrel," Saul Kavonic, a Sydney-based energy analyst at MST Marquee, said.
"The market will be watching closely for confirmation Iran won't counter attack in the coming weeks, which could see the risk premium rise again."
Commonwealth Bank of Australia analyst Vivek Dhar expects market attention to turn to ceasefire talks between Israel and Iran-backed militant group Hamas that resumed over the weekend.
"Despite Israel’s choice of a low aggression response to Iran, we have doubts that Israel and Iran’s proxies (i.e. Hamas and Hezbollah) are on track for an enduring ceasefire," he said in a note.
Citi lowered its Brent price target in the next three months to $70 a barrel from $74, factoring in a lower risk premium in the near term, its analysts led by Max Layton said in a note.
Analyst Tim Evans at US-based Evans Energy said in a note: "We think this leaves the market at least somewhat undervalued, with some risk OPEC+ producers may push back the planned increase in output targets beyond December."
In October, the Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, kept their oil output policy unchanged including a plan to start raising output from December. The group will meet on Dec. 1 ahead of a full meeting of OPEC+.