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FedEx Express Moves to Direct-serve Presence in Saudi Arabia

FedEx announces moving to a direct-serve presence in Saudi Arabia (Asharq Al-Awsat)
FedEx announces moving to a direct-serve presence in Saudi Arabia (Asharq Al-Awsat)
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FedEx Express Moves to Direct-serve Presence in Saudi Arabia

FedEx announces moving to a direct-serve presence in Saudi Arabia (Asharq Al-Awsat)
FedEx announces moving to a direct-serve presence in Saudi Arabia (Asharq Al-Awsat)

The world’s largest express transportation company FedEx Express is moving to a direct-serve presence in Saudi Arabia.

FedEx Express will invest more than 1.5 billion Saudi riyals ($400 million) into the Saudi economy over the next 10 years to meet the country's growing international shipping demands.

The investment will go into talent management, local operations and infrastructure, the company said in a statement.

The company's investment, in line with Saudi's Vision 2030 goals and the ‘National Industrial Development and Logistics Program’, seeks to increase non-oil exports to more than 1 trillion riyals ($266 billion).

FedEx Express has been facilitating trade in Saudi Arabia since 1994, offering international solutions and connectivity through local service providers, most recently through SAB Express.

Its direct presence will further help local businesses trade with ease and expand their reach into the more than 220 countries and territories that it serves, the statement added.

“This strategic expansion in the kingdom will help Saudi-based businesses connect to new markets and customers around the world, supporting Saudi Arabia’s Vision 2030 goals to diversify the national economy,” said Jack Muhs, regional president of FedEx Express Middle East, Indian Subcontinent, and Africa.

“In addition to our commitment to the Saudi economy, we see FedEx Express playing an important role in developing the small- and medium-enterprise environment in Saudi Arabia, which forms the backbone of the economy, and represents 99 percent of Saudi Arabia’s private sector.”

FedEx Express will continue to work closely with SAB Express to provide pickup, delivery, and customs clearance services across the country, the statement read.

“We’re happy to continue supporting FedEx Express in Saudi Arabia with their growth journey and join them in playing a critical role in developing Saudi Arabia’s logistics infrastructure, in line with the country’s coordinated efforts and strategy in diversifying the economy,” Sheikh Salah Al Bluewi, chairman of SAB Express, said.

“The logistics sector is a key contributor towards employment, investment, and overall economic growth in our nation.”

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Iran’s Energy Sector: A Long History of Sanctions and Instability

Abadan oil refinery facility in southwestern Iran (Reuters)
Abadan oil refinery facility in southwestern Iran (Reuters)
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Iran’s Energy Sector: A Long History of Sanctions and Instability

Abadan oil refinery facility in southwestern Iran (Reuters)
Abadan oil refinery facility in southwestern Iran (Reuters)

Israel launched airstrikes on Iran Friday, targeting nuclear facilities, ballistic missile factories, and senior military commanders. The operation, which Israeli officials warned could be “prolonged,” is intended to prevent Tehran from developing nuclear weapons.

Iran’s National Oil Refining and Distribution Company confirmed that its oil refining and storage facilities were not damaged in the attacks. Similarly, the Abadan Oil Refining Company announced it was operating at full capacity with no service disruptions.

Iran is the third-largest oil producer in OPEC, pumping approximately 3.3 million barrels per day, about 3% of global output.

Sanctions and OPEC Role

Iran’s oil production peaked in the 1970s, reaching a record 6 million barrels per day in 1974, more than 10% of global supply at the time, according to OPEC data.

The first US sanctions were imposed on Tehran in 1979, and Iran has since remained under recurring waves of American and European restrictions. In 2018, President Donald Trump withdrew from the nuclear deal and reimposed strict sanctions, sending Iran’s oil exports plummeting—sometimes to near zero.

Under President Joe Biden, however, exports began to climb again. Analysts say enforcement has been less aggressive, and Iran has increasingly succeeded in evading restrictions. It’s also important to note that Iran is exempt from OPEC’s production quotas.

In recent months, Iranian oil exports have surged to around 1.8 million barrels per day—the highest since 2018, fueled by strong demand from China. Beijing does not recognize unilateral sanctions against its trade partners. Private Chinese refineries remain the main buyers of Iranian crude, despite some being targeted by recent US Treasury sanctions. So far, these measures have had limited impact on the flow of Iranian oil to China.

Iran continues to skirt sanctions using tactics like ship-to-ship transfers and by concealing tanker locations.

Production and Infrastructure

Energy consultancy FGE reports that Iran refines around 2.6 million barrels per day of crude and condensates, while exporting an equivalent amount that includes crude, condensates, and refined products. Iran also produces 34 billion cubic feet of natural gas daily - about 7% of global production - all of which is consumed domestically.

Most of Iran’s oil and gas infrastructure is concentrated in the southwest: oil fields in Khuzestan, gas in Bushehr, and condensates from the massive South Pars field. About 90% of crude exports pass through Kharg Island.

While OPEC members theoretically have the capacity to offset a drop in Iranian supply, many are already operating near their limits, placing pressure on the group’s spare production capacity.