Türkiye, Saudi Arabia Sign Comprehensive Power Purchase Agreement

Saudi Energy Minister Prince Abdulaziz bin Salman Al Saud and Turkish Energy and Natural Resources Minister Alparslan Bayraktar attend the signing of a power purchase agreement between Türkiye and ACWA Power in Istanbul on Friday (photo from the Turkish minister’s account on X).
Saudi Energy Minister Prince Abdulaziz bin Salman Al Saud and Turkish Energy and Natural Resources Minister Alparslan Bayraktar attend the signing of a power purchase agreement between Türkiye and ACWA Power in Istanbul on Friday (photo from the Turkish minister’s account on X).
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Türkiye, Saudi Arabia Sign Comprehensive Power Purchase Agreement

Saudi Energy Minister Prince Abdulaziz bin Salman Al Saud and Turkish Energy and Natural Resources Minister Alparslan Bayraktar attend the signing of a power purchase agreement between Türkiye and ACWA Power in Istanbul on Friday (photo from the Turkish minister’s account on X).
Saudi Energy Minister Prince Abdulaziz bin Salman Al Saud and Turkish Energy and Natural Resources Minister Alparslan Bayraktar attend the signing of a power purchase agreement between Türkiye and ACWA Power in Istanbul on Friday (photo from the Turkish minister’s account on X).

Türkiye’s Energy and Natural Resources Ministry signed a comprehensive power purchase agreement with Saudi energy giant ACWA Power to develop solar power plants and projects in Türkiye with major investments.

The agreement, signed in Istanbul on Friday, was attended by Türkiye’s Energy and Natural Resources Minister Alparslan Bayraktar and Saudi Energy Minister Prince Abdulaziz bin Salman Al Saud.

It includes the construction of two solar power plants in the Turkish provinces of Sivas and Karaman with a combined capacity of 2,000 megawatts and investments totaling $2 billion, as well as the implementation of large-scale solar projects with a total capacity of 5,000 megawatts in Türkiye.

Commenting on the agreement, Bayraktar said: “During our president Recep Tayyip Erdogan’s visit to Riyadh on Feb. 3, we signed an intergovernmental agreement on renewable power plant projects with my Saudi counterpart, HRH Prince Abdulaziz bin Salman Al Saud, which provides for total investments in solar and wind energy in Türkiye of 5,000 megawatts.”

“Today, we reinforced this cooperation by signing the agreement with ACWA Power in Istanbul. In the first phase of the project, two solar power plants with a total capacity of 2,000 megawatts will be built in Sivas and Karaman, with an investment of around $2 billion. This will add capacity to our grid to meet the electricity needs of 2.1 million households,” he added.

Bayraktar said on X that in Sivas, the agreed purchase price is 2.35 euro cents per kilowatt-hour, while in Karaman, electricity will be bought at a fixed price of 1.99 euro cents per kilowatt-hour, the lowest price recorded in Türkiye. The agreed prices will be valid for 25 years.

He said the projects, which are expected to make a significant contribution to the energy sector, require a minimum 50% local content ratio, adding that groundwork is targeted this year, operations are scheduled for 2028, and full production capacity will be reached as soon as possible.

In the second phase of the agreement, with a total capacity of 5,000 megawatts, “we aim to expand our cooperation with additional investments in solar and wind energy amounting to 3,000 megawatts,” Bayraktar said, expressing hope that the move would strengthen confidence in Türkiye’s renewable energy transition and investment climate and benefit the Turkish energy sector.

Two-phase plan

Construction under the first phase of ACWA Power’s investments in Türkiye is scheduled to begin in the first or second quarter of 2027, with electricity supply expected to start by mid-2028.

ACWA Power aims to sign an agreement with Türkiye on the second phase of its renewable energy investments before November.

The first-phase projects offer highly competitive electricity sale prices compared with other renewable power plants in Türkiye. In addition, the plants, valued at about $2 billion, will supply electricity to more than 2 million Turkish households.

A Turkish state-owned company will purchase the electricity generated by the plants for 30 years. During implementation, maximum use will be made of locally sourced equipment and services.

In recent years, Türkiye has sought to attract Gulf investments into its energy sector as it works to raise renewable power generation capacity to 120 gigawatts by 2035. Several previous attempts were not completed due to disagreements over financial valuations and pricing.

ACWA Power announced in June its intention to build two large solar power plants in Türkiye as part of a plan to invest billions of dollars in the Turkish energy sector.

Major investments

While the exact value of ACWA Power’s investment has not been disclosed, Türkiye said two years ago it was in talks with the company over projects worth up to $5 billion.

Türkiye’s Treasury and Finance Minister Mehmet Simsek described the intergovernmental energy agreement signed during Erdogan’s visit to Riyadh as a major boost for foreign direct investment inflows into Türkiye.

He said the pace of foreign direct investment in Türkiye is accelerating, reflecting growing confidence in its economic program, adding that the inflow of $2 billion in foreign direct investment into renewable energy projects through the agreement with Saudi Arabia would accelerate the green transition, strengthen energy security, and structurally reduce dependence on energy imports.

ACWA Power’s portfolio, 44% owned by Saudi Arabia’s Public Investment Fund, includes a gas-fired power plant in Türkiye. The company also expanded its solar energy projects in 2024 in Malaysia, Indonesia, and Uzbekistan.



China Energy Imports Drop in April Amid Iran War as Fuel Exports Hit Decade Low

Oil and gas tanks are seen at an oil warehouse at a port in Zhuhai, China October 22, 2018. REUTERS/Aly Song
Oil and gas tanks are seen at an oil warehouse at a port in Zhuhai, China October 22, 2018. REUTERS/Aly Song
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China Energy Imports Drop in April Amid Iran War as Fuel Exports Hit Decade Low

Oil and gas tanks are seen at an oil warehouse at a port in Zhuhai, China October 22, 2018. REUTERS/Aly Song
Oil and gas tanks are seen at an oil warehouse at a port in Zhuhai, China October 22, 2018. REUTERS/Aly Song

China's oil imports fell to the lowest level in almost four years in April as the closure of the Strait of Hormuz choked off supplies to the world's largest oil importer.

Crude oil imports fell 20% in April to 38.5 million metric tons compared to a year earlier, hitting their lowest level since July 2022, according to customs data released on Saturday.

China imports roughly half of its crude oil from the Middle East, where the closure of the strait has slashed the number of tankers ⁠carrying oil and ⁠refined products to the world.

Saturday's data from China does not distinguish between oil arriving by sea and oil coming in via pipeline. Data from ship-tracking firm Kpler, however, puts seaborne crude imports at 8.03 million barrels per day, also the lowest since July 2022, Reuters reported.

Despite the decline in imports, ⁠ship tracker Vortexa estimates crude inventories rose by 17 million barrels in April, although it said those would fall in May.

The disruption in the Middle East has led China to tightly manage exports of refined products such as gasoline or jet fuel to protect its domestic market.

That policy drove refined oil product exports for April down to their lowest in roughly a decade at 3.1 million tons, down by about a third since March.

This may still overestimate ⁠how ⁠much is going to customers in Asia and elsewhere because the data includes shipments to Hong Kong, typically a major destination for China's refined products and excluded from the export controls.

Natural gas imports also fell by 13% to 8.42 million tons, although the data does not separate seaborne liquefied natural gas (LNG) from gas piped overland. China imports significant quantities of LNG from the Middle East Gulf.

China's crude oil imports for the first four months of the year are still tracking 1.3% above last year's level at 185.3 million tons.


Germany's March Exports Rose Despite Fall of Industrial Output

A general view of the Port of Hamburg, in Hamburg, Germany, October 9, 2023. REUTERS/Wolfgang Rattay
A general view of the Port of Hamburg, in Hamburg, Germany, October 9, 2023. REUTERS/Wolfgang Rattay
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Germany's March Exports Rose Despite Fall of Industrial Output

A general view of the Port of Hamburg, in Hamburg, Germany, October 9, 2023. REUTERS/Wolfgang Rattay
A general view of the Port of Hamburg, in Hamburg, Germany, October 9, 2023. REUTERS/Wolfgang Rattay

German exports rose unexpectedly in March, official data showed on Friday, lifted by higher demand from Europe, as industrial output fell despite a forecast rise, dampened by a drop in energy production.

German exports rose 0.5% in March over the previous month, boosted by an increase of 3.4% in shipments to other European Union countries, the federal statistics office said. Analysts polled by Reuters had expected a 1.7% decrease.

“The string of positive figures ⁠continues,” said VP Bank economist Thomas Gitzel, after the statistics office reported on Thursday higher-than-expected growth in March industrial orders.

The rise in new orders makes the drop of 0.7% in industrial production reported on Friday tolerable, he added.

Analysts polled by Reuters had expected a 0.5% increase.

The statistics office attributed the output decrease to a drop in energy production and in machinery and equipment manufacturing.

“These strong orders are expected to boost industrial production - and, by extension, exports - in the coming months,” Gitzel said, though he warned the well-being of German industry hinged on ⁠how much longer the Iran war will persist.

Sentiment indicators point to a second-quarter contraction in industrial output, because of high energy prices and supply bottlenecks resulting from the blockade of the Strait of Hormuz, said Commerzbank analyst Joerg Kraemer.

A 7.9% month-on-month slump in exports to the United States in ⁠March also showed a clear drag on trade, added Gitzel.

The United States remains the biggest destination for German goods despite the slump, receiving shipments of German goods worth 11.2 billion euros in March.

Imports surged in ⁠March, rising 5.1% compared with expectations for an increase of only 0.8%.

Most imports came from China, accounting for goods worth 15.6 billion euros ($18.31 billion) and marking a 4.9% increase on ⁠the month.

As a result, the foreign trade surplus narrowed more than expected, to 14.3 billion euros ($16.80 billion), from 19.6 billion the month before.


Asia Gets First Mexican Fuel Oil Cargo in 9 Months

FILE PHOTO: Oil tankers in the Singapore Strait in Singapore March 17, 2026. REUTERS/Edgar Su/File Photo
FILE PHOTO: Oil tankers in the Singapore Strait in Singapore March 17, 2026. REUTERS/Edgar Su/File Photo
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Asia Gets First Mexican Fuel Oil Cargo in 9 Months

FILE PHOTO: Oil tankers in the Singapore Strait in Singapore March 17, 2026. REUTERS/Edgar Su/File Photo
FILE PHOTO: Oil tankers in the Singapore Strait in Singapore March 17, 2026. REUTERS/Edgar Su/File Photo

Asia received its first fuel oil cargo from Mexico in nine months on Thursday, with more to follow, as higher Asian prices draw supply after the loss of Middle East cargoes due to the Iran war, according to industry sources and shipping data.

The incoming cargoes from Mexico will ease some concerns about declining inventories in Asia's trading and bunkering hub Singapore, after the Iran conflict choked off most fuel oil supplies from key exporters in the Middle East like Iraq and ⁠Kuwait via the Strait of Hormuz, according to Reuters.

Suezmax tanker Orion, carrying about 160,000 metric tons (1 million barrels) of Mexican high-sulphur fuel oil (HSFO) loaded from the Salina Cruz refinery on the Pacific coast, reached Singapore on May 7, according to traders and ship-tracking data from Kpler.

PMI, the trading arm of Mexican state energy company Pemex, offered another 150,000-ton HSFO cargo to Asia for June delivery via a tender that closed on May 6 with bids valid until May 8, a Singapore-based trader familiar with the matter said. PMI is expected to award the tender later on Friday.

Fuel oil traders said that strong Asian prices are pulling cargoes to Asia while there is ⁠excess supply in the Americas.

“Mexican fuel barrels have to search for more optimal economics due to an influx of Venezuelan oil into the US Gulf Coast,” said Emril Jamil, senior analyst for crude and fuel oil at LSEG.

Most of Mexico's fuel oil exports typically land in the US or the Caribbean Islands, Kpler data showed.

Neither Pemex nor its trading ⁠arm immediately responded to a request for comment.

Traders in Asia have been looking for more arbitrage supplies from the West after the Middle East supply disruption.

The arbitrage is open with front-month 380-cst HSFO East-West spread at near $60 a ton this week, ⁠more than double the level before the conflict, LSEG data showed.

The spread breached $80 a ton on March 9 following the Middle East war, the data showed, a level last seen in September 2019.

A wider East-West price ⁠spread, which measures the price difference between Asian fuel oil versus supply from the Americas and Europe, typically makes it more attractive for cargoes to be shipped from the West to Asia.