Despite Oil Wealth, Poverty Fuels Despair in South Iraqhttps://english.aawsat.com/home/article/3286691/despite-oil-wealth-poverty-fuels-despair-south-iraq
Despite Oil Wealth, Poverty Fuels Despair in South Iraq
From patchy supplies of water and electricity, to pockmarked roads and toxic pollution, Basra residents are struggling -- a job in the petroleum sector is the ultimate prize - AFP
Despite Oil Wealth, Poverty Fuels Despair in South Iraq
From patchy supplies of water and electricity, to pockmarked roads and toxic pollution, Basra residents are struggling -- a job in the petroleum sector is the ultimate prize - AFP
In Iraq's southern province of Basra, the oil flows freely but little of the wealth trickles down to the people, and many struggle to make ends meet.
Sajad, 17, who lives in Basra city, says he "has no future" and no present. Like other young people, he says he just survives, a living emblem of the city's maladies.
Basra province produces about 70 percent of crude oil in Iraq, itself the second biggest exporter in the Middle East after Saudi Arabia.
Yet the province is hit especially hard by many of the problems plaguing Iraq, which is still seeking to recover from years of war and turmoil since the 2003 US-led invasion that toppled dictator Saddam Hussein.
Unemployment in Basra affects 20 to 25 percent of the people and almost 30 percent of youth, estimated Iraqi economist Barik Schuber in the absence of official figures.
This compares to a national rate of 13.7 percent, according to World Bank figures, AFP reported.
From patchy supplies of water and electricity, to pockmarked roads and toxic pollution caused by extracting hydrocarbons, Basra province and its four million inhabitants are struggling.
But what hits hardest is the despair of the young.
Gathered around their shisha pipes, Sajad and Jawad, both aged 16, are hard pressed to find anything to be optimistic about.
Sajad does not work, while Jawad said he toils for "eight to 13 hours in a restaurant for 7,000 dinars (about $4.80) per day".
"I don't see a future here, I want to go to Baghdad," said Sajad, sitting on the shores of the Shatt al-Arab waterway, where the Tigris and Euphrates rivers meet.
Some investments have been made, such as a new stadium under construction ahead of the Gulf Cup football tournament due to be held in Basra in January 2023.
But the deputy governor of Basra, Dorgham al-Ajwadi, conceded that "the people are angry".
He blamed the distant government in Baghdad for the inequitable distribution of the federal budget.
"In 2021, the Iraqi budget is about 130 trillion Iraqi dinars ($89 billion), but for Basra it's less than one trillion," he told AFP.
"It is maybe 0.7 percent of the total budget, while more than 108 trillion come from Basra."
For Basra resident Mortada, 27, it's not Baghdad that's to blame but rather the local authorities.
Before the pandemic, he ran an unregistered ice cream shop, he explained.
"Then the authorities shut down the illegal businesses, including mine," he said, requesting that his surname not be published to avoid problems "with certain people".
In Iraq's October 10 parliamentary elections, he voted for an independent candidate unaffiliated with the major parties because "I believe he can change things".
For many, the grievances run deeper.
Basra was a hotbed of massive protests in mid-2018, a precursor to the near-nationwide protests that rocked the country from October 2019.
Anger erupted in Basra over corruption, poor public services and, above all, the influence of neighboring Iran, whose local consulate was set ablaze.
Tehran has long exercised influence over Iraq through certain political parties, as well as factions of the Hashed al-Shaabi -- a former paramilitary umbrella organization that was folded into the Iraqi armed forces.
In Basra, some accuse "groups loyal to Tehran" of wielding harmful influence and of infiltrating the economic fabric.
One such critic refused to give his name, saying that "if it is published, I risk being killed".
Three years after the Basra demonstrations, little has changed, according to Mortada, who does odd jobs and dreams of working "for the state".
In Basra, more than in any other part of the country, a job in the petroleum sector is seen as the ultimate prize for its promise of stability and prosperity.
But according to Mac Skeleton, executive director of the Institute of Regional and International Studies based in Iraqi Kurdistan, jobs in Basra's petrol industry are handed out through nepotism.
"Each of the major Shiite majority parties are competing over the Basra oil company, they're competing over the security contracts in the oil fields, for different assets," he explained.
But "connections" are necessary for a way in, he said, adding that "at the end of the day there is a kind of limit to how many people can benefit from these different spheres of power".
Some people miss out despite having connections, said Sajad, whose uncle works at the oil ministry.
The young man complained that his elder relative had already "accommodated two people from his family" and therefore "cannot hire me".
FILE PHOTO: The logo of British multinational oil and gas company Shell is displayed during the LNG 2023 energy trade show in Vancouver, British Columbia, Canada, July 12, 2023. REUTERS/Chris Helgren/File Photo
Shell Starts Gas Production from Egypt's Mina West Field
FILE PHOTO: The logo of British multinational oil and gas company Shell is displayed during the LNG 2023 energy trade show in Vancouver, British Columbia, Canada, July 12, 2023. REUTERS/Chris Helgren/File Photo
Shell Egypt has started production from the Mina West gas field in the Egyptian Mediterranean, the company said on Sunday, adding a new source of domestic supply.
The field, discovered in 2023 in the North El-Amriya concession, could produce 160 million cubic feet of gas per day, the company estimates. It is connected to existing West Delta Deep Marine infrastructure, which Shell said enabled it to complete the project faster.
Field operator Shell has a 60% stake in Mina West while a subsidiary of Kuwait Foreign Petroleum Exploration Company (KUFPEC) holds the remaining 40%.
Egypt’s gas production was about 112.6 billion cubic feet (bcf) in August, down about 48% from roughly 214.7 bcf in August 2021 and about 10.5% below a year earlier, according to the Joint Organizations Data Initiative (JODI).
Saudi Arabia Keeps Inflation in Check Despite Geopolitical Tensions and Global Trade Disruptionshttps://english.aawsat.com/business/5341495-saudi-arabia-keeps-inflation-check-despite-geopolitical-tensions-and-global-trade
Saudi Arabia Keeps Inflation in Check Despite Geopolitical Tensions and Global Trade Disruptions
A Saudi shopper at a grocery store (SPA)
Saudi Arabia's annual inflation rate slowed to 1.7% in October from 1.9% in September, returning to its lowest level this year and signaling the economy's continued ability to contain price pressures and maintain stability despite geopolitical tensions and disruptions to global trade.
Data released Sunday by the Kingdom's General Authority for Statistics (GASTAT) showed that the Consumer Price Index (CPI) rose 0.1% month-on-month in October.
The annual slowdown was driven by relatively modest price increases across several major categories, although housing costs remained the largest contributor to inflation.
The figures showed that prices in the housing, water, electricity, gas and other fuels category rose 3.5% year-on-year in October, matching the increase in actual housing rents. The category remained the biggest driver of overall inflation.
Insurance and financial services prices also increased 3.5%, driven by a 6.5% rise in insurance service costs.
Recreation, sports and culture prices climbed 2.7%, reflecting a 4.6% increase in package holiday prices.
Food and Beverages
Transportation prices rose 2.3% year-on-year, driven by a 9.5% increase in passenger transport services.
Prices for restaurants and accommodation services increased 1.8%, while education services rose 1.3%.
Food and beverage prices, which carry considerable weight in the consumer basket, increased 1.1%, while information and communication prices rose 0.5%.
Conversely, prices for furnishings, household equipment and routine household maintenance declined 0.5%, while clothing and footwear prices fell 0.2%.
The personal care, social protection and miscellaneous goods and services category recorded a 0.6% decrease.
Monthly Comparison
On a monthly basis, the overall CPI increased 0.1%, with housing, water, electricity, gas and other fuels rising 0.2%, driven by a 0.4% increase in actual housing rents.
Food and beverage prices also rose 0.2%, while insurance and financial services increased 1.5%.
Although these figures point to an improving inflation outlook, housing costs and rents remain the most significant challenge for household budgets amid persistent cost-of-living pressures.
This raises questions about how far easing inflation is translating into stronger purchasing power and an improved quality of life.
Trade Disruptions
Saudi Arabia's annual inflation rate slowed to 1.7% in October from 1.9% in September, even as global economies continued to face mounting pressure from geopolitical tensions and disruptions to trade and supply chains.
According to financial and economic adviser Hussein Al-Attas, the slowdown reflects a combination of domestic factors that have supported price stability.
Foremost among them is the Saudi riyal's peg to the US dollar, which provides relative protection against fluctuations in import prices, alongside moderate essential commodity prices, efficient supply chains and diversified import sources.
Speaking to Asharq Al-Awsat, Al-Attas said stable monetary and exchange rate policies, together with government and regulatory measures, had helped limit the transmission of external inflationary pressures to the domestic market.
He noted that food and beverage inflation slowed to 1.1% in October from 1.4% in September, while the increase in housing costs moderated to 3.5%.
Both developments helped ease the overall inflation rate, although residential rents remained a major source of upward pressure on prices.
While October's figures indicate that inflation remains contained at moderate levels, its trajectory in the coming months will depend on domestic demand, housing costs and imported goods prices.
Al-Attas expects inflation to remain relatively moderate through the end of the year, although limited fluctuations could occur as economic activity and major projects expand.
He also warned of risks associated with rising shipping and insurance costs.
Purchasing Power
Economic analyst Ahmed Al-Shehri said the decline in Saudi Arabia's inflation rate to 1.7% in October was a positive indicator of economic stability and the country's ability to contain price pressures, particularly amid global uncertainty and geopolitical and trade challenges.
Speaking to Asharq Al-Awsat, he stressed that what mattered more than the decline in the inflation rate itself was whether that stability translated into tangible improvements in the daily lives, purchasing power and household spending of citizens and residents.
Al-Shehri identified housing costs and rents as the most pressing challenge requiring greater attention.
He explained that continued increases in these expenses meant a substantial proportion of households still faced financial pressure, even as overall inflation slowed.
Consumers, he said, do not assess economic conditions solely through indicators and percentages, but through what they pay each month for housing, food, transportation and essential services.
Controlling living costs should therefore be a priority alongside maintaining overall price stability.
Economic Stability
Al-Shehri said the next phase should focus on leveraging relatively stable inflation to strengthen purchasing power, continuing efforts to address the factors driving rent increases, and improving the efficiency of markets and supply chains.
He emphasized that economic success should not be measured solely by a lower inflation rate, but by the extent to which people experience its benefits in their everyday lives.
Genuine economic stability, he said, is reflected in a better quality of life, greater household confidence in the future and an improved ability to plan and save.
Saudi Energy Companies Post $105.6 Billion in Profits Over Nine Monthshttps://english.aawsat.com/business/5341446-saudi-energy-companies-post-1056-billion-profits-over-nine-months
Saudi Energy Companies Post $105.6 Billion in Profits Over Nine Months
A general view of Saudi Aramco's Shaybah oil field in the Empty Quarter (Reuters)
Energy companies listed on the Saudi Exchange recorded strong earnings growth during the first nine months of 2026, with combined net profits rising 42.8% to SAR 396.15 billion ($105.64 billion) compared with the same period last year.
The performance came amid sharp shifts in global energy markets driven by geopolitical tensions, supply disruptions and rising shipping costs, which affected companies across the energy industry to varying degrees.
The Saudi results reveal significant differences in how companies benefited from these developments. While Saudi Aramco accounted for the overwhelming majority of sector profits, Bahri recorded a sharp earnings increase and Petro Rabigh returned to profitability. Some drilling companies, however, reported weaker results.
Growth also extended into the third quarter, when the six companies' combined net profits rose 50.1% to SAR 145.15 billion ($38.71 billion).
Global Energy Companies' Profits
The improvement in earnings was not limited to Saudi companies. Major international oil producers also reported strong gains in the third quarter, supported by supply disruptions, higher energy prices and wider refining margins.
ExxonMobil's net profit reached $15.4 billion, compared with $7.5 billion in the same quarter last year.
Shell's adjusted earnings rose to $10.81 billion from $5.43 billion, while TotalEnergies' adjusted net income surged to $9.1 billion from $4 billion a year earlier.
The companies said supply disruptions in the Middle East, combined with limited available refining capacity and declining inventories, had pushed refining margins to historically high levels.
According to Reuters, Shell's refining margins approached $42 per barrel, while those at TotalEnergies reached approximately $33.20 per barrel, boosting earnings from petroleum products and trading operations.
Aramco Leads Sector Profits
Saudi Aramco topped the energy sector in net profits during the first nine months of 2026, with earnings attributable to shareholders rising 36.1% to SAR 379.02 billion ($101.07 billion), compared with SAR 278.57 billion ($74.29 billion) in the corresponding period last year.
The company accounted for approximately 95.7% of the sector's combined net profits, reflecting the considerable weight of its results in determining overall performance.
That dominance also underscores the importance of examining the other companies individually to understand developments across different energy-related activities.
Aramco's revenue and other income related to sales increased 20.8% to approximately SAR 1.52 trillion ($405.33 billion), compared with around SAR 1.25 trillion ($333.33 billion) during the first nine months of 2025.
Bahri Records Sharp Profit Surge
The National Shipping Company of Saudi Arabia (Bahri) ranked second in net profits, recording a 586.7% surge to approximately SAR 9.98 billion ($2.66 billion), compared with SAR 1.45 billion ($386.7 million) during the first nine months of the previous year.
Revenue also climbed 268.4% to approximately SAR 26.1 billion ($6.96 billion), up from SAR 7.08 billion ($1.89 billion).
The performance reflects the company's gains from stronger maritime transportation activity and higher freight earnings, particularly in oil shipping, which increased its contribution to the combined profit growth of listed energy companies.
Petro Rabigh Returns to Profitability
Rabigh Refining and Petrochemical Company (Petro Rabigh) recorded a significant turnaround, posting net profits of approximately SAR 6.7 billion ($1.79 billion) during the first nine months of 2026, compared with losses of SAR 3.29 billion ($877.3 million) in the corresponding period last year.
Revenue increased 113.6% to around SAR 52.03 billion ($13.88 billion), compared with SAR 24.36 billion ($6.50 billion) a year earlier.
The improvement was supported by higher operating rates at the company's industrial complex, increased sales volumes, stronger prices for refined and petrochemical products, and lower financing costs.
The year-on-year comparison was also affected by weaker production and sales during the corresponding period of 2025, when the company's operating facilities underwent a comprehensive scheduled maintenance shutdown.
Drilling Companies Face Pressure
Changes in global energy markets did not benefit every segment of the sector.
ADES Holding reported a 23% decline in net profit to approximately SAR 459.8 million ($122.6 million), compared with SAR 597.3 million ($159.3 million) during the first nine months of 2025, despite a 44% increase in revenue to around SAR 6.77 billion ($1.81 billion).
Revenue growth was driven by the expansion of international operations and contributions from new acquisitions, while earnings were affected by lower operating margins, higher expenses and the temporary suspension of several regional operations.
Arabian Drilling Company's net profit fell 90.6% to approximately SAR 6.9 million ($1.84 million), compared with SAR 73.3 million ($19.55 million) a year earlier.
Revenue declined 8.1% to approximately SAR 2.4 billion ($640 million).
Saudi Arabian Refineries Company (SARCO) also reported a 24.4% increase in net losses to approximately SAR 27.5 million ($7.33 million), compared with losses of SAR 22.1 million ($5.89 million) during the first nine months of the previous year.
The deterioration reflected impairment losses related to the market value of certain investments, alongside higher general and administrative expenses.
The Qassim 1 Independent Power Plant project (ACWA)
Third-Quarter Results
In the third quarter of 2026, the six listed energy companies recorded a 50.1% increase in combined net profits to approximately SAR 145.15 billion ($38.71 billion), compared with SAR 96.72 billion ($25.79 billion) in the same quarter last year.
The results extended the earnings growth recorded during the first nine months.
Aramco maintained its leading position, with third-quarter profits attributable to shareholders reaching approximately SAR 137.39 billion ($36.64 billion), up 41.3% year-on-year.
Bahri ranked second after its quarterly net profit jumped 890.7% to approximately SAR 5.09 billion ($1.36 billion), compared with SAR 513.4 million ($136.9 million) in the third quarter of 2025.
Petro Rabigh continued its recovery, reporting profits of approximately SAR 2.58 billion ($688 million), reversing losses of SAR 1.24 billion ($330.7 million) a year earlier.
The turnaround was supported by improved operating rates, higher sales volumes and stronger product margins.
ADES Holding, meanwhile, reported a 55.8% decline in quarterly net profit to approximately SAR 94.9 million ($25.3 million), despite a 34.8% increase in revenue, reflecting continued pressure on profitability.
Arabian Drilling returned to quarterly profitability, recording net income of approximately SAR 31.4 million ($8.37 million), compared with losses of SAR 9.4 million ($2.51 million) in the corresponding period of 2025.
The improvement was supported by higher rig utilization rates and greater operational efficiency.
Saudi Arabian Refineries Company posted a quarterly loss of approximately SAR 22.5 million ($6 million), compared with a profit of SAR 1.6 million ($427,000) in the third quarter of 2025.
The quarterly figures highlight the continuing divergence in performance across the energy sector.
While Aramco, Bahri and Petro Rabigh drove earnings growth, some drilling and investment companies continued to face pressure on profit margins and financial results, reflecting differences in business models, operating conditions and costs.
Uneven Performance and Sustainable Growth
Commenting on the sector's financial results, financial and economic expert and market analyst Dr. Suleiman Al-Humaid Al-Khaldi, a member of the Saudi Economic Association, said the performance of Saudi energy companies during the first nine months of 2026 reflected strong growth in combined profits, which increased more than 42% to approximately SAR 396.15 billion.
However, he cautioned that the headline figures concealed significant differences between companies and activities within the sector.
Speaking to Asharq Al-Awsat, Al-Khaldi explained that Saudi Aramco was the principal driver of sector earnings growth, generating approximately SAR 379 billion and accounting for 95.7% of combined profits.
This made Aramco's financial results the single most influential factor in overall sector performance, supported by higher revenue and improved operating results.
Al-Khaldi noted that Bahri recorded the most significant profit increase among the listed companies, with earnings rising approximately 587%, benefiting from stronger maritime transportation activity, particularly oil shipping, and higher freight rates.
He said the sustainability of this growth would depend on demand levels, shipping rates and operating costs, given the cyclical nature of the maritime transportation industry.
Al-Khaldi also described Petro Rabigh's return to profitability as one of the most notable developments in the sector's results.
The turnaround was driven by higher operating rates and sales volumes, improved product prices and reduced financing costs.
However, he pointed out that the comparison was also influenced by maintenance work that affected the company's results during the same period last year.
This made it important to distinguish between a recovery from a low comparison base and sustainable improvements in operating performance.
Conversely, Al-Khaldi highlighted declining profits at ADES Holding and Arabian Drilling, along with widening losses at Saudi Arabian Refineries Company.
He stressed that growth in combined sector profits did not necessarily indicate improved performance across all companies, particularly as some activities continued to face pressure from operating and financing costs and weaker profit margins.
Al-Khaldi said sustaining earnings growth in the coming period would depend on companies' ability to improve operational efficiency, control costs and translate revenue increases into actual profits.
He emphasized the importance of assessing each business segment independently rather than relying solely on aggregate growth indicators to evaluate the sector's financial performance.
لم تشترك بعد
انشئ حساباً خاصاً بك لتحصل على أخبار مخصصة لك ولتتمتع بخاصية حفظ المقالات وتتلقى نشراتنا البريدية المتنوعة