Saudi Labor Reform Initiative Goes Into Effect

On Sunday, March 14, 2021, the new Labor Reform Initiative (LRI), which seeks to “improve the contractual relationship” for workers in the Kingdom’s private sector, will come into force | Asharq Al-Awsat
On Sunday, March 14, 2021, the new Labor Reform Initiative (LRI), which seeks to “improve the contractual relationship” for workers in the Kingdom’s private sector, will come into force | Asharq Al-Awsat
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Saudi Labor Reform Initiative Goes Into Effect

On Sunday, March 14, 2021, the new Labor Reform Initiative (LRI), which seeks to “improve the contractual relationship” for workers in the Kingdom’s private sector, will come into force | Asharq Al-Awsat
On Sunday, March 14, 2021, the new Labor Reform Initiative (LRI), which seeks to “improve the contractual relationship” for workers in the Kingdom’s private sector, will come into force | Asharq Al-Awsat

Saudi Arabia’s Labor Reform Initiative (LRI), which was announced last November, has gone into effect as of Sunday, bringing the kingdom a step closer to its goal of developing human capital and empowering people by fostering a competitive but fair working environment.

Experts have confirmed that the initiative is a fundamental shift in the Saudi labor market and the relationship between the employer and expatriate workers.

They stressed the importance of improving the local labor market to match the kingdom’s aspirations and attract skilled workers.

The job mobility service offered by LRI helps eliminate unfair control and weak management of employment and forces employers to abide by the contractual relationship.

The vision of the LRI is to create an attractive labor market in the Kingdom that offers flexible working conditions for the contractual workers and helps to empower and improve human resources.

Prior to the reforms, sponsored foreign workers needed to take permission from their current employer to change their job. They also required approval before traveling outside the country or undertaking their administrative tasks.

Implementing contractual relationships will enable raising the efficiency of human capital operating in the Saudi labor market, said Mercer’s CEO in Saudi Arabia Mahmoud Ghazi.

Ghazi noted that the move standardizes work mobility according to fresh procedures and conditions that stem out of competency, merit, and professionalism.

The change brought about by the LRI to labor mobility will produce a qualitative leap in improving both employer and employee rights, Ghazi told Asharq Al-Awsat, adding that this will reflect positively on attracting investors to Saudi Arabia.

Economic analyst Abdulrahman al-Jubeiri has reaffirmed that the initiative brings about a number of advantages to the Saudi labor market.

“Implementing the LRI entails a list of pros that include increasing the competitiveness of the Saudi worker, improving the local work environment, advancing Saudi Arabia’s ranking in the international competitiveness index, and reducing employment costs,” Jubeiri told Asharq Al-Awsat.

He added that the LRI also supports greater opportunities for localizing jobs, technology, and experience in the kingdom.



Oil Steadies as Market Awaits Fresh US Tariffs

FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo
FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo
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Oil Steadies as Market Awaits Fresh US Tariffs

FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo
FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo

Oil prices were little changed on Wednesday as traders remained cautious ahead of US tariffs due to be announced at 2000 GMT, fearing they could exacerbate a global trade war and dampen demand for crude.

Brent futures were down 7 cents, or 0.09%, at $74.42 a barrel by 0858 GMT. US West Texas Intermediate crude futures fell 5 cents, or 0.07%, to $71.15.

The White House confirmed on Tuesday that President Donald Trump will impose new tariffs on Wednesday, though it provided no detail on the size and scope of the trade barriers, according to Reuters.

Trump's tariff policies could stoke inflation, slow economic growth and escalate trade disputes.

"Crude prices have paused last month's rally, with Brent finding some resistance above $75, with the focus for now turning from a sanctions-led reduction in supply to Trump's tariff announcement and its potential negative impact on growth and demand," said Ole Hansen, head of commodity strategy at Saxo Bank.

Traders will be watching for levies on crude imports, potentially driving up prices of refined products, he added.

For weeks Trump has touted April 2 as "Liberation Day", bringing new duties that could rattle the global trade system.

The White House announcement is scheduled for 4 p.m. ET (2000 GMT).

"The balance of risk lies to the downside, given that weaker than expected tariff measures are unlikely to drive a significant rally in Brent, while stronger than expected measures could trigger a substantial selloff," BMI analysts said in a note.

Trump has also threatened to impose secondary tariffs on Russian oil and on Monday he ramped up sanctions on Iran as part of his administration's "maximum pressure" campaign to cut its exports.

"Markets likely to be volatile ahead of the final announcements on tariffs and the scale of them. The threat of secondary tariffs on Russian crude continues to provide some support for prices, with more downside risk at present around tariff uncertainty," said Panmure Liberum analyst Ashley Kelty.

US oil and fuel inventories painted a mixed picture of supply and demand in the world's biggest producer and consumer.

US crude oil inventories rose by 6 million barrels in the week ended March 28, according to sources citing the American Petroleum Institute. Gasoline inventories, however, fell by 1.6 million barrels and distillate stocks were down by 11,000 barrels, the sources said.

Official US crude oil inventory data from the Energy Information Administration is due later on Wednesday.