Business

Explainer: Why is OPEC+ cutting oil output?

The Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+ which pumps around 40 percent of the world’s crude, agreed on a new oil output deal on Sunday.

Saudi Arabia, the group’s biggest producer, will make a deep cut to its output in July on top of a broader OPEC+ deal to limit supply into 2024 as the group faces flagging oil prices.

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A surprise announcement by OPEC+ in April to deepen production cuts helped to raise prices by about $9 a barrel to above $87 per barrel in the days followed.

Yet benchmark crude prices have shed those gains since, with Brent futures on Monday trading at just under $78 a barrel.

On Sunday, in addition to extending the existing OPEC+ cuts of 3.66 million barrels per day (bpd), the group agreed to reduce overall production targets from January 2024 by a further 1.4 million bpd to a combined output of 40.46 million bpd.

The changes, however, included lowered targets for Russia, Nigeria and Angola simply to bring them into line with current production levels.

Here are the main reasons why OPEC+ cut output:

Concerns about weak global demand

Data from China has aroused fears that the economic recovery after coronavirus lockdowns by world’s second-largest oil consumer is losing steam.

Russian Deputy Prime Minister Alexander Novak has also pointed to “interference with market dynamics,” a Russian expression to describe a Western price cap on Russian oil.

Fears of another banking crisis in recent months have led investors to sell out of riskier assets such as commodities with oil prices falling to near $70 per barrel from a peak of $139 in March 2022.

A global recession could lead to lower oil prices.

Oil prices also recently came under pressure from concerns about US debt ceiling negotiations, though fears of a debt default by the world’s biggest oil consumer have abated since a bipartisan deal was sealed last week.

Punishing speculators

The planned cuts will also punish oil short sellers betting on oil price declines.

In 2020, Saudi Energy Minister Prince Abdulaziz bin Salman warned traders against betting heavily in the oil market, saying that those who gamble on the oil price would be “ouching like hell.”

He repeated his warning ahead of Sunday’s meeting, telling speculators to “watch out” which many market watchers and investors interpreted as a signal that OPEC+ could consider further output cuts.

US output rising

US crude oil production is set to rise by 5.1 percent to 12.53 million barrels per day (bpd) in 2023 and by 1.3 percent to 12.69 million bpd in 2024, according to government forecasts.

This compares with around 10 million bpd as recently as 2018.

Meanwhile, Saudi’s energy ministry said the country’s output, the biggest chunk of OPEC+ production, would drop to 9 million barrels per day (bpd) in July from around 10 million bpd in May, in its biggest reduction in years.

Saudi output is set to rebound to around 10 million bpd from August, unless market conditions prompt the kingdom to extend cuts.

Russia, the world’s third-biggest oil producer, is targeting production of around 9.5 million bpd until the end of the year and 9.3 million bpd next year.

Tensions with Washington

Additional cuts from OPEC+ could drive tensions with leading consuming nations that are trying to fight inflation.

Washington called OPEC+’s action in April inadvisable.

The West has repeatedly criticized OPEC for manipulating prices and siding with Russia despite the war in Ukraine.

The United States is considering passing legislation known as NOPEC, which would allow the seizure of OPEC’s assets on US territory if market collusion is proven.

OPEC+ has criticized the International Energy Agency, the West’s energy watchdog for which the United States is the biggest financial donor, for advocating oil stocks releases last year. The IEA had argued these were necessary to bring down prices given concerns that sanctions would disrupt Russian supply.

The IEA’s predictions of price strength never materialized, prompting OPEC+ sources to say it was politically driven and designed to help boost US President Joe Biden’s ratings.

The United States, which released most stocks, said it would buy back some oil in 2023, but later ruled that out.

OPEC observers also say the group needs nominal oil prices to be higher because money printing by the West in recent years has lowered the value of the US dollar, the currency in which oil is traded.

Saudi Arabia’s oil production cut a ‘precautionary’ measure: Energy minister

Business

Almarai signs multiple agreements to localize jobs through training and recruitment programs

Almarai signed a cooperation memorandum with the Food Industries Polytechnic, the
Transport General Authority, and the Saudi Logistics Academy to localize jobs in the
food and beverages sector through training and rehabilitation programs ending in
employment. This came within the first international conference on the labor market,
organized by the Ministry of Human Resources and Social Development on 13 – 14
December 2023 at the King Abdulaziz Convention Center in Riyadh.

‘These agreements are part of Almarai’s corporate program for the social responsibility
to achieve localization in the food industry sector, which is one of the top priorities of the
comprehensive strategic plans in Almarai, especially since the company is one of the
largest working environments in the kingdom, with more than 9,000 Saudi employees,
including more than 900 Saudi female employees.”Fahad Aldrees, Chief Human
Resources Officer of Almarai, said.

He added that the agreements signed to train and qualify young people are part of the
integrated initiatives and training and rehabilitation programs for national human
resources in Almarai. He pointed out that the company provided about half a million
employee training hours during 2022, raising its retention rate to 90% during 2022.

It is worth mentioning that Almarai is the world’s largest vertically integrated dairy
company, and the largest food and beverage producer and distributor in the Middle
East. Almarai was ranked among LinkedIn’s top 15 Saudi companies for professional
career development for 2022.

Business

SEBA Bank rebrands to AMINA Bank and continues to write its success story

a fully licensed Swiss crypto bank, announced today its new brand identity: AMINA Bank AG. The group operates
globally from its regulated hubs in Zug, Abu Dhabi and Hong Kong, offering its clients traditional and crypto banking services.
SEBA Bank made history in 2019 by becoming one of the first FINMA-regulated institutions to provide crypto banking services. This rebrand marks a new chapter for the company, which has proudly been in operation for more than four years. AMINA Bank is inspired by the same trailblazing ambition to lead the way for its clients and to write its own future as a Swiss-
regulated crypto bank offering services to its traditional and crypto savvy clients around the globe. The name ‘AMINA’ stems from the term ‘transAMINAtion’, meaning transference of one compound to another. AMINA is a brand driven by perpetual change, bringing together the various ‘compounds’ of traditional, digital, and crypto banking to unlock new potential and
growth for our clients. This vision of change represents the transformation of our clients’ financial future. Franz Bergmueller, CEO of AMINA, said: “We are delighted to introduce the world to our new brand identity. While we say goodbye to the SEBA name, we remain forever proud of the achievements made by the group under the former brand. “Our brand signifies a new era in the company’s growth and strategy; we are a key player in crypto banking and are here to define the future of finance. With our client-focused approach, our years of traversing traditional and crypto finance, we offer a platform for investors to build
wealth safely and under the highest regulatory standards.” “We are grateful to be encouraged by our supportive and committed investors who have been very helpful, supporting the growth of the company. We thank our employees in all the regions
for their dedication and client focus. As we look forward to 2024, our ambition is to accelerate the growth of our strategic hubs in Switzerland, Hong Kong, and Abu Dhabi, and to continue our global expansion, building on all the successes we have laid down over the past years.” Current clients of AMINA Bank (formerly SEBA Bank) will be unaffected by the rebrand other than encountering the new name; all operations will be business as usual across the board. The branch office based in Abu Dhabi and the subsidiaries in Hong Kong and Singapore will subsequently apply for a name change to align with the head office in Zug.

Business

Uptime Appoints Mustapha Louni Chief Business Officer

Uptime Institute is pleased to announce the appointment of Mustapha Louni to the position of Chief Business Officer, a role specifically created to drive strategic leadership and client success. In this new role, Mr. Louni will assume responsibility for the global Uptime sales and marketing organizations and drive overall business value for all Uptime clients. He will retain his existing responsibilities overseeing operations in the Middle East, India, Africa, and the Asia Pacific regions. In this elevated capacity, Mr. Louni is poised to play a pivotal role in driving Uptime’s next phase of global expansion through strategic initiatives to enhance market awareness of the dramatically expanding global service lines and delivery capabilities of Uptime that uniquely support the global data center industry in its pursuit of ever higher performance through elevated availability, resiliency, sustainability, and cyber-security of digital infrastructure. Louni’s appointment renews and expands Uptime

Institute 39;s 30-year commitment to advancing excellence in the data center sector on a global scale. “Today we are experiencing the next phase of the one-time, planetary transformation from analog to digital. This unprecedented, once-in-a-generation growth in data center demand is primarily driven by continuing cloud adoption, the new promise of AI, and the demonstrable fact
that hybrid digital infrastructure is here to stay for the foreseeable future,” said Martin McCarthy, CEO, Uptime Institute. “These complex and nuanced market demands require a visionary talent like Mustapha Louni. He is someone who cannot only deftly manage specific aspects of the business but also remain ahead of accelerating changes and trends. He continues to earn client
trust and respect by timely delivery on demanding commitments while he also inspires and energizes colleagues and clients alike. I am delighted to announce Mr. Louni’s new position and know that he will continue to expand the impact that he has already brought to Uptime since his arrival.” In 2014, Mr. Louni joined the Uptime organization in the United Arab Emirates, leveraging his extensive experience from roles at Panduit and Schneider Electric in Paris and Dubai. As the company’s first commercial resource in the Middle East and Africa region, Mr. Louni played a pivotal role in expanding Uptime’s presence. Within a year, he successfully established what became and remains Uptime’s fastest growing regional office. Under his leadership, Uptime has
extended his impressive trajectory of growth in MEA to the Asia-Pacific regions, augmenting the Uptime workforce with dedicated team members spanning more than a dozen countries across these regions. A new Uptime office has been inaugurated in Riyadh, Kingdom of Saudi Arabia (KSA) this year, further fortifying the company’s ability to meet its commitment to sustained
growth and excellence and serve clients in critical, accelerating markets for digital infrastructure.

Uptime Institute began development of its proprietary and now globally recognized Tier Standards and its Tier Certifications 30 years ago to ensure that the mission critical computing needs of all organizations could be met with confidence and understood by executive management. Since that time, Uptime Tier Certification as well as other Uptime offerings including assessments and awards in digital infrastructure for ensuring business performance in areas of management and operations, risk and resilience, sustainability, and more recently cyber- security have gained global adoption. Uptime’s expanding success is based on delivering a
unique business service that is based upon unparalleled engineering excellence and technical mastery, while remaining vendor independent and technology agnostic.