{"id":93613,"date":"2025-01-22T00:00:00","date_gmt":"2025-01-22T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2025\/01\/22\/aramco-ceo-sees-healthy-oil-market-demand-in-2025\/"},"modified":"2025-01-22T00:00:00","modified_gmt":"2025-01-22T00:00:00","slug":"aramco-ceo-sees-healthy-oil-market-demand-in-2025","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2025\/01\/22\/aramco-ceo-sees-healthy-oil-market-demand-in-2025\/","title":{"rendered":"Aramco CEO sees healthy oil market demand in 2025"},"content":{"rendered":"

Good morning, wonderful readers. <\/strong>It\u2019s another packed issue as we head towards the end of a very busy week, both at home and in the US. In today\u2019s issue: <\/strong>S&P is out with its Banking Sector Outlook (and it\u2019s looking good); PIF\u2019s Social Impact Capital confirms its 88.7% stake in Egypt\u2019s CIRA Education; and Gaca reports latest numbers on complaints against air carriers and airports. Let\u2019s dive in.<\/p>\n

HAPPENING TODAY-<\/p>\n

<\/a> <\/strong>Trading <\/strong>on Raoom Trading\u2019s shares will be suspended starting today ahead of its<\/strong> main market transition<\/a><\/strong>, Tadawul said in a statement<\/a>. The suspension will last a maximum of five trading sessions, although the exchange has yet to confirm when Raoom will formally debut on the main market. <\/p>\n

WEATHER-<\/strong> Riyadh will see a high of 21\u00b0C and a low of 6\u00b0C today, while Jeddah\u2019s mercury will go as high as 30\u00b0C before tapering off to 22\u00b0C. Makkah\u2019s weather will see a 31\u00b0C high and 21\u00b0C low.<\/p>\n

PSAs- <\/p>\n

#1- Investors have until 4 March to purchase the bid document for a project to build, <\/strong>operate, and maintain a dry port east of Buraidah in Qassim<\/strong> under a 50-year contract, according to state news agency SPA<\/a>. Details are available on the Furas<\/a> platform.<\/p>\n

#2- <\/strong>The Commerce Ministry<\/strong> is seeking feedback on its commercial registry system <\/strong>proposal, <\/strong>putting up the draft regs for consultation on Istitlaa<\/a> until 15 February 2025. The new regs ban duplicated commercial names for businesses and give companies a five-year grace period to do away with their sub-records by establishing a new company, transferring the sub-record to another entity, or canceling it altogether. We\u2019ve covered the regs in full detail here<\/a>.<\/p>\n

#3- <\/strong>The Interior Ministry<\/strong> introduced an advanced drone to its road security system<\/strong>, featuring a fully-electric engine that allows it to operate at altitudes of up to 6k meters, the Saudi Gazette<\/a> reports. The drone can zoom up to 30x and detect objects within a 50 km range using radars, sensors, and dual cameras combining optical and thermal imaging. It is also built to withstand harsh weather conditions.<\/p>\n

WATCH THIS SPACE-<\/p>\n

<\/a> #1- <\/strong>Olam Group<\/a><\/strong> and PIF-backed <\/strong>Salic<\/a><\/strong> are set to put pen to paper for the Olam Agri <\/strong>acquisition: <\/strong>The Singapore-based agricultural trader is close to finalizing the full sale of its agribusiness unit, Olam Agri Holdings, to Saudi Agricultural and Livestock Investment Co. (Salic), with an announcement in the cards by the end of January or early February, Wall Street Journal<\/a> reports, citing people familiar with the matter. <\/p>\n

Where does this leave Olam Agri\u2019s IPO plans?<\/strong> In August 2023, Olam Agri announced plans to pursue a dual listing in Singapore and Saudi Arabia by 1H 2024, though the timeline has been delayed due to \u201cregulatory bottlenecks,\u201d according to Reuters<\/a>. It remains unclear whether the acquisition will see the agribusiness firm\u2019s new owners scrap its IPO plans entirely, or if the offering could still materialize. <\/p>\n

Background:<\/strong> Salic made a non-binding offer in November<\/a> to take Olam\u2019s remaining stake in the agribusiness unit, which stands at 64.57% after Salic acquired a 35.43% stake in 2022<\/a> in a USD 1.24 bn transaction \u2014 valuing the Olam Agri at USD 3.5 bn at the time. The follow-on transaction could push the value up to USD 4 bn, according to Bloomberg<\/a>. <\/p>\n

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#2- <\/strong>Trump hints at<\/strong> eventual Saudi-Israeli normalization:<\/strong> US President Donald Trump hinted at the possibility of the Kingdom joining the Abraham Accords during his inaugural day remarks while signing executive orders (watch, runtime: 41:33<\/a>). \u201cI think it\u2019s going to happen, maybe not quite yet, but they\u2019ll end up being in the accords,\u201d said Trump. <\/p>\n

REMEMBER-<\/strong> Previous reports indicated that Trump is eager to secure a normalization accord between Saudi Arabia and Israel during his term, after a previous Biden-led effort<\/a> that would have also included US security assurances to Riyadh, as well as cooperation on nuclear technologies and AI fell through due to the outbreak of the War in Gaza. Meanwhile, Saudi Arabia insists on assurances for a credible path to Palestinian statehood<\/a> before normalizing ties with Israel.<\/p>\n

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#3- GAS pulls the brakes on main market transition: <\/strong>Nomu-listed Gas Arabian Services (GAS)<\/a> has withdrawn its request to transition to Tadawul\u2019s main market, citing the need to square away additional liquidity and regulatory requirements, it said in a filing<\/a> to the exchange. <\/p>\n

REFRESHER- <\/strong>The Dammam-based company submitted its request<\/a> to move up Tadawul\u2019s big league back in September 2024<\/a>. GAS planned to debut an additional 10% stake on the market in a secondary share sale to meet the necessary requirements. <\/p>\n

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#4- Dinar Investment Company received the green light from the Capital Market Authority<\/strong> for <\/strong>the public offering of its Dinar Saudi Equity Fund<\/strong>, the authority said in a statement<\/a>. Dinar Investment received a license from the authority in October<\/a> to carry out investment and fund management activities, as well as custody services.<\/p>\n

DATA POINTS-<\/p>\n

#1- The Interior Ministry\u2019s <\/strong>Absher platfor<\/strong>m processed over 8.5 mn electronic transactions<\/strong> in December 2024<\/strong>, it said in a statement<\/a>. Individuals accounted for over 6 mn transactions, including 84.7k ID verification checks and 38k ID renewals.<\/p>\n

#2- <\/strong>Commercial <\/strong>registrations in the arts, entertainment, and amusement sector grew 20%<\/strong> y-o-y in 2024,<\/strong> the Commerce Ministry said in a post on X<\/a>. Creative arts and entertainment activities saw 30% growth to 4.2k records, amusement parks 26% to 6.1k, recreational activities 25% to 14.2k, and sports clubs 18% to 8.1k.<\/p>\n

#3- The Kingdom exported 1.5 bn tons of dates in 2024, <\/strong>nearly tripling from 579 mn tons in 2016, state news agency SPA<\/a> reports citing figures from the National Center for Palms and Dates. Saudi Arabia has over 123k agricultural holdings cultivating 300 date varieties, with more than 37 mn palm trees producing over 3 bn tons of dates annually. <\/p>\n

#4- In the past year, the Environment, Water, and Agriculture Ministry issued 1.4k water<\/strong> resource licenses,<\/strong> including 1.1k for groundwater use, 81 for bottled water factories, and 23 for well drilling activities, it said in a post on X<\/a>. The ministry also granted 124 licenses for non-potable tanks and 66 for non-potable objects. <\/p>\n

OIL WATCH-<\/p>\n

<\/a> <\/strong>A healthy oil <\/strong>market could see demand increase by 1.3 mn bbl \/ d this year to reach 106 <\/strong>mn bbl \/ d<\/strong>, Aramco CEO Amin Nasser told Reuters<\/a> on the sidelines of the World Economic Forum in Davos. \u201cWe will wait and see [how US President Donald Trump\u2019s plans to increase US oil output will] translate into tightness in the market, it is still in the early stage,\u201d said Nasser.<\/p>\n

ICYMI- <\/strong>Trump pledged to ramp up US oil production<\/a> under his term, which could result in additional price pressures for MENA oil-producing states, with estimates from OPEC and the International Energy Agency projecting relatively weak demand for oil in 2025.<\/p>\n

\u201cWe see good<\/strong> demand coming from China,\u201d<\/strong> Nasser separately told Bloomberg, maintaining that the oil market is seeing \u201chealthy and balanced\u201d dynamics between supply and demand (watch, runtime: 19:43<\/a>). Some 40% of global growth in oil demand comes from Asia \u2014 particularly China and India, Nasser said. While reports suggest that China\u2019s demand for gasoline might dip as EVs gain traction, the country\u2019s appetite for oil-derived chemicals is on the rise, he said. The state-owned oil giant has already started investing in China-based chemical-producing oil refineries, aiming for 10%-20% stakes in the projects. Contracts to supply these facilities with 60% of their oil needs are also in the works in a bid to secure long-term demand, Nasser said.<\/p>\n

BACKGROUND-<\/strong> The Kingdom is set to dial back<\/a> its crude oil shipments to China in February, cutting allocations to an estimated 43.5 mn barrels, down from January\u2019s three-month high<\/a> of 46 mn barrels, Reuters<\/a> reported earlier this month. Key Chinese refiners including state-owned CNOOC and PetroChina, and privately-held Hengli, are set to take fewer barrels, even as Sinopec and Sinochem reportedly move to increase their deliveries. <\/p>\n

Excess capacity to maintain market stability: <\/strong>Aramco has 3 mn bbl \/ d of excess capacity readily available to address the potential impact of the US\u2019 sanctions on Russia or other changes in the market, based on the ministry\u2019s monthly targets to maintain market stability. Some two-thirds of oil consumption today comes from the Global South, with that share expected to rise to 90% by 2050, creating space for growth, Nasser said.<\/p>\n

And on Aramco\u2019s dividend sustainability: <\/strong>Addressing concerns about dividends in 2025, Nasser maintained that Aramco plans to allocate 50-70% of freecash flow (after base dividends and external investments) to shareholders, subject to board approval. \u201cWe have a proven track record of delivering value to shareholders,\u201d he said, dismissing similar past concerns. Aramco\u2019s 2024 dividend payouts totaled USD 81 bn in 2024.<\/p>\n

SPORTS-<\/p>\n

Your move, Al Ittihad:<\/strong> Al Hilal dispatched Al Wehda 4-1 at home yesterday, adding a three-point cushion between them and their closest rival for this year\u2019s Saudi Pro League season, Al Ittihad, who face Al Shabab today at 8pm. It\u2019s been tit for tat so far this season between these two clubs, with only goal difference giving Al Hilal an advantage so far. <\/p>\n

More highlights from matchday 16: <\/strong><\/p>\n