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Saudi Arabia Makes Great Strides in Global Logistics Services

Saudi Arabia has recently witnessed significant development in the logistics services industry (Asharq Al-Awsat)
Saudi Arabia has recently witnessed significant development in the logistics services industry (Asharq Al-Awsat)
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Saudi Arabia Makes Great Strides in Global Logistics Services

Saudi Arabia has recently witnessed significant development in the logistics services industry (Asharq Al-Awsat)
Saudi Arabia has recently witnessed significant development in the logistics services industry (Asharq Al-Awsat)

Saudi Arabia has jumped 17 ranks in the World Bank’ Logistics Performance Index (LPI) 2023, which allows it to attract more investments, and increase the volume of exports, imports, and international trade, experts told Asharq Al-Awsat.

The Kingdom’s progress in the international index came after achieving large leaps in several indicators, namely: logistical efficiency, tracking and tracing, timing, customs, infrastructure, and maritime freight.

Nashmi Al-Harbi, a logistics expert, told Asharq Al-Awsat that with unlimited empowerment and support from the government, Saudi Arabia will be able to reach the top ten positions, based on its development of the basic pillars of the LPI, namely: customs and ease of procedures, diversity, and transportation means, as well as facilities infrastructure, such as ports, airports, railways and land lines.

He also pointed to the initiatives recently launched by Crown Prince Mohammad bin Salman, including the establishment of four economic zones that are aimed at attracting major foreign investments and companies and creating many job and commercial opportunities for the local market.

For his part, Economist Nasser Al-Qarawi told Asharq Al-Awsat that the Kingdom’s jump in the LPI came as a result of a national strategic plan that seeks to transform the Kingdom into an international logistical business hub.

Saudi Arabia launched the National Strategy for Transport and Logistics Services, with the aim of increasing the sector’s contribution to the national GDP from 6 to 10 percent by 2030.

Minister of Transport and Logistic Services Eng. Saleh Bin Nasser Al-Jasser announced last week that Saudi Arabia has jumped 17 ranks in the World Bank’ Logistics Performance Index.

This jump was achieved within the support and empowerment of Crown Prince and Prime Minister Mohammed bin Salman, the minister said, adding that the system will continue, through the directives of Saudi Arabia’s leadership, to move forward to consolidate the Kingdom’s position as a global logistic hub, in accordance with the national strategy for transportation and logistics services.

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Russian Gas Flows via Ukraine for Last Days as Transit Deal Crumbles

A view shows the Orenburg gas processing plant of Gazprom in the Orenburg Region, Russia September 1, 2023. REUTERS/Alexander Manzyuk/File Photo
A view shows the Orenburg gas processing plant of Gazprom in the Orenburg Region, Russia September 1, 2023. REUTERS/Alexander Manzyuk/File Photo
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Russian Gas Flows via Ukraine for Last Days as Transit Deal Crumbles

A view shows the Orenburg gas processing plant of Gazprom in the Orenburg Region, Russia September 1, 2023. REUTERS/Alexander Manzyuk/File Photo
A view shows the Orenburg gas processing plant of Gazprom in the Orenburg Region, Russia September 1, 2023. REUTERS/Alexander Manzyuk/File Photo

Russia pumped gas on Monday to European customers via Ukraine for one of the last days before a key transit deal expires at the end of the year, marking the almost complete loss of Russia's once mighty hold over the European gas market.

Supplies of Russian gas via Ukraine are due to stop from the early hours of Jan. 1 after the current five-year deal expires. Kyiv has refused to negotiate a new transit deal as its war against Russia approaches the end of a third year.

Russia and the Soviet Union spent half a century building up a major share of the European gas market, which at its peak stood at 35%, but the war in Ukraine has all but destroyed that business for Gazprom, Russia's state-controlled gas giant.

Moscow has lost its share to rivals such as Norway, the United States and Qatar since the 2022 invasion of Ukraine, which prompted the EU to cut its dependence on Russian gas.

The slump in Russian gas supplies to Europe pushed gas prices to an all-time high, stoking inflation and raising the cost of living across the continent.

The end of the transit deal is unlikely to cause a repeat of the 2022 EU gas price rally as the remaining volumes are relatively small. Russia shipped about 15 billion cubic metres (bcm) of gas via Ukraine in 2023 - only 8% of peak Russian gas flows to Europe via various routes in 2018-2019.

President Vladimir Putin said last week that there was no time left this year to sign a new Ukrainian gas transit deal, laying the blame on Kyiv for refusing to extend the agreement, according to Reuters.

The Soviet-era Urengoy-Pomary-Uzhgorod pipeline brings gas from Siberia via the town of Sudzha - now under the control of Ukrainian soldiers - in Russia's Kursk region. It then flows through Ukraine to Slovakia. In Slovakia, the gas pipeline splits into branches going to the Czech Republic and Austria.

Most other Russian gas routes to Europe are shut, including Yamal-Europe via Belarus and Nord Stream under the Baltic that was blown up in 2022.

The only other operational Russian gas pipeline routes to Europe are the Blue Stream and TurkStream to Turkey under the Black Sea. Turkey sends some Russian gas volumes onward to Europe including to Hungary.

DISPUTES

Gazprom plunged to a net loss of $7 billion in 2023, its first annual loss since 1999, because of the loss of the EU's gas markets.

Disruptions to gas supplies have also sparked numerous contractual and political disputes.

On Monday, Moldovan Prime Minister Dorin Recean ordered his government to start preparing for the possible nationalisation of gas company Moldovagaz, which is 50%-owned by Gazprom.

Gazprom had said it plans to suspend gas exports to Moldova from 0500 GMT on Jan. 1 due to unpaid debts. Moldova disputes it is in arrears for previous gas shipments and accuses Russia of destabilising the country, which Moscow denies.

Slovakian Prime Minister Robert Fico said on Friday that Slovakia would consider reciprocal measures against Ukraine such as halting back-up electricity supplies if Kyiv stops the gas transit from Jan. 1.

Ukrainian President Volodymyr Zelenskiy accused Fico on Saturday of opening a "second energy front" against Ukraine on the orders of Russia. Slovakia denied the accusation.

Gazprom said that it will send 42.4 million cubic metres of gas to Europe via Ukraine on Monday, a volume in line with recent days.

Reuters reported last month that Gazprom is making the assumption that no more gas will flow to Europe via Ukraine after Dec. 31 in its internal planning for 2025.

Ukraine could consider continued transit of Russian gas on the condition that Moscow does not receive money for the fuel until after the war, Zelenskiy said earlier this month.