Riyadh Seeks to Achieve Recovery Plan for International Aviation Sector

The Saudi Energy Minister attends the Future of Civil Aviation conference in Riyadh on Monday. (Asharq Al-Awsat)
The Saudi Energy Minister attends the Future of Civil Aviation conference in Riyadh on Monday. (Asharq Al-Awsat)
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Riyadh Seeks to Achieve Recovery Plan for International Aviation Sector

The Saudi Energy Minister attends the Future of Civil Aviation conference in Riyadh on Monday. (Asharq Al-Awsat)
The Saudi Energy Minister attends the Future of Civil Aviation conference in Riyadh on Monday. (Asharq Al-Awsat)

Saudi Arabia has revealed plans to strengthen its capabilities in the aviation sector over the next ten years, with the aim to become a leading center for aviation and air transport in the Middle East and the world.

Under the patronage of the Custodian of the Two Holy Mosques, the Saudi General Civil Aviation Authority announced an international initiative to unify procedures and policies regarding health requirements, in order to support the sector’s recovery from the Covid-19 pandemic.

This came during the launch of the Future of Civil Aviation conference in Riyadh on Monday.

In this regard, Saudi Energy Minister Prince Abdulaziz bin Salman underlined the efforts to face energy challenges in the aviation sector.

“We are focusing on two fronts; first, we work with the aerospace industry to develop engines, materials, and innovation; and second, on low-carbon aviation fuels that we believe will be the transitional fuels of the future,” he said.

Speaking during his participation in a dialogue session entitled, “Energy Transformation: How We Can Overcome the Sustainability Challenge”, the minister noted that energy security was the most important pillar, “without which the goals of economic growth and sustainability cannot be achieved, including dealing with climate change.”

He added: “We are not in a position to choose among the sustainability solutions; rather, we should take advantage of all available options, to achieve our goals realistically.”

Prince Abdulaziz stressed that these goals could be reached within the framework of the circular carbon economy, through carbon sequestration from the source, in addition to the use of captured gas in the production of industrial fuels.

According to the Saudi official, the aviation sector emissions do not exceed two percent of the total emissions.

“Whether this percentage is large or small, the world agrees on the importance of finding solutions to reduce emissions of all sectors,” he remarked.

The Saudi Energy Minister noted that the gap between crude oil prices and the prices of jet fuel, diesel and gasoline was about 60 percent in some cases, due to a lack of investment in refining capacity.

“The world needs to consider energy security, sustainability and overall affordability,” he said. “All types of mobility fuels have risen sharply, and the gap between crude oil prices and these products in some cases actually reaches 60 percent.”

On whether geopolitical events in Europe will accelerate or impede the transition to cleaner energy in the medium term, the Saudi minister said: “I think it brought us back to reality about how actual conditions in which we live can undermine aspirations.”

He said that even before the Ukraine crisis, the “dreamland scenario of net zero emissions was faced by many realities, including the cost.”

For his part, Salvatore Sciacchitano, President of the Council of the International Civil Aviation Organization (ICAO), said that the number of passengers around the world was likely to constitute, by the end of 2022, 75 percent of the number achieved in 2019, before the outbreak of the Covid-19 pandemic.

The number of travelers is growing in certain regions faster than others, such as Latin America and Europe, compared to regions that are still suffering from the effects of the pandemic, such as China, he noted.

Meanwhile, the Saudi Civil Aviation Authority said on Monday that it was working to develop a framework aimed at facilitating international travel, in cooperation with the ICAO.

The Saudi initiative will promote a policy of standardizing procedures to ease international travel, whether for passengers or airlines and government agencies, by creating a single digital platform that provides the latest information and developments with clarity and transparency, and identifies entry requirements for all participating countries.

If endorsed by the member states of the ICAO in October, the initiative will enable the unification of procedures and policies regarding health requirements to support the sector’s post-pandemic recovery.



Oil Gains Capped by Uncertainty over Sanctions Impact

FILE PHOTO: An oil pump jack is seen at sunset near Midland, Texas, US, May 3, 2017. REUTERS/Ernest Scheyder/File Photo
FILE PHOTO: An oil pump jack is seen at sunset near Midland, Texas, US, May 3, 2017. REUTERS/Ernest Scheyder/File Photo
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Oil Gains Capped by Uncertainty over Sanctions Impact

FILE PHOTO: An oil pump jack is seen at sunset near Midland, Texas, US, May 3, 2017. REUTERS/Ernest Scheyder/File Photo
FILE PHOTO: An oil pump jack is seen at sunset near Midland, Texas, US, May 3, 2017. REUTERS/Ernest Scheyder/File Photo

Oil prices crept higher on Wednesday as the market focused on potential supply disruptions from sanctions on Russian tankers, though gains were tempered by a lack of clarity on their impact.

Brent crude futures rose 16 cents, or 0.2%, to $80.08 a barrel by 1250 GMT. US West Texas Intermediate crude was up 26 cents, or 0.34%, at $77.76.

The latest round of US sanctions on Russian oil could disrupt Russian oil supply and distribution significantly, the International Energy Agency (IEA) said in its monthly oil market report on Wednesday, adding that "the full impact on the oil market and on access to Russian supply is uncertain".

A fresh round of sanctions angst seems to be supporting prices, along with the prospect of a weekly US stockpile draw, said Ole Hansen, head of commodity strategy at Saxo Bank, Reuters reported.

"Tankers carrying Russian crude seems to be struggling offloading their cargoes around the world, potentially driving some short-term tightness," he added.

The key question remains how much Russian supply will be lost in the global market and whether alternative measures can offset the , shortfall, said IG market strategist Yeap Jun Rong.

OPEC, meanwhile, expects global oil demand to rise by 1.43 million barrels per day (bpd) in 2026, maintaining a similar growth rate to 2025, the producer group said on Wednesday.

The 2026 forecast aligns with OPEC's view that oil demand will keep rising for the next two decades. That is in contrast with the IEA, which expects demand to peak this decade as the world shifts to cleaner energy.

The market also found some support from a drop in US crude oil stocks last week, market sources said, citing American Petroleum Institute (API) figures on Tuesday.

Crude stocks fell by 2.6 million barrels last week while gasoline inventories rose by 5.4 million barrels and distillates climbed by 4.88 million barrels, API sources said.

A Reuters poll found that analysts expected US crude oil stockpiles to have fallen by about 1 million barrels in the week to Jan. 10. Stockpile data from the Energy Information Administration (EIA) is due at 10:30 a.m. EST (1530 GMT).

On Tuesday the EIA trimmed its outlook for global demand in 2025 to 104.1 million barrels per day (bpd) while expecting supply of oil and liquid fuel to average 104.4 million bpd.

It predicted that Brent crude will drop 8% to average $74 a barrel in 2025 and fall further to $66 in 2026 while WTI was projected to average $70 in 2025, dropping to $62 in 2026.