LONDON: Oil prices surged on Tuesday, supported by OPEC-led production cuts, which Saudi Arabia said it would surpass by more than half a million barrels per day (bpd), and by US sanctions against Iran and Venezuela.
Brent crude futures were up almost 3 percent while West Texas Intermediate (WTI) crude oil futures also gained by a similar measure. Markets are tightening because of voluntary production cuts from Jan. 1, led by OPEC and allies including Russia, aimed at forestalling a global overhang.
Saudi Arabia, the world’s top oil exporter and de facto leader of OPEC, said it would reduce crude production to about 9.8 million bpd in March, over half a million bpd more than it had originally pledged. Energy Minister Khalid Al-Falih announced the move in an interview with the Financial Times published on Tuesday as the Kingdom seeks to drive up oil prices to help fund an economic transformation plan.
However, rising US oil production, fighting near Libya’s main oilfield, sanctions on Venezuela and suspense over whether Washington will grant more waivers to import Iranian oil have left markets unsure about broader supply. OPEC cut its forecast for 2019 world oil demand on Tuesday, citing slowing economies and expectations of faster supply growth from rivals, underlining the challenge it faces in preventing a glut. Also on the radar are hopes expressed by US and Chinese officials that a new round of talks, which began in Beijing on Monday, would bring them closer to easing their months-long trade war.
Beijing and Washington are trying to hammer out a deal before a March 1 deadline, without which US tariffs on $200 billion worth of Chinese imports are scheduled to rise to 25 percent from 10 percent. The suspense over the talks continues to affect oil markets.
“Resumption of the US-China trade talks has prompted risk appetite in financial markets, which has also manifested in oil prices gaining strength,” said Abhishek Kumar, senior energy analyst at Interfax Energy in London. “Nevertheless, there needs to be a tangible outcome from the talks for a sustained rally in prices.” But Bank of America warned of a “significant slowing” in global growth, adding that it expects Brent and WTI to average $70 and $59 a barrel respectively in 2019, and $65 and $60 in 2020.
Oil prices jump on Saudi and OPEC cuts
Oil prices jump on Saudi and OPEC cuts
- Markets are tightening because of voluntary production cuts from Jan. 1, led by OPEC and allies including Russia, aimed at forestalling a global overhang
- Saudi Arabia, the world’s top oil exporter and de facto leader of OPEC, said it would reduce crude production to about 9.8 million bpd in March
Ma’aden forms JV with Hancock for mineral exploration across Saudi Arabia
RIYADH: A new joint venture aimed at accelerating mineral exploration across Saudi Arabia has been formed under a shareholders’ agreement between Saudi Arabian Mining Co., known as Ma’aden, and Australia-based Midana Exploration Pty Ltd, part of Hancock Prospecting.
According to a regulatory filing, the initial work will focus on the Nabita–Ad-Duwayhi Gold Belt, following a successful bid for exploration licenses awarded by the Ministry of Industry and Mineral Resources. The licensed areas span more than 24,000 sq. km of mineral-rich territory.
The partnership comes as Saudi Arabia steps up efforts to expand its mining sector as a pillar of economic diversification, encouraging international participation and private investment to unlock the Kingdom’s estimated $2.5 trillion in untapped mineral resources under Vision 2030.
The government has accelerated licensing rounds and increased exploration incentives to boost geological mapping and downstream development.
In a Tadawul filing, the company stated: “Maaden will own 50.1% of the capital of the Joint Venture, whilst Hancock will own 49.9% of its share capital.”
It added: “The objects of the Joint Venture will include exploration, development, mining, sales and marketing of minerals in licensed areas in the Kingdom.”
The shareholders’ agreement was signed on Dec. 29, with no defined duration. The initial share capital of the joint venture will be $5 million. The entity will also approve budgets and business plans for its exploration and development operations on an ongoing basis.
The transaction remains subject to regulatory and antitrust approvals. No related parties were identified, according to the disclosure.
Shares of Ma’aden were trading at SR61.95 as of 2:15 PM Saudi time, reflecting a 0.32 percent decline during the day.
Saudi Arabia has significantly ramped up its mineral exploration activity in recent years, with spending rising to SR487 per sq meter — more than double the Vision 2030 target.
This marks a 600 percent increase over the past seven years, underscoring the Kingdom’s accelerated efforts to map its geological potential and unlock critical mineral resources.
In 2024 alone, total exploration expenditures surpassed SR1.05 billion, supported by both government and private sector funding. The increase reflects Saudi Arabia’s strategic push to position mining as a central pillar of economic diversification under Vision 2030.
