Riyadh Combines Supply Security and Diplomacy to Calm Energy Markets

A Saudi Aramco facility (Aramco)
A Saudi Aramco facility (Aramco)
TT

Riyadh Combines Supply Security and Diplomacy to Calm Energy Markets

A Saudi Aramco facility (Aramco)
A Saudi Aramco facility (Aramco)

As mounting geopolitical tensions threaten global energy supply routes, Saudi Arabia has emerged as a pivotal player in safeguarding oil market stability, drawing on a combination of strategic infrastructure and active diplomacy.

By maintaining the flow of exports through the East-West Pipeline, which transports around 7 million barrels per day to the Red Sea away from sensitive maritime chokepoints, alongside its central role within the OPEC and OPEC+ alliance and its political efforts to ease regional tensions, the Kingdom has reinforced its position as one of the world's most reliable energy suppliers. These efforts have helped curb market volatility and preserve global energy supply security.

Saudi Arabia has also played a central role within OPEC+ in maintaining market balance, leading efforts to coordinate production levels in a way that limits sharp price swings and prevents significant supply shortages or surpluses. This role has strengthened confidence among both producers and consumers in the alliance's ability to respond effectively to crises.

East-West Pipeline

In this context, former senior adviser to the Saudi oil minister Mohammed Al-Sabban told Asharq Al-Awsat that Saudi Arabia and its partners have successfully maintained export flows through the East-West Pipeline, which was built in the mid-1980s. Without it, he said, the market would have faced severe disruptions under current conditions.

Al-Sabban explained that the pipeline carries approximately 7 million barrels per day, a volume that has played a major role in stabilizing markets. He added that Saudi Arabia has also contributed to oil market stability through OPEC and OPEC+, reinforcing its standing as a dependable and reassuring supplier capable of meeting global demand.

He added that Saudi Arabia continues to pursue solutions acceptable to both sides through its direct and indirect contacts with Iran and the United States, playing an active role in de-escalation efforts while supporting the stability of global energy markets.

Infrastructure

Energy specialist Nayef Al-Dandani told Asharq Al-Awsat that Saudi Arabia maintained uninterrupted crude exports during the 2026 Strait of Hormuz crisis and continued supplying global markets despite severe disruptions to maritime navigation. He said this achievement played a key role in limiting global supply shocks and stabilizing markets thanks to prior planning, alternative infrastructure, and regional coordination.

Al-Dandani said the East-West Pipeline, also known as Petroline, served as the Kingdom's primary export artery and provided a critical alternative to the Strait of Hormuz, the center of the disruption. The pipeline stretches from Saudi Arabia's Eastern Province to the Red Sea port of Yanbu and has a capacity of up to 7 million barrels per day.

During the crisis, Saudi Arabia redirected most of its exports through the pipeline, enabling it to ship around 4 million to 5 million barrels per day while bypassing the Strait of Hormuz. Al-Dandani said the pipeline later returned to full operating capacity after sustaining temporary damage. He added that Red Sea ports played a fundamental role by becoming key export hubs, with shipments rising significantly and export volumes through Yanbu increasing by more than 300 percent compared with previous periods during some months.

Alternative Routes

Al-Dandani added that Saudi Arabia worked closely with its regional partners, holding discussions with Kuwait, Bahrain, and other countries to expand pipeline networks and accommodate their crude exports. Overseas storage facilities operated by Saudi Aramco, together with Egypt's SUMED pipeline, also supported oil flows to Europe and Asia.

He stressed that Riyadh maintained its credibility as a global supplier and continued to honor its commitments despite a decline in overall Gulf exports. Tracking data also showed that Saudi crude continued flowing through alternative and partial routes, demonstrating strong logistical flexibility.

"This success did not prevent a temporary decline in export volumes, but it averted a complete supply breakdown and helped avoid catastrophic oil price scenarios," he said.

These developments come as recent events have reinforced analysts' assessment of Saudi Arabia's importance in stabilizing global energy markets. Saudi Aramco announced on Monday that it continues to maintain reliable energy supplies despite geopolitical disruptions, supported by its diversified infrastructure, led by the East-West Pipeline and export facilities on the Red Sea.

The announcement followed days after OPEC+ decided to proceed with its gradual production increase beginning in September, a move reflecting continued coordination among leading producers under Saudi leadership to preserve market balance.

The decision aligns with what experts told Asharq Al-Awsat: that the Kingdom's robust infrastructure, leadership within OPEC+, and diplomatic efforts to reduce regional tensions have been key factors in limiting market volatility and safeguarding global energy supply security.



Diesel Prices Overtake Jet Fuel in Europe as Global Shortage Widens

Petrol prices are displayed at a filling station, as the price of oil and gas has surged amid the conflict in the Middle East, in London, Britain, March 5, 2026 REUTERS/Jack Taylor
Petrol prices are displayed at a filling station, as the price of oil and gas has surged amid the conflict in the Middle East, in London, Britain, March 5, 2026 REUTERS/Jack Taylor
TT

Diesel Prices Overtake Jet Fuel in Europe as Global Shortage Widens

Petrol prices are displayed at a filling station, as the price of oil and gas has surged amid the conflict in the Middle East, in London, Britain, March 5, 2026 REUTERS/Jack Taylor
Petrol prices are displayed at a filling station, as the price of oil and gas has surged amid the conflict in the Middle East, in London, Britain, March 5, 2026 REUTERS/Jack Taylor

Diesel cargoes are costing more than jet fuel in Europe for the first time in more than a year, LSEG data showed, as the continent replaces lower Middle East air fuel shipments with other sources of supply, but struggles to secure more diesel for industry and agriculture.

Europe has been able to pull in jet cargoes from the US and other countries like Nigeria as prices surged after the start of the Iran war, which disrupted crude and fuel supply. Global diesel supply tightened even further when Russia banned exports amid Ukrainian attacks on its refineries.

"We see a higher risk of persistent scarcity pricing in diesel than in crude heading into winter," analysts at Goldman Sachs said in a note.

Europe boosted imports of jet fuel to 750,000 barrels per day in June — the highest since October 2025 — and a similar rate in July from 612,000 bpd in January, according to Kpler.

By contrast, European diesel imports have dropped to 1.56 million bpd in July from 1.97 million bpd in January. Against that backdrop, the price of diesel overtook that of jet fuel this week, LSEG data showed.

Diesel prices have resumed their rally in recent weeks amid an impasse in Iran peace talks and Russian export disruptions, and are now only 14% below their April peaks. Jet fuel prices, which have also risen in recent weeks, are meanwhile 25% below their March records.

"A brief period of cautious optimism for refined product markets has been quickly overtaken by renewed hostilities in the Strait of Hormuz, the collapse of Russian product supply and a diesel exports ban," said Karim Fawaz of S&P Global Energy.

WEAKENING JET DEMAND LIKELY WEIGHS ON PRICES, ANALYST SAYS

In a further sign of jet's relative weakness, it has dropped against the price of gasoil futures - the benchmark against which it is priced in Europe.

The price assessment of a jet cargo coming into Europe stood at a discount of $24 a metric ton to gasoil futures on August 10, according to LSEG.

This is the widest discount since July 2025, according to LSEG and Argus Media. At the height of the Iran war in March, LSEG and Argus assessed jet's premium at more than $500 a barrel. Weakening jet demand after the summer travel seasonal high and the expectation of higher European imports are likely weighing on prices, said Jay Maroo, analyst at Sparta Commodities.

 

 

 

 


Türkiye Central Bank Raises End-2026 Inflation Forecast to 28%, Leaves Target Unchanged

 Stray cats wait next to a fisherman at Karakoy sea promenade in Istanbul, Türkiye, Wednesday, June 24, 2026. (AP)
Stray cats wait next to a fisherman at Karakoy sea promenade in Istanbul, Türkiye, Wednesday, June 24, 2026. (AP)
TT

Türkiye Central Bank Raises End-2026 Inflation Forecast to 28%, Leaves Target Unchanged

 Stray cats wait next to a fisherman at Karakoy sea promenade in Istanbul, Türkiye, Wednesday, June 24, 2026. (AP)
Stray cats wait next to a fisherman at Karakoy sea promenade in Istanbul, Türkiye, Wednesday, June 24, 2026. (AP)

Türkiye's central bank raised its inflation forecast for the end of 2026 to 28% from 26% but left its interim inflation target for the same period at 24%, Governor Fatih Karahan said on Thursday.

Presenting the central bank's quarterly inflation report ‌in Istanbul, Karahan said ‌the bank kept ‌its ⁠interim inflation target for ⁠end-2027 steady at 15% and the interim target for end-2028 stayed at 9%.

"The CBRT will ensure the tightness required by the projected disinflation path in line with ⁠the interim targets," Karahan said.

He said ‌the upward ‌revision of the end-2026 forecast was "driven ‌by the increase in the ‌assumption for Turkish lira-denominated import prices in view of the developments in prices of diesel oil, natural gas, and some ‌other commodities".

Last month, the central bank left its key interest ⁠rate ⁠at 37%, as expected, keeping borrowing costs unchanged for a fourth consecutive meeting as it monitors the inflationary impact of the Iran war.

Turkish consumer price inflation rose to 1.78% month-on-month in July while annual inflation dipped slightly from a month earlier to 31.75%.


UK Economy Slows Amid Political Unrest, Middle East War

A person cycles through parched parkland in Birmingham, Britain, 13 August 2026. (EPA)
A person cycles through parched parkland in Birmingham, Britain, 13 August 2026. (EPA)
TT

UK Economy Slows Amid Political Unrest, Middle East War

A person cycles through parched parkland in Birmingham, Britain, 13 August 2026. (EPA)
A person cycles through parched parkland in Birmingham, Britain, 13 August 2026. (EPA)

Britain's economy slowed in the second quarter, the national statistics office reported Thursday, saying that output remained "robust" despite domestic political unrest and fallout from the US-Iran war.

Gross domestic product increased 0.4 percent in the April-June period after GDP expansion of 0.6 percent in the first quarter, the Office for National Statistics (ONS) said in a statement.

Keir Starmer resigned as British prime minister in late June and was replaced around one month later by Andy Burnham, as the Labour government was overtaken in opinion polls by the hard-right party Reform UK.

Following Thursday's data, the country's new finance minister, John Healey, said that under Burnham, Labour was a "hands-on government, putting British interests first -- giving breathing space to those feeling the strain, making our country more resilient and bringing hope back".

Struggling already with elevated inflation, millions of Britons have seen their situation worsen after the US-Iran war sent energy costs soaring.

"I know people are worried about the impact of the conflict in the Middle East on their cost of living, which has been too high for too long and it has added pressure on British businesses," Healey added in a statement.

- World Cup boost -

The latest GDP data showed that output from the services sector grew 0.5 percent in the second quarter, and construction also expanded while production flattened.

"Growth (overall) slowed in the second quarter of the year, following a strong start to 2026, but remained relatively robust," said ONS director of economic statistics, Liz McKeown.

"Services were once again the main driver of growth," she added.

The second quarter had a strong finish, growing 0.3 percent in June after zero expansion in May and a slight dip in April, the ONS said.

It cited the recent football World Cup "as a reason for an increase in turnover in June... by businesses in industries such as wholesale, food and beverage serving activities, publishing activities, television production and advertising".

But Stuart Morrison, research manager at the British Chambers of Commerce, said in a statement that "the headline figures shouldn't disguise the cocktail of cost pressures choking long-term business growth".

He said Healey's first budget, due October 28, "must be a game changer for stronger, sustainable growth", adding that Britain needed "measures that boost trade, investment and productivity".

Burnham has so far concentrated on easing the cost of living for households, with tax on their electricity bills set to be removed this winter.

The Bank of England recently warned that British inflation was set to rise as the Middle East war keeps energy prices high.