عربي English Türkçe اردو فارسى
Logo
Latest News
Business

Shadow of Iranian Oil Exports Drop Looms over Upcoming OPEC Meeting

The OPEC logo is pictured on the wall of its Vienna headquarters. (Reuters)
The OPEC logo is pictured on the wall of its Vienna headquarters. (Reuters)
TT
TT

Shadow of Iranian Oil Exports Drop Looms over Upcoming OPEC Meeting

The OPEC logo is pictured on the wall of its Vienna headquarters. (Reuters)
The OPEC logo is pictured on the wall of its Vienna headquarters. (Reuters)

Two months ahead of US sanctions on Iranian oil exports being reintroduced, Tehran witnessed a sharp drop in its crude oil sales. It also lost key importers in Asia and Africa.

The decline in Iran oil sales came before the 10th OPEC (Organization of the Petroleum Exporting Countries) and non-OPEC producers Ministerial Meeting later this month.

The decline in Iranian exports, a trend expected to continue in coming weeks, comes at a time of rising tensions within OPEC members on some member countries breaking away from a cut deal and raising production.

Disputes could reach a peak during the upcoming meeting in Algeria scheduled for September 23.

Iran exported just over 2 million barrels a day of crude oil and condensate (a light form of crude extracted from gas fields) in August, according to Bloomberg tanker tracking.

That is the lowest since March 2016, and down 28 percent from April, the last month before President Donald Trump announced that he was withdrawing from the Iran nuclear deal and re-imposing sanctions, said Bloomberg.

Several key buyers of Iranian oil have already halted purchases. There have been no shipments to South Korea or France since June, while overall exports to the European Union have fallen by about 40 percent since April.

The loss of the South Korean market creates a particular problem for Iran, as it was the destination for almost 60 percent of the country’s condensate exports. These flows were exempted from sanctions under President Barack Obama — but have been included this time around.

Bloomberg said Iran may have to cut gas extraction rates if it cannot get rid of its gas condensate, which could result in shortages during the winter.

China appears to be making good on its pledge to neither raise nor cut its purchases of Iranian crude, while India and Japan are still seeking waivers from US sanctions in return for a reduction, rather than a full curtailment, of their purchases.

Despite fears that a drop in oil exports from Iran could lead to a supply shortfall in global markets, increased production from other OPEC countries have compensated for the loss, at least so far.

OPEC production has increased by 840,000 bpd since last April, excluding the Republic of the Congo (DRC), which officially joined the group last June, with a net increase of 500,000 bpd.

While the decision taken at the meetings in Vienna in June to boost output by bringing production closer to the level agreed at the end of 2016 is helping to ease supply worries, it is also causing friction within OPEC.

Saudi oil minister Khalid Al-Falih said after the meetings that the deal allowed those producers with spare capacity to make up volumes that others were unable to produce in order to bring the group’s total output into line with the agreed level.

Iran disputes this interpretation, arguing each country should keep production in line with its individual target.

Most Viewed

 
 
Business

IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
TT
TT

IMF and Arab Monetary Fund Sign MoU to Enhance Cooperation

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA
The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki - SPA

The International Monetary Fund (IMF) and the Arab Monetary Fund (AMF) signed a memorandum of understanding (MoU) on the sidelines of the AlUla Conference on Emerging Market Economies (EME) to enhance cooperation between the two institutions.

The MoU was signed by IMF Managing Director Dr. Kristalina Georgieva and AMF Director General Dr. Fahad Alturki, SPA reported.

The agreement aims to strengthen coordination in economic and financial policy areas, including surveillance and lending activities, data and analytical exchange, capacity building, and the provision of technical assistance, in support of regional financial and economic stability.

Both sides affirmed that the MoU represents an important step toward deepening their strategic partnership and strengthening the regional financial safety net, serving member countries and enhancing their ability to address economic challenges.

Business

Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT
TT
TT

Saudi Chambers Federation Announces First Saudi-Kuwaiti Business Council

File photo of the Saudi flag/AAWSAT
File photo of the Saudi flag/AAWSAT

The Federation of Saudi Chambers announced the formation of the first joint Saudi-Kuwaiti Business Council for its inaugural term (1447–1451 AH) and the election of Salman bin Hassan Al-Oqayel as its chairman.

Al-Oqayel said the council’s formation marks a pivotal milestone in economic relations between Saudi Arabia and Kuwait, reflecting a practical approach to enabling the business sectors in both countries to capitalize on promising investment opportunities and strengthen bilateral trade and investment partnerships, SPA reported.

He noted that trade between Saudi Arabia and Kuwait reached approximately SAR9.5 billion by the end of November 2025, including SAR8 billion in Saudi exports and SAR1.5 billion in Kuwaiti imports.

Business

Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
TT
TT

Leading Harvard Trade Economist Says Saudi Arabia Holds Key to Success in Fragmented Global Economy

Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).
Professor Pol Antràs speaks during a panel discussion at the AlUla Conference for Emerging Market Economies (Asharq Al-Awsat).

Harvard University economics professor Pol Antràs said Saudi Arabia represents an exceptional model in the shifting global trade landscape, differing fundamentally from traditional emerging-market frameworks. He also stressed that globalization has not ended but has instead re-formed into what he describes as fragmented integration.

Speaking to Asharq Al-Awsat on the sidelines of the AlUla Conference for Emerging Market Economies, Antràs said Saudi Arabia’s Vision-driven structural reforms position the Kingdom to benefit from the ongoing phase of fragmented integration, adding that the country’s strategic focus on logistics transformation and artificial intelligence constitutes a key engine for sustainable growth that extends beyond the volatility of global crises.

Antràs, the Robert G. Ory Professor of Economics at Harvard University, is one of the leading contemporary theorists of international trade. His research, which reshaped understanding of global value chains, focuses on how firms organize cross-border production and how regulation and technological change influence global trade flows and corporate decision-making.

He said conventional classifications of economies often obscure important structural differences, noting that the term emerging markets groups together countries with widely divergent industrial bases. Economies that depend heavily on manufacturing exports rely critically on market access and trade integration and therefore face stronger competitive pressures from Chinese exports that are increasingly shifting toward alternative markets.

Saudi Arabia, by contrast, exports extensively while facing limited direct competition from China in its primary export commodity, a situation that creates a strategic opportunity. The current environment allows the Kingdom to obtain imports from China at lower cost and access a broader range of goods that previously flowed largely toward the United States market.

Addressing how emerging economies should respond to dumping pressures and rising competition, Antràs said countries should minimize protectionist tendencies and instead position themselves as committed participants in the multilateral trading system, allowing foreign producers to access domestic markets while encouraging domestic firms to expand internationally.

He noted that although Chinese dumping presents concerns for countries with manufacturing sectors that compete directly with Chinese production, the risk is lower for Saudi Arabia because it does not maintain a large manufacturing base that overlaps directly with Chinese exports. Lower-cost imports could benefit Saudi consumers, while targeted policy tools such as credit programs, subsidies, and support for firms seeking to redesign and upgrade business models represent more effective responses than broad protectionist measures.

Globalization has not ended

Antràs said globalization continues but through more complex structures, with trade agreements increasingly negotiated through diverse arrangements rather than relying primarily on multilateral negotiations. Trade deals will continue to be concluded, but they are likely to become more complex, with uncertainty remaining a defining feature of the global trading environment.

Interest rates and artificial intelligence

According to Antràs, high global interest rates, combined with the additional risk premiums faced by emerging markets, are constraining investment, particularly in sectors that require export financing, capital expenditure, and continuous quality upgrading.

However, he noted that elevated interest rates partly reflect expectations of stronger long-term growth driven by artificial intelligence and broader technological transformation.

He also said if those growth expectations materialize, productivity gains could enable small and medium-sized enterprises to forecast demand more accurately and identify previously untapped markets, partially offsetting the negative effects of higher borrowing costs.

Employment concerns and the role of government

The Harvard professor warned that labor markets face a dual challenge stemming from intensified Chinese export competition and accelerating job automation driven by artificial intelligence, developments that could lead to significant disruptions, particularly among younger workers. He said governments must adopt proactive strategies requiring substantial fiscal resources to mitigate near-term labor-market shocks.

According to Antràs, productivity growth remains the central condition for success: if new technologies deliver the anticipated productivity gains, governments will gain the fiscal space needed to compensate affected groups and retrain the workforce, achieving a balance between addressing short-term disruptions and investing in long-term strategic gains.