MUST-READS

• IEA’s hard line on oil glut clashes with Opec forecast

  In a monthly report published on Thursday the IEA forecast that oil demand would grow by 1 million barrels per day (bpd) in 2025, down 70,000 bpd from its February prediction. The Paris watchdog cited deteriorating macroeconomic conditions due to trade tensions. “New US tariffs, combined with escalating retaliatory measures, tilted macro risks to the downside,” the IEA said. Asian countries will account for almost 60 percent of the growth, with the lead taken by China, where the need for petrochemical feedstock will take up all of the growth. The IEA’s forecast contrasts with Opec‘s outlook, which remains confident in relatively strong demand and in plans to increase output. On Wednesday the organisation, led by Saudi Arabia, kept its forecast for demand growth at 1.4 million bpd this year, pointing to air travel and transport as a driver.

• ‘Golden era’ for GCC capital markets as global investors cash in on $2.3 trillion powerhouse
  GCC capital markets have undergone an unprecedented transformation, soaring to a collective market capitalisation of $2.3 trillion by the end of 2024, with international investors increasingly viewing the region as a long-term structural investment opportunity rather than a tactical allocation. “The pace of reforms in this region has been phenomenal and stakeholders in each market have a powerful and persuasive story to tell global investors,” said Nabeel Albloushi, HSBC’s Regional Head of Markets & Securities Services for the Middle East North Africa & Türkiye (MENAT) region, speaking to Arabian Business at the HSBC MENAT Future Forum in Dubai this week. “We are living our golden era right now,” said Karim Tannir, Head of Banking for MENAT at HSBC Holdings. “If I have to pick one sector that demonstrates the growth and momentum in the region, I would have to say the capital markets, specifically the IPO markets…which has become world-leading, with issuances among the largest by volume.”

• Saudi Arabia opens applications for mining licences as it eyes $2.5tn minerals haul

  Saudi Arabia’s Ministry of Industry and Mineral Resources has opened pre-qualification applications for the ninth round of exploration licence competitions, covering three mineralised belts spanning 24,946sq km. The licensing round is part of a broader strategy to accelerate greenfield exploration and development in the Kingdom’s mining and mineral sector, maximise its mineral resources valued at $2.5tn and enhance value-added mineral supply chains. The ministry specified that the targeted belts include the Al Naqrah Belt and the Al Sukhaybirah “Al Safraa” Belt in the Madinah region, as well as the Al Duwaihi “Nabaitah” Belt in the Riyadh region.

• Saudi Arabia targets $2.9bn Red Sea tourism spend and 28,000 jobs as it becomes yachting hub

  In collaboration with its partners, SRSA has accelerated infrastructure development along the Red Sea, issuing 29 tourism licences that have strengthened the economic landscape for yacht tourism. Among these, three licences were granted to yacht chartering companies, 10 to marina operators, and five to technical service providers in leisure and tourism, fostering a thriving marine tourism ecosystem. The Red Sea region, spanning 1,800km of coastline, is home to more than 1,000 islands, 150 pristine beaches, and 3,200 cultural and tourism assets, including heritage villages, markets, and active maritime ports.

• Reimagining Syria: A Roadmap for Peace and Prosperity Beyond Assad

  For more than a decade, the conflict in Syria appeared too intense, too complex, and too intertwined in geopolitics to be resolved, with the international community choosing to prioritize managing and containing the symptoms rather than seeking to resolve their root causes. However, that all changed in late 2024, when armed opposition groups toppled the Assad regime in 10 days. Today, the country remains extraordinarily fragile and marked by the debilitating effects of a lengthy civil war. Despite a widespread national consensus on the need to reunify Syria, malign and destabilizing actors remain active, including ISIS, Iran, and pro-Assad loyalist insurgents. Nevertheless, there is now a historic opportunity to reshape Syria for the first time in more than half a century. And engagement by the international community will be critical to the country’s success.

• Arab states to keep talking with Trump envoy on Egypt’s Gaza plan
  Arab foreign ministers said on Wednesday they would continue consultations with U.S. President Donald Trump's special envoy over Egypt's plan for rebuilding the Gaza Strip, an alternative to Trump's proposed takeover of the Palestinian territory. Consultations and coordination on the plan would continue with the U.S. special envoy, Steve Witkoff, as a "basis for the reconstruction efforts" in Gaza, according to a joint statement following a meeting of the foreign ministers in Doha. Earlier this month, Arab leaders adopted a $53 billion Egyptian reconstruction plan for Gaza that would avoid displacing Palestinians from the enclave, in contrast to Trump's vision of a "Middle East Riviera".

• Navigating volatility: The impact on GCC economies

  The optimism is welcome – but it may be misplaced. This week the Riyad Bank Purchasing Managers’ Index in Saudi Arabia hit its highest level in more than 10 years – a significant vote of confidence in the Arab world’s largest economy. There was positive news too on jobs in the kingdom. Employment rose “solidly” last year, the survey found. Elsewhere, the local advisory house Jadwa Investment reported that consumer spending in Saudi Arabia rose by 7.5 percent last year – implying that ordinary people are happy to spend rather than save for the unforeseen. Government revenue and spending were also higher than budgeted, Jadwa said, using finance ministry figures. So far, so good.

• Aramco Ventures invests in global climate tech startups

  The venture capital arm of Saudi Aramco, the world’s largest listed oil major, has invested in two climate tech startups. Aramco Ventures said it had invested in Ucaneo, a German company that is developing a direct air capture (DAC) demonstration plant expected to be commissioned in the first half of 2026. Ucaneo raised €6.75 million ($7.34 million) in seed funding last September and has launched its first industrial pilot, which is designed to capture up to 30 to 50 tonnes of CO₂ annually. Aramco Ventures also led the $30 million series A funding — typically the second stage in capital raising — for the US-based climate technology company Spiritus. Other companies investing included Khosla Ventures, Mitsubishi Heavy Industries America, and TDK Ventures, Spiritus said.

• Saudi banks to see stronger performance in Q1 2025: Fitch

  Saudi banks are set for a stronger start to 2025, with their asset-quality metrics expected to “remain strong” throughout the year, Fitch Ratings said in its latest report. The agency noted that lower interest rates helped boost Saudi bank’s net interest margins (NIMs) in Q4 2024, supported by strong lending growth. Fitch further stated, “We expect [Saudi banks’ lending growth] to continue outpacing Gulf peers' in 2025.” In Q4 2024, Saudi banks’ combined net income rose to SAR 21.5 billion, from SAR 20 billion in the previous quarter. This was driven by the rapid lending growth and lower cost of risk, “both underpinned by the healthy operating environment,” the agency added. Saudi banks’ total lending, according to Fitch, is estimated to grow by 12% in 2025. “Further interest rate cuts and stronger liquidity conditions should underpin banks’ growth appetite,” it wrote.

• Egypt approves investment promotion agreement with Saudi Arabia

  The Egyptian parliament yesterday approved an agreement on the promotion and protection of mutual investments signed between Egypt and Saudi Arabia last October, Gulf Online reported. According to a statement published by the Federation of Saudi Chambers on its official account on X, the approval by the Egyptian parliament will help create optimal conditions for investment exchange between the two countries. The federation noted that the agreement “will lead to an increase in capital flows and investments between the two countries, provide more job opportunities, and strengthen economic relations.”

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