OPEC to issue July oil market report at 1200 GMT
(Reporting by Alex Lawler)
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Khaleej Times
2 hours ago
- Khaleej Times
UAE navigates global tariff storm with oil stability and fiscal strength
As global markets brace for a new wave of US tariffs and shifting Opec+ production strategies, the UAE appears firmly grounded, thanks to strategic oil exemptions, fiscal resilience, and a diversified economy, analysts say. With President Donald Trump reinstating a hardline trade agenda, a series of sweeping tariffs are scheduled to take effect on August 1. These include duties of up to 50 per cent on copper and significant increases on imports from Brazil, Japan, South Korea, and 14 other nations. Analysts fear escalating trade tensions could disrupt global supply chains and stoke inflationary pressure across import-heavy economies. Yet amid this volatility, the UAE stands out as an outlier. According to Razan Hilal, Market Analyst, CMT at 'While global headlines focus on tariff escalation, the exemption of crude oil from US tariffs protects a key revenue stream for the UAE.' This safeguard ensures that the UAE's vital energy sector remains insulated from a major external shock, allowing the country to maintain stable export flows at a time when volatility is the global norm. Concurrently, the latest developments within Opec+ may play in the UAE's favour. A subset of the alliance, including the UAE, has announced an unexpected increase of 548,000 barrels per day in August as part of a gradual unwind of voluntary production cuts. With Brent crude trading above $68 and WTI maintaining support above $67, Hilal sees a strong fiscal upside. 'Recovering global oil demand and rising production are set to support fiscal inflows and growth momentum,' she said. At the monetary level, currency dynamics are adding nuance to the UAE's economic outlook. Hilal highlights the precarious position of the US dollar: 'The US dollar hovers just above a 17-year trendline extending from the 2008 lows. A breakdown below this level could strain the dirham peg and amplify import-driven inflation.' That said, she notes, if the dollar index (DXY) stays above the 96-zone, the dirham may recover in H2 2025, particularly against the euro and pound. What underpins the UAE's relative calm amid these global tremors? Hilal points to a blend of strategic buffers: 'Supported by economic diversification, oil price stability, and a proactive fiscal stance, the UAE remains well-positioned to absorb external shocks and preserve currency stability.' In a global landscape dominated by tariff tension and fluctuating energy dynamics, the UAE's steady footing showcases the advantage of long-term planning and diversified resilience. As other economies scramble for clarity, the Emirates are focused on execution, Hilal noted.
The National
4 hours ago
- The National
Acwa Power signs pacts to export renewable energy and green hydrogen to Europe
Saudi Arabia's Acwa Power has signed preliminary agreements to export renewable energy and green hydrogen to Europe under the India-Middle East-Europe Economic Corridor (IMEC) project. A multi-party deal was signed by Acwa Power with Italy's Edison, France's TotalEnergies Renewables, Zhero Europe from Netherlands and Germany's EnBW, Saudi Arabia's Ministry of Energy said on Sunday. "This deal establishes a collaborative framework to assess the market demand and feasibility of developing large-scale renewable energy projects dedicated for export in Saudi Arabia and the creation of a corridor to deliver generated electricity to Europe," it said. Acwa Power also signed individual pacts with companies involved in the development of electricity corridors, including technical consultant Cesi (Italy) and HVDC technology and cable providers Prysmian (Italy), GE Vernova, Siemens Energy (Germany) and Hitachi (France). "These agreements aim to develop advanced energy transmission corridors that enhance supply reliability and the efficiency of cross-border energy infrastructure," the ministry said. A joint development agreement was also signed with EnBW to collaborate on the first phase of the Yanbu Green Hydrogen Hub, which is planned to be ready for commercial operations by 2030. The hub seeks to be a fully integrated base with its own captive electricity generation from renewable sources, desalination plants to support its hydrogen electrolysis and ammonia conversion facilities, and an export terminal. The project leverages Saudi Arabia's potential to develop renewable energy at competitive rates and supply global industrial demand, the ministry said. The latest pacts, which were signed in Riyadh, are part of the IMEC, which was announced during the G20 summit in 2023. The project consists of an eastern route connecting India to the Gulf and a northern pathway connecting the Gulf to Europe. The cross-border, ship-to-rail transit corridors are expected to reduce shipping costs across the network and support trade in goods and services to, from and between the UAE, Saudi Arabia, India and Europe. The combined exports from these regions are projected to account for 44 per cent of global trade by 2030. Acwa Power, backed by Saudi Arabia's sovereign wealth fund, the Public Investment Fund, is one of the largest renewable energy developers in the Middle East. It currently has operations in 14 countries across the Middle East, Africa, and Central and South-east Asia. It is an investor in and operator of 101 power generation and water desalination projects in operation, construction and advanced development with an overall portfolio size of about $107.5 billion as of February. Last week, Saudi Arabia signed agreements worth more than 31 billion riyals ($8.3 billion) for seven renewable energy projects with an Acwa Power -led consortium to boost the kingdom's green energy capacity. In February, Acwa Power also signed a preliminary agreement with the German company Securing Energy for Europe (Sefe) to produce and supply green hydrogen to Europe. Under the pact, Acwa Power and Sefe will establish a hydrogen bridge between Saudi Arabia and Germany, with an initial target of supplying 200,000 tonnes of green hydrogen annually by 2030. Acwa Power will act as the lead developer, investor, and operator of green hydrogen and green ammonia production assets. Sefe will be a co-investor and the primary off-taker to market the green hydrogen to its German and European customers, the companies said at the time. The Saudi company is also a partner in the $5 billion Neom Green Hydrogen project, the world's largest, which is expected to be completed next year. The other venture partners are Neom and the US-based Air Products, which has secured an off-take agreement for all the green ammonia produced at the site.
Khaleej Times
8 hours ago
- Khaleej Times
Foreign investors are warming to London's unloved stocks
Britain's stock market finally appears to be reversing years of underperformance against the rest of Europe, as a UK/U.S. trade deal, lighter regulation and cheap stocks deliver juicy returns that are starting to attract foreign investors. The FTSE 100 has gained nearly 10% this year to hit record highs this week, beating the STOXX 600, which is up 7.5%. On a year-to-date basis, London's blue-chip index has performed better than its European counterpart for the last six weeks, its longest such stretch since late 2022, when a weak pound beefed up revenues for the export-focused FTSE. This week, the financial regulator said it will roll out new rules to boost Britain's capital markets, while Chancellor Rachel Reeves told the financial industry to paint a less negative picture of UK stocks for would-be retail investors, as she seeks new ways to revive a stagnating economy. For foreign investors, the blue-chip index is already looking appealing given sterling's rally this year, while asset managers say the narrative around the UK is shifting. "We are seeing signs of big asset allocators coming back to the UK," Justin Onuekwusi, chief investment officer at St. James's Place. "I am talking about non-UK endowments, pension funds, asset owners, wealth managers who were all very underweight the UK post-Brexit," he said. In dollar terms, the FTSE-100 is up nearly 18% so far this year, set for the biggest dollar-denominated returns since 2009, compared with a 6% year-to-date gain in the SP 500, which has also hit record highs. The pound, up 7% this year against the dollar as investors turn away from U.S. assets in response to heightened U.S. policy uncertainty under U.S. President Donald Trump, acts as a headwind for FTSE constituents, 80% of whom get their revenues from overseas. Yet the index's wealth of large defensive companies, including healthcare, utilities and food retailers, help insulate it against swings in the underlying economy, like drugmaker AstraZeneca or supermarket chain Tesco It also has growth-sensitive resource stocks such as Anglo American and BP to tap into strength in oil, copper and gold. Britain meanwhile is one of the few economies facing less trade uncertainty with a U.S. trade deal in place. In contrast, the European Union faces the threat of 30% tariffs if there is no agreement by August 1. 'Tea and biscuit' "The UK stock market is the calming cup of tea and biscuit in an uncertain world. There's nothing fancy on offer, just reliable names that do their job day in, day out," AJ Bell investment analyst Dan Coatsworth said. Valuations for FTSE-100 companies have lagged those elsewhere in Europe for years. The 2016 Brexit vote accelerated that trend, with fewer companies using London to list their shares and fewer cropping up as MA targets, given the political and economic uncertainty that prevailed at the time. Now the UK market is catching up. The FTSE-100's 12-month forward price-to-earnings ratio of 12.5 is the highest for around five years, compared with 14.11 for the STOXX, the narrowest gap in around 18 months, LSEG data shows. The SP trades at a ratio of 23, a near-10 point premium to the FTSE, compared with under 2 points 10 years ago. "The relatively poor performance we've seen in the UK versus particularly the U.S. over the past two years has begun to unwind. We're in the foothills of that," Michael Stiasny, head of UK Equities, MG Investments, said, adding that the UK market has traded at a "significant discount". The pound is close to a four-year high against the dollar, but has weakened against the euro this year, offering a tailwind to the FTSE's big exporters. The EU is Britain's largest trading partner, accounting for 41% of exports in 2024, followed by the United States, with 22%, according to official data. It isn't all rosy. The British economy is flagging, inflation is well above the Bank of England's target of 2% and business activity and employment are slowing. Barclays data shows UK equities have seen a net outflow of $20 billion in 2025, although outflows have almost dried up in the last month, compared with Europe's year-to-date inflow of $13 billion and rapidly slowing inflows. Sebastian Raedler, head of European equity strategy and Bank of America Merrill Lynch, said he felt the FTSE's strong run was a function of the currency and in line with the rest of Europe. "Net-net, the FTSE has mildly outperformed, but I would say in an environment where there are a lot of big stories ... a 2% (out)performance of the UK this year would rank further down the radar from my perspective," he said, referring to the percentage gain in the FTSE in 2025 versus that of the STOXX.
