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Saudi Aramco Converts Jeddah Refinery into Distribution Hub after 50 Years

Saudi Aramco Converts Jeddah Refinery into Distribution Hub after 50 Years
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Saudi Aramco Converts Jeddah Refinery into Distribution Hub after 50 Years

Saudi Aramco Converts Jeddah Refinery into Distribution Hub after 50 Years

Saudi Aramco has shut down its crude oil refinery in Jeddah, which is considered one of the Kingdom’s oldest as it was established 50 years ago, converting the complex into a hub for oil products distribution.

The company is seeking to eliminate refining operations in the industrial complex south of Jeddah while maintaining the operation of other facilities in order to achieve a continuous supply and reliable and efficient petroleum products for Makkah.

The refinery has a production capacity of 80,000 barrels per day, accounting for 2.7 percent of the Kingdom’s total refining capacity.

Aramco said, in a statement, it had decided to convert the complex into a distribution center to improve the performance of its facilities in line with its strategic objective of maintaining the reliability of energy supplies on the highest standards.

The plant, which started operations in 1967, served less than 20 percent of demand from the Makkah region, western Saudi Arabia, and its closure will increase demand at other Saudi facilities.

Aramco will supply the Makkah region with petroleum products from its facilities in Yanbu and Rabigh instead of the one in Jeddah until the Jazan refinery starts operations in 2018.

The expected operation of the Jazan refinery, along with newly launched refineries such as Yasref in Yanbu and Satorp in Jubail, will provide more refining capacity to meet domestic demand with a total capacity of 1.2 million barrels per day.

The refinery has seen a decline in demand for fuel, Aramco’s senior vice president of downstream Abdulaziz al-Judaimi said, adding that the complex’s proximity to residential areas and its economic inefficiency have prevented its expansion.

He noted that Aramco currently has a number of large-scale development projects underway to supply petroleum products to the Makkah region, including the establishment of a refined petroleum products collection and pumping center in Yanbu, the construction of pipelines from Yanbu to Jeddah and the expansion of the North Jeddah distribution plant in Bremen.

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Russia's Central Bank Holds Off on Interest Rate Hike

People skate at an ice rink installed at the Red Square decorated for the New Year and Christmas festivities, with the St. Basil's Cathedral, left, and the Kremlin, right, in the background in Moscow, Russia, Friday, Dec. 20, 2024. (AP Photo/Alexander Zemlianichenko)
People skate at an ice rink installed at the Red Square decorated for the New Year and Christmas festivities, with the St. Basil's Cathedral, left, and the Kremlin, right, in the background in Moscow, Russia, Friday, Dec. 20, 2024. (AP Photo/Alexander Zemlianichenko)
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Russia's Central Bank Holds Off on Interest Rate Hike

People skate at an ice rink installed at the Red Square decorated for the New Year and Christmas festivities, with the St. Basil's Cathedral, left, and the Kremlin, right, in the background in Moscow, Russia, Friday, Dec. 20, 2024. (AP Photo/Alexander Zemlianichenko)
People skate at an ice rink installed at the Red Square decorated for the New Year and Christmas festivities, with the St. Basil's Cathedral, left, and the Kremlin, right, in the background in Moscow, Russia, Friday, Dec. 20, 2024. (AP Photo/Alexander Zemlianichenko)

Russia's central bank has left its benchmark interest rate at 21%, holding off on further increases as it struggles to snuff out inflation fueled by the government's spending on the war against Ukraine.
The decision comes amid criticism from influential business figures, including tycoons close to the Kremlin, that high rates are putting the brakes on business activity and the economy.
According to The Associated Press, the central bank said in a statement that credit conditions had tightened “more than envisaged” by the October rate hike that brought the benchmark to its current record level.
The bank said it would assess the need for any future increases at its next meeting and that inflation was expected to fall to an annual 4% next year from its current 9.5%
Factories are running three shifts making everything from vehicles to clothing for the military, while a labor shortage is driving up wages and fat enlistment bonuses are putting more rubles in people's bank accounts to spend. All that is driving up prices.
On top of that, the weakening Russian ruble raises the prices of imported goods like cars and consumer electronics from China, which has become Russia's biggest trade partner since Western sanctions disrupted economic relations with Europe and the US.
High rates can dampen inflation but also make it more expensive for businesses to get the credit they need to operate and invest.
Critics of the central bank rates and its Governor Elvira Nabiullina have included Sergei Chemezov, the head of state-controlled defense and technology conglomerate Rostec, and steel magnate Alexei Mordashov.
Russian President Vladimir Putin opened his annual news conference on Thursday by saying the economy is on track to grow by nearly 4% this year and that while inflation is “an alarming sign," wages have risen at the same rate and that "on the whole, this situation is stable and secure.”
He acknowledged there had been criticism of the central bank, saying that “some experts believe that the Central Bank could have been more effective and could have started using certain instruments earlier.”
Nabiullina said in November that while the economy is growing, “the rise in prices for the vast majority of goods and services shows that demand is outrunning the expansion of economic capacity and the economy’s potential.”
Russia's military spending is enabled by oil exports, which have shifted from Europe to new customers in India and China who aren't observing sanctions such as a $60 per barrel price cap on Russian oil sales.