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Bahrain Begins Developing Oldest Refinery in Gulf Region

Bahraini Prime Minister lays corner stone for the modernization of the oldest refinery in the presence of Crown Prince. (Asharq Al-Awsat)
Bahraini Prime Minister lays corner stone for the modernization of the oldest refinery in the presence of Crown Prince. (Asharq Al-Awsat)
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Bahrain Begins Developing Oldest Refinery in Gulf Region

Bahraini Prime Minister lays corner stone for the modernization of the oldest refinery in the presence of Crown Prince. (Asharq Al-Awsat)
Bahraini Prime Minister lays corner stone for the modernization of the oldest refinery in the presence of Crown Prince. (Asharq Al-Awsat)

Bahrain begun Tuesday the modernization process of the oldest refinery in the Gulf region.

The government plans to raise its refining capacity from 260,000 barrels per day to about 360,000 barrels a day.

Bahraini Premier Prince Khalifa bin Salman Al Khalifa laid the corner stone for the largest industrial project in the country’s history, in the presence of Crown Prince Salman bin Hamad Al Khalifa.

The project, valued at $4.1 billion, is set to modernize Bahrain Petroleum Company’s (Bapco) refinery.

The project was launched after the completion and expansion of the $300 million oil pipeline linking Bahrain and Saudi Arabia to boost the amount of oil flowing through it.

On the sidelines of the event, the Premier underlined the government's resolve to fast track the Kingdom's development by supporting giant ventures aimed at serving the industrial sector.

He pointed to the importance of Bapco refinery modernization project as one of the major national ventures aimed at developing the oil industry infrastructure and supporting the national economy.

Prince Khalifa shed light on the significance of the project, especially that the oil sector is heading towards a new phase heralding a promising future.

This comes in light with the giant developmental projects that will have great impact in supporting national strategies to achieve sustainable economic growth.

He also stressed the government's keenness to boost investments in the oil and gas sectors and use their revenues to serve development efforts and meet citizens' needs.

The Prime Minister also praised contributions by national competencies in the oil and gas sector and their pioneering achievements, which placed Bahrain among advanced countries in terms of coping with global development and the latest technologies in oil exploration and drilling.

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4 Factors Behind the Decline of Saudi Stock Market in H1 2025

Two investors monitor the trading screen in the Saudi financial market in Riyadh (AFP) 
Two investors monitor the trading screen in the Saudi financial market in Riyadh (AFP) 
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4 Factors Behind the Decline of Saudi Stock Market in H1 2025

Two investors monitor the trading screen in the Saudi financial market in Riyadh (AFP) 
Two investors monitor the trading screen in the Saudi financial market in Riyadh (AFP) 

Financial analysts and market specialists have identified four main factors driving the decline of the Saudi stock market during the first half of 2025. Speaking to Asharq Al-Awsat, they pointed to heightened geopolitical tensions in the region, ongoing trade disputes and tariffs between the United States, China, and Europe, oil price volatility, and persistently high interest rates. Collectively, these pressures have squeezed liquidity and weighed heavily on market performance.

Despite the downturn, analysts expect the market to gradually recover over the second half of the year, supported by potential global interest rate cuts, stabilizing oil prices, easing economic uncertainty, and forecasts of robust growth in Saudi Arabia’s GDP and the non-oil sector, alongside continued government spending on major projects.

The Saudi stock market recorded notable losses in the first six months of 2025, with the benchmark index retreating 7.25%, shedding 872 points to close at 11,163, compared to 12,036 at the end of 2024. Market capitalization plunged by around $266 billion (SAR 1.07 trillion), bringing the total value of listed shares to SAR 9.1 trillion.

Seventeen sectors posted declines during this period, led by utilities, which plummeted nearly 32%. The energy sector fell 13%, and basic materials dropped 8%. In contrast, telecom stocks advanced around 7%, while the banking sector eked out a marginal 0.05% gain.

Dr. Suleiman Al-Humaid Al-Khalidi, a financial analyst and member of the Saudi Economic Association, described the first-half performance as marked by significant swings. “The index rose to 12,500 points, only to lose nearly 2,000 points before recovering to about 11,260,” he said.

He attributed the volatility to several factors: regional geopolitical strains, oil prices dipping to $56 a barrel, and high interest rates, which constrained liquidity. He noted that financing costs for traders now range between 7.5% and 9%, historically elevated levels.

“The Saudi market posted the steepest decline among regional exchanges despite record banking sector profits, which failed to translate into stronger overall index performance,” he observed.

Looking ahead, Al-Khalidi anticipates three interest rate cuts totaling 0.75 percentage points by next year, which would bring rates down to about 3.75%. “That should encourage a recovery in trading activity, improve liquidity, and support an upward trend in the index toward 12,000 points, potentially reaching 13,500 if momentum builds,” he added.

Meanwhile, Mohamed Hamdy Omar, economic analyst and CEO of G-World, described the downturn as largely expected, citing external pressures and prolonged trade tensions between the US, China, and Europe. “Retaliatory tariffs dampened investor confidence globally, and Saudi Arabia was no exception,” he said.

Lower oil revenues also strained state finances, leading to a budget deficit of SAR 58.7 billion in the first quarter, further tightening liquidity. Trading volumes fell over 30% year-on-year.

Omar pointed out that changes to land tax regulations and heightened regional security risks also weighed on sentiment. Nonetheless, he expects gradual improvement in the second half of 2025, driven by anticipated rate cuts, rebounding oil prices, and continued large-scale public investments.

He stressed the need for vigilance: “Saudi Arabia remains among the most stable markets, thanks to proactive regulation and policies designed to attract foreign capital and bolster investor confidence.”