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Saudi Arabia's GDP grew 3.9% in the second quarter
According to estimates by the government released on Monday, Saudi Arabia's GDP (gross domestic product) will grow 3.9% in 2025 due to non-oil sector growth. According to the Saudi General Authority for Statistics, non-oil activities grew 4.6% in comparison to the same period last year. The fastest growing sectors were electricity, water, and gas, followed by business, finance, and insurance. Oil grew by 3.8%, while government activities grew 0.6%. The oil activities grew the most compared to first quarter by 5.6%. On Sunday, the Saudi-led OPEC+ decided to increase oil production further as the kingdom tries to regain its market share. In an online meeting held on Sunday, the eight members of OPEC+ decided to increase production by 137,000 barrels a day from October. This is a much smaller increase than the monthly increases for September and August of approximately 555,000 bpd and 411,000 bpd between July and June. Oil prices have fallen by around 15% this year due to the increase in production. The prices haven't fallen, but are still trading at $65 per barrel. This is due to the sanctions imposed by the West on Russia and Iran. Saudi Arabia's economy is expected to be affected by the lower oil prices. The International Monetary Fund says Riyadh requires a price of over $90 per barrel to balance its accounts. Saudi Arabia has embarked on a costly transformation program called Vision 2030, which aims to wean its economy off of oil dependence. It is investing billions in sectors such as tourism, entertainment, and sports. Saudi Arabia's fiscal deficit in 2025 is expected to be around 101 billion riyals (about 27 billion dollars). Reporting by Pesha Magd; editing by Andrew Cawthorne
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Abu Dhabi's financial hub sees 42% increase in active companies
Abu Dhabi's financial centre reported a 42% increase year-on-year in the number of registered entities for the first half 2025. Global firms are looking to gain access to the powerful sovereign wealth fund in the emirate and to expand their presence in Gulf. Abu Dhabi Global Market reported an increase of 42% in assets under management from last June. The financial hub is now home to 154 asset and fund managers who manage a total 209 funds. ADGM is an English Common Law financial free zone. Abu Dhabi, the city that holds 90% of its country's oil reserves has intensified its efforts to diversify its economy beyond hydrocarbons. It is doing this by using its sovereign wealth funds which manage collectively nearly $2 trillion, more than any other place in the world. In recent years, the United Arab Emirates have become more attractive to high-net worth individuals and companies, due to their strong economic recovery following the pandemic, its tax-free environment and ease of doing businesses. Kimmeridge, Fortress Investment Group and Abu Dhabi sovereign wealth fund Mubadala are among the key entrants in ADGM for the first half of this year. The latter signed a $1 billion deal with Mubadala back in May. Lunate, a fund manager led by Sheikh Tahnoun bin Zayed (a royal family member and UAE national security advisor), acquired a minority stake in Brevan Howard in August. Brevan Howard is one of the world's first hedge funds to establish a global headquarters in ADGM, 2023. Sheikh Tahnoun is also the head of Abu Dhabi's biggest sovereign wealth fund ADIA. ADGM reported that the number of companies based in the centre had increased to 2,972 by June 30 from 2,381 as of the end of the month of December. The results of the centre come after the neighboring Dubai International Financial Centre announced a 25% increase in active companies year-over-year, reaching 7,700 by the end the first half. (Reporting and editing by Rod Nickel.)
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Gunvor: New sanctions against Russian oil buyers will disrupt flow, according to trader Gunvor
Frederic Lasserre said that new sanctions against buyers of Russian crude oil could disrupt crude flow, according to the global head of research and analyses at energy trader Gunvor, Frederic Lasserre. His comments followed after U.S. president Donald Trump, seeking to broker a resolution to the Ukraine conflict said he was ready to move into a second stage of sanctions against Russia in order to reduce the oil revenues and bring Vladimir Putin to the negotiation table. Treasury Secretary Scott Bessent stated on Sunday that both the U.S. & the European Union can impose "secondary tariffs" on countries that purchase Russian oil. India is the second largest buyer of Russian crude oil after China. Lasserre told the APPEC Conference that President Trump was serious about imposing tougher sanctions. He added that sanctions against Russia and Iran would have a negative impact on supplies of more than one million barrels per daily (bpd). "But, the issue is about the nature of sanctions... Today, if you do not impose any sanctions against the buyers, China and India, the rest is just rhetoric." Trump has said that India's oil exports help fund the war effort in Moscow and imposed a tariff of 50% on Indian imports. New Delhi says its purchases of Russian crude oil have helped to keep the market in balance, and has prevented global oil prices from rising. Nirmala Sitharaman, India's Finance Minister, said on Friday that India would continue to purchase Russian oil if it is cost-effective. Lasserre stated that the recent meetings and speeches by leaders from China, Russia India Brazil, at recent summts, indicate they will not accept "any further" sanctions. Last week, Chinese President Xi Jinping hosted over 20 leaders from non-Western nations for the Shanghai Cooperation Organization summit (SCO), including Russian Prime Minister Vladimir Putin and Indian Premier Narendra Modi. Putin and Modi held hands as they walked towards Xi, before the three men stood together. (Reporting and editing by Florence Tan, Mohi Naryan; writing by Nidhi verma; editing by Sonali Paul).
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Gold nears record high amid US rate cuts
Gold held steady near its all-time highest on Monday. It moved closer to the key $3,600 mark, buoyed by expectations that the U.S. Federal Reserve will cut rates this month after a weaker than expected jobs report last weekend. As of 0454 GMT, spot gold had not changed much at $3,583.41 an ounce. Bullion reached a record-high of $3,599.89 per ounce on Friday. U.S. Gold Futures for December Delivery fell by 0.8% to $3624. The main drivers are the U.S. job data and expectations that the Fed will cut by 50 basis point in September. The marginal change is a significant one compared to the situation before the employment figures, said Capital.com's financial market analyst Kyle Rodda. "Basically...all the tailwinds for gold are blowing at the moment, and despite an inflation shock in this week, we'll make a good check of $3,600." The U.S. unemployment rate rose to nearly four-year levels in August. This confirms that the labor market is softening, which will lead the Fed to cut rates next week. According to CME FedWatch, traders have priced in a rate cut of 25 bp this month. There is an 8% probability that the cut will be a 50 bp jumbo. Gold becomes cheaper when interest rates are lower. The Fed will now be focusing on the U.S. Inflation report due out on Thursday, which could provide more information on the expected size of its rate cut. Bullion prices have risen 37% this year, after a gain of 27% in 2024. This is due to the weakening dollar, central bank purchases, a softerening of monetary policy, and a wider geopolitical, economic, and political uncertainty. China's central banks added gold to their reserves in August. This is the 10th consecutive month that they have purchased bullion. Gold speculators increased their net long positions to 168.862 contracts in the week ending September 2. Silver spot fell 1% elsewhere to $40.57 an ounce. Platinum increased 0.2% to $1375.33 and palladium remained flat at $1109.50.
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China's coal imports in August hit an 8-month-high, but are still lower than the year-ago level
Customs data released on Monday showed that China's coal exports reached an eight-month peak in August. This was largely due to higher prices at home, but volumes were still below those seen a year ago. According to the General Administration of Customs, the country imported 42.74 millions metric tons of coke last month. This was the highest since December but down around 7% compared to August 2024. Toby Hassall is the lead analyst of LSEG's coal market. He said that "the rise in imports reflected a widened arbitrage as China’s domestic prices climbed following a reduction in coal production locally in July and a drawing down in Bohai Rim Port stocks." China's imports of coal have fallen year-over-year, as buyers have turned to the abundant and cheap domestic supply. To support the price, however, the authorities have set production limits since July. This has caused domestic coal production to drop to its lowest level in more than a year. According to an index published by the government, domestic coal prices rose to a six month high at the end August due to tightening supply. Import arbitrage became more profitable due to the surge in domestic coal prices. Since September, prices have decreased as the weather has cooled. In its half-yearly report, Shenhua Energy - the listed subsidiary of China's largest mining company - forecasts that imports will remain below the levels of last year through the second half. Customs data revealed that coal imports for the first eight-month period were down by 12% on an annual basis, at 299.94 millions tons. (Reporting and editing by Rashmi aich and Sherry j. Phillips; Colleen howe)
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What you need to Know about the Norwegian Election
The general elections in Norway on September 8 and 9 are expected to be close between the centre-left block led by the Labour Party and the centre-right group dominated by the Progress Party. Inequality and taxation are two of the key issues that will determine the outcome. The result could also have an impact on the energy and power supply to Europe, and the management and control of Norway's massive sovereign fund. What's at stake? Labour, led by Prime Minister Jonas Gahr Stoere, is seeking to extend its reign after returning to government in 2021. This follows eight years of Conservative governments. Labour led a minor government supported by the Socialist Left Party and the rural Centre Party. According to a Respons Analyse survey conducted for the daily Aftenposten between August 7-13, inequality is top of voters' concerns. Defence and national security have dropped to sixth place from a similar poll taken in April. The campaign has been dominated by cost of living issues and budgetary concerns, with the inflation rate in food prices at 5.9% over the past 12 months. According to the survey, voters also prioritized taxes, jobs, and the economy. Labour's allies, however, want to raise taxes on the wealthy in order to fund tax cuts for families with low incomes and expand public services. Both Progress and Conservatives advocate for large tax reductions. SOVEREIGN FUND Norway’s wealth fund of $2 trillion, built from oil and gas revenues, allows the government to spend more freely than other European countries. However, inflation and interest rate control are factors that limit spending. The debate about investments in Israel was at the forefront of the campaign and sparked a public discussion on how the world's biggest sovereign fund works. Last week, the Socialist Left said that it would support a Labour government only if they divested from companies that were involved in "Israel's illegal war in Gaza". Labour rejected this demand but it could be hard to reject such demands after the election. OIL AND GAS Norway has replaced Gazprom as Europe's largest gas supplier after the Russian invasion of Ukraine in 2022. Norway's importance is expected to increase as the European Union plans on phase-out Russian gas use by 2027. However, exploitation of new oil and gas resources is crucial to slowing production down. The influence of the Greens, Liberals, and other smaller parties could determine whether Norway opens up new areas for oil exploration or if it restricts them to the existing ones. It is unlikely that radical proposals such as stopping exploration altogether will receive enough support. Norway exports its surplus power to Europe. Some left-wing and rights-wing parties continue to campaign on the issue of limiting exports. This would cause problems for both the neighbours of Norway and Brussels. Norway may not be a member of the EU, but it is a part of the Single European Market and must follow its rules. Restriction of power exports would be a breach. The parties are divided on how to meet the growing domestic demand, which is eroding Norway’s surplus. In recent years, little new generation capacity has been added. The cost of wind on land, solar, and new hydropower is relatively low, and the construction process is quick. However, there are local protests about their environmental impact. Due to its high cost, offshore wind is controversial. HOW DOES IT OPERATE? Norway uses a proportional system where 169 legislators are elected for a four-year fixed term from 19 geographic districts. A party that receives more than 4% of the vote nationwide will be guaranteed representation. However, a strong showing within a district can also result in one or several seats. A majority of 85 seats is not expected by any party, so the most likely outcome will be a continuation of minority rule by Labour or the formation a coalition. Nine parties are predicted to gain seats, according to polls. On the left are Labour, the Socialists and the Greens. Labour's Stoere will remain in power if the centre-left party wins. If it is centre-right, either Progress Party leader Sylvi Listehaug, or Conservative Party chief Erna Solberg, could become Prime Minister. Results are expected to be known by the end of the ballot on 8 September at 1900 GMT. The results could be revealed late in the evening. However, the final result may not be known for several days. Negotiations after the election will determine which parties form the cabinet.
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Pacific Islands Leaders meet to discuss climate change, security
Leaders of the Pacific Islands began a seven-day summit in the Solomon Islands on Monday. They are expected to adopt a "Ocean of Peace", amid concerns over the rising tensions between China and the United States. Leaders are expected to support Australia's bid for the COP31 United Nations Climate Summit, after Canberra committed to working closely with its island neighbors to raise awareness about the challenges they face due to rising sea levels and worsening weather. Solomon Islands cancelled the participation of 20 donor partners including China, Taiwan, and the United States due to pressure from China to prevent Taiwan's involvement at the forum being held in Honiara. Three of the 18 members have diplomatic relations with Taiwan. Three have signed defence compacts with America. Several are French territories. Thirteen members of the forum have diplomatic ties with China. Australia is the largest member of the forum and is the biggest donor in the region. It has increased its efforts to stop China from expanding its presence in the area, following a 2022 pact between Beijing and the Solomon Islands. Anthony Albanese, Australia's prime minister, is expected to arrive at Honiara Wednesday after visiting Vanuatu. He is expected sign a landmark A$500m ($326.5m) deal strengthening economic and security links. Christopher Luxon, the New Zealand Prime Minister, said that his country was adamant about bringing the donors to the forum to discuss the development opportunities. However he added that the forum was still united. Reporting by Kirsty Neeham in Sydney, Lucy Craymer and Raju Gopalakrishnan in Wellington.
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MORNING BID EUROPE - From one political kerfuffle into another
Ankur Banerjee gives us a look at what the future holds for European and global markets. The eurozone's second largest economy will be plunged into chaos as France, the world's fifth-largest economy in three years is almost certain to begin its search for a new prime minister. Francois Bayrou is set to lose a vote of confidence on Monday. The crisis is already priced in for many, but the debt ratings that begin this week will test the appetite of investors for France's assets. Moody's downgraded France's credit rating after the collapse of its previous government last year. A repeat would be an even greater blow, causing it to receive a lower credit rating and increasing the risk that its bonds, already under pressure, will have to be sold. Investors were worried about the outlook for France's fiscal situation and the ongoing political turmoil. Last week, France 30-year government bonds yielded a record high. In terms of yields, Japanese government bond prices were muted Monday following the resignation of Japanese PM Shigeru Shiba over the weekend. This led to fiscal uncertainty, and clouded the Bank of Japan's policy direction. The yen was the main driver of the action, as it dropped across the board and remained near the 148-per-dollar level. The Nikkei index fell just below its record high reached last month due to the softening yen. Investors worry that the next Prime Minister could be a proponent of looser fiscal policy and monetary policy like Sanae Takaichi, a veteran from the Liberal Democratic Party. The poor U.S. job report has dampened what could have been a raucous Monday for risky assets. It has also heightened expectations that the Federal Reserve will cut rates at its meeting next week. Only one question remains: will it be a 25-basis-point cut, or a 50-basis point cut? In this debate, the U.S. inflation data on Thursday is crucial. Market developments on Monday that may have a significant impact Germany Industrial data for July
Why one Eastern European nation was slow to give up its Russian oil addiction: Vladimirov
By Martin Vladimirov
Czechia, on April 7, has the infrastructure, reserves and access to other suppliers that it needs to stop importing Russian oil. Three years after Russia's invasion of Ukraine on a large scale, the Czech Republic has continued to delay a strategic shift despite viable alternatives. According to a Center for the Study of Democracy analysis, Czechia imported Russian crude oil worth 1.5 billion euros in 2024. The volume was down 30% compared to 2023. However, this wasn't due to a proactive strategy to phase out Russian crude. It was mainly the result of 3 major disruptions in the Druzhba Pipeline. After the completion of the Trans-Alpine pipeline expansion in 2024, Czechia should have been able to replace Russian crude. As of February, however, neither the state-owned MERO CR nor the dominant refiner Orlen Unipetrol were able to fully exploit this new resource. In the end, each month more than 100 millions of euros were sent to the Kremlin.
This is not a technical problem. MERO CR had confirmed, even before the final certification of TAL-plus was granted, that the spare capacity in pipelines would be sufficient to meet Czechia’s entire annual crude oil demand.
The country's strategic reserve of 3.6 millions tonnes could also cover almost half its annual consumption. The volume of Russian oil imported in 2024's final quarter increased by 30% compared to the previous year, and reached 970,000 tonnes. This was the highest quarterly level since the European Union oil embargo came into effect in 2022. In 2025, Czechia purchased an additional 220,000 tons of Russian crude. Orlen Unipetrol claims that Rosneft's long-term contract obligations, which expire in mid-2025 prevented an immediate withdrawal from Russian crude. It is not certain that this is the case. Take-or-pay provisions - which are often used as a justification – are uncommon in the global oil market, where flexibility of supply is the norm. Orlen appears to be primarily motivated by financial concerns. Russian crude, on average, was 20% cheaper than Azeri oil in 2023-2024. Retail fuel prices were stable, with average gasoline and diesel costs of 1,500 euros and 1,360 euro per tonne respectively. Orlen Unipetrol, which relied heavily on Russian crude oil during its peak years, was able to take advantage of the cost difference and report EBITDA in excess of 600 million euros per year.
The discount on Russian crude could increase in the future, as tariffs recently implemented by the U.S. government may dampen demand for oil globally, forcing Russia lower its prices.
REPERCUSSIONS
This passive attitude has had important geopolitical consequences. Since the beginning of the war, Czechia has contributed almost 3 billion euros to the Russian government in the form of tax revenue. Czechia spent 8.4 billion euro on Russian gas and oil since February 2022. This is more than six-times the amount of money it gave to Ukraine in aid.
Czechia also continues to import refined petroleum products from Slovakia, Hungary and other EU-exempt countries, where refineries are processing Russian crude oil. This exemption is extended until June 2025. Slovakia exported 710,000 tons of fuel worth 520 millions euros to Czechia in 2024 despite alternatives being available. Germany, for example, only charges a 6-7% higher price than Slovak suppliers on gasoline and diesel.
Czechia also follows a similar pattern in its natural gas imports. Czechia's Russian gas purchases increased by almost 400% in 2024 in anticipation of Ukraine terminating its Russian transit in January 2025. Imports of Russian gas in the last quarter of 2024 were 62% more than average.
The Czech government can unilaterally ban Russian crude imports. It can also stop purchases of fuels refined using Russian oil in Slovakia or Hungary. And it can make full use both of the TAL pipe and its domestic reserves. Bulgaria has shown that a complete phase-out of Russian oil is possible. Sofia ended its exemption early in 2024 by invoking the force majeure clause, and cut off Russian crude over night. The result was neither an increase in fuel prices nor a threat to the security of oil supplies, despite Bulgaria relying on Russian crude for 90% of its crude imports.
Czech Government Officials on April 17,
The country is now fully independent from Russian oil after the completion of the capacity upgrades to the TAL pipeline. Czechia appears to be able to align its actions with European imperatives for energy security without suffering severe economic consequences. If the current halt of Russian oil imports doesn't hold, then it will struggle justifying why it has not done so.
(source: Reuters)