THIS MORNING: Houthis continue their attacks on Saudi airports and military sites

Good morning, ladies and gentlemen. The month is coming to a close, but the floodgates of earnings are still open. The quarter’s results come down to where a company sits in relation to the disruption — the same risk that pads one Saudi company’s pockets is eating away at the numbers for another.

Shipping and refining collected margins that the disruption handed them, the sharpest headline declines trace to tax lines rather than to trading, and the companies that genuinely worked for their numbers were the ones selling at home on procurement and cost discipline.

The markdown is plainest in football. Buyers are still at the table for the clubs being privatized, and they are bidding lower, which Hamad Bin Khalifa University’s Christos Anagnostopoulos frames as capital asking for a discount rather than walking away. Due diligence is now separating clubs that can show commercial growth from those carried by outside funding.

More international debt

Saudi Arabia could return to international debt markets to raise as much as USD 12 bn before the end of the year, Jefferies Chief Middle East Economist Alia Moubayed tells Asharq Business.

The borrowing would bring the Kingdom above the planned threshold for financing from international debt markets. On top of the USD 14.75 bn already raised — USD 11.5 bn in January and USD 3.25 bn in sukuk in September — the potential additional financing would bring the total to roughly SAR 100 bn. That would be close to 46% of the SAR 217 bn in total financing needs identified in the 2026 plan — nearly double the 25-30% the plan earmarked for international markets this year.

Moubayed sees demand holding up because sovereign bonds have shown limited sensitivity to geopolitical risk amid regional military escalation. She also points to a shift toward spending on projects with stronger development returns, particularly in ports, transport, and telecommunications, to support private-sector activity and non-oil growth.

Fourth Asian host

Saudi Arabia is in talks to add the Philippines to its overseas crude storage network, as it seeks to build strategic reserves and hedge against price spikes caused by the Iran war, Philippine Energy Secretary Sharon Garin tells Reuters.

The Kingdom is exploring overseas locations to store its crude following attacks on its ports and oil facilities. Aramco announced an initial agreement this week to store Saudi crude in Singapore’s underground rock caverns starting in 2027, making it the company’s third Asian host. The oil giant already stores 8.2 mn bbl in Okinawa under an agreement with Japan’s Jogmec, renewed in November last year, and 5.3 mn bbl at South Korea’s Ulsan under a five-year agreement signed in 2023. In both, the host government has priority to buy the oil during a shortage.

On the supply side: Aramco has offered European buyers spot crude for October and November loading, Bloomberg reports, citing a source familiar with the matter. The cargoes load from either Yanbu on Saudi Arabia’s Red Sea coast or Egypt’s Sidi Kerir terminal on the Mediterranean, and the offers suggest Aramco is making up for supplies lost while the East-West pipeline was shut down.

IN CONTEXT- Aramco cut European refiners’ October term cargoes after a drone attack knocked the pipeline offline, and has since restored full November allocations. Yanbu had an estimated five to seven days of export-ready crude, and Aramco now wants to double its overseas crude storage to cushion future outages.

War Watch

The Houthis are continuing their attacks on airports and military sites. The group targeted the Defense Ministry in the Saudi capital with a ballistic missile and hit Abha International Airport with a drone, the group said. It struck two military transport aircraft with two missiles, the first at Najran Airport and the second at King Khalid Air Base in Khamis Mushait. The Saudi-backed coalition said it intercepted a missile launched toward Taif.

Coalition presses on with strikes: The Houthis said yesterday that the Saudi military had carried out 101 airstrikes and missile attacks over the past 24 hours, targeting Sanaa, Al Jawf, Taiz, Amran, Hajjah, Al Dhalea, Al Mahwit, Lahij, and Saada. The airstrikes were launched from the Khamis Mushait and Taif air bases, according to the group. The Houthis say Saudi Arabia has carried out more than 3.4k airstrikes and missile attacks since the escalation began in July.

The fighting also continues on the ground near Bab Al Mandab, with the Houthis claiming that they had repelled an attempted advance from the south by Saudi-backed forces using missiles and heavy weapons, leaving a large number dead and wounded and destroying several vehicles.

The threat of a wider conflict in the region remains high. Washington has warned several Gulf states to prepare for a brief but forceful US military operation against Iran once the US midterm elections are over, The Wall Street Journal reported, citing sources in the know. The US is also shipping a Patriot missile defense system from Texas to Israel, and has pulled troops away from exposed bases in the Middle East to prepare for possible escalation.

Another one bites the dust

The hydrogen-powered Extreme H off-road World Cup, scheduled for Qiddiya City from today until Saturday, has been postponed to 2027, the FIA said, blaming “logistical and operational challenges affecting the preparations required to deliver the event.”

Repeated Houthi missile and drone attacks targeting the Saudi capital in recent weeks prompted Riyadh to push several events into next year, including the sixth UN World Data Forum and the second Saudi Statistics Forum and the Future Investment Initiative, or move them to other countries. The Dakar Rally recently relocated from the Kingdom to Africa.

***

You’re reading EnterpriseAM Saudi, your essential daily roundup of business, economics, and must-read news about Saudi, delivered straight to your inbox. We’re out Sunday through Thursday by 7am Riyadh time.

EnterpriseAM Saudi is available without charge thanks to the generous support of our friends at Tas’heel and Hassan Allam Properties.

Want to send us a story idea, request coverage, ask for a correction, or otherwise get in touch? Reach out to us on [email protected].

DID YOU KNOW that we also cover MENA+, Egypt, the UAE, and the MENA logistics industry?

Were you forwarded this email? Tap or click here to get your own copy of EnterpriseAM Saudi delivered every weekday.

***

The big story abroad

Families, companies, and governments across Europe are under growing strain as gas prices climb back above EUR 100 a megawatt-hour for the first time since 2022. The anger over living costs is spilling into unrest in several parts of the continent. Gas prices are now more than three times what they were before the Iran war. The latest jump comes from higher demand for heating, unusually small gas reserves across Europe, and concern that a wider conflict could squeeze global supplies even more. The impact is also reaching beyond gas, as rising oil, diesel, and electricity costs push up energy inflation across Europe.

China is scrambling to prop up its stock market as its AI stocks struggle. China’s CSI 300 blue-chip index has fallen about 20% from its June peak, and the slide has spread to Hong Kong. Weak consumer demand, a long property slump, and shrinking government spending are behind the drop. Beijing has sent state-backed funds to buy shares, but analysts say a lasting rebound needs stronger demand at home. Investors are watching this week’s Communist Party plenum for signs of bigger stimulus.

Oracle says it will start generating more funds than it uses in the second half of fiscal 2028, as it tries to ease concerns about the cost of its AI expansion. Much of Oracle’s growth depends on ChatGPT maker OpenAI, and building data centers for that deal has led the company to take on large amounts of debt and issue new shares. Oracle has capped any new fundraising at USD 20 bn through fiscal 2030.