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Energy Fund to Boost Saudi-US Strategic Investments

Heads of companies investing in the energy fund (Asharq Al-Awsat)
Heads of companies investing in the energy fund (Asharq Al-Awsat)
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Energy Fund to Boost Saudi-US Strategic Investments

Heads of companies investing in the energy fund (Asharq Al-Awsat)
Heads of companies investing in the energy fund (Asharq Al-Awsat)

A $5 billion energy investment fund was unveiled in Riyadh on Tuesday during the Saudi-US Investment Forum, held in conjunction with US President Donald Trump’s visit to the kingdom, in a move aimed at boosting bilateral partnerships and stabilizing the global energy sector.

The White House announced in a statement that the fund was among several key initiatives agreed during Trump’s visit, calling it a “historic step” toward deepening economic cooperation between the United States and Saudi Arabia.

Scott Pruitt, who served as the Administrator of the Environmental Protection Agency (EPA), told Asharq Al-Awsat the fund will target strategic investments in the energy sector, focusing primarily on US-based companies.

These include firms supporting existing energy hubs and those developing transitional technologies to advance the global energy future and promote efficient manufacturing.

Pruitt said the fund aligns with Saudi Arabia’s Vision 2030, aiming to invest in companies that can benefit from the kingdom’s business environment while also supporting energy-related infrastructure, services, and manufacturing in the US.

The fund is expected to begin deploying its $5 billion capital in 2025, he added.

Strategic Investment in Energy

Neil Bush, chairman of Skytower Investments, a green technology investment firm, said the energy fund brings together experienced partners in fund management and energy investment.

He noted that it will play a critical role in directing strategic capital toward the future of global energy and efficient production.

The fund naturally targets the development of US infrastructure, bolstering America’s leadership in global energy markets and delivering strong returns to investors, Bush said.

Launched during President Trump’s visit, this initiative sends a strong signal of renewed economic momentum between Washington and Riyadh.

Saudi businessman Abdullah Al-Meleihi, CEO of Saudi Excellence Co., described the fund as more than a capital mechanism, calling it a “bridge of trust and ambition” between the two countries.

He emphasized Trump’s role in creating a climate conducive to innovation and opportunity.

Al-Meleihi said the fund is expected to be fully established and financed in 2025, characterizing it as a model of public-private cooperation and strategic alignment between the US and Saudi Arabia.

He noted that it enjoys robust support from the private sector in both countries as well as international investors, and will focus on energy, technology, artificial intelligence in energy, and advanced industries, while also facilitating knowledge transfer to the kingdom and capital investment in the US.

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Business

Strait of Hormuz Under Siege: A Double Shock to Global Energy Markets

People visit Hormuz Island in the Strait of Hormuz off the Iranian city of Bandar Abbas (File photo – AFP)
People visit Hormuz Island in the Strait of Hormuz off the Iranian city of Bandar Abbas (File photo – AFP)
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Strait of Hormuz Under Siege: A Double Shock to Global Energy Markets

People visit Hormuz Island in the Strait of Hormuz off the Iranian city of Bandar Abbas (File photo – AFP)
People visit Hormuz Island in the Strait of Hormuz off the Iranian city of Bandar Abbas (File photo – AFP)

Global energy markets are on maximum alert following the military escalation in the Middle East. The outbreak of direct confrontation between the United States and Israel on one side and Iran on the other has effectively paralyzed shipping through the Strait of Hormuz - the vital artery that carries more than 20 percent of the world’s oil and gas supplies - fueling fears of a major supply shock.

How quickly oil tanker traffic resumes normal operations through the strait is now critical. Roughly one-fifth of global oil production and a similar share of liquefied natural gas transit the narrow waterway.

Estimates from JPMorgan suggest that a 25-day halt in tanker traffic would fill storage tanks in producing countries to capacity, forcing them to cut output.

On Monday, in the first trading session since Saturday’s attack, oil prices surged sharply. Brent crude, the international benchmark, jumped as much as 13 percent to trade above $82 a barrel, its highest level since January 2025.

At the same time, insurers announced the cancellation of some policies covering vessels operating in the region. Meanwhile, S&P Global Platts, a leading provider of oil price assessments, suspended bids and offers for Middle Eastern refined product benchmarks that pass through the Strait of Hormuz, citing shipping disruptions linked to the US-Iran conflict. The agency added that it is reviewing its pricing methodology for Middle Eastern crude.

Gas Crisis Deepens

The turmoil has not been limited to oil. Natural gas markets have also been jolted, with European prices jumping more than 30 percent after QatarEnergy announced a suspension of production and exports.

Qatar’s Ministry of Defense said an Iranian drone targeted an onshore gas processing facility in Ras Laffan Industrial City, forcing operations to halt.

The impact is particularly severe for Europe, which relies on Qatar as a strategic alternative to Russian gas. Ole Hvalbye, a commodities analyst at SEB, said disruption to flows through Hormuz, which account for about 20 percent of global LNG supplies, would spark fierce competition between Asian and European buyers for US cargoes, driving prices sharply higher across the Atlantic basin.

The direction of prices now depends largely on how long the conflict persists. Analysts say the base-case scenario hinges on political developments in Tehran, where the international community hopes for either a significant leadership shift or US diplomatic intervention to de-escalate tensions within one to two weeks.

However, if prices remain elevated for a prolonged period, the risk of a renewed global inflation surge looms, placing central banks in a historic bind between curbing inflation and supporting economic growth.

Asia at the Epicenter

Asia - widely regarded as the engine of global growth - now finds itself at the heart of the crisis. The region is the most exposed to the fallout from the Middle East conflict due to its heavy dependence on Gulf oil and gas supplies. This is not merely a trade disruption; it is a direct challenge to energy security across Asian capitals.

Countries such as Japan, South Korea and India rely heavily on Middle Eastern shipping lanes to secure their energy needs. In Japan, around 70 percent of imported oil passes through the Strait of Hormuz, leaving the country highly vulnerable to geopolitical tensions in the corridor. China, despite diversifying its suppliers, remains the largest buyer of Iranian crude and Qatari LNG, making the security of these flows critical to its industrial economy.

Asian governments are now scrambling to reassess their strategic reserves.

If the conflict turns into a prolonged war of attrition, countries such as Japan and South Korea could face an unenviable choice: draw down reserves that may prove difficult to replenish quickly, or accept soaring spot market prices.

With Qatari LNG supplies disrupted, Asia has already entered into intense competition with Europe for US and Australian cargoes. The scramble for alternative supplies is tightening global availability and sharply increasing energy costs across emerging Asian economies.

For India and several Southeast Asian nations, higher prices mean an immediate rise in import bills, placing heavy pressure on balance-of-payments positions and fueling imported inflation that could undermine growth targets for the year.

The strain extends beyond crude oil. Asia’s refineries - the largest in the world - depend heavily on medium and heavy Middle Eastern grades. A sustained disruption in these supplies could force refiners to cut processing rates, leading to shortages of diesel, gasoline and jet fuel within the region itself, with knock-on effects for transportation and logistics.

Business

Demand Remained Strong in Saudi Arabia's Non-oil Business in February, PMI Shows

A general view of the city of Riyadh (AFP)
A general view of the city of Riyadh (AFP)
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Demand Remained Strong in Saudi Arabia's Non-oil Business in February, PMI Shows

A general view of the city of Riyadh (AFP)
A general view of the city of Riyadh (AFP)

Growth in Saudi Arabia's non-oil private sector slowed slightly in February, a survey showed on Tuesday, although demand remained strong.

The seasonally adjusted Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI) slipped to a reading of 56.1 in February from January's 56.3, but remained well above the 50.0 threshold that separates growth from contraction.

"This performance was driven by ⁠robust domestic demand ⁠and a steady flow of new project approvals," said Naif Al-Ghaith, Riyad Bank's chief economist.

In February's PMI survey, the new orders sub-index remained steady at 61.8, similar to the previous month, indicating strong demand with businesses continuing to report strong output growth and a sharp rise in employment.

The rate of ⁠employment ⁠growth accelerated to a four-month high, driven by increased sales and a build-up of backlogs, according to the survey. However, the rate of staff cost inflation hit its highest since the survey began in August 2009.

Business

Qatar LNG Halt Won't Immediately Affect Japan's Energy Supply, Minister Says

FILE PHOTO: Model of LNG tanker is seen in this illustration taken May 19, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: Model of LNG tanker is seen in this illustration taken May 19, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
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Qatar LNG Halt Won't Immediately Affect Japan's Energy Supply, Minister Says

FILE PHOTO: Model of LNG tanker is seen in this illustration taken May 19, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: Model of LNG tanker is seen in this illustration taken May 19, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

Qatar's LNG production halt due to Iranian strikes will not immediately affect Japan's energy supply, and if there is any impact, Japan could tap the spot market or utilities could buy from each other, Trade Minister Ryosei Akazawa said on Tuesday.

Akazawa told a regular press conference that Qatari liquefied natural gas accounts for 4% of Japan's total LNG imports and reiterated the government has no specific plans to release oil ⁠from stockpiles, while ⁠some Japan-bound ships are stranded in the Middle East.

If needed, Japanese companies have LNG inventory equivalent to about three weeks of consumption, according to the government, with the country's oil stockpiles holding the equivalent of 254 days of net imports.

The US and Israeli attack on Iran has pitched the Gulf into war, killed scores of people in Iran, ⁠Israel and Lebanon, thrown global air transport into chaos and shut down shipping through the Strait of Hormuz, where a fifth of the world's oil trade and a large amount of LNG skirt the Iranian coast.

Some 42 Japan-related ships are waiting in the Gulf, the country's foreign ministry said on Tuesday.

Qatar halted its LNG production on Monday, as Iran continued to strike Gulf countries in retaliation for Israeli and US strikes against it, prompting precautionary shutdowns of oil and gas facilities across the Middle East.

Japan, the world's second largest LNG importer, bought 3.4 million ⁠metric tons ⁠of LNG from Qatar last year, customs data shows, according to Reuters.

Together with LNG supply from Oman and the United Arab Emirates, Japan imported around 7 million tons of LNG from the Middle East last year, making up about 11% of its supply.

Some of Japan's biggest LNG importers, including JERA and Kansai Electric Power Co, have offtake contracts with the Middle Eastern producers.

Japan trades around 40 million tons of LNG annually and could redirect some of that back home in case of emergency. It also has a mechanism in place to buy at least one LNG cargo – or 70,000 metric tons – per month to mitigate supply risks.