Saudi Arabia Drives September Surge in OPEC+ Output Despite Iran War Disruptionshttps://english.aawsat.com/business/5329239-saudi-arabia-drives-september-surge-opec-output-despite-iran-war-disruptions
Saudi Arabia Drives September Surge in OPEC+ Output Despite Iran War Disruptions
An oil tanker at Ras Al-Khair port, north of Dammam, in 2019. REUTERS
OPEC+ crude output surged in September as Saudi Arabia ramped up production, despite continued disruption to oil shipments through the Strait of Hormuz caused by the Iran war, OPEC said in its monthly report on Tuesday.
The Organization of the Petroleum Exporting Countries raised its forecast for global oil demand growth in 2027 to 2.55 million barrels per day (bpd) from 2.36 million bpd, citing the need to replenish inventories depleted by war-related supply disruptions.
But it cut its demand growth forecast for this year for a sixth straight month, to 180,000 bpd from about 380,000 bpd in its August estimates.
OPEC+, which groups OPEC members and allies including Russia, pumped an average of 39.068 million bpd in September, up 903,000 bpd from 38.165 million bpd in August, the report showed.
Output has risen by about 1.36 million bpd since July, when it stood at 37.710 million bpd, according to the secondary sources OPEC uses to track production.
OPEC members drove the increase, raising output by about 920,000 bpd to 25.097 million bpd from 24.177 million bpd a month earlier. Production by participating non-OPEC countries fell by about 18,000 bpd.
Saudi Arabia leads surge
Saudi Arabia posted the alliance's largest production increase. Output climbed to 8.372 million bpd in September from 6.238 million bpd in August, a gain of more than 2 million bpd, according to figures the kingdom submitted to OPEC.
The increase comes as Saudi Arabia seeks to restore oil flows and strengthen the resilience of its exports against war-related disruptions. Aramco increased oil loadings at Gulf export terminals in September after an attack on the East-West pipeline disrupted shipments through the Red Sea.
Inventory rebuilding to support demand
OPEC expects global oil demand to rise by 2.55 million bpd in 2027 to average 108.3 million bpd, compared with 108.19 million bpd in last month's forecast.
The forecast assumes demand growth in 2026 will slow as currently expected, with the need to replenish depleted inventories supporting growth next year, OPEC said.
For 2026, the group expects demand growth of just 180,000 bpd. It also cut its fourth-quarter demand estimate to 107.73 million bpd from 107.85 million bpd in last month's report.
Demand in countries belonging to the Organisation for Economic Co-operation and Development is forecast to shrink by about 210,000 bpd this year, while demand in non-OECD economies is expected to grow by 390,000 bpd.
Oil supply from outside OPEC+ is forecast to grow by 640,000 bpd in 2026 and 620,000 bpd in 2027.
Russian output declines
Russian oil output fell by 38,000 bpd in September to 8.643 million bpd, the report showed, amid continued Ukrainian strikes on Russian energy infrastructure, including refineries.
Russian Deputy Prime Minister Alexander Novak said the country would trim oil production this year. Russia's Economy Ministry lowered its 2026 output forecast to a 17-year low amid the war with Ukraine.
Kazakhstan's production rose by 22,000 bpd in September to 1.851 million bpd, according to the OPEC report.
From Hydrogen to AI, Energy Leaders Map the Sector’s Global Futurehttps://english.aawsat.com/business/5329233-hydrogen-ai-energy-leaders-map-sector%E2%80%99s-global-future
From Hydrogen to AI, Energy Leaders Map the Sector’s Global Future
A panel discussion examines challenges and opportunities at the World Petroleum Congress in Riyadh (Asharq Al-Awsat)
Green hydrogen, artificial intelligence and strategic partnerships took center stage at the World Petroleum Congress in Riyadh, as sessions mapped the energy sector’s future amid rapid technological and industrial change.
Progress on clean energy projects, led by the NEOM Green Hydrogen Project, now 96% complete, intersected with the challenge of cutting emissions from transport, which accounts for about 30% of global energy demand.
The discussions highlighted a widening agenda: developing energy sources and reshaping how energy is produced and used to improve efficiency and sustain supplies.
Saudi Aramco said it plans to increase gas sales by 80% by 2030 compared with 2020 and 2021 levels, and to build and start operating six to seven gas and liquefied gas facilities between 2025 and 2027.
Decarbonization
Transport and logistics account for about 30% of global energy demand, Saudi Vice Minister of Transport and Logistics Services Rumaih Al-Rumaih told a conference session.
Decarbonization is a long journey that requires a broader energy mix, he said, stressing the need for available, reliable, affordable and safe supplies.
The Saudi Green Initiative provides a framework for reaching net-zero emissions by 2060, with transport playing a major role, Al-Rumaih said.
Saudi Arabia is expanding public transport and cutting urban emissions to meet its commitments, he added. The Riyadh Metro network spans 187 kilometers and has 85 stations.
Green hydrogen
National Development Fund Governor Abdulaziz Al-Arifi said the fund had provided financing and strategic support for the NEOM Green Hydrogen Project alongside local banks and other entities and organizations.
That support helped advance one of the clean energy sector’s leading projects, strengthening investment opportunities and local content, he told the conference.
ACWA Power Chairman Mohammad Abunayyan said local resources, knowledge and expertise accounted for about 90% of those used in new projects. He reaffirmed the company’s commitment to expanding investment and overcoming challenges on the ground in major global markets such as China.
At the same session, Saudi Aramco Executive Vice President of Gas Abdulkarim Al-Ghamdi discussed operational readiness and supply chains.
Resource localization under the company’s iktva program had reached levels ranging from more than 75% to 90%, he said, offering strong protection against external disruptions.
Saudi personnel and technological integration are the two pillars of sustained gas-sector growth and future resilience, he said.
Artificial intelligence
A panel at the 25th World Petroleum Congress explored how energy powers artificial intelligence, how the two sectors interact and how AI can sharpen decisions, improve operations and raise energy efficiency.
Speakers said development of the energy and electricity sectors under Vision 2030 aims to meet demand and attract investment, including in AI data centers that need reliable, competitively priced electricity.
The approach involves anticipating sectors’ needs and connecting them with investors. Speakers stressed the need to integrate infrastructure, data, technology and human expertise, drawing on Saudi Arabia’s strengths to develop solutions and bring them to global markets.
Smart meters
AI can improve forecasts of electricity loads and demand and detect grid faults early, helping planners respond faster, speakers said.
Smart meter data can track consumption, forecast bills, show electricity use by appliance and flag unusual usage.
In oil and gas exploration and resource development, particularly drilling, AI can analyze data in real time and combine engineering models with geological information.
This can speed up decisions, improve accuracy, shorten the gap between planning and execution, enhance safety and support risk assessments and investment decisions.
To expand these applications, companies must deliver tangible business value and integrate the tools into operations, speakers said.
They must also ensure data quality and timely collection, train personnel to assess outputs and keep people involved in final decisions, while using digital tools to reduce risks.
IMFC Extends Aljadaan's Term as Chair by One Yearhttps://english.aawsat.com/business/5329161-imfc-extends-aljadaans-term-chair-one-year
Saudi Arabia's Finance Minister Mohammed Al-Jadaan speaks during a press briefing following a meeting of the IMFC (International Monetary and Financial Committee) at the 2026 IMF and World Bank Group Spring Meetings in Washington, DC, on April 17, 2026. (Photo by Kent Nishimura / AFP)
Saudi Arabia's Finance Minister Mohammed Al-Jadaan speaks during a press briefing following a meeting of the IMFC (International Monetary and Financial Committee) at the 2026 IMF and World Bank Group Spring Meetings in Washington, DC, on April 17, 2026. (Photo by Kent Nishimura / AFP)
The International Monetary and Financial Committee (IMFC) of the International Monetary Fund (IMF) announced a request for a one-year extension of Saudi Finance Minister Mohammed Aljadaan's term as Committee Chair after his current term ends on January 3, 2027.
The move aims to ensure continuity in the Committee's work and maintain momentum in advancing its key priorities, including important ongoing reforms.
In a statement issued Tuesday, the IMF said Committee members had asked Aljadaan to extend his term as Chair for an additional year and that he had agreed. Aljadaan was selected to chair the Committee for a three-year term beginning January 4, 2024.
Committee members expressed appreciation for Aljadaan's leadership, saying the extension would help ensure continuity and sustain momentum in addressing the Committee's key priorities, including its efforts on important ongoing reforms.
The IMFC is the primary policy advisory body of the IMF's Board of Governors and comprises finance ministers and central bank governors. It deliberates on major policy issues facing the Fund and the international monetary and financial system.
The Committee has 25 members, reflecting the composition of the IMF's Executive Board. Each member country, or group of member countries that elects an Executive Director to the Board, appoints a representative to the Committee.
The IMFC normally meets twice a year, once during the Spring Meetings and again in the fall, alongside the Annual Meetings of the IMF and World Bank Group.
Diversified Oil Export Routes Pave the Way for Strong Saudi Economic Recovery in 2027https://english.aawsat.com/business/5329136-diversified-oil-export-routes-pave-way-strong-saudi-economic-recovery-2027
Diversified Oil Export Routes Pave the Way for Strong Saudi Economic Recovery in 2027
Cars drive past city skyscrapers in Riyadh on October 11, 2026. (Photo by Fayez Nureldine / AFP)
As war reshapes energy flows across the region, the International Monetary Fund (IMF) is forecasting a strong recovery for Saudi Arabia's economy in 2027, with growth projected at 7.9 percent, driven by renewed momentum in production and exports as disruptions to shipping ease. Compared with Gulf economies more exposed to disruptions in transit through the Strait of Hormuz, this forecast rests on Saudi Arabia's diversified oil export routes, which help cushion the impact of the shock.
The IMF has also revised its outlook for the Saudi economy in 2026, projecting a smaller contraction than in its previous forecasts. The trajectory of the recovery will therefore depend on how long the disruptions persist and how quickly energy and trade flows return to normal.
The IMF's forecasts reflect both the scale of the shock facing regional economies and the recovery expected as its effects subside. In its World Economic Outlook report, titled Resilience Under Strain, Urgent Choices, the IMF projects that the economies of the Middle East and Central Asia will contract by 0.3 percent in 2026, followed by growth of 6.3 percent in 2027.
Compared with its April estimates, the IMF lowered its 2026 forecast by 2.2 percentage points while raising its 2027 projection by 1.7 percentage points. The revisions reflect an assumption that the Strait of Hormuz will remain closed longer than previously expected, intensifying pressure on regional economies this year but setting the stage for a stronger recovery once it reopens and production, exports and transportation resume.
Under this scenario, the IMF expects GDP to contract by 16.7 percent in Kuwait, 16 percent in Iraq, 15.6 percent in Qatar and 11.3 percent in Bahrain in 2026. In 2027, all four economies are projected to rebound sharply, with Iraq growing by 19 percent, Qatar by 18.8 percent, Kuwait by 17.1 percent and Bahrain by 13.9 percent, as production, exports and logistics return to normal operations.
Saudi Arabia's Economic Outlook
By contrast, the IMF expects the disruptions to have a relatively less severe impact on Saudi Arabia. It has revised its estimate for the Saudi economy's contraction in 2026 to 3.3 percent, compared with 5 percent in its July forecast and 6.4 percent in April. At the same time, it raised its forecast for Saudi economic growth in 2027 to 7.9 percent, up from 2.4 percent in its July update and 3.4 percent in April. The Ministry of Finance, meanwhile, expects stronger growth of 12.8 percent, according to its pre-budget statement. Although the estimates differ in magnitude, they reflect optimism about the recovery next year, amid hopes that production, exports and trade will regain momentum as shipping disruptions ease.
This outlook is consistent with World Bank projections. In its October report on the economic outlook for the Middle East, North Africa, Afghanistan and Pakistan, the bank anticipated a strong rebound in regional growth in 2027, forecasting expansion of 7.8 percent for the region's economies, excluding Iran, if the conflict subsides by the end of 2026. It attributed the recovery primarily to the resumption of hydrocarbon production and exports as trade routes reopen and energy flows gradually normalize. In Saudi Arabia, the bank noted that the East-West Pipeline had enabled exports to be rerouted to the Red Sea port of Yanbu, helping the Kingdom limit the impact of disrupted shipping through the Strait of Hormuz.
The IMF's projected contraction for the Saudi economy this year is smaller than the Ministry of Finance's estimate of a 3.6 percent decline in real GDP in 2026. The recovery outlook also aligns with the IMF's findings during its July Article IV consultations with Saudi Arabia, when it highlighted the economy's resilience to disruptions in oil and trade flows, supported by diversified energy and logistics infrastructure and the ability to reroute shipments.
Oil Export Routes
Against this backdrop, Saudi Arabia is benefiting from multiple oil export routes and working to strengthen its ability to deliver supplies to global markets through the Red Sea. Energy Minister and Minister of Industry and Mineral Resources Prince Abdulaziz bin Salman announced a target of increasing oil export capacity to approximately 10 million barrels per day within two to three years by upgrading the East-West Pipeline and expanding its associated infrastructure. He also pointed to the possibility of temporarily converting a gas pipeline to transport oil, adding approximately 1.2 million barrels per day of capacity within seven to eight weeks before returning it to its original use to meet summer demand.
These measures strengthen the Kingdom's ability to diversify its export outlets, while the IMF's 2027 forecasts assume that production, exports and trade will return to normal as shipping disruptions ease.
In this context, data from Kpler showed that Saudi crude oil exports rose to 6.67 million barrels per day in September, reaching their highest level in seven months and returning to prewar levels. This reflects renewed momentum in the Kingdom's oil flows, supported by increased exports through the Strait of Hormuz since September, alongside the benefits of diversified export outlets.
Alongside the anticipated recovery, credit rating agency Moody's had forecast that spending restraint and a reprioritization of government investments would support a fiscal recovery in 2027 and help the Kingdom preserve fiscal space to continue its economic diversification projects. The agency noted that prolonged trade disruptions and additional spending had limited the fiscal improvement it previously expected, while disruptions to strategic maritime shipping routes could persist until mid-2027, potentially affecting oil production.
As for economic indicators, the IMF expects inflation in Saudi Arabia to reach 1.9 percent in 2026 and rise to 2.2 percent in 2027. It also projects a current account deficit equivalent to 3.5 percent of GDP this year, narrowing to 1.3 percent next year.
Saudi Minister of Energy Prince Abdulaziz bin Salman Al Saud speaks at the 25th WPC Energy Congress in Riyadh, Saudi Arabia, October 12, 2026. REUTERS
International Monetary and Financial Committee Meeting
These forecasts come as the repercussions of the war and its effects on growth, trade and energy flows dominate the agenda of the IMF and World Bank Group Annual Meetings, taking place in Bangkok from October 12 to 18.
Saudi Finance Minister Mohammed Al-Jadaan is leading the Kingdom's delegation to the meetings and chairing a meeting of the IMF's International Monetary and Financial Committee, which is discussing the global economic outlook, risks to growth, economic policy priorities and the Fund's role in helping member countries address current challenges. These discussions are particularly significant given the differing effects of the conflict on regional economies, from pressures caused by disruptions to production and trade to opportunities for recovery as energy flows and exports resume.
Saudi Arabia's Finance Minister Mohammed Al-Jadaan speaks during a press briefing following a meeting of the IMFC (International Monetary and Financial Committee) at the 2026 IMF and World Bank Group Spring Meetings in Washington, DC, on April 17, 2026. (Photo by Kent Nishimura / AFP)
Ultimately, the trajectory of Saudi Arabia's recovery in 2027 will remain tied to how quickly energy and trade flows are restored. Meanwhile, diversified export outlets and non-oil activities, together with the reprioritization of spending and investment, provide support for the economy's ability to overcome the repercussions of regional disruptions.
لم تشترك بعد
انشئ حساباً خاصاً بك لتحصل على أخبار مخصصة لك ولتتمتع بخاصية حفظ المقالات وتتلقى نشراتنا البريدية المتنوعة
