Oil Rises on Concerns over Strait of Hormuz Reopening Plans

The scale of selling in oil markets appears somewhat excessive given the persistent high uncertainty in the Middle East (Reuters)
The scale of selling in oil markets appears somewhat excessive given the persistent high uncertainty in the Middle East (Reuters)
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Oil Rises on Concerns over Strait of Hormuz Reopening Plans

The scale of selling in oil markets appears somewhat excessive given the persistent high uncertainty in the Middle East (Reuters)
The scale of selling in oil markets appears somewhat excessive given the persistent high uncertainty in the Middle East (Reuters)

Oil extended gains on Friday amid further concerns around the opening of the Strait of Hormuz as Iran, working with Oman, suggested banning vessels deemed hostile from the strait and heavily fining those which violated the proposed rules.

Brent crude futures rose 80 cents, or 0.97%, to $83.29 a barrel by 0303 GMT. US West Texas Intermediate futures rose 64 cents, or 0.83%, to $77.93. Oil futures settled up at over $3 a barrel on Thursday as Iran reviewed a bill to ban US and Israeli vessels from the Strait of Hormuz where roughly a fifth of the world’s oil and liquefied natural gas transmitted before the war ‌began at ‌the end of February.

Prices fell earlier in the week as ‌a ⁠possible solution to ⁠the ongoing conflict looked more likely but benchmark Brent breached $80 on Thursday after falling below that for the first time since July 13. Both benchmarks were headed for a weekly loss of about 8%.

Analysts said the events that have unfolded this week signaled that the hostilities between Iran and the US are not yet over. "The proximate trigger is more specific, it's (oil prices) reacting to Iran's published draft plan for Hormuz ⁠transit conditions, which would ban US and Israeli vessels and ‌require other 'hostile' countries to pay compensation before passage," said ‌Lin Ye, vice president of commodities market – oil at consultancy Rystad Energy.

"That's not the market ‌pricing in a bad deal, it's pricing in confirmation that whatever emerges is ‌a managed/conditional corridor, not a restoration of normal flow," Ye added.

An Iranian lawmaker said a parliamentary committee is reviewing a preliminary bill to ban US, Israeli and other vessels deemed hostile from the Strait of Hormuz, and fine violators of the proposed restrictions up to ‌20% of cargo value, according to Fars news agency.

Iran is seeking fees of between 5% and 7% of the price ⁠of cargoes from ships ⁠using the strait, according to the senior Iranian official. Oman is discussing fees of around 3%, while Washington wants no fees at all.

Four industry sources have said the proposed deal is not easily workable due to US sanctions and restrictive insurance clauses on any payments.

"This week’s signals on a potential Iran-Oman transit deal have driven a roller-coaster ride in market sentiment but as of now, (it is) left it in the dark as to what needs to happen for the agreement to be clinched," said Vandana Hari, founder of oil market analysis provider Vanda Insights.

US President Donald Trump on Thursday told reporters that he believed the war would be over soon.



'AlUla Peregrina': From Fields to Global Markets

A Saudi woman works on products derived from the Peregrina tree in AlUla.
A Saudi woman works on products derived from the Peregrina tree in AlUla.
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'AlUla Peregrina': From Fields to Global Markets

A Saudi woman works on products derived from the Peregrina tree in AlUla.
A Saudi woman works on products derived from the Peregrina tree in AlUla.

In AlUla, where the Peregrina tree has been part of the local environment for generations, the tree is taking a new path from fields to laboratories and global markets. Rather than simply marketing raw materials, AlUla Peregrina is seeking to develop oils, extracts, and natural ingredients for applications in beauty and personal care, adding value to a local resource before it reaches overseas markets.

AlUla Peregrina was established in 2021 by the Royal Commission for AlUla, with the aim of developing economic uses for the tree and its extracts. The company is now expanding its applications in skincare, haircare, and wellness products, while also developing its presence in international markets.

The strategy comes as efforts to increase the added value of local resources and expand non-oil exports gain importance. The company is betting that developing and manufacturing ingredients within Saudi Arabia can generate greater economic returns than exporting raw materials, while creating opportunities for products that carry Saudi knowledge and technology into international markets.

In an exclusive interview with Asharq Al-Awsat, Eng. Abobakar Alanazi, Chairman of the Board of AlUla Peregrina, said the company's ambition is to establish AlUla Peregrina as a leading Saudi platform for high-quality active natural ingredients, expanding from AlUla into regional and global markets, with a focus on skincare, haircare, and personal care.

Added Value

According to Alanazi, the company is gradually building a presence in international markets, benefiting from growing demand for natural ingredients with traceable origins and scientific evidence, alongside increasing interest in responsible supply chains.

He said the goal extends beyond exporting a Saudi product to developing ingredients and products based on local natural resources and combining scientific research, development, and manufacturing within Saudi Arabia, thereby increasing the product's added value before it reaches overseas markets.

Development efforts focus on the Arabian Peregrina tree, Moringa peregrina, and its natural compounds, including ceramides, plant exosomes, bioactive peptides, and antioxidants. Alanazi said the company has developed a range of oils and extracts that can be used in various skincare applications.

The development of these products is based on scientific research, laboratory testing, and clinical evaluations to verify their effectiveness before moving into commercial applications. Alanazi said these efforts have resulted in four registered patents, reflecting part of the company's research and development work.

Hospitality Sector

In the hospitality sector, Alanazi said the company is developing customized formulations and solutions for hotels and spas, inspired by Arab traditions of personal care but presented in contemporary formulations. These solutions include formulations and fragrances that can be tailored to reflect the identity of each establishment rather than offering a standardized product.

He explained that product development begins by identifying the needs of the market and partners, followed by scientific and technical evaluation before arriving at the final formulation.

On sustainability, he said responsible practices form part of the company's business model and supply chain, from cultivation and harvesting in cooperation with local farmers to the processing and development of ingredients in AlUla. The company is focusing on tracing raw materials and identifying their sources and journey throughout the production process, alongside responsible sourcing practices.

He noted that the supply chain has undergone verification by the Union for Ethical BioTrade (UEBT) in relation to responsible sourcing, in line with relevant international standards. He said developing processing and production operations within Saudi Arabia contributes to increasing local added value and supports the emergence of an integrated economic value chain around the activity in the region.

The company is also working to strengthen the participation of local farmers and suppliers, transfer knowledge, and develop the capabilities needed to support the growth of the natural ingredients sector in Saudi Arabia.

Economic Diversification

Alanazi said AlUla Peregrina's business model aligns with several objectives of Saudi Vision 2030, particularly economic diversification, increasing local content, and developing value-added industries, while also benefiting from growth in the tourism and hospitality sectors.

“We are transforming a natural resource from AlUla into ingredients and products that are developed and manufactured locally, creating economic value beyond the sale of raw materials,” he said.

He added that the growth of tourism and hospitality in Saudi Arabia is creating opportunities to develop Saudi solutions for hotels, resorts, and the wellness sector that are connected to the identity of the place and the visitor experience.

He pointed to an opportunity to develop a specialized sector for natural ingredients and their applications in personal care and beauty that could expand beyond the domestic market, bringing together natural resources, scientific research, manufacturing, and services linked to tourism and hospitality.

International Expansion

The Chairman of the Board said exports are a key pillar of the company's growth strategy, amid growing global demand for natural ingredients with traceable origins and scientific evidence supporting their use.

“What distinguishes our model is that the added value is created within Saudi Arabia, starting with the natural resource and research and development, through processing and manufacturing, and ultimately to the finished product or ingredient tailored for overseas markets,” he said.

He explained that the company is not simply seeking to export raw materials, but to develop specialized, higher-value products and ingredients.

Alanazi revealed that the company is working to expand its commercial relationships and presence in international markets through trade fairs and specialized platforms, as well as by building partnerships with global companies and brands. He said international expansion could support the growth of Saudi non-oil exports while opening new markets for products and ingredients developed locally.

The long-term goal, he added, is for products developed in AlUla to reach global markets under the “Made in Saudi” brand, reflecting not only their country of origin but also the development, knowledge, and manufacturing added to the products locally.


Crown Prince Launches CEER's Flagship Vehicles

Saudi Crown Prince Mohammed bin Salman (SPA)
Saudi Crown Prince Mohammed bin Salman (SPA)
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Crown Prince Launches CEER's Flagship Vehicles

Saudi Crown Prince Mohammed bin Salman (SPA)
Saudi Crown Prince Mohammed bin Salman (SPA)

Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince, Prime Minister and Chairman of the Board of Directors of the Public Investment Fund (PIF), has launched EXOBOT, the flagship electric vehicles from CEER, Saudi Arabia's national automotive company.

This national milestone reflects Saudi Arabia's strategic direction toward developing an advanced industrial sector aligned with the objectives of Saudi Vision 2030 and further strengthening Saudi Arabia’s position in the global automotive industry, SPA reported.

Commenting on this occasion, the Crown Prince said: "The launch of CEER's first vehicles represents another step forward in Saudi Arabia's progression to build a sustainable and prosperous industrial ecosystem. It further enables the automotive sector as a key driver of economic growth, through attracting investments, empowering national talent, and expanding the private sector's role to further position Saudi Arabia to become a leading regional and global hub for this industry."

The EXOBOT sedan and SUV vehicles represent part of a planned portfolio of seven models that will be launched over the next five years, including midsize and compact vehicles with various propulsion options to serve different customer needs.

These vehicles will be manufactured at CEER Manufacturing Complex (CMC), the largest automotive production facility in the Middle East and one of the most technologically advanced in the world.

Additionally, the EXOBOT sedan and SUV feature a distinctive design inspired by Saudi Arabia's landscape, rooted in its culture, and reflective of its vision. Designed and engineered locally, the vehicles have been developed according to the highest global standards, further strengthening Saudi Arabia's position as a rising force in the global automotive industry.

By 2034, CEER is projected to contribute over SAR30 billion ($8 billion) to Saudi Arabia's GDP, over SAR80 billion ($21 billion) to trade balance improvement, and create quality direct and indirect jobs.

The announcement aligns with PIF's efforts to develop an integrated and competitive local automotive ecosystem, as part of PIF's mandate as a key driver of Saudi Arabia's economic diversification. PIF launched CEER in 2022 as the first Saudi vehicle brand to support the development of the national industrial ecosystem, attract investments, create opportunities for the private sector, and increase Saudi GDP.


Oil Prices Slide on Hopes of Diplomacy in Iran War

Oil tankers in Basra port (Reuters)
Oil tankers in Basra port (Reuters)
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Oil Prices Slide on Hopes of Diplomacy in Iran War

Oil tankers in Basra port (Reuters)
Oil tankers in Basra port (Reuters)

Oil prices slid to their lowest in more than a week on Monday as investors hoped for diplomatic progress on the Iran war due to this week's UN meeting.

Brent crude futures and US West Texas Intermediate crude touched their lowest since September 10 earlier on Monday. The Brent contract for November was at $102.09 a barrel at 0655 GMT, down $1.78, or 1.71%, after settling 0.91% lower on Friday, Reuters said.

The WTI October contract that is expiring on Tuesday fell $1.97, or 1.96%, to $98.33 a barrel following a ‌1.58% drop in the ‌previous session.

"It seems that a degree of risk premium is ‌being ⁠removed from oil prices ⁠on hopes that a diplomatic path to de-escalate the US-Iran war may arrive this week," said Tim Waterer, chief market analyst at KCM Trade.

"Whether that hope proves to be warranted or not is another question. Time will tell."

WTI broke a key psychological support at $100 a barrel while some investors may have rolled over their positions in the October contract a day ahead of expiry to November, a Singapore-based broker said.

Iran and the US exchanged new threats on Sunday, although President Donald Trump said ⁠he would be open to meeting Iranian President Masoud Pezeshkian, who is ‌expected to be in New York this week for ‌the United Nations General Assembly.

Iran has conveyed its conditions to mediators for re-engaging in negotiations aimed at ‌ending the war with the US, Al Jazeera cited Iran's security chief, Mohsen Rezaei, as ‌saying in an interview on Saturday.

On Monday, a spokesman ‌for the Revolutionary Guards, Hossein Mohebbi, said Iran would use new weapons and target locations not previously attacked if the US launched a ⁠new offensive against it, ⁠according to the Fars news agency.

China has asked Iran to help rein in the Houthis after an appeal to Beijing following the attacks, according to three Iranian sources familiar with the matter.