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.



Egypt, Cyprus Sign Gas Export Deals, Boosting Eastern Mediterranean Energy Cooperation

The logo of Italian energy company Eni is seen at a gas station in Rome, Italy August 16, 2018. (Reuters)
The logo of Italian energy company Eni is seen at a gas station in Rome, Italy August 16, 2018. (Reuters)
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Egypt, Cyprus Sign Gas Export Deals, Boosting Eastern Mediterranean Energy Cooperation

The logo of Italian energy company Eni is seen at a gas station in Rome, Italy August 16, 2018. (Reuters)
The logo of Italian energy company Eni is seen at a gas station in Rome, Italy August 16, 2018. (Reuters)

Egypt and Cyprus signed agreements on Monday enabling the export of gas from Cyprus's offshore fields to Egypt for liquefaction and re-export to Europe, as both countries seek to bolster the Eastern Mediterranean's role as an energy hub.

The deals signed at the 2025 Egypt Energy Show formalize a long-anticipated plan to link Cypriot reserves to Egypt’s liquefied natural gas (LNG) facilities, a move that leverages Egypt’s existing infrastructure to process and ship natural gas to European markets.

Monday's agreements involve gas extracted from one Cypriot site, Cronos Block 6 - now under license to a consortium of Italy's Eni and France's Total - to be processed at Egypt's Zohr facilities before being liquefied at Damietta and exported to Europe.

A second memorandum of understanding outlines a framework of processing gas from Cyprus' offshore Aphrodite field, under license to a Chevron-led consortium, which will also be sent to Egypt for processing.

The east Mediterranean has yielded some major gas discoveries in recent years, while a disruption in energy supplies from Russia after its invasion of Ukraine in 2022 has sharpened Europe's attention on securing supplies elsewhere.

"The essence of these agreements is not limited to promoting the exploitation of deposits, but broadens the prospects for energy cooperation with Egypt, while contributing to regional stability and strengthening our country's geopolitical position in the Eastern Mediterranean," a statement from Cyprus's Presidency said.

Cypriot officials have previously said they expect gas from Block 6 Cronos to possibly come online in 2026 or 2027. Cronos gas in place is estimated at more than 3 trillion cubic feet (tcf).

Aphrodite holds an estimated 3.5 tcf of gas. Israel's NewMed, a member of the consortium, expects gas to come online in 2031, it said in a stock exchange filing on Sunday.

In a Monday filing update, it said the "non-binding" MoU envisaged that Egypt's national gas company, EGAS, would be the sole buyer of the gas produced from Aphrodite, while the partners would be granted an option to purchase specific quantities of the gas sold to EGAS as LNG.

The signing of the Aphrodite deal follows a recent breakthrough between Cyprus and the Chevron-led consortium after months of disagreement over a development plan.

The agreement provides a boost for Egypt, which has struggled with declining domestic gas production and last year returned to being a net importer of natural gas.

Egypt recently signed $3 billion worth of LNG supply deals with Shell and TotalEnergies to cover domestic demand for 2025.

Egyptian Prime Minister Mostafa Madbouly has emphasized the country's need to ramp up production at its own Zohr gas field, where operator Eni has resumed drilling after output dropped to 1.9 billion cubic feet per day in early 2024.