Saudi Energy Minister: We’ll Have to See Demand on Oil Before Offering Supply https://english.aawsat.com/home/article/3008736/saudi-energy-minister-we%E2%80%99ll-have-see-demand-oil-offering-supply
Saudi Energy Minister: We’ll Have to See Demand on Oil Before Offering Supply
Saudi Energy Minister Prince Abdulaziz bin Salman and Russian Deputy Prime Minister Alexander Novak at a session during Russia’s St. Petersburg Economic Forum on Thursday, June 3, 2021. (Reuters)
Saudi Energy Minister: We’ll Have to See Demand on Oil Before Offering Supply
Saudi Energy Minister Prince Abdulaziz bin Salman and Russian Deputy Prime Minister Alexander Novak at a session during Russia’s St. Petersburg Economic Forum on Thursday, June 3, 2021. (Reuters)
It would be premature to talk about potential overheating in the global oil market before seeing higher demand, Russia’s RIA news agency quoted Saudi Energy Minister Prince Abdulaziz bin Salman as saying on Thursday.
“There will always be a good amount of supply to meet demand, but we’ll have to see demand before you see supply,” he said when asked about the overheating risk at the St. Petersburg economic forum in Russia.
Russian Deputy Prime Minister Alexander Novak, for his part, said on Thursday it was premature to talk about output decisions due to be made by the so-called OPEC+ group of oil producers in August.
Novak said the group would look at seasonal demand growth and consider the potential return of Iranian oil supplies to the market.
Current oil prices reflect the balance between supply and demand and are unlikely to rise further in the short term, he added. “The current oil price is good enough for Russia,” he further noted.
In related news, top oil exporter Saudi Arabia has raised the July official selling prices (OSPs) of most crude grades it sells to Asia, a pricing document showed on Thursday.
It set the July OSP for the flagship Arab light crude at $1.90 a barrel above the Oman/Dubai average for Asia, up 20 cents from June.
It also set its Arab Light OSP to northwest Europe at a discount of $1.90 a barrel against ICE Brent for July, compared with a discount of $2.90 for June, according to the document seen by Reuters.
The OSP to the United States was set at a premium of $1.05 a barrel over Argus Sour Crude Index (ASCI), unchanged from June.
Oil prices rose for a third day on Thursday on expectations for a surge in fuel demand later this year at the same time major producers are maintaining supply discipline.
Brent crude futures were up 11 cents, or 0.15 percent, at $71.46 a barrel by 1327 GMT, the highest since September 2019. The international benchmark gained 1.6 percent on Wednesday.
US West Texas Intermediate crude futures rose eight cents, or 0.12 percent, to $68.91 a barrel. Prices earlier rose to as much as $69.40, the most since October 2018, after gaining 1.5 percent in the previous session.
Oil prices have risen in recent days on expectations from forecasters, including the Organization of the Petroleum Exporting Countries (OPEC) and its allies, that oil demand will exceed supply in the second half of 2021.
OPEC+ data showed that by the end of the year oil demand will be 99.8 million barrels per day (bpd) versus supply of 97.5 million bpd.
This rebalancing will be led by resurgent demand in the United States, the world’s biggest oil user, from vehicle consumption this summer, along with rising fuel needs in China, the world’s second biggest oil consumer, and in the UK as it exits its COVID-19 lockdowns.
“The US driving season is a period that sees higher than normal fuel consumption. UK traffic is now sitting above pre pandemic levels,” CBA commodities analyst Vivek Dhar said in a note.
“We continue to see the oil demand recovery led by the US, Europe and China.”
Egypt Seeks Faster Progress on Libya Gas, Refining and Power Projectshttps://english.aawsat.com/business/5338878-egypt-seeks-faster-progress-libya-gas-refining-and-power-projects
Egyptian Foreign Minister Badr Abdelatty speaks during a press conference with Minister of Information Diaa Rashwan (not pictured) in Cairo, Egypt, March 25, 2026. (Reuters)
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Egypt Seeks Faster Progress on Libya Gas, Refining and Power Projects
Egyptian Foreign Minister Badr Abdelatty speaks during a press conference with Minister of Information Diaa Rashwan (not pictured) in Cairo, Egypt, March 25, 2026. (Reuters)
Egypt aims to accelerate energy projects with Libya, including gas pipeline links, refining of Libyan crude in Egypt and an electricity interconnection, Egyptian Foreign Minister Badr Abdelatty said late on Saturday.
Abdelatty's comments were in a ministry statement after a meeting with Libya’s acting oil and gas minister Khalifa Abdulsadek in Tripoli.
Abdelatty also called for cooperation on petroleum products and the completion of projects to refine Libyan oil in Egypt and re-export it, the statement said, adding that Abdulsadek had said that Libya would continue implementing existing projects and would visit Cairo soon to continue technical talks with Egypt’s petroleum and electricity ministers.
The statement did not provide details on costs or the status of the projects.
GCC: Railway Agreement Sets Joint Framework for Project Implementation and Operationhttps://english.aawsat.com/business/5338872-gcc-railway-agreement-sets-joint-framework-project-implementation-and-operation
GCC: Railway Agreement Sets Joint Framework for Project Implementation and Operation
GCC transport ministers pose for a group photo following the 27th committee meeting in Kuwait. (GCC Railway Authority)
Jasem Albudaiwi, secretary-general of the Gulf Cooperation Council (GCC), said on Sunday that the signing of the General Agreement on the GCC Railway Project marked an important step toward establishing an integrated regional transport network.
He said the network would facilitate the movement of citizens and residents, ease freight transport, boost intra-GCC trade efficiency and strengthen member states’ economic competitiveness and the region’s position in regional and international trade.
Albudaiwi's remarks came at the signing ceremony in the Bahraini capital, Manama, on Sunday, held under the patronage and in the presence of Bahrain’s Crown Prince and Prime Minister Salman bin Hamad Al Khalifa.
He said the project reflected the GCC’s shared ambition to connect member states and improve mobility and trade by linking their economic and industrial hubs, ports and logistics centers.
He added that the project would create opportunities for safe, reliable, affordable and environmentally friendly transport services that meet development needs, serve the aspirations of future generations and strengthen economic integration among GCC states.
Albudaiwi said the agreement sets a common framework for member states to implement and operate the project in coordination with their national railway networks, while establishing mechanisms and a timetable to accelerate its completion.
Albudaiwi praised GCC leaders and transport ministers for their support of strategic regional projects, thanking Bahrain’s crown prince and prime minister for hosting the signing ceremony and officials for advancing the railway project.
Mega Projects Drive Growth for Saudi Small and Medium Factorieshttps://english.aawsat.com/business/5338869-mega-projects-drive-growth-saudi-small-and-medium-factories
Mega Projects Drive Growth for Saudi Small and Medium Factories
A factory in Madinah’s industrial city. (SPA)
Mega projects in Saudi Arabia are offering increasing opportunities for small and medium-sized factories to expand their businesses and integrate into local supply chains. This shift is accompanied by growing demand for industrial products and auxiliary services, including transport, warehousing, maintenance, and engineering services.
This demand has the potential to broaden the domestic manufacturing base, enabling factories to scale up capacity and upgrade their products rather than limiting their operations to meeting existing market needs. However, capitalizing on these opportunities remains contingent on the factories' ability to overcome financing and liquidity challenges, secure qualification from major corporations, and meet strict requirements for volume, specifications, and delivery schedules.
Experts speaking to Asharq Al-Awsat noted that integrating small and medium-sized industrial enterprises into supply chains requires tailoring opportunities to match their actual capacities. They also stressed the need to develop financing solutions that assist these companies in executing contracts, alongside creating avenues for them to build a track record that qualifies them to compete for larger orders.
A worker at a factory in Saudi Arabia. (SPA)
Mega projects expand domestic demand base
Dr. Abdullah Al-Salloum, a finance professor at Imam Mohammad Ibn Saud Islamic University, stated that small and medium-sized enterprises represent roughly 90 percent of global businesses, provide 60 to 70 percent of employment, and account for about 50 percent of the world's GDP.
Strengthening their role in industrial activity remains a primary developmental objective, he added.
He explained that Saudi Arabia is working to expand the contribution of these enterprises by developing the regulatory environment and national industrial strategies, improving logistics services, and reducing investment risks, as well as stimulating demand for local products through mega projects, value chains, procurement, and local content programs.
Al-Salloum added that the industrial ecosystem provides financing solutions and demand guarantees for national products, alongside qualification and operational support programs. He cited the industrial business accelerator affiliated with the Public Investment Fund, which he said received 350 applications over the past year.
These initiatives offer domestic manufacturing an opportunity to strengthen its presence in the local market and leverage that footing to expand into regional and international markets, he remarked.
The participation of small and medium-sized enterprises in the supply chains of mega projects is not limited to factories producing goods, but extends to supporting activities and services, such as transport, warehousing, maintenance, and engineering services, thereby expanding the base of beneficiaries from investment spending, he said.
The higher the capacity of local industry to meet the needs of these projects, the greater the share of spending that remains within the national economy, he explained.
He cited as an example the spending of the PIF and its subsidiaries on local content, which reached 207 billion riyals ($55.2 billion) during 2024, according to an announcement by the fund's governor, Yasir Al-Rumayyan. He explained that while this figure is not exclusive to small and medium enterprises or industrial factories, it reflects the volume of demand that local factories can leverage to expand their businesses and develop their products.
Visitors at the 2025 Saudi Industrial Expo. (Saudi Made)
Al-Salloum explained that recurring orders help factories raise their capacity utilization rates and distribute fixed costs across a larger number of units, thereby improving efficiency and enabling them to invest in equipment, technologies, and workforce training. It also provides them with a supply track record and practical experience that can be leveraged to attract new clients both within Saudi Arabia and abroad.
He said that reducing reliance on imports is linked to the capacity of local industry to produce a wider range of goods, components, and services that were previously imported, increasing domestic value-added, while acknowledging the continued need for certain imports during the initial stages of industrial development.
Al-Salloum added that the expansion of domestic production creates jobs across multiple fields, including technicians, engineers, and workers in quality control, operations, and maintenance.
The sustainability of these jobs depends on the factories' capacity to diversify their client base and avoid relying on a single project or entity, he remarked.
Liquidity and demand continuity present challenges for factories
Consulting engineer Abdulaziz Aba Arrous, CEO of A&BC for Safety Tools and Materials Manufacturing, stated that while the Saudi industrial sector has received government support and incentives that helped boost confidence in investment and expansion, factories still face daily challenges related to liquidity and demand continuity.
He explained that executing a large order requires the factory to purchase raw materials and pay wages and production costs before collecting its dues, creating a financing gap between the start of implementation and receiving the supply value. Furthermore, scaling up production capacity demands investment in equipment and recruiting qualified technical labor, as well as bearing continuous operational obligations.
Clarity regarding future demand, the availability of long-term contracts, and the regular settlement of dues are factors that help enterprises plan, expand, and utilize available support and incentives, rather than operating under intermittent orders that make it difficult to determine production and investment needs, he continued.
Aba Arrous said that opportunities for small and medium-sized factories to enter the supply chains of mega projects exist, but they vary depending on the nature of the product, the volume of demand, and the factory's ability to commit to specifications, quantities, and delivery schedules.
He added that the "Etimad" platform allows enterprises to view government tenders, while the preference for national products, in accordance with applicable regulations, contributes to boosting the competitiveness of local factories. However, the challenge with major corporations often begins at the stage of registration and qualification as an approved supplier, prior to accessing an actual supply opportunity.
Aba Arrous explained that while a factory may possess a quality product and adequate production capacity, it often faces lengthy qualification procedures, or orders with volumes and payment terms that exceed its financial capabilities. Therefore, he highlighted the importance of awarding small and medium-sized enterprises initial orders tailored to their capacities, with the volume of business scaling up based on execution quality and adherence to delivery schedules.
This approach allows the factory to prove its capability while enabling the buyer to assess its actual performance, he noted.
Qualification and financing requirements determine expansion opportunities
Regarding the obstacles preventing factories from securing supply contracts, Al-Salloum stated that financing challenges, production capacity, qualification requirements, and contract accessibility are interconnected.
A factory may possess a quality product but lack the experience necessary to qualify as a supplier, or it may secure a contract without having sufficient liquidity to execute it, he explained.
He pointed to the PIF's announcement in September 2026 of the launch of the "Tawreed" company, aimed at providing supply chain financing products, including early payment against approved invoices. He said that while these solutions can improve cash flows for factories, they do not replace the need for pre-invoice financing, which is essential for the enterprise to purchase raw materials and commence production.
Quality, safety, and compliance requirements are essential, but experience, financial solvency, and guarantee demands should align with the contract size and the nature of its risks, preventing qualification criteria from becoming a barrier to smaller factories, he added.
He also called for providing these enterprises with opportunities to prove their capabilities through smaller orders before moving to larger contracts.
A view inside of a Saudi factory. (Vision 2030)
For his part, Aba Arrous explained that small and medium-sized factories are capable of supplying various products to mega projects, including metal products, electrical components, packaging materials, and safety equipment, alongside maintenance services and custom manufacturing.
He noted that his company operates in the field of industrial safety equipment, and its products include personal protective equipment for industrial sector workers, such as flame- and heat-resistant clothing and cut-resistant gloves, whose specifications are determined according to the nature of the hazards and usage requirements.
He added that the proximity of local factories to clients gives them an advantage in monitoring their needs, managing variations in quantities and sizes, and responding to required modifications, compared to direct imports which may take longer in some cases. This proximity helps in developing products and building ongoing supply relationships with clients.
Client diversification ensures sustainable growth
Al-Salloum stressed that overreliance on mega projects or government initiatives could expose enterprises to single-customer concentration risks, making productivity improvements, cost controls, and customer base diversification essential for business sustainability, rather than tying the factory's future to specific contracts or a single entity.
The most significant developmental impact of small and medium factories participating in these projects extends to building more productive enterprises, developing worker skills, and forming a baseline of competitive national products, enabling local industry to sustain itself and grow after the projects conclude, he said.
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