IMF: Oil Price Decline Represents Key Challenge to GCC Countries

Oil demand would peak by around 2040, says IMF report. Reuters
Oil demand would peak by around 2040, says IMF report. Reuters
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IMF: Oil Price Decline Represents Key Challenge to GCC Countries

Oil demand would peak by around 2040, says IMF report. Reuters
Oil demand would peak by around 2040, says IMF report. Reuters

The International Monetary Fund (IMF) said analysis of past oil market developments revealed “a strong and sustained declining trend in the global oil demand, after accounting for income and population growth.”

Oil demand “would peak by around 2040 in our benchmark projection or much sooner in scenarios of a stronger regulatory push for environmental protection and faster improvements in energy efficiency.”

According to the IMF staff study, at the current fiscal stance, fiscal sustainability will require significant consolidation in the coming years.

Growth of global demand for natural gas is also expected to slow, the Fund said, “although it is expected to remain positive in the coming decades.”

The report said the oil market has experienced a significant turnaround in recent years due to technological advancements as well as climate change concerns. This represents a challenge to the six-nation Gulf Cooperation Council (GCC) that accounts for over one-fifth of global oil supply.

Long-term fiscal health requires that average annual non-oil primary deficits decline from a current level of 44 percent of non-oil GDP to less than 10 percent by 2060.

“Managing the long-term fiscal transition will require wide-ranging reforms and a difficult inter-generational choice. Continued economic diversification will be important but would not suffice on its own. Countries will also need to step up their efforts to raise non-oil fiscal revenue, reduce government expenditure, and prioritize financial saving when economic returns on additional public investment are low," the IMF added.

The sudden and unexpected oil price decline of more than 50 percent during 2014-15 was among the largest in the past century, according to the report. “It amounted to a transfer of nearly USD6.5 trillion from oil-exporting to oil-importing countries, in the form of cumulative oil revenue decline, between 2014 and 2018. Many oil-exporting countries are still adjusting to the effects of this oil price decline.”

The 2014 oil price slump led to large fiscal deficits but has also served as a catalyst for significant reforms in GCC countries, according to the report.

Global oil demand will peak around 2041 at about 115 million barrels a day and gradually decline thereafter as the demand-reducing effects of improvements in energy efficiency and increased substitution away from oil begin to dominate the weakened positive impact of rising incomes and population.



New Chapter for Saudi Real Estate Market as Foreign Ownership Allowed

Residential and commercial properties in Riyadh – Asharq Al-Awsat
Residential and commercial properties in Riyadh – Asharq Al-Awsat
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New Chapter for Saudi Real Estate Market as Foreign Ownership Allowed

Residential and commercial properties in Riyadh – Asharq Al-Awsat
Residential and commercial properties in Riyadh – Asharq Al-Awsat

Saudi Arabia has approved a new law allowing non-Saudis to own real estate across the Kingdom, a move officials say will stimulate foreign investment, increase the quality and availability of housing stock, and help bring balance to the property market.

The decision, announced by the Council of Ministers on Tuesday, marks a shift in the structure of the real estate sector and aligns with the Kingdom’s broader strategy to diversify investment and improve urban development under its Vision 2030 reform agenda.

Municipal and Rural Affairs and Housing Minister Majid Al-Hogail said the new framework is expected to attract foreign developers and investors, increase competition in the domestic market, and ultimately help stabilize prices while improving housing options for Saudi citizens.

“A Strategic Restructuring”

“This step will encourage real estate supply and raise the quality of developments,” Al-Hogail said in a statement. “It supports the economic momentum and investment movement we are witnessing under Vision 2030.”

Khalid Al-Jasser, head of Amaken Group and a real estate specialist, said the updated system prioritizes Saudi citizens’ interests and will include mechanisms to regulate the market and achieve planned targets—chief among them, property market balance.

He added that the move would introduce global real estate standards to the Kingdom and draw capital to improve housing infrastructure, while creating jobs and lowering property prices.

“This is more than just an investment measure—it’s a structural shift,” Al-Jasser said.

Focus on Mega Projects and New Cities

Khaled Almobid, CEO of Menassat Realty Co., said the measure would allow foreign investors to buy properties in major development zones such as NEOM and the Red Sea Project—areas central to Crown Prince Mohammed bin Salman’s economic diversification efforts.

Almobid said the law is intended to protect Saudi homebuyers from being priced out of the market, while enabling high-value foreign investment that brings hard currency and supports large-scale development.

“The focus will be on strategic areas,” he said. “We expect foreign ownership will be restricted in districts designated for Saudi housing, with safeguards against speculation.”

He noted that details would become clearer once executive regulations are released.

Riyadh Housing Reforms

The foreign ownership law follows a series of housing reforms launched in March by Crown Prince Mohammed, aimed at curbing soaring land and rental prices in Riyadh.

As part of the measures, the government lifted bans on land sales, divisions, and permits, and instructed the Royal Commission for Riyadh City to develop 10,000 to 40,000 new residential plots annually over the next five years - priced at no more than 1,500 riyals ($400) per square meter - for eligible citizens.

Eligibility is limited to married Saudis or individuals over 25 years old with no prior property ownership.

The government also pledged to amend regulations governing undeveloped land fees and tenant-landlord relations within 60 to 90 days to boost supply and protect all parties’ rights.

The Real Estate General Authority and the Royal Commission were also tasked with monitoring Riyadh property prices and submitting regular reports.