Saudi Arabia’s Non-oil Activity Rises to Highest Level in 8 Years

Non-oil activity increased due to a strong rise in demand and a positive economic outlook. (Asharq Al-Awsat)
Non-oil activity increased due to a strong rise in demand and a positive economic outlook. (Asharq Al-Awsat)
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Saudi Arabia’s Non-oil Activity Rises to Highest Level in 8 Years

Non-oil activity increased due to a strong rise in demand and a positive economic outlook. (Asharq Al-Awsat)
Non-oil activity increased due to a strong rise in demand and a positive economic outlook. (Asharq Al-Awsat)

Non-oil private business activity in Saudi Arabia rose to an 8-year high in February, supported by a strong increase in demand and a positive economic outlook. The Kingdom’s Purchasing Managers Index hit 59.8, up from 58.2 in January, at the fastest rate of increase since March 2015.

Sunday’s survey showed that the large rise in new orders indicates an improvement in the economic conditions of companies. The new orders sub-index rose to 68.7 last month, the highest reading in more than eight years, from 65.3 in January, extending a recent upward trend and building strong demand momentum.

As a result, the output sub-index registered a strong increase, reaching 65.6 in February from 63.6 in the previous month, which led to further expansion in hiring and purchasing.

Naif Alghaith, chief economist at Riyad Bank, said that despite the tightening of monetary conditions, the balance of supply and demand seemed strong and driven by ongoing projects across the Kingdom, which led to a sharp rise in production and new orders for companies, in addition to an increase in the demand for labor.

However, the strong improvement in demand in February has pushed inflationary pressures higher.

“Prices have responded to the surge in demand, with the increase in input costs evident especially in the services and construction sectors. To that end, we maintain our inflation forecast just below 3 percent, amid the ongoing cost pressures and the current elevated demand that we believe will continue in the medium term,” Alghaith noted.



Aramco, Sinopec and Yasref Sign Venture Framework Agreement for Petrochemical Expansion

Photo by SPA
Photo by SPA
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Aramco, Sinopec and Yasref Sign Venture Framework Agreement for Petrochemical Expansion

Photo by SPA
Photo by SPA

Saudi Aramco, China Petroleum & Chemical Corporation (Sinopec), and Yanbu Aramco Sinopec Refining Company (Yasref) announced the signing of a Venture Framework Agreement (VFA) to pave the way for a major petrochemical expansion at Yasref, in Yanbu, on the west coast of Saudi Arabia.
According to a press release from Aramco, the agreement, coinciding with Yasref's 10th anniversary, seeks to advance engineering studies for the development of a fully integrated petrochemical complex at Yasref, a joint venture owned by Aramco (62.5%) and Sinopec (37.5%). The project aims to maximize operational synergies and create additional value by introducing a state-of-the-art petrochemical unit, a large-scale mixed feed steam cracker with a 1.8 million tons per year capacity, and a 1.5 million tons per year aromatics complex with associated downstream derivatives integrated into the existing Yasref complex. This is expected to enhance Yasref's ability to meet the growing demand for high-quality petrochemical products, SPA reported.
President and CEO of Saudi Aramco Amin H. Nasser said, "The Yasref Venture Framework Agreement further deepens and elevates our strategic partnership with Sinopec. The planned expansion project solidifies our commitment to product innovation and diversification. As we look forward to strengthening our collaboration with Sinopec in making Yasref a leading refining and petrochemicals joint venture, we aim to contribute to growing Saudi Arabia's position as a global leader in energy and chemicals."
Aramco Downstream President Mohammed Y. Al Qahtani stated, "The planned Yasref expansion aligns with our downstream strategy to unlock the full potential of our resources, including converting up to four million barrels per day of crude oil into petrochemicals by 2030. In partnership with Sinopec, we aim to advance cutting-edge refining and petrochemical capabilities to deliver high-value products, create new opportunities, drive industrial innovation, and enable economic transformation. This highlights our strategic, long-term partnership with Sinopec."
Sinopec President Zhao Dong emphasized, "Yasref, a flagship joint venture symbolizing China-Saudi energy cooperation, has not only served as a key driver for Saudi Arabia's local economic growth but also actively advanced petrochemical industry upgrades. We expect the Yasref expansion project to unlock new dimensions of collaborative potential as we navigate the energy transition. Sinopec and Aramco are poised to establish a world-class, integrated refining and petrochemical complex distinguished by comprehensive competitive advantages, aiming to redefine traditional energy cooperation models and expand new frontiers for more sustainable development."
The release also noted that Yasref is one of several strategic partnerships between Aramco and Sinopec. These collaborations include Sinopec Senmei (Fujian) Petroleum Company (SSPC), Sinopec SABIC Tianjin Petrochemical Co. (SSTPC), Fujian Refining & Petrochemical Company (FREP), and a new integrated refining and petrochemical complex under development in Fujian Province, China. Through these ventures, the two groups aim to strengthen energy security, fuel industrial innovation, foster long-term cooperation, and contribute to the global economy.