SINGAPORE: Asian refiners are paying the highest premiums for Middle East and Russian crude oil in about a year, due to firm demand and more costly imports from the West, industry sources said.
High prices could prompt refiners to draw down inventories, tightening supply buffers even as the Organization of the Petroleum Exporting Countries (OPEC) and their allies including Russia gradually ease supply cuts.
Several popular grades in Asia, such as Oman, Russian ESPO and Sokol crude, are trading at the highest premiums in 11 months against Dubai quotes, according to trade sources and Refinitiv data.
The spread between first and third month cash Dubai prices is at its widest backwardation since pre-COVID levels in January 2020, Reuters data showed, indicating strong demand for prompt supplies.
Spot crude prices in Asia are a leading indicator for global markets as several of the world’s top importers are located in the region. Asian refiners also typically buy oil two months in advance, earlier than other regions. “Demand is rising and supply is falling short of expectations, leading to a strong market that is being reflected in physical markets now,” Energy Aspects analyst Virendra Chauhan said.
Major refineries in top importer China are processing more crude as domestic margins have improved after a government crackdown on some fuel imports, refining and trade sources said. Some independent refiners have also resumed crude purchases for July and August arrivals, anticipating a second batch of import quotas soon, they added.
Refineries in other parts of Asia are also cranking up after maintenance to meet demand during the peak summer season in the northern hemisphere, including during the Tokyo Olympics which start in July, they said.
However, importing crude oil from Europe, West Africa and the United States is currently uneconomical as Brent’s premium to Dubai has widened while spot premiums for grades such as Angola’s Cabinda and Kazakhstan’s CPC Blend have climbed, the sources said.
“Arbitrage from West Africa and Europe to Asia could decline and increase demand for regional barrels,” a North Asian refining source said, referring to oil from Asia Pacific, Russia, and Middle East.
While Asian refiners will buy crude to meet baseload demand, or the minimum amount of crude required for a refinery, they are likely to draw down inventories for incremental supplies, the industry sources said.
“If everybody only buys baseload crude, (prices in) the market may be toppish soon,” a second North Asian refining source said.
Energy Aspects expects a global crude stocks draw of 2.7 million barrels per day (bpd) in the third quarter, compared with 1.4 million bpd in the second quarter.
“OECD inventories are back at the 2015-2019 average so OPEC+ have achieved their aim,” Chauhan said.
“The only way to stop prices from rising is a rise in OPEC+ supply, but they are waiting for clarity on Iran before taking any action.”
Asian refiners pay highest premium for Mideast crude in a year
https://arab.news/mrcr8
Asian refiners pay highest premium for Mideast crude in a year
- Spot crude prices in Asia are a leading indicator for global markets as several of the world’s top importers are located in the region
Saudi Arabia sets global benchmark in AI modernization
- Executives hail the Kingdom’s robust infrastructure and strategic workforce programs
RIYADH: Saudi Arabia is emerging as a global leader in artificial intelligence, according to executives from OpenText, one of the world’s largest enterprise information management companies.
With 22 years of international AI experience, Harald Adams, OpenText’s senior vice president of sales for international markets, said the Kingdom’s modernization efforts are now setting a global standard.
“From my perspective, Saudi Arabia is not only leading the modernization towards artificial intelligence in the Middle East, I think it is even not leading it only in the MENA region. I think it is leading it globally,” Adams told Arab News.
In an interview, Adams and George Schembri, vice president and general manager for the Middle East at OpenText, discussed the Kingdom’s significant investments in AI during the inauguration of OpenText’s new regional headquarters in Riyadh.
“So for us (OpenText), from our perspective, it was a strategic decision to move our MENA headquarters to Saudi Arabia because we believe that we will see here a lot of innovation coming out of the country, we can replicate not only to the MENA region, maybe even further to the global level,” Adams said.
The new headquarters, located in the King Abdullah Financial District, will serve as a central hub for OpenText customers and partners across the Middle East. Its opening reflects a broader trend of tech giants relocating to Riyadh, signaling the Kingdom’s rise as a hub for global AI innovation.
Adams attributed Saudi Arabia’s lead in AI modernization to a combination of substantial financial backing, a unified national strategy, and a remarkable pace of execution.
“I mean, a couple of things, because the ingredients in Saudi Arabia are of course, quite interesting. On the one hand side, Saudi Arabia has deep pockets and great ambitions. And they are, I mean, and they are executing fast, yeah,” he said.
“So from that perspective, at the moment, what we see is that there are, especially on the government side, I can’t see any other government organizations globally moving faster into that direction than it is happening in Saudi Arabia. Not in the region, not even on a global level, they are leading the game,” he underlined.
Schembri added, “Saudi’s AI vision is one of the most ambitious in the world, and AI on a national scale is not good without trusted, secured, and governed, and this is where OpenText helps to enable the Saudi organizations to be able to deliver on the 2030 Vision.”
“The Kingdom’s focus on AI and digital transformation creates a powerful opportunity for organizations to unlock value from their information,” Schembri stated.
“With OpenText on the ground in Riyadh, our customers gain direct access to trusted global expertise combined with local insight — enabling them to manage information securely, scale AI with confidence, and compete on a global stage,” he added.
DID YOU KNOW?
• Saudi Arabia ranks 5th globally and 1st in the region for AI growth under the 2025 Global AI Index.
• The Kingdom is also 3rd globally in advanced AI model development, trailing only the US and China.
• AI is projected to contribute $235.2 billion — or 12.4 percent — to Saudi Arabia’s GDP by 2030.
The inauguration of OpenText’s new regional headquarters was attended by Canada’s Minister of International Trade and Economic Development, Maninder Sidhu, and Jean-Philippe Linteau, Canada’s ambassador to Saudi Arabia.
Sidhu emphasized the alignment of Saudi Vision 2030 with Canada’s economic and innovation goals.
“His Highness (Crown Prince Mohammed bin Salman) and Vision 2030, there is a lot of alignment with Canada, as you know, with the economic collaboration, with his vision around mining, around education, tourism, healthcare, you look at AI and tech, there’s a lot of alignment here at OpenText Grand opening their regional headquarters,” Sidhu told Arab News.
Saudi Arabia’s AI ambitions are projected to contribute $235.2 billion — or 12.4 percent — to its GDP by 2030, according to PwC. The Saudi Data and AI Authority, established by a royal decree in 2019, drives the Kingdom’s national data and AI strategy.
One flagship initiative, Humain, chaired by Crown Prince Mohammed bin Salman, was launched in May 2025 under the Public Investment Fund. It aims to build a full AI stack — from data centers and cloud infrastructure to models and applications — positioning Saudi Arabia as a globally competitive AI hub. The project plans to establish a data center capacity of 1.8 GW by 2030 and 100 GW of AI compute capacity by 2026.
Saudi Arabia is also expanding international partnerships. In May 2025, Humain signed a $5 billion agreement with Amazon Web Services to accelerate AI adoption domestically and globally, focusing on infrastructure, services, and talent development.
The Kingdom ranked fifth globally and first in the Arab region for AI sector growth under the 2025 Global AI Index, and third worldwide in advanced AI model development, behind only the US and China, according to the Stanford University AI Index 2025.
Education is another pillar of Saudi AI strategy. Starting in the 2025-26 academic year, AI will be taught as a core subject across all public school grades, reaching roughly 6.7 million students. The curriculum will cover algorithmic thinking, data literacy, and AI ethics.
OpenText executives emphasized their commitment to supporting Vision 2030 and the national AI strategy through workforce development.
“OpenText has put a lot of investment in the Kingdom, right. We brought cloud to the Kingdom, we’ve opened our headquarters in the Kingdom, we’ve basically hiring Saudis in the Kingdom, We basically building, if you like, an ecosystem to support the Kingdom. And on top of that, what we’re doing is we’re putting a plan together, if you like, a program to look at how we can educate, if you like, the students at universities,” Schembri said.
“So this is something that we are looking into, we are basically investigating and to see how we can support the Saudi nationals when they come into the workplace. And I’m really excited. I have Harry who is, our leadership who’s supporting this program.”
“It’s something that we are putting together. It’ll take some effort. So it’s still in play because we want to make sure what we put it basically delivers on what we're trying to achieve based on the vision of Saudi,” he added.
“The younger generation is sooner or later either working for us or maybe for a partner or for maybe for a customer. So that’s why we are to 100 percent committed to enable all of that,” Adams said.
