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Middle East Eye
7 days ago
- Business
- Middle East Eye
Saudi Arabia asks consultants to review feasibility of 'The Line' megaproject: Report
Saudi Arabia has asked consulting firms to review its plans to build a futuristic, 170km long city on its Red Sea coast called "The Line", a key pillar of Saudi Arabia's Neom gigaproject. The kingdom's public investment fund (PIF) asked the consultants to determine whether its plans to build the car-free city are feasible, Bloomberg reported on Monday. The report is likely to pile on more scepticism about The Line's future. In April, The Financial Times reported that the CEO of Neom had launched a 'comprehensive review' of the kingdom's megaproject. Neom, along with luxury Red Sea hotels and a ski resort, is the flagship project of Crown Prince Mohammed bin Salman's Vision 2030 plan to transform the kingdom's economy and reduce its dependence on oil revenue. New MEE newsletter: Jerusalem Dispatch Sign up to get the latest insights and analysis on Israel-Palestine, alongside Turkey Unpacked and other MEE newsletters Bloomberg reported in 2024 that Saudi Arabia was cutting back plans for The Line. Instead of 1.5 million people living there by 2030, Saudi officials were said to anticipate fewer than 300,000 residents. Meanwhile, only 2.4km of the city is expected to be completed by 2030. The Line was unveiled with much fanfare by Saudi Crown Prince Mohammed bin Salman in 2021, with a short clip displaying some of human history's biggest technological advancements over the last century, including the moon landing and the creation of the internet. It then asked, 'What's next?' and the answer came in the form of a televised address from the crown prince. He said that the 170km city would have 'zero cars, zero streets and zero carbon emissions' and that its one million inhabitants could fulfil all their daily requirements, including education and leisure, within a five-minute walk of home. The crown prince also said it would be possible to travel from one end of The Line to the other in 20 minutes, implying that a very high-speed rail service would be built. At the time, Saudi Arabia said it expected the city to contribute $48bn to the kingdom's economy and create 380,000 jobs. Why Saudi Arabia can spend more money than it makes, even as oil prices drop Read More » The kingdom has pushed through liberalising social reforms, even as it cracks down on dissent. It has also opened up its economy, including recently legalising real estate purchases for foreigners. However, the more grandiose megaprojects have faced setbacks due to their high cost and falling oil prices. Oil still accounts for roughly 61 percent of Saudi Arabia's revenue, according to its 2025 budget. Brent crude, the international benchmark, has been trading for under $70 per barrel for most of this year. For years, Saudi Arabia was the main proponent of restricting supply in an alliance alongside Russia dubbed Opec+. The kingdom absorbed most of the production cuts within Opec+, while Iraq, the United Arab Emirates, and Kazakhstan boosted production. In April, Saudi Arabia led Opec+ in a surprise move to boost production, in what energy analysts said was a move designed to punish 'cheaters' exceeding production limits. The new supply has put more downward pressure on prices. In April, Goldman Sachs painted a bleak picture for Saudi Arabia's projects in a note to clients, projecting 'pretty significant' budget deficits and more scaling back of megaprojects. Neom has already faced internal challenges. Nadhmi al-Nasr, who managed Neom's construction from 2018 to 2024, departed from his post in November. Nasr earned a chilling reputation managing Neom. He bragged that he put everyone to work 'like a slave', adding, 'When they drop down dead, I celebrate. That's how I do my projects.' Two other foreign executives also left Neom at the end of 2024, according to The Wall Street Journal. One reportedly disparaged Islam, made lewd references about sexual positions and said women from the Arabian Gulf looked like 'transvestites'. Aiman al-Mudaifer was appointed CEO of Neom in November after overseeing a real estate division of the kingdom's nearly $1 trillion PIF.
Business Times
14-07-2025
- Business
- Business Times
Oil edges up, investors eye Trump statement on Russia
[SINGAPORE] Oil prices nudged higher on Monday (Jul 14), adding to gains of more than 2 per cent from Friday, as investors eyed further US sanctions on Russia that may affect global supplies, but a ramp-up in Saudi output and ongoing tariff uncertainty limited gains. Brent crude futures rose 8 US cents to US$70.44 a barrel by 0011 GMT, extending a 2.51 per cent gain on Friday. US West Texas Intermediate (WTI) crude futures climbed to US$68.50, up 5 US cents, after settling 2.82 per cent higher in the previous session. US President Donald Trump said on Sunday that he will send Patriot air defence missiles to Ukraine. He is due to make a 'major statement' on Russia on Monday. Trump has expressed frustration with Russian President Vladimir Putin due to the lack of progress in ending the war in Ukraine and Russia's intensifying bombardment of Ukrainian cities. In a bid to pressure Moscow into good-faith peace negotiations with Ukraine, a bipartisan US bill that would hit Russia with sanctions gained momentum last week in Congress, but it still awaits support from Trump. European Union envoys are on the verge of agreeing an 18th package of sanctions against Russia that would include a lower price cap on Russian oil, four EU sources said after a Sunday meeting. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Last week, Brent rose 3 per cent, while WTI had a weekly gain of around 2.2 per cent, after the International Energy Agency (IEA) said the global oil market may be tighter than it appears, with demand supported by peak summer refinery runs to meet travel and power generation. However, ANZ analysts said price gains were limited by data showing Saudi Arabia lifted oil output above its quota under the Organization of the Petroleum Exporting Countries and allies' (Opec+) supply agreement. The IEA said that Saudi Arabia exceeded its oil output target for June by 430,000 barrels per day (bpd) to reach 9.8 million bpd, compared with the kingdom's implied Opec+ target of 9.37 million bpd. Saudi Arabia's energy ministry said on Friday the kingdom had been fully compliant with its voluntary Opec+ output target, adding that Saudi marketed crude supply in June was 9.352 million bpd, in line with the agreed quota. Elsewhere, the release of China's preliminary commodity trade data later on Monday should highlight any ongoing signs of weaker demand, ANZ said in a note. Investors are also eyeing the outcome of US tariff talks with key trading partners that could impact global economic growth and fuel demand. REUTERS
Business Times
11-07-2025
- Business
- Business Times
Oil rises over 2% as investors weigh market outlook, tariffs, sanctions
[NEW YORK] Oil prices rose over 2 per cent on Friday (Jul 11) as the International Energy Agency (IEA) said the market was tighter than it appears, while US tariffs and possible further sanctions on Russia were also in focus. Brent crude futures settled up US$1.72, or 2.5 per cent, at US$70.36 a barrel. US West Texas Intermediate (WTI) crude gained US$1.88, or 2.8 per cent, to US$68.45 a barrel. For the week, Brent rose 3 per cent, while WTI had a weekly gain of around 2.2 per cent. The IEA said the global oil market may be tighter than it appears, with demand supported by peak summer refinery runs to meet travel and power generation. Front-month September Brent contracts were trading at about a US$1.20 premium to October futures. 'The market is starting to realise that supplies are tight,' said Phil Flynn, senior analyst with Price Futures Group. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up US energy firms this week cut the number of oil and natural gas rigs operating for an 11th straight week, energy services firm Baker Hughes said. The last time that happened was July 2020, when the Covid-19 pandemic cut demand for fuel. Short-term market tightness notwithstanding, the IEA boosted its forecast for supply growth this year, while trimming its outlook for growth in demand, implying a market in surplus. 'Opec+ will quickly and significantly turn up the oil tap. There is a threat of significant oversupply. In the short term, however, oil prices remain supported,' Commerzbank analysts said. Opec+ is the Organization of the Petroleum Exporting Countries plus allies including Russia. Further adding support to the short-term price outlook, Russian Deputy Prime Minister Alexander Novak said Russia will compensate for overproduction against its Opec+ quota this year in the August-September period. Another sign of robust short-term demand was the prospect of Saudi Arabia shipping about 51 million barrels of crude oil in August to China, the biggest such shipment in more than two years. On a longer-term basis, however, Opec cut its forecasts for global oil demand in the 2026 to 2029 period because of slowing Chinese demand in its 2025 World Oil Outlook, published on Thursday. Saudi Arabia's energy ministry said on Friday the kingdom had been fully compliant with its voluntary Opec+ output target. On Thursday, both benchmark futures contracts lost more than 2 per cent as investors worried about the impact of US President Donald Trump's tariffs on global economic growth and oil demand. Trump told NBC News on Thursday that he will make a 'major statement' on Russia on Monday, without elaborating. Trump has expressed frustration with Russian President Vladimir Putin due to the lack of progress in ending the war in Ukraine and Russia's intensifying bombardment of Ukrainian cities. The European Commission is set to propose a floating Russian oil price cap this week as part of a new draft sanctions package, but Russia said it has 'good experience' of tackling and minimising such challenges. REUTERS
Business Times
10-07-2025
- Business
- Business Times
Oil falls amid bearish Trump tariff outlook
[HOUSTON] Oil prices fell more than 2 per cent on Thursday, as investors weighed the potential impact of US President Donald Trump's tariffs on global economic growth. Brent crude futures settled at US$68.64 a barrel, down US$1.55, or 2.21 per cent. US West Texas Intermediate crude finished at US$66.57 a barrel, down by US$1.81, or 2.65 per cent. On Wednesday, Trump threatened Brazil, Latin America's largest economy, with a punitive 50 per cent tariff on exports to the US, pressuring his Brazilian counterpart Luiz Inacio Lula da Silva over Brazil's trial of former President Jair Bolsonaro over charges of plotting a coup to stop Lula from taking office in 2023. On Thursday, Lula called a meeting with ministers, a day after hinting at reciprocal measures in a post on social media. Trump has also announced plans for tariffs on copper, semiconductors and pharmaceuticals. His administration sent tariff letters to the Philippines, Iraq and others, adding to over a dozen letters this week including to powerhouse US suppliers South Korea and Japan. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Trump's history of back-pedalling on tariffs has caused the market to become less reactive to such announcements, said Harry Tchilinguirian, group head of research at Onyx Capital Group. 'People are largely in wait-and-see mode, given the erratic nature of policymaking and the flexibility the administration is showing around tariffs,' Tchilinguirian said. Policymakers remain worried about inflationary pressures from Trump's tariffs, with only 'a couple' of officials at the Federal Reserve's June 17-18 meeting saying they felt interest rates could be reduced as soon as this month, minutes of the meeting released on Wednesday showed. Higher interest rates make borrowing more expensive and can slow demand for oil. Opec+ oil producers are set to approve another big output boost for September, as they complete unwinding voluntary production cuts by eight members and the United Arab Emirates' move to a larger quota. However, Opec+ indicated it may pause output hikes in October because of a possible peak in oil demand, said Phil Flynn, senior analyst with Price Futures Group. 'Earlier fears of reaching 'peak oil' have not materialised, and rising prices incentivise the discovery of new oil sources, both domestically and offshore,' Flynn wrote in a note on Thursday. Elsewhere, US Secretary of State Marco Rubio held 'frank' talks with Russian Foreign Minister Sergei Lavrov in which he expressed Washington's frustration around a lack of progress in ending the war in Ukraine. Trump said recently he was considering a bill that would impose tougher sanctions on Russia. REUTERS
Business Times
09-07-2025
- Business
- Business Times
Oil steady on strong petrol demand, Red Sea attacks while Trump tariffs loom
[HOUSTON] Oil prices were steady on Wednesday as investors weighed strong US petrol demand data and attacks on shipping in the Red Sea, while US copper tariffs loomed. Brent crude futures settled up 4 cents, or 0.06 per cent, to US$70.19 a barrel. US West Texas Intermediate crude settled up 5 cents, or 0.07 per cent, to US$68.38 a barrel. US crude stocks rose while gasoline and distillate inventories fell last week, the Energy Information Administration said on Wednesday. Crude inventories rose by 7.1 million barrels to 426 million barrels in the week ended July 4, the EIA said, compared with analysts' expectations in a Reuters poll for a draw of 2.1 million barrels. Petrol demand rose 6 per cent to 9.2 million barrels per day last week, the EIA said. 'Demand seems to be solid and not slowing down,' said Phil Flynn, senior market analyst with Price Futures Group. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up After months of calm in the Red Sea, attacks in the major global shipping lane were renewed in the past week. Rescuers pulled six crew members alive from the Red Sea on Wednesday and 15 were still missing from the second of two ships sunk in recent days in attacks claimed by Yemen's Iran-aligned Houthi militia after months of calm. Oil prices were also supported by an EIA forecast on Tuesday that the US will produce less oil in 2025 than previously expected, as declining prices have prompted US producers to slow activity. On Tuesday, US President Donald Trump said he would impose a 50 per cent tariff on copper, aiming to boost US production of a metal critical to electric vehicles, military hardware, the power grid and many consumer goods. Trump made the announcement as he delayed a deadline for some tariffs to August 1, spurring hopes among major trade partners that deals to ease duties could still be reached, though many remain uncertain. Elsewhere, Opec+ oil producers were set for another big output boost for September as they complete both the unwinding of voluntary production cuts by eight members, and the United Arab Emirates' move to a larger quota, five sources said. On Saturday, Opec+ approved a supply increase of 548,000 barrels per day for August. 'Oil prices have stayed surprisingly resilient in the face of accelerated Opec+ supply additions,' said Suvro Sarkar, energy sector team lead at DBS Bank. UAE Energy Minister Suhail al-Mazrouei said on Wednesday that oil markets were absorbing Opec+ production increases without building inventories, which means they are thirsty for more oil. 'You can see that even with the increases for several months we haven't seen a major buildup in inventories, which means the market needed those barrels,' he said. REUTERS
