Aramco Increases Production in Offshore Fields

An Aramco employee walks near an oil tank at Saudi Aramco's Ras Tanura oil refinery and oil terminal in Saudi Arabia May 21, 2018. (File Photo: Reuters)
An Aramco employee walks near an oil tank at Saudi Aramco's Ras Tanura oil refinery and oil terminal in Saudi Arabia May 21, 2018. (File Photo: Reuters)
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Aramco Increases Production in Offshore Fields

An Aramco employee walks near an oil tank at Saudi Aramco's Ras Tanura oil refinery and oil terminal in Saudi Arabia May 21, 2018. (File Photo: Reuters)
An Aramco employee walks near an oil tank at Saudi Aramco's Ras Tanura oil refinery and oil terminal in Saudi Arabia May 21, 2018. (File Photo: Reuters)

Saudi Aramco has pressed ahead with plans to increase production from offshore fields to maintain its capacity of producing 12 million bpd in the coming years.

The company has set a $300 billion budget for oil and gas projects in the next 10 years.

On Tuesday, Aramco said it awarded a contract to China Harbour Engineering Arabia for the construction of two drilling islands under the company’s Berri Increment Program (BIP).

The objective of the BIP is to produce an additional 250,000 barrels per day (bpd) of Arabian Light crude oil from the Berri Oil Field to reach 500,000 bpd to maintain Aramco’s maximum sustained capacity by early 2023.

Last week, Aramco awarded the first large-scope integrated services contract for its Marjan oilfield to GE’s Baker Hughes.

Baker Hughes will provide drilling services, coiled tubing services and drilling fluids engineering services in Marjan, which is the first of three major offshore expansions in Saudi Arabia, and the company’s largest upstream development project this year.

Aramco has announced in its annual report that it restored one of the units at Zuluf field, which had been shut down for 23 years. This would help the field maintain an 800,000 bpd production.

The annual report also indicated that Dammam field will begin producing 25,000 bpd in 2021, which will be increased to 75,000 in 2026.

On Tuesday, Aramco signed a contract with China Harbour Engineering in Dhahran.

The Program includes the installation of a new Gas Oil Separation Plant (GOSP) in Abu Ali Island and additional gas processing facilities at the Khursaniyah Gas Plant (KGP) to process 40,000 bpd of hydrocarbon condensate associated with the Berri Crude Increment. Related pipelines, water injection facilities, onshore drilling sites, drilling islands and offshore facilities are also included.

Under the contract, two drilling islands shall be constructed near shore at the north and south sides of the King Fahad Industrial Port (KFIP) causeway in Jubail, to support the Berri field production capacity islands.

The two drill sites referred to as Site A and Site B will have an approximate overall area of 616,553 square meters and 263,855 square meters respectively.

At least three North Asian buyers will receive extra supplies of Saudi oil after the kingdom cut its prices for most grades in October and as they look to cushion the impact on supply of US sanctions on Iran, sources told Reuters.

Buyers have asked to lift more Saudi oil than contracted volumes in October amid fears that the sanctions will crimp supply during peak winter demand in Asia, the sources said.

The sources, who preferred to remain anonymous as they are not authorized to speak to the media, indicated that Aramco will supply more oil to the buyers in October, with one to receive more Arab Light crude.

Washington has asked buyers of Iranian oil to cut imports to zero in the run up to early November to force Tehran to negotiate a new nuclear agreement and to limit its influence in the Middle East.

Increase in Brent price has also made European and African oil more expensive for Asian refiners, while the US-China trade war has sharply reduced China’s oil imports from the United States.

However, last week, Aramco cut its official selling prices for most of the crude grades it sells to Asia in October, making Saudi oil competitive.

Saudi Arabia, the world’s top crude oil exporter, and other producers from the Middle East and Russia have increased exports after a June meeting where they agreed to raise output by 1 million bpd. The rise in supply is to replace falling exports from Venezuela and Iran.



IMF: Middle East Faces Pivotal Economic Moment

Azour speaks during a presentation of the Regional Economic Outlook update (AFP)
Azour speaks during a presentation of the Regional Economic Outlook update (AFP)
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IMF: Middle East Faces Pivotal Economic Moment

Azour speaks during a presentation of the Regional Economic Outlook update (AFP)
Azour speaks during a presentation of the Regional Economic Outlook update (AFP)

The International Monetary Fund said the Middle East, North Africa, and Pakistan were facing a pivotal and exceptionally difficult moment in their modern economic history after the war that broke out on Feb. 28, 2026, describing it as a severe and multifaceted shock to one of the world’s most strategically important economic corridors.

The IMF said the conflict was not merely a border crisis but had disrupted “three pillars of stability, energy markets, trade routes, and business confidence,” triggering a global energy shock and weakening supply chains.

Amid these challenges, Saudi Arabia’s economy emerged as a model of resilience, showing what the IMF described as “exceptional sturdiness” that enabled it to absorb the impact of disruptions to the Strait of Hormuz and a decline in regional output, supported by the pillars of Vision 2030, which strengthened fiscal discipline and logistical flexibility.

Jihad Azour, director of the IMF’s Middle East and Central Asia Department, said while presenting an update of the Regional Economic Outlook in Washington, on the sidelines of the IMF and World Bank Spring Meetings, that the war was reshaping the region’s economic outlook.

At the center of the shock was energy, he said, noting that the Strait of Hormuz, “the world’s most critical energy chokepoint, through which roughly one-fifth of global oil supply and about one-quarter of global LNG trade normally transit,” had come close to a standstill.

He said disruptions and shutdowns had cut oil and gas output across Gulf Cooperation Council countries, pushing Brent crude above $100 a barrel, while “European gas prices rose by roughly 60 percent, exceeding the spike observed after Russia’s invasion of Ukraine,” putting global energy security at risk.

He said energy disruptions caused by the war would weigh heavily on Gulf exporters, while oil-importing countries such as Egypt and Jordan were facing higher commodity prices and weaker remittance flows.

More broadly, the Middle East and North Africa region is expected to see a marked slowdown in growth this year, with real GDP projected at about 1.1%, significantly below pre-war forecasts, before a recovery in 2027, according to the IMF.

Azour said the shock extended beyond oil and gas, noting that “commodity disruptions extend beyond oil and gas,” affecting fertilizers, chemicals, and other products in which the region holds a strategic position.

He warned that rising food costs were directly threatening vulnerable populations, saying that “these price increases translate directly into higher food costs for some of the world’s most vulnerable populations,” particularly in import-dependent economies across the region and beyond.

He added that the conflict had also affected services, saying, “air traffic collapsed at major Gulf hubs, maritime insurance premiums surged, shipping routes lengthened, and logistics chains weakened,” highlighting the broad impact on aviation and logistics.

The IMF said some oil-importing economies in the region relied heavily on Gulf countries for energy imports and financial flows, leaving them exposed if the conflict intensified or persisted.

Saudi experience

Azour said one of the most important lessons from the war and the disruption of the Strait of Hormuz was the need to diversify trade routes.

“This shock underscores the importance of building greater resilience and strengthening integration,” he said, adding that this includes “diversifying trade routes and deepening regional cooperation,” to ensure the continued flow of goods and energy.

He said Saudi Arabia’s approach under its strategic vision went beyond infrastructure development to a broader reshaping of logistics networks. By expanding alternative ports on the Red Sea and strengthening land and rail connectivity, the kingdom reduced its reliance on a single maritime chokepoint.

He said this ability to create parallel trade routes allowed Saudi trade to continue effectively despite disruptions to regional corridors, offering a model for protecting economic security and ensuring uninterrupted supply flows.

Egypt

Azour said economic reforms implemented by Egypt, along with stronger policy buffers, were helping the country better manage external shocks.

He said allowing the exchange rate to become more flexible helped absorb shocks, while higher reserves provided reassurance to markets.

Regional divergence

The IMF report highlighted a sharp divergence across countries. Qatar faced a steep downgrade to growth forecasts due to damage to its gas infrastructure, while Oman showed relative resilience given its geographic position outside the Strait of Hormuz.

At the same time, financing pressures increased on Egypt, Pakistan, and Jordan as sovereign spreads widened, prompting Azour to stress that the IMF stood ready to support countries.

He said that if oil production recovered and the Strait of Hormuz fully reopened, countries would be able to increase output quickly, adding that higher oil prices compared with pre-2026 levels would help producers recover some of their losses from the crisis.


Pakistan Central Bank Receives $2 billion from Saudi Arabia as Part of Broader Financial Support Package

Mohammed Al-Jadaan and Muhammad Aurangzeb following the agreement for Saudi Arabia to provide an additional $3 billion in support to Pakistan (X).
Mohammed Al-Jadaan and Muhammad Aurangzeb following the agreement for Saudi Arabia to provide an additional $3 billion in support to Pakistan (X).
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Pakistan Central Bank Receives $2 billion from Saudi Arabia as Part of Broader Financial Support Package

Mohammed Al-Jadaan and Muhammad Aurangzeb following the agreement for Saudi Arabia to provide an additional $3 billion in support to Pakistan (X).
Mohammed Al-Jadaan and Muhammad Aurangzeb following the agreement for Saudi Arabia to provide an additional $3 billion in support to Pakistan (X).

Pakistan announced that it has received $2 billion from Saudi Arabia’s Ministry of Finance as part of a broader financial support package.

Earlier, Pakistan’s Finance Minister, Muhammad Aurangzeb, said that Saudi Arabia had committed to depositing an additional $3 billion, while extending an existing $5 billion loan for three years instead of renewing it annually.

This support comes as Pakistan faces repayment of $3.5 billion to the United Arab Emirates, putting pressure on its reserves, which stand at about $16.4 billion.

Saudi Arabia has a history of assisting Pakistan during economic crises, including a $6 billion support package in 2018 that included deposits and deferred oil payments.


Gold Rises as Middle East Optimism Calms Inflation Fears

Samples of gold displayed in a program affiliated with the Brazilian Federal Police specializing in tracking gold in Brasilia (Reuters)
Samples of gold displayed in a program affiliated with the Brazilian Federal Police specializing in tracking gold in Brasilia (Reuters)
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Gold Rises as Middle East Optimism Calms Inflation Fears

Samples of gold displayed in a program affiliated with the Brazilian Federal Police specializing in tracking gold in Brasilia (Reuters)
Samples of gold displayed in a program affiliated with the Brazilian Federal Police specializing in tracking gold in Brasilia (Reuters)

Gold prices rose on Thursday as growing optimism about a possible end to conflicts in the Middle East calmed inflation worries and improved prospects for lower interest rates.

Spot gold rose 0.5% to $4,815.15 per ounce by 0926 GMT, after rising to a one-month high in the previous session. US gold futures for June delivery gained 0.3% to $4,836.50.

"For the month of March gold was under pressure because of the need for liquidity in the metal following the war, but that is kind of mostly run its course, that need for liquidity," said Nitesh Shah, commodity strategist at WisdomTree.

Shah added that he expects gold prices to remain very well supported as concerns surrounding central bank independence and dollar debasement risk still remain prevalent, Reuters reported.

Optimism grew on Thursday that the war in the Middle East may be near an end, with a key Pakistani mediator in Tehran and the administration of US President Donald Trump talking up hopes for a deal that would open the crucial Strait of Hormuz.

Crude oil prices were up more than 1% on Thursday, but remained well below the $100-a-barrel mark.

"Gold remains supported amid renewed optimism around de-escalation. The pullback in oil prices is easing some of the inflation concerns that weighed on prices earlier in the conflict. The move reflects a broader shift in market focus," ING analysts said.

Global equities vaulted past their previous all-time highs in Asian trading as optimism grew about a deal to end the Iran war.

Gold prices fell to as low as $4,097.99 an ounce on March 23 as high inflation concerns due to soaring energy prices raised expectations of a more hawkish approach to intrest rates by the US Federal Reserve, weighing on the non-yielding metal's demand.

Prices have since recovered as investors now see a more than 34% chance of at least one US interest rate cut by 2026-end, up from 32% a day prior, as per CME's FedWatch Tool.

Among other metals, spot silver rose 1.4% to $80.12 per ounce, platinum gained 1% to $2,130.25, and palladium was up 0.9% at $1,587.25.