Good morning, ladies and gents. We say goodbye to August and welcome September, hoping the worst of the scorching heat wave is already behind us. The expected summer lull is bringing about a calm issue today, led by banks like Saudi Awwal and Alinma completing debt issuances, with more gearing up to tap the market. Let’s dive in.

HAPPENING TODAY-

Today is the last day for businesses subject to VAT with more than SAR 40 mn in annual revenues to file their July tax returns, the Zakat, Tax, and Customs Authority said in a statement last week. Late submissions may incur fines ranging from 5-25% of the declared taxes.

WEATHER- Thunderstorms and heavy rain are expected today in Jazan, Asir, and Makkah, with lighter showers in Najran, Madinah, Riyadh, Al Baha, Hail, and Eastern Province.. Riyadh can expect a high of 42°C and a low of 31°C, while Jeddah will see temperatures peak at 40°C and drop to 33°C. Makkah's forecast is a high of 42°C and a low of 32°C.

WATCH THIS SPACE-

Deme gears up for Oxagon phase 2: Belgium-based dredging and marine infrastructure contractor Deme Group is preparing to begin cutter suction dredging later this year for the second phase of Neom’s Oxagon, after it advanced dry earthworks at the site, according to the company’s 1H 2025 financial statement (pdf).

REFRESHER- A consortium that includes Deme Group and Dutch EPC contractor Archirodon was awarded the dredging contract in December 2023 for the second phase of transformation work at the port of Neom in Oxagon, the nearly USD 50 bn floating port city located near the Suez Canal, set to serve as amajor logistics and industrial center.

PIF-owned aircraft lessor AviLease currently has 105 aircraft in its order book, mainly of the Airbus A350 freighter model, slated for delivery after 2030 along with the Boeing 737 order, CEO Ted O’Byrne told Bloomberg on Friday (watch, runtime: 04:43)

Looking forward, AviLease aims to be one of the top 10 in the industry by more than doubling its balance sheet to USD 20 bn by 2030. This growth will be driven by direct investments and M&A agreements, such as the acquisition of Standard Chartered's aircraft leasing arm in November 2023, O’Byrne said.

AviLease’s portfolio: Launched three years ago, the lessor has a portfolio of about USD 8 bn, comprising up to 200 aircraft leased to 50 airlines in 30 countries. The firm targets expanding its footprint to include the US, India, and Asia, with the main focus on Saudi Arabia, which holds 20% of its booked aircraft.

Defense minister meets with top Ukrainian officials: Prince Khalid bin Salman bin Abdulaziz and National Security Adviser Musaad bin Mohammed Al Aiban held talks in Riyadh with the Ukrainian President’s Chief of Staff Andriy Yermak and Head of National Security and Defense Council Rustem Umerov, focusing on peace scenarios in Ukraine and the Kingdom’s role, Reuters reported on Wednesday.

REMEMBER- Saudi Arabia hosted the planned US and Ukraine talks in Jeddah in March to support efforts ensuring “lasting peace in Ukraine.”

OIL WATCH-

Saudi Arabia could lower October crude prices for Asia: Aramco is expected to cut October’s official selling price (OSP) for Arab Light bound to Asia by USD 0.40-0.70 a barrel from September, bringing it to a range of USD 2.50-2.80 a barrel above the Oman-Dubai benchmark, Reuters reports, citing a survey of five refining sources. The OSPs for Arab Extra Light, Arab Medium, and Arab Heavy are also expected to fall by USD 0.40-0.60 a barrel for the month.

REMEMBER- Aramco raised the price of its flagship Arab Light crude bound to Asia by USD 1 a barrel for September deliveries, taking the premium to USD 3.20 per barrel above the Oman-Dubai benchmark. September was the second consecutive month where the Kingdom hiked prices, signaling confidence in the strength of demand.

Elevated Saudi prices have slowed buying in Asia, with refiners in China turning to cheaper Russian crude and other Asian buyers sourcing more US barrels. Indian state refiners also resumed Russian purchases, adding further pressure on spot prices. Refiners told Reuters that a sizable price cut may be required for Saudi crude to regain demand.

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THE BIG STORY ABROAD-

Fed governor Christopher Waller said he wants rate cuts to begin as of next month’s meeting, which he expects will deliver a 25 bps rate cut, though he did not completely dismiss the possibility of a bigger cut if employment data — out next Friday — shows a substantially weakening economy alongside contained inflation. (Reuters | Financial Times)

SPEAKING OF- The US’ economy grew at 3.3% in 2Q 2025, faster than expected on the back of healthy consumer spending and a drop in imported goods. (WSJ)

ALSO- The US ended the de minimis tariff exemption on small packages valued at USD 800 or less, potentially shaking up the e-commerce sector, with several already suspending deliveries of small packages or raising prices. (Bloomberg).

BUT- Tariffs hit a snag: A US court of appeals ruled on Friday that President Trump’s aggressive trade agenda is overstepping his presidential authority. The ruling blocks sweeping tariffs on all imports from countries, but does not affect tariffs on specific industries like steel, aluminum, and autos.

CLOSER TO HOME- Israeli airstrikes on Yemen killed Houthi’s Prime Minister Ahmed Al Rahawi and several political leaders on Thursday, the rebel group confirmed yesterday, vowing to take revenge. The news comes as Hamas also confirmed yesterday the death of military chief Mohammad Sinwar.

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