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After Harvey, Aramco Shuts Down Biggest Refinery in US

Harvey, Aramco
Harvey, Aramco
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After Harvey, Aramco Shuts Down Biggest Refinery in US

Harvey, Aramco
Harvey, Aramco

Damages resulting from Harvey storm on the US refining sector mounted as Motiva Enterprises – owned by Aramco – announced that it would completely halt operating in Port Arthur refinery because of the flood.

“At 5 a.m. on Wednesday, Motiva began a controlled shutdown of the Port Arthur refinery in response to increasing local flood conditions,” the company said – it added that restarting the refinery would depend on flood waters receding.

Barclays clarified in a research memorandum that the US stocks data this week and the next one won’t be accurate, which means that the data won’t be clear for a period of time. This would affect oil prices that are influenced by stocks’ data.

Goldman Sachs estimated in its statement issued on Monday that the storm would increase domestic crude oil availability by about 1.4 million barrels a day if the case remained the same. The bank added that until August 27, refineries of 3 million barrels per day capacity were shut down, knowing that they represent 16.5 percent of the overall refining capacity in the US.

Bloomberg revealed on Tuesday that the capacity of refineries that shut down is 2.35 million barrels a day. Some refineries haven’t been shut down yet (by the time Bloomberg published its report) but some units were and refining was curbed. Among them is the 605,000 barrel-per-day (bpd) Port Arthur, Texas, plant, Motiva Enterprises.

Goldman Sachs stated that 4.4 million barrels of US refining capacity has been shut by Harvey on Tuesday, that represents nearly 23 percent of US refining production. Restarting plants under even the best conditions can take a week or more.

The Energy Information Administration in US issued a report on Wednesday, revealing a sharp drop in crude stocks in the US last week despite the increase of refineries’ product.

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Saudi Business and Job Growth Hit 14-Year High

Riyadh, Saudi Arabia (AFP)
Riyadh, Saudi Arabia (AFP)
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Saudi Business and Job Growth Hit 14-Year High

Riyadh, Saudi Arabia (AFP)
Riyadh, Saudi Arabia (AFP)

Business conditions in Saudi Arabia’s non-oil private sector improved notably in June, driven by a marked rise in customer demand and expanded production, according to the latest Riyad Bank Purchasing Managers’ Index (PMI) data.

New business volumes surged, fueling the fastest pace of employment growth since May 2011. This strong demand for workers pushed wage costs to record highs, adding pressure on overall expenses and contributing to a fresh increase in output prices.

The headline PMI climbed to 57.2 in June from 55.8 in May - its highest level in three months and slightly above the long-term average of 56.9. The reading signaled a robust improvement in the health of the non-oil private sector economy.

Companies reported another rise in new orders last month, with growth accelerating following a recent low in April. Many firms cited gaining new clients, alongside improved marketing efforts and stronger demand conditions. Domestic sales were the main driver of the increase, while export sales edged up slightly.

Purchasing Activity Expands

Production continued to expand through the end of Q2, although growth slowed to a 10-month low. Purchasing activity picked up sharply as companies sought to secure additional inputs to meet rising demand, with the pace of purchase growth reaching its fastest in two years.

Employment growth accelerated as businesses rapidly expanded their workforce to keep pace with incoming orders, pushing hiring to the highest level since mid-2011. This strong recruitment trend, which began early in 2025, was largely driven by a rising need for skilled workers, prompting companies to increase salary offers. Consequently, overall wage costs rose at the fastest rate since the PMI survey started in 2009.

Facing mounting cost pressures from higher raw material prices, firms raised their selling prices sharply in June , the biggest increase since late 2023, reversing declines recorded in two of the previous three months. This price hike largely reflected the passing of higher operating costs onto customers, although some companies opted for competitive pricing strategies by cutting prices.

Resilient Economic Outlook

Looking ahead, non-oil private sector firms remained confident about business activity over the next 12 months. Optimism hit a two-year high, supported by resilient domestic economic conditions, strong demand, and improved sales. Supply-side conditions also showed positive momentum, with another strong improvement in supplier performance.

Dr. Naif Alghaith, Chief Economist at Riyad Bank, said: “Future expectations among non-oil companies remain very positive. Business confidence reached its highest level in two years, underpinned by strong order inflows and improving local economic conditions.”

He added: “However, cost pressures became more pronounced in June, with wage growth hitting record levels as companies compete to retain talent. Purchasing prices also rose at the fastest pace since February, partly driven by increased demand and geopolitical risks. Despite these challenges, companies broadly raised selling prices to recover from May’s declines, reflecting an improved ability to pass higher costs onto customers.”