Saudi Arabia’s refinery output down for third month in a row: JODI

Gas or diesel oil, which comprises 48.7 percent of refinery oil exports making it the highest exported product, went down 5.9 percent from 740,000 bpd in June to 696,000 bpd in July. (Supplied)
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Updated 25 September 2022

Saudi Arabia’s refinery output down for third month in a row: JODI

  • Kingdom’s refinery output grew 8.3 percent from 2.56 million bpd, and exports rose 8.0 percent from 1.32 million bpd, compared to July 2021

RIYADH: Saudi Arabia’s refinery output has inched lower for the third month in a row, while oil product exports met the same fate, the Joint Organizations Data Initiative reported.

The Kingdom's refinery output decreased to 2.76 million barrels per day in July, from 2.85 million bpd in June, while oil product exports decreased from 1.60 million bpd in June to 1.43 million bpd in July, JODI revealed.

While production saw a 3.1 percent month-on-month decline from June to July, total oil exports experienced a bigger 10.6 percent decrease over the same period, distorted from their growth in the past two months. 

Year-over-year, the Kingdom’s refinery output grew 8.3 percent from 2.56 million bpd, and exports rose 8.0 percent from 1.32 million bpd, compared to July 2021.

All components of refinery output decreased from June’s values, bar the production of motor and aviation oil where the 23 percent constituent remained almost unchanged at 628,000 bpd in July, from 626,000 bpd the previous month.

Gas or diesel oil — by far the highest contributor to refinery oil production at 43.4 percent —went down slightly by 1.8 percent, from 1.22 million bpd in June to 1.20 million barrels per day in July.  

Moreover, fuel oil showed its second consecutive monthly decline of 6.2 percent from 503,000 to 472,000 million bpd. Fuel oil is a prominent proportion of total oil products as it makes up 17 percent of total refinery oil production.

Smaller components of total oil products like kerosene, which includes jet fuel, recorded a 6.4 percent monthly decrease in July 2022.

Naphtha and liquefied petroleum gas fell 3.2 percent and 30.8 percent respectively over the same period.

Oil products falling into the classification ‘other’ almost doubled over the year from 121,000 bpd last July to 237,000 bpd this year, fueled by their 75.7 percent growth in June, where they reached 246,000 barrels of production per day.

However, like most oil products, they contracted 3.7 percent in the transition between June and July this year.

Exports of refinery oil

Refinery oil exports were pushed down this month by reductions in all components apart from fuel oil.

Motor and aviation oil exports plummeted 23.2 percent from 280,000 bpd in June to 215,000 bpd in July — falling for the third consecutive month in contrast to their fixed output in production.

Gas or diesel, oil which comprises 48.7 percent of refinery oil exports making it the highest exported product, went down 5.9 percent from 740,000 bpd to 696,000 bpd over the same period.

Although Kerosene and Naphtha make up smaller portions of total oil exports, their decreases also brought down oil exports.

Fuel oil, the second largest contributor alongside motor and aviation, went up 12.2 percent from 198,000 bdp to 222,000 bpd, showing a growth in exports for the first time in four months.

Closing stocks

The Kingdom’s closing stocks of all oil products decreased by less than one percent, due to declines in gas or diesel oil, motor and aviation oil, and kerosene. 

The total closing stock was equivalent to 92.13 million barrels by the end of July, down 700,000 from 92.83 million barrels in June. 

Saudi Arabia issues 136 industrial licenses in August 2023

Updated 54 sec ago

Saudi Arabia issues 136 industrial licenses in August 2023

RIYADH: Saudi Arabia’s economic activity gained momentum with the Ministry of Industry and Mineral Resources issuing 136 industrial licenses in August compared to 102 in July.

According to the Saudi Press Agency, the food product manufacturing sector received 29 permits, followed by the non-metallic mineral industry with 21.

Moreover, the rubber and plastics industry obtained 15 permits, and 12 licenses were issued in the paper production sector.

The SPA report added that the ministry issued 795 industrial licenses between January and August. The number of factories during this period reached 11,110, taking the total investments made by these firms to SR1.489 trillion ($400 billion).

The SPA report further noted that investment volume in August for new licenses stood at SR1.6 billion.

Small enterprises accounted for 83.09 percent of the total licenses issued in August, followed by medium enterprises with 16.18 percent and micro-enterprises with 0.74 percent.

The report added that national factories held the most significant chunk of the total licenses at 76.47 percent, followed by foreign establishments and joint-investment firms with 16.18 percent and 7.35 percent, respectively.

On the other hand, 87 factories started production in August, with an investment of SR1.5 billion. Of these plants, 79.31 percent were national factories, 12.64 were foreign establishments and 8.64 percent were joint investment firms.

Meanwhile, the ministry issued 36,293 certificates of origin in August, up from 34,926 in July.

The initiative is seen as a part of the ministry’s efforts to boost exports across various sectors.

A certificate of origin is a pivotal document in international trade, validating that the exported goods are on a nationality basis.

Banks in GCC benefiting from strong operating conditions: Fitch Ratings  

Updated 53 min ago

Banks in GCC benefiting from strong operating conditions: Fitch Ratings  

RIYADH: Banks in the Gulf Cooperation Council are currently reaping the benefits of robust operating conditions, driven by factors such as high oil prices, contained inflation, and rising interest rates, according to Fitch Ratings.  

In its latest report, the US-based credit rating agency pointed out variations in bank performance across the GCC markets, with financial institutions in the UAE demonstrating signs of improvement compared to their counterparts. 

“We expect this improvement to be overall sustained, which, along with other solid financial metrics being maintained, could lead to positive rating actions on some UAE banks’ Viability Ratings,” said Fitch Ratings.  

The report highlights that banks in Saudi Arabia, Qatar, and the UAE are well-positioned to benefit from rising interest rates, primarily due to the swift repricing of loan books and substantial funding from low-cost current and savings accounts. 

UAE banks, in particular, have seen significant gains from rising rates, with average net interest margins increasing by 100 base points in the first half of 2023 compared to 2020.  

NIMs in the UAE are anticipated to stabilize in the second half of 2023 before experiencing a slight dip in 2024, the report added. 

Conversely, Qatari banks have experienced only modest NIM improvements due to weak credit demand and ongoing public sector repayment of overdraft facilities. 

Strong operating conditions have contributed to robust asset quality metrics in the UAE and Saudi Arabia during the first half of 2023.  

“UAE mortgage portfolios could be pressured given their high proportion of variable-rate loans, but the rise in property prices should keep losses-given-default close to nil,” added Fitch.   

Saudi banks are projected to outpace the GCC average in financing growth for both 2023 and 2024, driven by increased corporate credit demand and persistent high interest rates. 

With oil prices expected to average $80 per barrel in 2023 and $75 per barrel in 2024, the region’s banks can anticipate continued support for their operating conditions, as per the report. 

Saudi endowment investment funds exceed $133m in net assets 

Updated 49 min 9 sec ago

Saudi endowment investment funds exceed $133m in net assets 

RIYADH: Saudi Arabia’s endowment investment funds have experienced significant growth, with the number of licensed funds increasing by 13 in 2023, reaching a total of 24, as reported by the General Authority of Awqaf. 

In a newly released report, the authority revealed that this expansion has pushed the net assets of endowment investment funds in the Kingdom beyond the SR500 million ($133 million) milestone for the current year. 

This aligns with the government’s strategic objectives to advance the financial sector and streamline the licensing processes for various products.  

Saudi Arabia to grant premium residency for regional HQ executives 

Updated 01 October 2023

Saudi Arabia to grant premium residency for regional HQ executives 

RIYADH: As part of Saudi Arabia’s ongoing efforts to enhance its business environment, the Ministry of Investment has developed a mechanism to grant premium residency to executives based at regional headquarters. The initiative is being undertaken in collaboration with the country’s Premium Residency Center, according to an official release. 

In its pre-budget statement for 2024, the Ministry of Finance highlighted the collaborative work between the Ministry of Investment and various government entities to remove obstacles for investors.  

This includes cooperation with the Ministry of Municipal and Rural Affairs and Housing to establish an exception mechanism and permissions for companies looking to set up their headquarters within one of their branches in the Kingdom. 

Furthermore, the Ministry of Finance revealed that the Investment Ministry is working closely with the Ministry of Human Resources and Social Development to implement incentives for employees at regional headquarters. 

These incentives include granting visas based on the company’s requirements, enabling spouses under the family residency to work, and extending the age limit for dependents allowed to stay with regional headquarters employees to 25 years. 

Saudi Arabia continues to make strides in improving its business climate, attracting investments and fostering a more accommodating environment for foreign companies.

S&P upgrades Oman’s credit rating to BB+ with stable outlook  

Updated 15 min 11 sec ago

S&P upgrades Oman’s credit rating to BB+ with stable outlook  

RIYADH: In a new development signaling a shift in Oman’s economic landscape, global credit rating agency Standard & Poor has upgraded the nation’s long-term credit rating from “BB” to “BB+.” 

S&P Global’s assessment underscores a transformation in Oman’s non-oil sector, promising substantial growth in the years ahead, particularly between 2023 and 2026. This shift is expected to play a pivotal role in enhancing the country’s financial prosperity. 

Furthermore, government fiscal and economic momentum is set to continue until 2026, forecasting an average of 2 percent year-on-year growth in the country’s gross domestic product, according to the agency. 

“Oman’s economy depends on the oil sector, which accounts for about 30 percent of GDP, 60 percent of goods exports, and 70 percent of government fiscal receipts. This dependence weighs on our assessment of its fiscal and external resilience, and we reflect this in the rating,” the report stated. 

The agency predicts a deceleration in economic growth by 1 percent in 2023, mainly attributed to reductions in oil production.   

Nonetheless, the dip in oil output is anticipated to be counterbalanced by a surge in condensate and gas. 

In the non-hydrocarbon sector, Oman is projected to witness a 2 percent increase in 2023, with hydrocarbon manufacturing expected to rally in 2024 and 2025. 

Moreover, the banking sector witnessed a marked boost in credit balance, registering a growth of 5.3 percent in July 2023 compared to the same month the previous year. 

Data from the nation’s central bank indicates that credit extended to the private sector surged by 5.2 percent by the end of July 2023, totaling 20.2 billion Omani rials ($52.41 million). 

Highlighting another significant sector, Oman’s tourism industry is poised for expansion over the upcoming years. Its contribution to the GDP is projected to rise to 2.75 percent, up from 2.4 percent in 2023, according to Oman’s Minister of Heritage and Tourism. 

In a statement to Oman News Agency, Salim Al-Mahrouqi detailed that the tourism industry was responsible for 1.07 billion Omani rials of the comprehensive 1.9 billion Omani rials revenue in 2022.