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Goldman Sachs: OPEC Oil Request Won't Reverse Stockpiles

Goldman Sachs: OPEC Oil Request Won't Reverse Stockpiles
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Goldman Sachs: OPEC Oil Request Won't Reverse Stockpiles

Goldman Sachs: OPEC Oil Request Won't Reverse Stockpiles

Brent crude futures hit a one-month low on Tuesday after Bloomberg cited people familiar with the matter saying the US government has quietly asked Saudi Arabia and some other OPEC producers to increase oil production by about 1 million barrels a day.

Although the proposed increase is somewhat large, Goldman Sachs considered the increase requested by the US insufficient to raise commercial oil inventories in industrialized countries, which recently fell to negative levels below the five-year average.

But Goldman’s global head of commodities research, Jeff Currie, said an increase of that magnitude won’t prevent stockpiles from diminishing in the second half of this year.

“It’s not enough,” he said on the sidelines of the S&P Global Platts’ annual crude oil summit in London.

He downplayed the impact of an increase of 1 million barrels per day, insisting stockpiles would continue to edge lower in the second half of this year.

Oil demand is surging higher in 2018 and consumption in China is probably stronger than the market’s anticipating, indicated Currie.

Brent crude futures rose 9 cents to settle at $75.38 a barrel, a 0.12 percent gain. It touched a low of $73.81, its lowest since May 8.

US West Texas Intermediate (WTI) crude futures rose 77 cents to settle at $65.52 a barrel, a 1.2 percent gain. Earlier, WTI hit a session low of $64.22, the lowest since April 10.

Organization of the Petroleum Exporting Countries (OPEC) is due to meet in Vienna on June 22 to decide whether the group and a number of producers outside of the country, including Russia, will increase production to offset any potential supply shortfalls from Iran and Venezuela.

Sources with knowledge of the matter said on May 25 that Saudi Arabia and Russia were already considering an increase in oil production from OPEC and beyond by about 1 million bpd.

On Tuesday, Russian Energy Minister Alexander Novak said after a meeting with OPEC Secretary-General Mohammad Barkindo in Vienna that Russia and OPEC share a common view on the current oil market situation. He declined to provide further information.

On the other hand, chief executive of Indian private refiner Nayara Energy, a key buyer of Iranian oil, announced the company is prepared to replace Iranian oil if required under US sanctions and hopes to settle dues owed to Tehran for past purchases ahead of a November deadline.

Nayara, formerly known as Essar Oil, would leverage the vast network of its promoters Russia's Rosneft and trader Trafigura, to replace Iranian oil, if required under the US sanctions.

The company operates a 400,000 bpd sophisticated refinery at Vadinar in the country's west coast.

In April, Nayara's CEO B. Anand said the company was aiming to buy 120,000 bpd of oil from Iran in 2018/19, the same as the previous year, adding his company was receiving the same concessions as state-owned Indian refiners for Iranian oil purchases.

Anand also said he "most likely" expected Nayara to repay outstanding debt to Iran before the Nov. 4 deadline when the180-day "wind-down period" of US sanctions on Iran would end.

The company settled about 2 billion euros in dues to Iran to cover previous oil purchases and still owes around 500 million euros.

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Aljadaan: Emerging Markets Account for 70% of Global Growth

Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat
Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat
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Aljadaan: Emerging Markets Account for 70% of Global Growth

Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat
Al-Jadaan speaking to the attendees at the "AlUla Conference for Emerging Market Economies" (Asharq Al-Awsat

Saudi Minister of Finance Mohammed Aljadaan stressed Sunday that the world economy is going through a “profound transition,” saying emerging markets and developing economies now account for nearly 60 percent of the global Gross Domestic Product (GDP) in purchasing power terms and over 70 percent of global growth.

In his opening remarks at the AlUla Conference for Emerging Market Economies, organized by the Saudi Ministry of Finance and the IMF in AlUla, the minister said these economies have become an increasingly important driver of global growth with their share of global economy more than doubling since 2010.

“Today, the 10 emerging economies in the G20 alone account for more than half of the world growth. Yet, they face a more complex and fragmented environment, elevated debt levels, slower trade growth and increasing exposure to geopolitical shocks.”

“Unfortunately, more than half of low income countries are either in or at the risk of debt distress. At the same time global trade growth has slowed at around half of what it was pre the pandemic,” Aljadaan added.

The Finance Minister stressed that the Saudi experience over the past decade has reinforced three lessons that may be relevant to the discussions at the two-day conference, which brings together a select group of ministers and central bank governors, leaders of international organizations, leading investors and academics.

“First, macroeconomic stability is not the enemy of growth. It is actually the foundation,” he said.

“Structural reforms deliver results only when institutions deliver. So there is no point of reforming ... if the institutions are unable to deliver,” he stated.

Finally, he said that “international cooperation matters more, not less, in a fragmented world.”

Business

Georgieva from AlUla: Growth Still Lacks Pre-pandemic Levels

Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)
Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)
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Georgieva from AlUla: Growth Still Lacks Pre-pandemic Levels

Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)
Kristalina Georgieva speaking to attendees at the second edition of the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat)

International Monetary Fund (IMF) Managing Director Kristalina Georgieva said Sunday that world growth still lacks pre-pandemic levels, expressing concern as she expected more shocks amid high spending and rising debt levels in many countries.

Georgieva spoke at the AlUla Conference for Emerging Market Economies, organized by the Saudi Ministry of Finance and the IMF in AlUla.

The two-day conference brings together a select group of ministers and central bank governors, leaders of international organizations, leading investors and academics to deliberate on policies to global stability, prosperity, and multilateral collaboration.

Georgieva said that the conference was launched last year in recognition of the growing role of emerging market economies in a world of sweeping transformations.

“I came out of this gathering .... With a sense of hope for the pragmatic attitude and determination to pursue good policies and build strong institutions,” she said.

Georgieva stressed that “good policies pay off,” and said that growth rates across emerging economies reached four percent this year, exceeding by a large margin those of advanced economies that are around 1.5 percent.

Business

Saudi Arabia’s flynas, Syrian Civil Aviation Authority Partner to Launch 'flynas Syria'

The new airline will operate commercial air transport services in accordance with approved regulations and standards (flynas)
The new airline will operate commercial air transport services in accordance with approved regulations and standards (flynas)
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Saudi Arabia’s flynas, Syrian Civil Aviation Authority Partner to Launch 'flynas Syria'

The new airline will operate commercial air transport services in accordance with approved regulations and standards (flynas)
The new airline will operate commercial air transport services in accordance with approved regulations and standards (flynas)

Saudi budget carrier flynas has signed an agreement with the Syrian General Authority of Civil Aviation and Air Transport to establish a new commercial airline under the name "flynas Syria," with operations scheduled to begin in the fourth quarter of 2026.

Saturday’s agreement comes within the framework of bilateral cooperation between Saudi Arabia and Syria, as well as the strategic investment agreements between the two countries, coordinated with the Saudi Ministry of Investment and the Syrian General Authority of Civil Aviation and Air Transport.

The new airline will operate commercial air transport services in accordance with approved regulations and standards, meeting the highest safety and aviation security requirements. All licensing and operational procedures will be completed in coordination with the relevant authorities.

The carrier will be established as a joint venture, with 51% ownership held by the Syrian General Authority of Civil Aviation and Air Transport and 49% by flynas.

The new airline will operate flights to several destinations across the Middle East, Africa, and Europe. This expansion aims to bolster air traffic to and from Syria, enhance regional and international connectivity, and meet growing demand for air travel.

"This step is part of our commitment to supporting high-quality cross-border investments. The aviation sector is a key enabler of economic development, and the establishment of 'flynas Syria' serves as a model for constructive investment cooperation,” said Saudi Minister of Investment Khalid Al-Falih.

“This partnership enhances economic integration and market connectivity and supports development goals by advancing air transport infrastructure, ultimately serving the mutual interests of both nations and promoting regional economic stability,” he added.

President of the Syrian General Authority of Civil Aviation and Air Transport Omar Hosari also stated that the establishment of flynas Syria represents a strategic step within a comprehensive national vision aimed at rebuilding and developing Syria's civil aviation sector on modern economic and regulatory foundations.

“This will be achieved while balancing safety requirements, operational sustainability, investment stimulation, and passenger services. The partnership reflects the state's orientation toward smart cooperation models with trusted regional partners, ensuring the transfer of expertise, the development of national capabilities, and the enhancement of Syria's air connectivity with regional and international destinations, in line with global best practices in the air transport industry."

flynas Chairman Ayed Al-Jeaid stated that the company continues to pursue strategies aimed at growth and international expansion, describing the agreement as a historic milestone in the company's journey and a promising investment model in partnership with Syria.

flynas CEO Bander Al-mohanna said the step represents a qualitative leap in the company's strategy and financial performance, highlighting the transfer of the company's low-cost aviation experience to the Syrian market to support regional and international air connectivity.

flynas currently operates 23 weekly flights from Riyadh, Jeddah, and Dammam to Damascus, including two daily direct flights from Riyadh, one daily flight from Jeddah, and two weekly flights from Dammam.

The airline made history on June 5, 2025, by adding the Syrian capital to its network, becoming the first Saudi carrier to resume scheduled flights to Damascus.