IEA: Oil Demand Holds Up Despite Omicron

The sun sets behind an oil pump outside Saint-Fiacre, near Paris, France March 28, 2019. REUTERS/Christian Hartmann/File Photo
The sun sets behind an oil pump outside Saint-Fiacre, near Paris, France March 28, 2019. REUTERS/Christian Hartmann/File Photo
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IEA: Oil Demand Holds Up Despite Omicron

The sun sets behind an oil pump outside Saint-Fiacre, near Paris, France March 28, 2019. REUTERS/Christian Hartmann/File Photo
The sun sets behind an oil pump outside Saint-Fiacre, near Paris, France March 28, 2019. REUTERS/Christian Hartmann/File Photo

Oil supply will soon overtake demand as some producers are set to pump at or above all-time highs, the International Energy Agency (IEA) said on Wednesday, while demand holds up despite the spread of the Omicron coronavirus variant.

“This time around, the surge is having a more muted impact on oil use,” the Paris-based IEA said in its monthly oil report.

“The steady rise in supply could see a significant surplus materialize in Q1 2022 and going forward,” it said, with the United States, Canada and Brazil set to pump at all-time highs for the year while Saudi Arabia and Russia could also break their output records.

"World oil supply in 2022 has the potential for a massive Saudi-driven gain of 6.2 million bpd (barrels per day), provided the OPEC+ alliance continues to unwind the remainder of its record 2020 supply cut.”

OPEC and other producers including Russia, a group known as OPEC+, is unwinding record output cuts put in place last year to counter a fall in demand caused by the pandemic.

Its plan calls for adding back 400,000 bpd of production per month to fully unwind the cuts by the end of September, although some countries are struggling to raise output, with OPEC+ in December falling 790,000 bpd short of its target.

Eased lockdown measures mean mobility remains robust, the IEA added, leading the energy watchdog to increase its oil demand estimate for last year and 2022 by 200,000 bpd.

But the IEA warned that with commercial oil and fuel stocks in OECD countries at their lowest levels in seven years, any dents in supply could render the oil market in 2022 volatile.

The impact could be greater given that the ramp-up in pumping means the effective spare capacity of the group is reduced and is now centered in Saudi Arabia and the United Arab Emirates as some smaller OPEC members face output issues.

OPEC+ producers’ effective spare capacity by the second half of the year, excluding Iranian oil which is blocked by sanctions, could shrink to 2.6 million bpd, the IEA said.



3,000 Saudi SMEs Benefit from Loans Exceeding $2.1 billion

Cafes are among the small establishments witnessing growth in the Saudi market (SPA)
Cafes are among the small establishments witnessing growth in the Saudi market (SPA)
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3,000 Saudi SMEs Benefit from Loans Exceeding $2.1 billion

Cafes are among the small establishments witnessing growth in the Saudi market (SPA)
Cafes are among the small establishments witnessing growth in the Saudi market (SPA)

Around 3,000 Saudi SMEs benefited from The Small and Medium Enterprises Loan Guarantee Program (Kafalah) during the first half of 2024.

The program reported issuing 3,543 financing guarantees worth over SAR 8 billion, compared to SAR 7.2 billion last year, marking an 11.66% increase. The value of the guarantees provided exceeded SAR 6 billion, compared to SAR 5.7 billion in 2023, reflecting a 4.63% increase, according to a statement by Kafalah.

CEO and Board Member Homam Hashem stated that SMEs are the main economic driver and crucial for achieving economic development and income diversification, as emphasized by Vision 2030.

He highlighted the importance of government and private sector efforts to support SMEs and address their challenges, pointing to the program’s success as a public-private partnership model.

Kafalah program, in coordination with the SME Bank, aims to achieve Vision 2030 goals in all initiatives and products, helping SMEs obtain financing to grow and expand across the Kingdom, and encouraging financial institutions to engage with the SME sector.

Since its launch in fiscal year 2006, and until the end of the second quarter of 2024, the program has approved more than 63,000 guarantees benefitting 22,000 SMEs, with a total value of financing exceeding SAR 99 billion ($26.4 billion). The total value of issued guarantees amounted to SAR 70.5 billion.