THIS MORNING: Aramco to supply crude volumes to European refiners

Good morning, folks. We’re closing out the work week with exciting developments in sports, tech, and capital markets. Up first is PIF, which took the last quarter of Saudi football’s big four under its wing. Next up is Saudi Arabia’s relationship with Japan, and how Sony could be investing in the Kingdom’s tech sector. Then we look at the possibility that the Kingdom will raise the foreign cap once again — a move that could bring USD 4.3 bn to Tadawul.

Reassuring

Saudi Aramco told at least three European refiners that they’ll get their full contractual crude volumes for September, Bloomberg reports, citing people familiar with the matter. Two of the buyers will lift from Egypt’s Mediterranean port of Sidi Kreir, and the third was offered a choice of Sidi Kreir, Yanbu, or a ship-to-ship transfer off Malta.

Traders were bracing for the worst. Before the allocations landed, several told Bloomberg they expected Asian buyers to soak up the available Sidi Kreir barrels and leave Europe short. The allocations also arrived about a week later than usual, with Red Sea hostilities scrambling the Kingdom's normal logistics.

Europe needed the reassurance: Gulf flows remain constrained by shipping disruption at the Strait of Hormuz, and the region lost much of its CPC Blend supply last month after drone attacks in the Black Sea.

REMEMBER- Asian refiners were notified earlier this week, and at least two are pushing back on Aramco's request that they load at Yanbu, where Houthi threats have made tankers hard to secure. Crude exports from Sidi Kreir more than doubled to around 2.3 mn bbl / d in August, mostly on Saudi barrels.

The bigger shift: With both main export routes — Hormuz and Yanbu — carrying risk, Aramco is improvising, offering ship-to-ship cargoes from points including Sohar in the Gulf of Oman. This suggests that the Kingdom may be shuttling Gulf barrels out through Hormuz, as the UAE has been doing.

Data point

SAR 36.1 bn — that was the cumulative investment in operational renewable energy projects by the end of 2025, according to Gastat data (pdf). Five new solar projects, with a combined capacity of 5.7k MW, entered operation during the year.

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The big story abroad

The state of US debt has taken top billing on the front pages, after reaching a record USD 40 tn — rising by USD 3 tn over the past year, the fastest ever pace excluding the pandemic years. Rising spending on social programs and interest, compounded by tax cuts, is stoking investor fears of an impending US fiscal crisis. The US Treasury stepped in with measures for long-term bonds, offering some relief to global investor jitters over surging yields.

Over in Silicon Valley, semiconductor group Marvell will help Google develop in-demand custom chips, and has offered the tech giant the right to buy up to USD 12.2 bn in Marvell shares. Companies are turning to in-house chips like Google’s Tensor Processing Units for cheaper AI inference compared to costly Nvidia GPUs.

And in Asian markets: South Korean memory chipmaker SK Hynix announced plans to buy back KRW 40 tn in stock, a move to stabilize its stock price following a steep two-month decline of over 50%. Analysts view the measure as an effort to appease local retail investors upset after new share issuances for the company's US listing diluted their holdings.

In the defense space: JPMorgan Chase co-led a USD 1 bn funding round for missile-making startup Castelion, alongside Andreessen Horowitz and Carlyle. The fresh capital will fund the development of a larger hypersonic strike weapon and a mass-produced air missile defense, signaling blue-chip interest in the booming defense sector.

Meanwhile, in Hollywood: BlackRock’s HPS and Oaktree Capital Management have seized MBS Group, a firm specializing in lighting and rigging for Hollywood films, erasing as much as USD 900 mn in debt. The firms converted debt into around USD 100 mn in equity and agreed to invest USD 40 mn more in the global entertainment provider.