Abu Dhabi: Mubadala Capital, Aldar to Tap External Capital for $1 Billion Fund - Bloomberg
Mubadala Capital is preparing to raise third-party capital in its home market for the first time, expanding a model it has used abroad since becoming a rare sovereign wealth fund-owned entity to attract external money for alternative investments.
The asset management arm of Abu Dhabi’s Mubadala Investment Co. is partnering with Aldar Properties PJSC, the emirate’s largest developer, to launch a real-assets investment platform targeting opportunities in the United Arab Emirates and the wider Gulf region, according to a statement on Thursday.
The new venture, Aldar Capital, aims to raise $1 billion for its first fund next year with initial commitments from both partners. It will also target institutional investors, potentially scaling to several billion dollars of assets under management in the coming years.
“We have received significant inbound interest from a number of our existing investors who want exposure to the region,” Hani Barhoush, chief executive officer of Mubadala Capital, said in an interview.
Based in Abu Dhabi’s financial center ADGM, Aldar Capital will invest across residential and office buildings, logistics and other real assets. It will build equity and debt strategies to meet rising demand from regional and international investors, Aldar Group CEO Talal Al Dhiyebi said.
The platform will help transform Aldar from a regional developer, known for projects such as Ferrari World and the Formula 1 racetrack, into a manager of global capital, Al Dhiyebi said. “We want to be recognized as the partner of choice when it comes to real assets in the entire region.”
Aldar Properties is listed in Abu Dhabi and counts a unit of the $330 billion wealth fund Mubadala as one of its top shareholders.
Abu Dhabi’s appeal to billionaires, hedge funds and crypto executives has driven up demand for housing and offices, with apartment prices rising 14% over the past year, according to brokerage JLL.
The emirate is also investing in a Disney theme park, a Sphere arena, new museums and data centers expected to create thousands of jobs and lure new residents.
Founded in 2011, Mubadala Capital has accelerated dealmaking under Barhoush and now manages, advises and administers more than $430 billion in assets. Earlier this year, it sold a minority stake to TWG Global, an investment firm led by Guggenheim Partners founder Mark Walter and financier Thomas Tull. That followed its acquisition of Canadian mutual fund manager CI Financial Corp. in one of the largest privatizations by an Abu Dhabi entity.
Aldar Capital’s initial team will include staff from both Mubadala Capital and Aldar. It aims to start with up to 20 people and plans to expand further over time, Barhoush said.
Thursday, 4 December 2025
Buyout Giant KKR Signals Growing Ambition on Middle East Deals - Bloomberg
Buyout Giant KKR Signals Growing Ambition on Middle East Deals - Bloomberg
In October, over 150 professionals from KKR & Co. descended on Abu Dhabi. They huddled in conference rooms at the Mandarin Oriental and dined out in the desert, before traveling to meet with institutional investors across the region that now sits firmly at the heart of global finance.
Weeks after that off-site, KKR picked Abu Dhabi as the location for its third Middle Eastern office. For the $723 billion alternatives giant which pioneered the buyout industry, the moves spotlighted the growing significance of the oil-rich Gulf that boasts a young demographic, growing consumption and robust economic growth.
KKR was set up about five decades ago in the US, later expanding to Europe and Asia. The firm has had an office in Dubai since 2009 and started deploying capital into the region more recently, though executives are looking to dial up their presence.
“Once we decide that we want to go into a region, we operate more like a switch than a dimmer,” co-Chief Executive Officer Scott Nuttall told Bloomberg News in Riyadh on the sidelines of the Future Investment Initiative. “We want to invest more capital in and with partners that are here,” he said in an exclusive interview alongside two of KKR’s most senior regional executives.
The firm recently reported its second-highest fundraising quarter, a period where investment activity also rose sharply. Over the past year, it has deployed about $85 billion globally across asset classes. The Middle East accounts for a small proportion, but Nuttall pledged to scale up, “much like we’ve done in Europe and Asia.”
Buyout firms have been drawn to newly-ascendant Gulf economies that are trying to diversify from oil into areas like finance and artificial intelligence. Massive privatization programs are also seen as a lucrative opportunity.
But it’s also a delicate moment for alternative managers in the region. Many of the largest Gulf wealth funds — historically significant backers of the industry — have become pickier about who they work with. Some have sounded alarm over valuation practices and returns, while others say pockets of the market have become crowded.
KKR, for its part, has picked up the pace of dealmaking in the Gulf, which Nuttall said delivered “emerging markets growth for developed market risk.” It has invested about $2 billion over the past ten months, buying a slice of Abu Dhabi National Oil Co.’s gas pipeline network and a stake in one of the largest Gulf data center firms.
A Wide Lens
Other titans of global finance, too, have rushed in.
Brookfield Asset Management is now one of the biggest foreign investors in the Gulf, BlackRock Inc. recently signaled ambitions to significantly boost regional investments, while the likes of CVC Capital Partners Plc and General Atlantic have ramped up dealmaking. Executives from many of these firms will head to Abu Dhabi this month for the city’s annual finance confab.
KKR executives brushed aside concerns over competition, and said their ability to do a broader variety of deals offers an edge. The firm invests from a global pool of capital, allowing it to target bigger opportunities, according to Julian Barratt-Due, head of Middle East investing.
“Our mandate is very broad and flexible with respect to duration and cost of capital as well as size, governance structures, holding periods,” he said in the interview. “That gives us a really wide lens when it comes to deployment and it widens the addressable opportunity set.”
“Being able to play across that whole range helps,” he said.
KKR opened its first regional office in Dubai 16 years ago, followed by Riyadh in 2014. Co-founders including Henry Kravis have flown into Gulf cities for over three decades to raise capital and build partnerships with sovereign wealth funds. Nuttall himself is a frequent visitor, while former US General David Petraeus — chairman of the Middle East franchise since April — is a fixture at regional finance forums.
In all, it currently has 20 employees in the region, and recently set up an investment team led by Barratt-Due. “This isn’t a new endeavor,” Nuttall said. “I’d say what is a bit younger is the idea of investing capital in the region, not just taking capital from the region.”
That appetite for dealmaking has triggered a regional revival for the industry following the collapse of Abraaj Group, but it’s also ratcheting up competition for assets and a slice of the region’s billions. Even a flare up in the regional conflict over the summer and fluctuations in the price of crude haven’t deterred firms from continuing to set up local outposts and adding investment professionals.
“The Middle East is the world’s worst-kept secret,” said George Traub, managing partner at Dubai-based boutique Lumina Capital Advisers. “The likes of Brookfield have had an early mover advantage by getting access to a string of deals and others have taken note,” he said, adding that firms who may have been underweight are now recalibrating their approach.
Recent transactions have centered on sectors tied to the region’s growth. Brookfield invested in a Dubai-based education provider last year, while Permira and Blackstone Inc. poured money into a property classifieds website recently, in a bet that an influx of expatriates would continue to boost those sectors.
“From an investment standpoint, it’s a pretty interesting area, and there are a lot of things that rhyme with what we see in Asia,” Nuttall said. “And we’re the largest manager in Asia.”
Opening Up
Buyout shops started to change their approach to the region a few years ago when Gulf states decided to open up some of the marquee infrastructure to international investors. KKR and BlackRock were involved in the first such deal in the Middle East, when they bought into Adnoc’s oil pipeline network in 2019.
“Every country has ambitious economic transformation plans and are seeking foreign investments,” General Petraeus said in the interview. “The thinking is why hold all these assets on your balance sheet when an investment firm can come and buy some of it.”
Such transactions continue to present opportunities for buyout firms. Earlier this year, Saudi Aramco signed an $11 billion lease transaction with a group led by BlackRock’s Global Infrastructure Partners for assets linked to the Jafurah gas project.
Aramco is now considering plans to raise billions by selling assets including its oil export and storage terminals business. The action has spread further afield to places like Kuwait, where the state oil firm is considering leasing part of its pipeline network to help fund a $65 billion investment plan.
But the region can still be hard to crack for alternative asset managers. Auction processes can be less structured than in the West, businesses are sometimes more reluctant to cede control, and capital markets are relatively illiquid.
KKR executives are looking to lean on their local presence to counter some of those challenges. A significant portion of its deal pipeline comes from having conversations with local entities, Barratt-Due said.
“You need to be on the ground,” he said. “This is impossible to do if you’re sitting in London or New York, you just need to meet with people.”
In October, over 150 professionals from KKR & Co. descended on Abu Dhabi. They huddled in conference rooms at the Mandarin Oriental and dined out in the desert, before traveling to meet with institutional investors across the region that now sits firmly at the heart of global finance.
Weeks after that off-site, KKR picked Abu Dhabi as the location for its third Middle Eastern office. For the $723 billion alternatives giant which pioneered the buyout industry, the moves spotlighted the growing significance of the oil-rich Gulf that boasts a young demographic, growing consumption and robust economic growth.
KKR was set up about five decades ago in the US, later expanding to Europe and Asia. The firm has had an office in Dubai since 2009 and started deploying capital into the region more recently, though executives are looking to dial up their presence.
“Once we decide that we want to go into a region, we operate more like a switch than a dimmer,” co-Chief Executive Officer Scott Nuttall told Bloomberg News in Riyadh on the sidelines of the Future Investment Initiative. “We want to invest more capital in and with partners that are here,” he said in an exclusive interview alongside two of KKR’s most senior regional executives.
The firm recently reported its second-highest fundraising quarter, a period where investment activity also rose sharply. Over the past year, it has deployed about $85 billion globally across asset classes. The Middle East accounts for a small proportion, but Nuttall pledged to scale up, “much like we’ve done in Europe and Asia.”
Buyout firms have been drawn to newly-ascendant Gulf economies that are trying to diversify from oil into areas like finance and artificial intelligence. Massive privatization programs are also seen as a lucrative opportunity.
But it’s also a delicate moment for alternative managers in the region. Many of the largest Gulf wealth funds — historically significant backers of the industry — have become pickier about who they work with. Some have sounded alarm over valuation practices and returns, while others say pockets of the market have become crowded.
KKR, for its part, has picked up the pace of dealmaking in the Gulf, which Nuttall said delivered “emerging markets growth for developed market risk.” It has invested about $2 billion over the past ten months, buying a slice of Abu Dhabi National Oil Co.’s gas pipeline network and a stake in one of the largest Gulf data center firms.
A Wide Lens
Other titans of global finance, too, have rushed in.
Brookfield Asset Management is now one of the biggest foreign investors in the Gulf, BlackRock Inc. recently signaled ambitions to significantly boost regional investments, while the likes of CVC Capital Partners Plc and General Atlantic have ramped up dealmaking. Executives from many of these firms will head to Abu Dhabi this month for the city’s annual finance confab.
KKR executives brushed aside concerns over competition, and said their ability to do a broader variety of deals offers an edge. The firm invests from a global pool of capital, allowing it to target bigger opportunities, according to Julian Barratt-Due, head of Middle East investing.
“Our mandate is very broad and flexible with respect to duration and cost of capital as well as size, governance structures, holding periods,” he said in the interview. “That gives us a really wide lens when it comes to deployment and it widens the addressable opportunity set.”
“Being able to play across that whole range helps,” he said.
KKR opened its first regional office in Dubai 16 years ago, followed by Riyadh in 2014. Co-founders including Henry Kravis have flown into Gulf cities for over three decades to raise capital and build partnerships with sovereign wealth funds. Nuttall himself is a frequent visitor, while former US General David Petraeus — chairman of the Middle East franchise since April — is a fixture at regional finance forums.
In all, it currently has 20 employees in the region, and recently set up an investment team led by Barratt-Due. “This isn’t a new endeavor,” Nuttall said. “I’d say what is a bit younger is the idea of investing capital in the region, not just taking capital from the region.”
That appetite for dealmaking has triggered a regional revival for the industry following the collapse of Abraaj Group, but it’s also ratcheting up competition for assets and a slice of the region’s billions. Even a flare up in the regional conflict over the summer and fluctuations in the price of crude haven’t deterred firms from continuing to set up local outposts and adding investment professionals.
“The Middle East is the world’s worst-kept secret,” said George Traub, managing partner at Dubai-based boutique Lumina Capital Advisers. “The likes of Brookfield have had an early mover advantage by getting access to a string of deals and others have taken note,” he said, adding that firms who may have been underweight are now recalibrating their approach.
Recent transactions have centered on sectors tied to the region’s growth. Brookfield invested in a Dubai-based education provider last year, while Permira and Blackstone Inc. poured money into a property classifieds website recently, in a bet that an influx of expatriates would continue to boost those sectors.
“From an investment standpoint, it’s a pretty interesting area, and there are a lot of things that rhyme with what we see in Asia,” Nuttall said. “And we’re the largest manager in Asia.”
Opening Up
Buyout shops started to change their approach to the region a few years ago when Gulf states decided to open up some of the marquee infrastructure to international investors. KKR and BlackRock were involved in the first such deal in the Middle East, when they bought into Adnoc’s oil pipeline network in 2019.
“Every country has ambitious economic transformation plans and are seeking foreign investments,” General Petraeus said in the interview. “The thinking is why hold all these assets on your balance sheet when an investment firm can come and buy some of it.”
Such transactions continue to present opportunities for buyout firms. Earlier this year, Saudi Aramco signed an $11 billion lease transaction with a group led by BlackRock’s Global Infrastructure Partners for assets linked to the Jafurah gas project.
Aramco is now considering plans to raise billions by selling assets including its oil export and storage terminals business. The action has spread further afield to places like Kuwait, where the state oil firm is considering leasing part of its pipeline network to help fund a $65 billion investment plan.
But the region can still be hard to crack for alternative asset managers. Auction processes can be less structured than in the West, businesses are sometimes more reluctant to cede control, and capital markets are relatively illiquid.
KKR executives are looking to lean on their local presence to counter some of those challenges. A significant portion of its deal pipeline comes from having conversations with local entities, Barratt-Due said.
“You need to be on the ground,” he said. “This is impossible to do if you’re sitting in London or New York, you just need to meet with people.”
Most Gulf markets gain on oil, US Fed rate cut hopes | Reuters
Most Gulf markets gain on oil, US Fed rate cut hopes | Reuters
Most Gulf stock markets closed higher on Thursday, buoyed by rising oil prices and growing expectations ahead of next week's U.S. Federal Reserve meeting, with investors awaiting key economic data for clearer insight into the Fed's future interest rate decisions.
Oil prices were steady on Thursday, with the market focused on Ukraine's attacks on Russian oil assets, while stalled peace talks tempered expectations of a deal restoring Russian oil flows.
Saudi Arabia's benchmark index (.TASI), opens new tab gained 0.5%, with Saudi National Bank (1180.SE), opens new tab, the country's biggest lender by assets, rising 1.6% and telecoms firm Etihad Etisalat Co (7020.SE), opens new tab finishing 2.9% higher.
Elsewhere, oil giant Saudi Aramco (2222.SE), opens new tab was up 0.3%.
The kingdom's non-oil private sector business activity expanded at its fastest rate in 10 months in November, driven by robust demand and increased hiring, although new order growth slowed from the previous month, a survey showed on Wednesday.
Dubai's main share index (.DFMGI), opens new tab rose 0.4%, led by a 3.6% jump in top lender Emirates NBD (ENBD.DU), opens new tab and a 0.7% increase in blue-chip developer Emaar Properties (EMAR.DU), opens new tab.
In Abu Dhabi, the index (.FTFADGI), opens new tab added 0.4%.
U.S. private payrolls fell by 32,000 in November, the steepest decline in more than two-and-a-half years, Wednesday's ADP report showed. However, still-low layoff levels indicate this weakness might not accurately represent the labour market's underlying strength.
Traders now see an 89% probability of an interest rate cut next week, based on the CME FedWatch tool, and major brokerages likewise anticipate easing at the December 9–10 meeting.
Monetary policy shifts in the U.S. have a significant impact on Gulf markets, where most currencies are pegged to the dollar.
The Qatari index (.QSI), opens new tab eased 0.1%, with Qatar Islamic Bank (QISB.QA), opens new tab losing 1%.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab closed 0.4% higher.
Most Gulf stock markets closed higher on Thursday, buoyed by rising oil prices and growing expectations ahead of next week's U.S. Federal Reserve meeting, with investors awaiting key economic data for clearer insight into the Fed's future interest rate decisions.
Oil prices were steady on Thursday, with the market focused on Ukraine's attacks on Russian oil assets, while stalled peace talks tempered expectations of a deal restoring Russian oil flows.
Saudi Arabia's benchmark index (.TASI), opens new tab gained 0.5%, with Saudi National Bank (1180.SE), opens new tab, the country's biggest lender by assets, rising 1.6% and telecoms firm Etihad Etisalat Co (7020.SE), opens new tab finishing 2.9% higher.
Elsewhere, oil giant Saudi Aramco (2222.SE), opens new tab was up 0.3%.
The kingdom's non-oil private sector business activity expanded at its fastest rate in 10 months in November, driven by robust demand and increased hiring, although new order growth slowed from the previous month, a survey showed on Wednesday.
Dubai's main share index (.DFMGI), opens new tab rose 0.4%, led by a 3.6% jump in top lender Emirates NBD (ENBD.DU), opens new tab and a 0.7% increase in blue-chip developer Emaar Properties (EMAR.DU), opens new tab.
In Abu Dhabi, the index (.FTFADGI), opens new tab added 0.4%.
U.S. private payrolls fell by 32,000 in November, the steepest decline in more than two-and-a-half years, Wednesday's ADP report showed. However, still-low layoff levels indicate this weakness might not accurately represent the labour market's underlying strength.
Traders now see an 89% probability of an interest rate cut next week, based on the CME FedWatch tool, and major brokerages likewise anticipate easing at the December 9–10 meeting.
Monetary policy shifts in the U.S. have a significant impact on Gulf markets, where most currencies are pegged to the dollar.
The Qatari index (.QSI), opens new tab eased 0.1%, with Qatar Islamic Bank (QISB.QA), opens new tab losing 1%.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab closed 0.4% higher.
How #AbuDhabi’s economy came to be dominated by IHC
How Abu Dhabi’s economy came to be dominated by IHC
From electricity, property development and hospitals to billboards, driving schools and chicken farms, one vast conglomerate lies behind much of Abu Dhabi’s domestic corporate landscape: International Holding Company.
From electricity, property development and hospitals to billboards, driving schools and chicken farms, one vast conglomerate lies behind much of Abu Dhabi’s domestic corporate landscape: International Holding Company.
IHC has grown rapidly in recent years and now boasts roughly 1,500 subsidiaries, according to chief executive Syed Basar Shueb, with interests — and influence — across the emirate’s rapidly growing economy.
“We are looking to consolidate sector by sector,” Shueb told the Financial Times.
IHC’s assets stand at more than $125bn — a figure the group, chaired by deputy ruler Sheikh Tahnoon bin Zayed al-Nahyan, wants to almost double over the next five years and a far cry from just seven years ago when it was a virtually unknown entity invested in fish farming and real estate.
However, experts in the Gulf’s political economy say the rapid rise of IHC reflects a blurring of lines in the emirate between royal and state assets, as well as a lack of transparency.
The concentration of economic heft in the hands of royalty makes the emirate “an interesting hybrid of hyper-modern and completely patrimonial”, said Steffen Hertog, an associate professor at the London School of Economics.
Karen Young, a senior fellow at Washington-based think-tank the Middle East Institute, said IHC’s grip on Abu Dhabi’s economy could lead to some “crowding out” of the private sector. The group’s subsidiaries own a bevy of local entities, including hotels and a vegetable oil producer.
IHC told the FT in October it planned to double its then $119bn asset base — its total as of the end of June — over the next five years. By the time it reported its third-quarter results in November, the figure had hit $126bn.
However, bankers privately express doubt about the valuations of its holdings, many of which were originally transferred for free from parent company Royal Group, also Sheikh Tahnoon’s company. There is no independent bank research on IHC, nor is it rated by any credit agencies.
“The ruling family in Abu Dhabi, bloated off the back of decades in oil rents, had all these bits and pieces in the private sector but they weren’t really joined up,” said Christopher Davidson, an academic writing a book on IHC. “A national champion was needed to streamline this into something more coherent and aligned with diversification objectives.”
While IHC has helped rationalise various royal holdings, Davidson added, its “market concentration is off-putting to many outside investors” who might otherwise consider stakes in Abu Dhabi’s companies.
IHC’s $240bn market capitalisation makes it by far the biggest constituent of the Abu Dhabi stock exchange, taking up 41.5 per cent of the FTSE ADX General Index — a figure that rises still further when listed subsidiaries such as Alpha Dhabi and 2PointZero are included. First Abu Dhabi Bank, the country’s largest lender and runner-up at a 10 per cent weighting, is also chaired by Sheikh Tahnoon.
Because IHC is ultimately controlled by Sheikh Tahnoon, who is also the UAE’s national security adviser and chairs two of Abu Dhabi’s sovereign wealth funds, academics classify it as a “state-related entity”. Its spread across the economy comes despite an economic master-plan drawn up by the oil-rich emirate in 2008 in which the first of nine pillars for success was a “large, empowered private sector”.
As economic activity unrelated to the oil industry has grown, now accounting for more than half the emirate’s GDP, one of the world’s richest cities by sovereign wealth has become a magnet for hedge funds, asset managers and millionaires setting up family offices at its offshore financial centre.
However, scholars and business people say domestic economic development is driven by companies controlled by the same royals who run the emirate or by those owned by sovereign investors such as ADQ, chaired by Sheikh Tahnoon, and Mubadala. Some private company executives complain the game is rigged against them.
One UAE-based executive described Abu Dhabi as “a very modern monarchy that really behaves like a conglomerate — someone handles finance and investment, another handles tech”. For the emirate, they said, “a company is a means rather than an end”.
Unlike neighbouring Dubai, which has modest oil reserves and a thriving private sector, Abu Dhabi’s crude-based wealth blunted the need for economic diversification, with its ruling family “way more present in the economic system”, the executive added.
One senior executive at an Emirati company said the situation was also the result of complacency among traditional business families in Abu Dhabi, which were “in their comfort zone for a long time . . . They didn’t want to take a risk of doing things differently”. Nevertheless, he said, “it’s not right you run the economy yourself 100 per cent — any private sector cannot compete”.
Today Abu Dhabi is further reducing its reliance on oil exports, with strong non-oil growth in recent years and investment in emerging technologies such as artificial intelligence. In the first half of the year, Abu Dhabi’s non-oil sectors collectively grew 6.4 per cent against the same period in 2024, according to official statistics.
But even as it pursues diversification, Abu Dhabi’s commitment to an independent private sector has waned, according to Kristian Coates Ulrichsen, Middle East fellow at Rice University’s Baker Institute in Texas.
Grand plans in the Gulf states “can be overtaken by new developments in emerging sectors”, he said, citing AI as an example. These “provide opportunities for state-linked entities to move rapidly and become market leaders, able to mobilise capital and leverage networks that crowd out private sector involvement.”
Another Sheikh Tahnoon-controlled group, G42, has taken the lead on AI, a technology Abu Dhabi has helped finance in an effort to position itself as a regional hub. An IHC subsidiary, Emircom, is a big contractor to data centres.
Some businesspeople cite healthcare as an example of how sovereign and royal-connected investors dominate whole sectors. PureHealth, the UAE’s biggest healthcare network, is largely owned by sovereign investor ADQ and IHC subsidiary Alpha Dhabi. Another major provider, Burjeel, is partly owned by IHC. Meanwhile, M42, a company co-owned by sovereign investor Mubadala and G42, owns Abu Dhabi’s Cleveland Clinic hospital.
Although Abu Dhabi’s sovereign wealth funds buy into private companies around the world, their home market is characterised by what bankers call “left pocket-right pocket” transactions — deals between sovereign investors and state-connected, royal-controlled entities. For example, IHC recently sold its entire 42.5 per cent stake in developer Modon Holding to government-owned L’imad Holding Company.
Opportunities do exist for international private sector companies to partner with state or royal-connected corporations. Microsoft is working closely with G42, having bought a minority stake in the company last year. BlackRock is partnering with IHC on a new reinsurance business.
IHC’s soaring asset base was partly down to companies in its stable growing, Shueb said, although he added that it planned to spend $36bn every 18 months making new acquisitions. It is among big global groups considering a bid for overseas assets owned by Lukoil after the Russian group was hit with new US sanctions.
Regarding criticism that his group could be crowding out the UAE’s private sector, he noted that “54 per cent of our revenue comes from outside the country”, with recent acquisitions set to push that figure closer to 65 per cent.
“We’re all striving for an international business,” he said. “Locally, whatever we can capture, we have captured those things.”
And he insisted IHC did not get special treatment because of its royal connections.
“There is zero preference given to us in any public tender,” Shueb said, adding that the market was “open for everyone”.
#AbuDhabi sovereign fund accuses US private equity firm of self-dealing in lawsuit
Abu Dhabi sovereign fund accuses US private equity firm of self-dealing in lawsuit
One of the world’s largest sovereign wealth funds is suing a US private equity firm, accusing it of attempting to short-change investors on the sale of a portfolio company to another one of its funds.
One of the world’s largest sovereign wealth funds is suing a US private equity firm, accusing it of attempting to short-change investors on the sale of a portfolio company to another one of its funds.
The Abu Dhabi Investment Council is seeking to block Energy & Minerals Group from selling its stake in Ascent Resources, one of America’s largest private gas drillers, to one of the private equity firm’s sister funds. The sovereign fund alleges the deal undervalues Ascent while generating a windfall for the new fund managed by EMG.
The wealth fund said in a court filing unsealed on Wednesday: “Defendants are trying to force a conflicted sale of EMG fund assets to a continuation vehicle to reap a massive benefit for themselves at the expense of ADIC and the other investors to whom defendants owe fiduciary duties.”
The dispute sheds new light on the potential conflicts of interest that arise as private equity firms increasingly exit ageing deals by selling companies between funds they manage instead of taking them public or finding outside buyers such as large corporations or other buyout groups.
Such transactions, known as continuation fund deals, have grown in popularity in recent years as private equity groups have struggled to find buyers for trillions of dollars in unsold assets. Continuation deals amounted to a record 19 per cent of all PE asset sales in the first half of 2025, the Financial Times previously reported. But they are viewed warily by investors, given that buyout groups arrange the deals and are on both sides of the transactions.
An investor in Ascent Resources told the FT they believed the gas driller was worth more than $7bn when including debt. But EMG’s continuation fund plans to buy its over 30 per cent stake in Ascent at roughly a $5.5bn valuation, leaving investors with lower proceeds than what they believe they could get from an initial public offering or a sale to a third party. EMG is also asking to pay its investors over a two-year time period, further lowering the present value of the proceeds, they said.
However, other private equity groups that specialise in energy passed on the deal based on the belief that Ascent was overvalued, other people briefed on the matter said.
EMG, a $12bn Texas-based group founded by John Raymond, the son of former ExxonMobil chief executive Lee Raymond, first invested in Ascent in 2014 when the company, founded by the late shale gas-drilling baron Aubrey McClendon, was called American Energy Partners. It is one of the leading gas drillers in the US with vast resources in Ohio’s Utica shale. In the ensuing decade, many energy-focused private equity groups were stung by deep downturns in the industry. They have since earned lacklustre returns and struggled to raise new money from investors.
EMG’s four most recent funds all have earned net returns of 10 per cent or less, according to public pension documents filed by the Minnesota State Board of Investment. While the group has not announced a new private equity fundraise since 2019, it completed a $1.1bn continuation fund earlier this year for midstream assets it held in decade-old funds.
A continuation fund deal would increase EMG’s ownership in Ascent and restart its ability to earn management fees and potentially lucrative performance fees if the driller’s value rises in the coming years.
The sovereign wealth fund said in its complaint it believed the deal incentivised EMG “to buy out its current investors, including ADIC, at as low a price as possible”.
It also said the PE firm stood to “earn no or minimal carried interest on the asset if an exit to a third-party buyer were to happen now”.
In addition to arguing EMG’s deal might short-change some investors, the sovereign fund criticised the speed at which the private equity group broached the continuation fund deal with its investors and tactics to win their consent which it called “underhanded” and “misleading”, the filing said.
ADIC alleged the PE group coerced investors to support its continuation fund deal by providing them with substantially lower valuations for Ascent than they did to prospective new buyers.
ADIC also claimed EMG concealed alternatives to the fund-to-fund deal, such as internal IPO plans and interest from third-party buyers. It is now asking EMG to launch a formal sale process for Ascent.
The sovereign fund is a part of Abu Dhabi’s broader state-backed investment group Mubadala, which manages more than $300bn in assets and is one of the largest investors in the world.
The sovereign fund said it could not comment on open litigation. EMG and its founder John Raymond did not respond to messages seeking comment.
Wednesday, 3 December 2025
Plus VC Plans 40 Startup Deals in 2026 as #Saudi Venture Scene Grows - Bloomberg
Plus VC Plans 40 Startup Deals in 2026 as Saudi Venture Scene Grows - Bloomberg
Early-stage investor Plus VC plans to fund more than three dozen startups in 2026, with a view toward deals in Saudi Arabia as the country cements its position as a regional venture capital hub.
The firm, which has backed more than 250 startups across 15 countries in the Middle East and North Africa, expects to increase capital deployment to about $10 million from $4.5 million this year, according to Hasan Haider, founder and managing partner.
It will focus on sectors including construction technology and food-waste platforms, and plans to push deeper into areas like fintech. Plus VC also intends to raise money from external investors for its next fund in 2026, Haider added, without offering further details.
“A lot more deals are taking place in the Saudi market and actually, in terms of amounts of funding, Saudi is now taking over the most out of anywhere else in the region,” he said in an interview.
Startups in the Middle East raised a record $1.2 billion last quarter as they benefit from continued sovereign support and increasing interest from international investors. They also hit a fundraising high on a nine-month basis, with the kingdom leading in deal count.
Plus VC has backed Saudi startups including foodtech company Calo, which is looking to list in the local market by 2027. It also recently joined a round for Strataphy, a cooling solutions firm.
The venture investor sees the kingdom benefiting in the years ahead as more funding becomes available for later-stage growth companies, increasing the likelihood for eventual exits.
Early-stage investor Plus VC plans to fund more than three dozen startups in 2026, with a view toward deals in Saudi Arabia as the country cements its position as a regional venture capital hub.
The firm, which has backed more than 250 startups across 15 countries in the Middle East and North Africa, expects to increase capital deployment to about $10 million from $4.5 million this year, according to Hasan Haider, founder and managing partner.
It will focus on sectors including construction technology and food-waste platforms, and plans to push deeper into areas like fintech. Plus VC also intends to raise money from external investors for its next fund in 2026, Haider added, without offering further details.
“A lot more deals are taking place in the Saudi market and actually, in terms of amounts of funding, Saudi is now taking over the most out of anywhere else in the region,” he said in an interview.
Startups in the Middle East raised a record $1.2 billion last quarter as they benefit from continued sovereign support and increasing interest from international investors. They also hit a fundraising high on a nine-month basis, with the kingdom leading in deal count.
Plus VC has backed Saudi startups including foodtech company Calo, which is looking to list in the local market by 2027. It also recently joined a round for Strataphy, a cooling solutions firm.
The venture investor sees the kingdom benefiting in the years ahead as more funding becomes available for later-stage growth companies, increasing the likelihood for eventual exits.
Most Gulf bourses in black on oil, US rate cut bets | Reuters
Most Gulf bourses in black on oil, US rate cut bets | Reuters
Most stock markets in the Gulf ended higher on Wednesday, amid rising crude prices, as investors look to U.S. economic data this week that could influence the Federal Reserve's monetary policy moves.
Oil prices, a catalyst for Gulf financial markets, climbed more than 1% after Russia said talks with U.S. officials in Moscow failed to reach a compromise on a potential Ukraine peace deal that could have eased sanctions on its oil sector.
Saudi Arabia's benchmark index (.TASI), opens new tab rose 0.4%, with Etihad Etisalat Company (7020.SE), opens new tab advancing 2.1%, while Saudi Aramco Base Oil Company (2223.SE), opens new tab surged 10% to 93.95 riyals after HSBC lifted its price target to 115 riyals from 107 riyals.
The kingdom approved its state budget for 2026 on Tuesday, forecasting a narrower fiscal deficit of 165 billion riyals ($44 billion), or about 3.3% of gross domestic product, as it shifts spending to priority sectors such as industry and logistics in a push to increase non-oil revenue.
The Qatari index (.QSI), opens new tab gained 0.5%, with the Qatar Islamic Bank (QISB.QA), opens new tab finishing 1.2% higher.
Dubai's main share index (.DFMGI), opens new tab - which traded after a two-session break - advanced 1.2%, with top lender Emirates NBD (ENBD.DU), opens new tab gaining 3.5%.
In Abu Dhabi, the index (.FTFADGI), opens new tab was up 0.7%.
Stock markets in the United Arab Emirates resumed trading after a two-day hiatus for its National Day celebrations.
Investors are closely watching upcoming releases, including Wednesday's November ADP private payrolls report and Friday's delayed September Personal Consumption Expenditures (PCE) Index — the Federal Reserve's preferred measure of inflation.
Monetary policy shifts in the U.S. have a significant impact on Gulf markets, where most currencies are pegged to the dollar.
U.S. rate futures are now assigning an 88% probability of a Federal Reserve rate cut at next week's meeting, up from 85% a week earlier, CME's FedWatch Tool shows.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab jumped 1.8%, hitting all-time high, with Commercial International Bank (COMI.CA), opens new tab rising 1.8%.
Egypt's non-oil private sector recorded its fastest growth in five years in November, driven by sharp increases in output and new orders, a business survey showed on Wednesday.
Most stock markets in the Gulf ended higher on Wednesday, amid rising crude prices, as investors look to U.S. economic data this week that could influence the Federal Reserve's monetary policy moves.
Oil prices, a catalyst for Gulf financial markets, climbed more than 1% after Russia said talks with U.S. officials in Moscow failed to reach a compromise on a potential Ukraine peace deal that could have eased sanctions on its oil sector.
Saudi Arabia's benchmark index (.TASI), opens new tab rose 0.4%, with Etihad Etisalat Company (7020.SE), opens new tab advancing 2.1%, while Saudi Aramco Base Oil Company (2223.SE), opens new tab surged 10% to 93.95 riyals after HSBC lifted its price target to 115 riyals from 107 riyals.
The kingdom approved its state budget for 2026 on Tuesday, forecasting a narrower fiscal deficit of 165 billion riyals ($44 billion), or about 3.3% of gross domestic product, as it shifts spending to priority sectors such as industry and logistics in a push to increase non-oil revenue.
The Qatari index (.QSI), opens new tab gained 0.5%, with the Qatar Islamic Bank (QISB.QA), opens new tab finishing 1.2% higher.
Dubai's main share index (.DFMGI), opens new tab - which traded after a two-session break - advanced 1.2%, with top lender Emirates NBD (ENBD.DU), opens new tab gaining 3.5%.
In Abu Dhabi, the index (.FTFADGI), opens new tab was up 0.7%.
Stock markets in the United Arab Emirates resumed trading after a two-day hiatus for its National Day celebrations.
Investors are closely watching upcoming releases, including Wednesday's November ADP private payrolls report and Friday's delayed September Personal Consumption Expenditures (PCE) Index — the Federal Reserve's preferred measure of inflation.
Monetary policy shifts in the U.S. have a significant impact on Gulf markets, where most currencies are pegged to the dollar.
U.S. rate futures are now assigning an 88% probability of a Federal Reserve rate cut at next week's meeting, up from 85% a week earlier, CME's FedWatch Tool shows.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab jumped 1.8%, hitting all-time high, with Commercial International Bank (COMI.CA), opens new tab rising 1.8%.
Egypt's non-oil private sector recorded its fastest growth in five years in November, driven by sharp increases in output and new orders, a business survey showed on Wednesday.
Tuesday, 2 December 2025
#Saudi National Bank’s $1 Billion Loan Adds to Middle East Spree - Bloomberg
Saudi National Bank’s $1 Billion Loan Adds to Middle East Spree - Bloomberg
Saudi National Bank is seeking a $1 billion syndicated loan, continuing a borrowing rush by the kingdom’s lenders that are helping finance a $2 trillion economic overhaul.
DBS Bank Ltd. and Mitsubishi UFJ Financial Group Inc. are the mandated lead arrangers and bookrunners of the five-year deal, according to a person familiar with the matter. The loan is being syndicated to the broader market, including Asia, said the person, who asked not to be identified discussing a private matter.
SNB didn’t immediately respond to a request for comment.
The SNB deal is the latest in a series of funding transactions from the Middle East, notably from Saudi Arabia, tapping Asian liquidity as economies there press ahead with expansion plans and seek to diversify funding sources. Middle Eastern borrowers raised around $13.5 billion via syndicated loans across the Asia Pacific so far in 2025, a record high and nearly three times the amount garnered during the same period last year, according to Bloomberg-compiled data that tracks volumes since 1999.
The SNB offering pays an interest margin of 90 basis points over the benchmark Secured Overnight Financing Rate and is targeting lenders globally, the person said.
Last month, Riyad Bank SJSC secured a $1.5 billion syndicated loan, primarily from banks in Greater China, while Abu Dhabi’s sovereign wealth fund ADQ obtained a $5 billion facility in October, targeting a similar pool of lenders, Bloomberg News reported.
Saudi National Bank is seeking a $1 billion syndicated loan, continuing a borrowing rush by the kingdom’s lenders that are helping finance a $2 trillion economic overhaul.
DBS Bank Ltd. and Mitsubishi UFJ Financial Group Inc. are the mandated lead arrangers and bookrunners of the five-year deal, according to a person familiar with the matter. The loan is being syndicated to the broader market, including Asia, said the person, who asked not to be identified discussing a private matter.
SNB didn’t immediately respond to a request for comment.
The SNB deal is the latest in a series of funding transactions from the Middle East, notably from Saudi Arabia, tapping Asian liquidity as economies there press ahead with expansion plans and seek to diversify funding sources. Middle Eastern borrowers raised around $13.5 billion via syndicated loans across the Asia Pacific so far in 2025, a record high and nearly three times the amount garnered during the same period last year, according to Bloomberg-compiled data that tracks volumes since 1999.
The SNB offering pays an interest margin of 90 basis points over the benchmark Secured Overnight Financing Rate and is targeting lenders globally, the person said.
Last month, Riyad Bank SJSC secured a $1.5 billion syndicated loan, primarily from banks in Greater China, while Abu Dhabi’s sovereign wealth fund ADQ obtained a $5 billion facility in October, targeting a similar pool of lenders, Bloomberg News reported.
#Qatar to Sell £273 Million Sainsbury’s Stake After Share Rally - Bloomberg
Qatar to Sell £273 Million Sainsbury’s Stake After Share Rally - Bloomberg
Qatar’s sovereign wealth fund plans to sell a stake worth about £273 million ($360 million) in J Sainsbury Plc, marking a significant selldown by the supermarket’s largest shareholder.
The Qatar Investment Authority plans to sell up to 83.6 million shares in the supermarket, according to a statement on Tuesday. It has also entered into a derivatives agreement with JPMorgan, as a result of which, the bank will sell a further 14 million shares. The value of the stake sale is based on Monday’s closing price of £3.26 a share.
The share sale comes after a 19% rally in Sainsbury’s shares this year, driven by higher sales as a result of British shoppers’ focus on value for money.
Qatar currently holds 239.4 mllion shares in the supermarket chain, representing a 10.5% stake, according to data compiled by Bloomberg.
Once the deal closes, Qatar will no longer be Sainsbury’s largest shareholder, dropping below Czech billionaire Daniel Křetínský’s investment vehicle Vesa Equity Investment, based on the proposed sale plan.
Qatar’s sovereign wealth fund plans to sell a stake worth about £273 million ($360 million) in J Sainsbury Plc, marking a significant selldown by the supermarket’s largest shareholder.
The Qatar Investment Authority plans to sell up to 83.6 million shares in the supermarket, according to a statement on Tuesday. It has also entered into a derivatives agreement with JPMorgan, as a result of which, the bank will sell a further 14 million shares. The value of the stake sale is based on Monday’s closing price of £3.26 a share.
The share sale comes after a 19% rally in Sainsbury’s shares this year, driven by higher sales as a result of British shoppers’ focus on value for money.
Qatar currently holds 239.4 mllion shares in the supermarket chain, representing a 10.5% stake, according to data compiled by Bloomberg.
Once the deal closes, Qatar will no longer be Sainsbury’s largest shareholder, dropping below Czech billionaire Daniel Křetínský’s investment vehicle Vesa Equity Investment, based on the proposed sale plan.
#SaudiArabia forecasts deficit of $44 billion in 2026 budget | Reuters
Saudi Arabia forecasts deficit of $44 billion in 2026 budget | Reuters
Saudi Arabia approved its state budget for 2026 on Tuesday, forecasting a narrower fiscal deficit as it shifts spending to priority sectors like industry and logistics in a push to increase non-oil revenue.
The kingdom projected a deficit of 165 billion riyals ($44 billion), or about 3.3% of gross domestic product. That would be down from the 245 billion riyals it now estimates for this year after lower oil prices and production weighed on revenue and spending overshot the budgeted level by around 4%.
The world's top oil exporter, Saudi Arabia is more than halfway through its Vision 2030 blueprint for economic transformation. The strategy, introduced by de facto ruler Crown Prince Mohammed bin Salman in 2016, calls for hundreds of billions of dollars in government investments to wean the kingdom’s economy off its dependence on hydrocarbon revenues.
According to the budget, 2026 will mark the start of a "third phase" of Vision 2030, signalling a shift in focus from launching economic reforms to maximising their impact.
The crown prince described the new phase as "accelerating the pace of progress and increasing growth opportunities to achieve a sustainable impact beyond 2030," according to state news agency SPA.
A SHIFT IN SPENDING BUT FEW SPECIFICS
The change in tone comes as Riyadh moves to refocus its $925 billion sovereign wealth fund away from delayed massive real estate projects toward sectors including logistics, minerals, artificial intelligence and religious tourism.
"Our level of spending in the last three budget cycles has been consistent, but now it is about what we are spending on, rather than how much we are spending," Finance Minister Mohammed Al Jadaan told Reuters ahead of the budget release.
The budget included few specific targets for that new focus, however, beyond setting a target of over 20 million visitors from abroad for the Umrah pilgrimage to Mecca in 2026, a sharp increase from the 15 million pilgrims expected this year.
SAUDI TO RUN 'DEFICIT BY DESIGN' UNTIL 2028, FINMIN SAYS
Total expenditure is projected at 1.31 trillion riyals in 2026, lower than an estimated 1.34 trillion riyals this year. Total revenue is forecast at 1.15 trillion riyals, slightly up on the estimated 1.1 trillion riyals in 2025.
"This is a deficit by design," Jadaan said in a media briefing on Monday. "We, by policy choice, will have a deficit until (20)28."
The expected leap in the 2025 deficit to more than double the budgeted target of 101 billion riyals would put the shortfall at 5.3% of GDP, up from an initial target of 2.3%.
Revenues this year are estimated to miss the budgeted target by about 7.8%, while spending is seen 4% higher.
Public debt is expected to reach approximately 1.5 trillion riyals by the end of 2025 - about 31.7% of GDP - up from 1.2 trillion riyals in 2024 in order to help meet financing needs this year, the finance ministry said.
"The still low government debt level provides space for this fiscal stance, though it is vulnerable to a further fall in the oil price," said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
RECALIBRATING TO ENSURE PROJECTS DELIVER
The Saudi government and the nation's almost $1 trillion Public Investment Fund have both undergone a review of project and spending priorities, Jadaan told Reuters.
Some demands that seemed to be overly ambitious in terms of time frame or investment were scaled back to more reasonable objectives, he said.
Reuters reported in October that the PIF is preparing to shift away from the real estate gigaprojects that have dominated its development goals for the last decade.
In a departure from this year's spending package, the 2026 budget made no mention of specific gigaprojects such as NEOM or the Sindalah island resort.
The PIF, like the finance ministry, is making sure initial plans for projects "are recalibrated to ensure that they are delivering what they are meant to deliver", Jadaan said.
Saudi Arabia approved its state budget for 2026 on Tuesday, forecasting a narrower fiscal deficit as it shifts spending to priority sectors like industry and logistics in a push to increase non-oil revenue.
The kingdom projected a deficit of 165 billion riyals ($44 billion), or about 3.3% of gross domestic product. That would be down from the 245 billion riyals it now estimates for this year after lower oil prices and production weighed on revenue and spending overshot the budgeted level by around 4%.
The world's top oil exporter, Saudi Arabia is more than halfway through its Vision 2030 blueprint for economic transformation. The strategy, introduced by de facto ruler Crown Prince Mohammed bin Salman in 2016, calls for hundreds of billions of dollars in government investments to wean the kingdom’s economy off its dependence on hydrocarbon revenues.
According to the budget, 2026 will mark the start of a "third phase" of Vision 2030, signalling a shift in focus from launching economic reforms to maximising their impact.
The crown prince described the new phase as "accelerating the pace of progress and increasing growth opportunities to achieve a sustainable impact beyond 2030," according to state news agency SPA.
A SHIFT IN SPENDING BUT FEW SPECIFICS
The change in tone comes as Riyadh moves to refocus its $925 billion sovereign wealth fund away from delayed massive real estate projects toward sectors including logistics, minerals, artificial intelligence and religious tourism.
"Our level of spending in the last three budget cycles has been consistent, but now it is about what we are spending on, rather than how much we are spending," Finance Minister Mohammed Al Jadaan told Reuters ahead of the budget release.
The budget included few specific targets for that new focus, however, beyond setting a target of over 20 million visitors from abroad for the Umrah pilgrimage to Mecca in 2026, a sharp increase from the 15 million pilgrims expected this year.
SAUDI TO RUN 'DEFICIT BY DESIGN' UNTIL 2028, FINMIN SAYS
Total expenditure is projected at 1.31 trillion riyals in 2026, lower than an estimated 1.34 trillion riyals this year. Total revenue is forecast at 1.15 trillion riyals, slightly up on the estimated 1.1 trillion riyals in 2025.
"This is a deficit by design," Jadaan said in a media briefing on Monday. "We, by policy choice, will have a deficit until (20)28."
The expected leap in the 2025 deficit to more than double the budgeted target of 101 billion riyals would put the shortfall at 5.3% of GDP, up from an initial target of 2.3%.
Revenues this year are estimated to miss the budgeted target by about 7.8%, while spending is seen 4% higher.
Public debt is expected to reach approximately 1.5 trillion riyals by the end of 2025 - about 31.7% of GDP - up from 1.2 trillion riyals in 2024 in order to help meet financing needs this year, the finance ministry said.
"The still low government debt level provides space for this fiscal stance, though it is vulnerable to a further fall in the oil price," said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
RECALIBRATING TO ENSURE PROJECTS DELIVER
The Saudi government and the nation's almost $1 trillion Public Investment Fund have both undergone a review of project and spending priorities, Jadaan told Reuters.
Some demands that seemed to be overly ambitious in terms of time frame or investment were scaled back to more reasonable objectives, he said.
Reuters reported in October that the PIF is preparing to shift away from the real estate gigaprojects that have dominated its development goals for the last decade.
In a departure from this year's spending package, the 2026 budget made no mention of specific gigaprojects such as NEOM or the Sindalah island resort.
The PIF, like the finance ministry, is making sure initial plans for projects "are recalibrated to ensure that they are delivering what they are meant to deliver", Jadaan said.
Gulf markets subdued on weak oil prices | Reuters
Gulf markets subdued on weak oil prices | Reuters
Most Gulf stock markets remained subdued on Tuesday, weighed down by lower oil prices, as investors awaited key U.S. economic data for clearer signals on the Federal Reserve’s interest rate trajectory.
Oil prices held firm on Tuesday as traders weighed up risks from Ukrainian drone strikes on Russian energy sites and mounting U.S.-Venezuela tensions.
Brent crude futures fell 18 cents, or 0.3%, to $62.99 a barrel by 1017 GMT.
Crude prices, even after the recent rebound, are still hovering near multi-month lows, putting pressure on the fiscal balances of oil-dependent Gulf nations through lower revenues.
Saudi Arabia's benchmark index (.TASI), opens new tab eased 0.1%, falling for a third consecutive session, with Al Rajhi Bank (1120.SE), opens new tab falling 0.4%.
In Qatar, the index (.QSI), opens new tab reversed early losses to finish 0.5% higher, led by a 1.6% rise in Qatar Islamic Bank (QISB.QA), opens new tab.
Data released on Monday revealed that U.S. manufacturing contracted for the ninth consecutive month in November. Attention now turns to Wednesday’s ADP November private payrolls report and Friday’s postponed September PCE inflation reading, both seen as critical indicators for a potential Federal Reserve rate cut at its meeting next week.
According to CME’s FedWatch Tool, markets are currently pricing in an 87% probability to a December rate reduction.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab eased 0.2%, with Telecom Egypt (ETEL.CA), opens new tab retreating 2.6%.
Dubai and Abu Dhabi markets were closed for a public holiday.
Most Gulf stock markets remained subdued on Tuesday, weighed down by lower oil prices, as investors awaited key U.S. economic data for clearer signals on the Federal Reserve’s interest rate trajectory.
Oil prices held firm on Tuesday as traders weighed up risks from Ukrainian drone strikes on Russian energy sites and mounting U.S.-Venezuela tensions.
Brent crude futures fell 18 cents, or 0.3%, to $62.99 a barrel by 1017 GMT.
Crude prices, even after the recent rebound, are still hovering near multi-month lows, putting pressure on the fiscal balances of oil-dependent Gulf nations through lower revenues.
Saudi Arabia's benchmark index (.TASI), opens new tab eased 0.1%, falling for a third consecutive session, with Al Rajhi Bank (1120.SE), opens new tab falling 0.4%.
In Qatar, the index (.QSI), opens new tab reversed early losses to finish 0.5% higher, led by a 1.6% rise in Qatar Islamic Bank (QISB.QA), opens new tab.
Data released on Monday revealed that U.S. manufacturing contracted for the ninth consecutive month in November. Attention now turns to Wednesday’s ADP November private payrolls report and Friday’s postponed September PCE inflation reading, both seen as critical indicators for a potential Federal Reserve rate cut at its meeting next week.
According to CME’s FedWatch Tool, markets are currently pricing in an 87% probability to a December rate reduction.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab eased 0.2%, with Telecom Egypt (ETEL.CA), opens new tab retreating 2.6%.
Dubai and Abu Dhabi markets were closed for a public holiday.
Monday, 1 December 2025
#SaudiArabia's PIF Plans to More Than Double Japan Investments - Bloomberg
Saudi Arabia's PIF Plans to More Than Double Japan Investments - Bloomberg
Saudi Arabia’s sovereign wealth fund is looking to increase its investments in Japan to about $27 billion by the end of 2030 as the kingdom looks to deepen ties in Asia and expand in areas from critical minerals to financial markets.
The Public Investment Fund aims to deploy more capital after investing $11.5 billion in Japan from 2019 to 2024, Governor Yasir Al Rumayyan said at the FII Priority Asia Summit in Tokyo on Monday. He highlighted spending in public and private markets and predicted recently-launched exchange traded funds between Saudi Arabia and Japan will “go further.”
“Asia is big for us. We want to have better ties, better relationships, better procurement process, access to the supply chain,” Al Rumayyan said. “Japan at some stage was one of the largest partners for Saudi Arabia and we want to get that back.”
Japan is Saudi Arabia’s third-largest trading partner at present. The sovereign wealth fund expects its investments in the country to contribute as much as $16.6 billion to Saudi Arabia’s gross domestic product, Al Rumayyan said. He also hopes to see more return investment to the kingdom in areas including travel and tourism.
Those sectors are among six areas of priority for the $1 trillion PIF under its 2026-2030 investment strategy, which is set to be unveiled early next year. The board has approved that plan and will be hammering out details over the next few days at a summit on the Red Sea in Saudi Arabia, Al Rumayyan said.
The comments suggest Japan will remain a priority for PIF global investment as the fund seeks to increase its annual deployment of capital to $70 billion after this year. It allocated nearly $57 billion across priority sectors in 2024.
Saudi Arabia has been leaning more heavily into its relationships with Asian nations in recent years as it seeks to draw more foreign partners to help advance the country’s multi-trillion dollar Vision 2030 economic transformation program.
There’s been a strong emphasis on the financial sector, with multiple ETFs launched in markets including mainland China, Hong Kong and Japan to track Saudi assets over the last two years. Asian banks have emerged as major financiers for Saudi entities. In energy, Saudi Arabia is working with Japan on developing the market for blue ammonia.
Additionally, the kingdom is developing Dragon Ball and anime theme parks at its Qiddiya mega entertainment city on the outskirts of Riyadh in partnership with Japan. The FII Tokyo conference held on Nov. 30-Dec. 1 was the second FII event ever held in Asia.
Saudi Arabia’s sovereign wealth fund is looking to increase its investments in Japan to about $27 billion by the end of 2030 as the kingdom looks to deepen ties in Asia and expand in areas from critical minerals to financial markets.
The Public Investment Fund aims to deploy more capital after investing $11.5 billion in Japan from 2019 to 2024, Governor Yasir Al Rumayyan said at the FII Priority Asia Summit in Tokyo on Monday. He highlighted spending in public and private markets and predicted recently-launched exchange traded funds between Saudi Arabia and Japan will “go further.”
“Asia is big for us. We want to have better ties, better relationships, better procurement process, access to the supply chain,” Al Rumayyan said. “Japan at some stage was one of the largest partners for Saudi Arabia and we want to get that back.”
Japan is Saudi Arabia’s third-largest trading partner at present. The sovereign wealth fund expects its investments in the country to contribute as much as $16.6 billion to Saudi Arabia’s gross domestic product, Al Rumayyan said. He also hopes to see more return investment to the kingdom in areas including travel and tourism.
Those sectors are among six areas of priority for the $1 trillion PIF under its 2026-2030 investment strategy, which is set to be unveiled early next year. The board has approved that plan and will be hammering out details over the next few days at a summit on the Red Sea in Saudi Arabia, Al Rumayyan said.
The comments suggest Japan will remain a priority for PIF global investment as the fund seeks to increase its annual deployment of capital to $70 billion after this year. It allocated nearly $57 billion across priority sectors in 2024.
Saudi Arabia has been leaning more heavily into its relationships with Asian nations in recent years as it seeks to draw more foreign partners to help advance the country’s multi-trillion dollar Vision 2030 economic transformation program.
There’s been a strong emphasis on the financial sector, with multiple ETFs launched in markets including mainland China, Hong Kong and Japan to track Saudi assets over the last two years. Asian banks have emerged as major financiers for Saudi entities. In energy, Saudi Arabia is working with Japan on developing the market for blue ammonia.
Additionally, the kingdom is developing Dragon Ball and anime theme parks at its Qiddiya mega entertainment city on the outskirts of Riyadh in partnership with Japan. The FII Tokyo conference held on Nov. 30-Dec. 1 was the second FII event ever held in Asia.
Cheap Oil Prices: Who Wins and Loses in a World With Surplus Crude? - Bloomberg
Cheap Oil Prices: Who Wins and Loses in a World With Surplus Crude? - Bloomberg
Oil prices have been falling as the market faces the prospect of a growing surplus.
This year is set to culminate in the first major glut since 2020. The International Energy Agency forecast in November that global supply will outweigh demand by 2.4 million barrels a day, and expects the gap to expand to a record 4 million barrels a day next year.
Sustained lower prices will put pressure on governments and businesses that are dependent on oil revenue, while others stand to benefit.
What’s driving the oil surplus?
Oil demand growth is faltering. The trade policies of US President Donald Trump are weighing on the outlook for the global economy, and China, the second-largest crude consumer, is struggling with a property market downturn and weak consumer spending.
On the supply side, OPEC+, the coalition of producers led by Saudi Arabia, has been unwinding past output cuts. Countries outside this group, in particular those in the Americas, are churning out more barrels, too.
Supply from Russia, the world’s third-biggest producer, remains a wild card. On the one hand, the country faces new US sanctions that threaten to disrupt its exports. But the Trump administration’s renewed effort to secure a deal to end the war in Ukraine has raised the prospect of some international sanctions being unwound, which could ease the flow of Russian barrels into the market.
Who are the winners in a world with an oversupply of oil?
- Oil-importing nations
A low-oil price environment is good for buyers, especially large net importers such as China, which has been filling up its strategic reserves, and India, which has faced US pressure to stop buying Russian crude.
India is the world’s third-biggest consumer of oil. It ramped up its purchases from Russia following the 2022 invasion of Ukraine, as Russian exporters offered big discounts to offset the loss of traditional European buyers. A drop in global prices could make it less painful for India to avoid sanctioned Russian barrels and switch to suppliers in the Middle East, whose medium and heavy crude grades are similar to Russia’s Urals export blend.
- US shale industry
The US shale industry has been the world’s engine for oil-production growth in recent years but the momentum is now slowing. Many producers need an oil price of around $65 a barrel to turn a profit and have been looking to increase their output at less than 5% annually as crude prices hover near the break-even threshold.
A global oil surplus that knocks prices down to about $50 a barrel would prompt US shale producers to idle their drilling rigs and park their frack fleets as operations become economically unviable.
Their output is holding up for now, but more than 10% of oil-focused rigs have been taken offline since the start of the year, according to data from Baker Hughes Co. The decline will likely accelerate in the coming months if oil prices stay low, which could put pressure on oilfield services companies.
Sustained lower oil prices could prompt more consolidation in the US shale patch. Mid-sized producers could scoop up struggling smaller players to add scale as some of the best drilling spots have already been tapped.
- The energy transition
Road transport is the biggest source of oil demand. Consumers are used to a certain amount of volatility in fuel prices, but a prolonged reduction could make them less inclined to switch to an electric vehicle. That said, in areas where there are high taxes on diesel and gasoline, such as Europe and California, there could be limited relief at the pump from lower oil prices.
The buildout of clean power sources is less likely to be impacted by a crude surplus. In most regions, other than places such as the Middle East, renewables are usually competing against coal and natural gas for utility-scale electricity generation rather than oil.
Oil prices have been falling as the market faces the prospect of a growing surplus.
This year is set to culminate in the first major glut since 2020. The International Energy Agency forecast in November that global supply will outweigh demand by 2.4 million barrels a day, and expects the gap to expand to a record 4 million barrels a day next year.
Sustained lower prices will put pressure on governments and businesses that are dependent on oil revenue, while others stand to benefit.
What’s driving the oil surplus?
Oil demand growth is faltering. The trade policies of US President Donald Trump are weighing on the outlook for the global economy, and China, the second-largest crude consumer, is struggling with a property market downturn and weak consumer spending.
On the supply side, OPEC+, the coalition of producers led by Saudi Arabia, has been unwinding past output cuts. Countries outside this group, in particular those in the Americas, are churning out more barrels, too.
Supply from Russia, the world’s third-biggest producer, remains a wild card. On the one hand, the country faces new US sanctions that threaten to disrupt its exports. But the Trump administration’s renewed effort to secure a deal to end the war in Ukraine has raised the prospect of some international sanctions being unwound, which could ease the flow of Russian barrels into the market.
Who are the winners in a world with an oversupply of oil?
- Oil-importing nations
A low-oil price environment is good for buyers, especially large net importers such as China, which has been filling up its strategic reserves, and India, which has faced US pressure to stop buying Russian crude.
India is the world’s third-biggest consumer of oil. It ramped up its purchases from Russia following the 2022 invasion of Ukraine, as Russian exporters offered big discounts to offset the loss of traditional European buyers. A drop in global prices could make it less painful for India to avoid sanctioned Russian barrels and switch to suppliers in the Middle East, whose medium and heavy crude grades are similar to Russia’s Urals export blend.
- Trump
Cheaper oil can translate into lower fuel prices. Trump likes to use the price of gasoline as an economic barometer and during last year’s election pledged to bring it below $2 a gallon.
Just over 10 months into his second term, the national average price of gasoline had dropped by about 12 cents, although had yet to fall beneath $3 a gallon, a level last seen in 2021. Further reductions in fuel prices could be limited by outages at key oil refineries in Asia and Africa, as well as permanent closures across Europe and the US.
Lower oil prices come with a catch for Trump. If they decline too much, crude extraction could become uneconomical in the US, undermining the president’s “drill, baby, drill” agenda and squeezing his political supporters that rely on the oil industry.
Cheaper oil can translate into lower fuel prices. Trump likes to use the price of gasoline as an economic barometer and during last year’s election pledged to bring it below $2 a gallon.
Just over 10 months into his second term, the national average price of gasoline had dropped by about 12 cents, although had yet to fall beneath $3 a gallon, a level last seen in 2021. Further reductions in fuel prices could be limited by outages at key oil refineries in Asia and Africa, as well as permanent closures across Europe and the US.
Lower oil prices come with a catch for Trump. If they decline too much, crude extraction could become uneconomical in the US, undermining the president’s “drill, baby, drill” agenda and squeezing his political supporters that rely on the oil industry.
- Oil refiners
Cheaper crude can boost the margins that refiners make from turning oil into products such as gasoline, diesel and jet fuel. In mid-November, US refiners’ margins hit their highest seasonal level since 2022.
As global refining capacity is relatively constrained, this limits how much extra oil can be processed and means refined product prices are likely to fall less steeply than for crude. Lower oil prices are therefore more beneficial for countries that import and refine crude themselves, rather than relying on inflows of refined products.
- Oil traders
In the run-up to the oil surplus, the “put skew” for the US oil benchmark West Texas Intermediate — a measure of how much more traders are willing to pay for bearish put options over bullish calls — reached its highest level in a month. That’s a sign speculators are geared up for a price drop.
Meanwhile, just before the US blacklisted Russian oil giants Rosneft PJSC and Lukoil PJSC in October, money managers were the least bullish on US crude on record, according to the most up-to-date investor positioning data, which was delayed by the government shutdown.
As futures prices finally reflect the somber outlook for the market, many investors see this as vindication of their longstanding bearish view. They point to two things as proof they’ve been on the right side of the trade all along: total US crude stockpiles (excluding the Strategic Petroleum Reserve) climbed to their highest level in five months in November, while the volume of crude aboard tankers at sea continues to hit fresh records, suggesting supply is outstripping demand.
- US strategic oil reserve
Low oil prices offer an opportunity for the US to replenish its store of emergency crude, which was only around 60% full as of mid-November. The Strategic Petroleum Reserve remains diminished after the Biden administration released supply into the market to try to tame the gasoline price spike that followed Russia’s full-scale invasion of Ukraine.
Trump vowed during his inaugural address to fill the SPR “right to the top.” Taking advantage of low oil prices, the Energy Department awarded contracts worth almost $56 million in November to procure 900,000 barrels for this stockpile.
However, as part of Trump’s sweeping tax-and-spending law passed over the summer, Congress only appropriated $171 million for oil purchases for the SPR between 2025 and 2029 — a limit the government could hit very quickly. That sum equates to less than 3 million barrels at current prices, which is a far cry from the roughly 300 million barrels needed to bring the SPR to full capacity.
Who are the losers when there’s a global excess of oil?
Cheaper crude can boost the margins that refiners make from turning oil into products such as gasoline, diesel and jet fuel. In mid-November, US refiners’ margins hit their highest seasonal level since 2022.
As global refining capacity is relatively constrained, this limits how much extra oil can be processed and means refined product prices are likely to fall less steeply than for crude. Lower oil prices are therefore more beneficial for countries that import and refine crude themselves, rather than relying on inflows of refined products.
- Oil traders
In the run-up to the oil surplus, the “put skew” for the US oil benchmark West Texas Intermediate — a measure of how much more traders are willing to pay for bearish put options over bullish calls — reached its highest level in a month. That’s a sign speculators are geared up for a price drop.
Meanwhile, just before the US blacklisted Russian oil giants Rosneft PJSC and Lukoil PJSC in October, money managers were the least bullish on US crude on record, according to the most up-to-date investor positioning data, which was delayed by the government shutdown.
As futures prices finally reflect the somber outlook for the market, many investors see this as vindication of their longstanding bearish view. They point to two things as proof they’ve been on the right side of the trade all along: total US crude stockpiles (excluding the Strategic Petroleum Reserve) climbed to their highest level in five months in November, while the volume of crude aboard tankers at sea continues to hit fresh records, suggesting supply is outstripping demand.
- US strategic oil reserve
Low oil prices offer an opportunity for the US to replenish its store of emergency crude, which was only around 60% full as of mid-November. The Strategic Petroleum Reserve remains diminished after the Biden administration released supply into the market to try to tame the gasoline price spike that followed Russia’s full-scale invasion of Ukraine.
Trump vowed during his inaugural address to fill the SPR “right to the top.” Taking advantage of low oil prices, the Energy Department awarded contracts worth almost $56 million in November to procure 900,000 barrels for this stockpile.
However, as part of Trump’s sweeping tax-and-spending law passed over the summer, Congress only appropriated $171 million for oil purchases for the SPR between 2025 and 2029 — a limit the government could hit very quickly. That sum equates to less than 3 million barrels at current prices, which is a far cry from the roughly 300 million barrels needed to bring the SPR to full capacity.
Who are the losers when there’s a global excess of oil?
- Petrostates
For fossil-fuel exporters whose economies are heavily dependent on the oil industry, subdued prices could weigh on their revenue and put pressure on their fiscal budgets.
Saudi Arabia, the world’s second-largest oil producer after the US, is seeking to diversify its economy through the Vision 2030 program. However, the massive investments being made in mega construction projects, such as the flagship Neom development, as well as other initiatives to build Red Sea tourism resorts, electric-vehicle factories and data centers, have arguably left it even more dependent on oil revenue.
While the kingdom has been rejigging its mega-project spending — delaying and scaling back some developments and accelerating others — it’s still expecting a national budget shortfall for the next few years. Bloomberg Economics estimated in November that the Saudi government needs an oil price of $98 a barrel to balance its budget and $115 when including domestic spending by its sovereign wealth fund, the Public Investment Fund. That’s well above this year’s average of $69 a barrel for Brent, the global benchmark, through the start of December.
For fossil-fuel exporters whose economies are heavily dependent on the oil industry, subdued prices could weigh on their revenue and put pressure on their fiscal budgets.
Saudi Arabia, the world’s second-largest oil producer after the US, is seeking to diversify its economy through the Vision 2030 program. However, the massive investments being made in mega construction projects, such as the flagship Neom development, as well as other initiatives to build Red Sea tourism resorts, electric-vehicle factories and data centers, have arguably left it even more dependent on oil revenue.
While the kingdom has been rejigging its mega-project spending — delaying and scaling back some developments and accelerating others — it’s still expecting a national budget shortfall for the next few years. Bloomberg Economics estimated in November that the Saudi government needs an oil price of $98 a barrel to balance its budget and $115 when including domestic spending by its sovereign wealth fund, the Public Investment Fund. That’s well above this year’s average of $69 a barrel for Brent, the global benchmark, through the start of December.
- Russia
Western sanctions have made Russian oil exporters heavily dependent on buyers in China and India, who have demanded discounts to keep importing this seaborne crude. In the absence of a peace deal to end the war in Ukraine, the new US sanctions and an oversupplied global market could force Russian producers to cut their prices even further.
As the US ban on dealings with Rosneft and Lukoil started to come into force in November, Russia’s flagship Urals blend was more than $20 a barrel cheaper than Brent, according to data from Argus Media. While that gap is significantly smaller than in the earlier years of the war in Ukraine, it’s still markedly wider than the historical discount of $2 to $4.
Taxes from Russia’s oil and gas industry account for about a quarter of the federal budget. Even before the new sanctions were announced, the government expected tax revenue from the sector this year to drop to the lowest level since 2020 due to the global crude price slump and a stronger ruble.
Russian authorities have downplayed the potential economic impact of the fresh US restrictions, saying the country will adapt quickly and find workarounds, allowing discounts on its oil to narrow within a couple of months. In the meantime, the volume of Russian oil aboard tankers has increased, suggesting that buyers are, at least in the short term, less willing to take delivery of these cargoes.
Western sanctions have made Russian oil exporters heavily dependent on buyers in China and India, who have demanded discounts to keep importing this seaborne crude. In the absence of a peace deal to end the war in Ukraine, the new US sanctions and an oversupplied global market could force Russian producers to cut their prices even further.
As the US ban on dealings with Rosneft and Lukoil started to come into force in November, Russia’s flagship Urals blend was more than $20 a barrel cheaper than Brent, according to data from Argus Media. While that gap is significantly smaller than in the earlier years of the war in Ukraine, it’s still markedly wider than the historical discount of $2 to $4.
Taxes from Russia’s oil and gas industry account for about a quarter of the federal budget. Even before the new sanctions were announced, the government expected tax revenue from the sector this year to drop to the lowest level since 2020 due to the global crude price slump and a stronger ruble.
Russian authorities have downplayed the potential economic impact of the fresh US restrictions, saying the country will adapt quickly and find workarounds, allowing discounts on its oil to narrow within a couple of months. In the meantime, the volume of Russian oil aboard tankers has increased, suggesting that buyers are, at least in the short term, less willing to take delivery of these cargoes.
- US shale industry
The US shale industry has been the world’s engine for oil-production growth in recent years but the momentum is now slowing. Many producers need an oil price of around $65 a barrel to turn a profit and have been looking to increase their output at less than 5% annually as crude prices hover near the break-even threshold.
A global oil surplus that knocks prices down to about $50 a barrel would prompt US shale producers to idle their drilling rigs and park their frack fleets as operations become economically unviable.
Their output is holding up for now, but more than 10% of oil-focused rigs have been taken offline since the start of the year, according to data from Baker Hughes Co. The decline will likely accelerate in the coming months if oil prices stay low, which could put pressure on oilfield services companies.
Sustained lower oil prices could prompt more consolidation in the US shale patch. Mid-sized producers could scoop up struggling smaller players to add scale as some of the best drilling spots have already been tapped.
- Big Oil
Low oil prices are bad for producers, although integrated oil majors with refining and trading businesses are less vulnerable than pure upstream companies that focus only on extraction.
The profits of the five Western oil supermajors — Exxon Mobil Corp., Chevron Corp., Shell Plc, TotalEnergies SE and BP Plc — have more than halved from three years ago and are poised to decline further. Still, the current oil price downturn isn’t as bad as in 2014 or 2020. Big Oil executives saw this decline coming and announced plans to cut share buybacks and costs earlier this year.
Some executives are even talking up possible opportunities. Exxon, for example, is on the lookout for potential acquisitions. Meanwhile, Occidental Petroleum Corp. Chief Executive Officer Vicki Hollub said in mid-October that low prices today will deter the investments needed for the future and tighten supply, making her “very bullish” on a price rebound from 2027.
Low oil prices are bad for producers, although integrated oil majors with refining and trading businesses are less vulnerable than pure upstream companies that focus only on extraction.
The profits of the five Western oil supermajors — Exxon Mobil Corp., Chevron Corp., Shell Plc, TotalEnergies SE and BP Plc — have more than halved from three years ago and are poised to decline further. Still, the current oil price downturn isn’t as bad as in 2014 or 2020. Big Oil executives saw this decline coming and announced plans to cut share buybacks and costs earlier this year.
Some executives are even talking up possible opportunities. Exxon, for example, is on the lookout for potential acquisitions. Meanwhile, Occidental Petroleum Corp. Chief Executive Officer Vicki Hollub said in mid-October that low prices today will deter the investments needed for the future and tighten supply, making her “very bullish” on a price rebound from 2027.
- The energy transition
Road transport is the biggest source of oil demand. Consumers are used to a certain amount of volatility in fuel prices, but a prolonged reduction could make them less inclined to switch to an electric vehicle. That said, in areas where there are high taxes on diesel and gasoline, such as Europe and California, there could be limited relief at the pump from lower oil prices.
The buildout of clean power sources is less likely to be impacted by a crude surplus. In most regions, other than places such as the Middle East, renewables are usually competing against coal and natural gas for utility-scale electricity generation rather than oil.
Saudis Tout ‘Vibrant’ IPO Pipeline Ahead of Market Reforms - Bloomberg
Saudis Tout ‘Vibrant’ IPO Pipeline Ahead of Market Reforms - Bloomberg
Saudi Arabia has dozens of companies seeking approval to list shares locally as the kingdom presses ahead with reforms to deepen its financial markets and draw more foreign investors.
“We have listed more than 40 since the beginning of this year and we have the same number that have already applied,” Mohammed Al-Rumaih, chief executive officer of the Saudi stock exchange, said at the FII Priority Asia Summit in Tokyo.
The tally of IPO hopefuls climbs to as many as 100 when adding local firms in the process of seeking financial advisers, he added, describing the pipeline as “very vibrant.”
Saudi Arabia has seen nearly $4.5 billion raised through IPOs on both its main market and Nomu parallel market in 2025, its strongest year since 2022, according to data compiled by Bloomberg. The biggest deals included low-cost airline Flynas Co., which has slid since its June debut, and Mecca developer Umm Al Qura for Development & Construction Co., which has been one of the top-performing listings in the region this year.
Al-Rumaih confirmed the kingdom is pressing ahead with reforms to open its equity market to all foreign investors, in addition to taking steps to lift foreign ownership limits. Analysts have said such adjustments would attract more funds to the Saudi market and spark foreign interest in mergers and acquisitions of companies from the kingdom.
Saudi Arabia has been accelerating the pace of market reforms in the past six months. The need for foreign inflows has become increasingly pronounced as high spending and lower oil revenues drive the government into deeper budget deficits, threatening to slow investment in the economy.
Regulators are also looking to revive the stock market. The Saudi benchmark Tadawul All Share Index is down about 12% so far in 2025, on course for its worst annual performance since 2015. That has slowed the pace of share sales by large companies, though a clutch of smaller firms are still braving the subdued market.
Car-rental operator Cherry Trading started trading on the Saudi exchange on Monday, closing nearly 6% below its IPO price in its first session. Almasar Alshamil Education Co. will also debut this week. Saudi Arabia’s Public Investment Fund has slowed work on IPOs in the wake of the falling index and weak trading debuts, Bloomberg reported previously.
Outside of equities, Saudi Arabia’s stock exchange operator and markets regulator are focusing on developing the debt and derivatives markets, Al-Rumaih said.
Debt is becoming increasingly important as companies look to the private sector to help drive development, while the latter will undergo a “major revamp” in the first quarter of 2026, he added, without offering further details.
Saudi Arabia has dozens of companies seeking approval to list shares locally as the kingdom presses ahead with reforms to deepen its financial markets and draw more foreign investors.
“We have listed more than 40 since the beginning of this year and we have the same number that have already applied,” Mohammed Al-Rumaih, chief executive officer of the Saudi stock exchange, said at the FII Priority Asia Summit in Tokyo.
The tally of IPO hopefuls climbs to as many as 100 when adding local firms in the process of seeking financial advisers, he added, describing the pipeline as “very vibrant.”
Saudi Arabia has seen nearly $4.5 billion raised through IPOs on both its main market and Nomu parallel market in 2025, its strongest year since 2022, according to data compiled by Bloomberg. The biggest deals included low-cost airline Flynas Co., which has slid since its June debut, and Mecca developer Umm Al Qura for Development & Construction Co., which has been one of the top-performing listings in the region this year.
Al-Rumaih confirmed the kingdom is pressing ahead with reforms to open its equity market to all foreign investors, in addition to taking steps to lift foreign ownership limits. Analysts have said such adjustments would attract more funds to the Saudi market and spark foreign interest in mergers and acquisitions of companies from the kingdom.
Saudi Arabia has been accelerating the pace of market reforms in the past six months. The need for foreign inflows has become increasingly pronounced as high spending and lower oil revenues drive the government into deeper budget deficits, threatening to slow investment in the economy.
Regulators are also looking to revive the stock market. The Saudi benchmark Tadawul All Share Index is down about 12% so far in 2025, on course for its worst annual performance since 2015. That has slowed the pace of share sales by large companies, though a clutch of smaller firms are still braving the subdued market.
Car-rental operator Cherry Trading started trading on the Saudi exchange on Monday, closing nearly 6% below its IPO price in its first session. Almasar Alshamil Education Co. will also debut this week. Saudi Arabia’s Public Investment Fund has slowed work on IPOs in the wake of the falling index and weak trading debuts, Bloomberg reported previously.
Outside of equities, Saudi Arabia’s stock exchange operator and markets regulator are focusing on developing the debt and derivatives markets, Al-Rumaih said.
Debt is becoming increasingly important as companies look to the private sector to help drive development, while the latter will undergo a “major revamp” in the first quarter of 2026, he added, without offering further details.
#SaudiArabia launches bidding for 13,000 sq km mineral exploration licences | Reuters
Saudi Arabia launches bidding for 13,000 sq km mineral exploration licences | Reuters
Saudi Arabia opened a bidding round for three mineral exploration licences across a 13,000 square km area, the Industry and Mineral Resources Ministry said in a statement on Monday, as the kingdom accelerates efforts to tap deposits estimated at 9.4 trillion riyals ($2.50 trillion).
The licences cover newly defined belts in the regions of Madinah, Makkah, Riyadh, Qassim and Hail, including areas prospective for gold, silver, copper, zinc and lead.
Saudi Arabia opened a bidding round for three mineral exploration licences across a 13,000 square km area, the Industry and Mineral Resources Ministry said in a statement on Monday, as the kingdom accelerates efforts to tap deposits estimated at 9.4 trillion riyals ($2.50 trillion).
The licences cover newly defined belts in the regions of Madinah, Makkah, Riyadh, Qassim and Hail, including areas prospective for gold, silver, copper, zinc and lead.
Gulf markets mixed on US rate cut hopes | Reuters #AbuDhabi #Dubai closed for National Day holiday
Gulf markets mixed on US rate cut hopes | Reuters
Gulf stock markets closed mixed on Monday, as optimism rose over a potential U.S. Federal Reserve rate cut.
Dovish comments from Federal Reserve Governor Christopher Waller and New York Fed President John Williams, combined with weaker-than-expected U.S. economic data, have solidified market expectations for a December rate cut.
CME FedWatch Tool currently prices in an 87% probability of easing from 30% earlier in November.
Core U.S. Personal Consumption Expenditures figures on Friday could provide further cues on the Fed's monetary policy path.
Shifts in U.S. monetary policy have a significant impact on Gulf markets, where most currencies are pegged to the dollar.
In Qatar, the index (.QSI), opens new tab edged 0.1%, helped by a 1.4% rise in the Gulf's biggest lender Qatar National Bank (QNBK.QA), opens new tab.
Saudi Arabia's benchmark index (.TASI), opens new tab dropped 0.5% on a 0.5% fall in Al Rajhi Bank (1120.SE), opens new tab and a 0.9% slide in oil major Saudi Aramco (2222.SE), opens new tab.
Elsewhere, Cherry Trading (4265.SE), opens new tab plunged 5.7% to 26.5 riyals in its debut trade.
"Risk-off" sentiment continues even though the non-oil economy remains backed by solid fundamentals and a positive growth outlook. Neither the rebound in oil prices nor the anticipated December Fed rate cut was enough to lift sentiment, said Daniel Takieddine Co-founder and CEO, Sky Links Capital Group.
"Additionally, liquidity remains constrained due to the high volume of initial public offerings introduced on the market this year."
Oil prices - a catalyst for the Gulf's financial markets - rose 1% as the Caspian Pipeline Consortium halted exports after a major drone attack and U.S.-Venezuela tensions raised concerns about supply, while OPEC+ agreed to leave oil output levels unchanged for the first quarter of 2026.
Brent crude futures advanced 71 cents, or 1.14%, to $63.09 a barrel at 1143 GMT. The contract settled down on Friday for the fourth consecutive month, its longest losing streak since 2023, as expectations for higher global supply weighed on prices.
Crude prices, even after the recent rebound, are still hovering near multi-month lows, putting pressure on the fiscal balances of oil-dependent Gulf nations through lower revenues.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab lost 0.2%, hit by a 2.1% drop in Telecom Egypt (ETEL.CA), opens new tab.
Gulf stock markets closed mixed on Monday, as optimism rose over a potential U.S. Federal Reserve rate cut.
Dovish comments from Federal Reserve Governor Christopher Waller and New York Fed President John Williams, combined with weaker-than-expected U.S. economic data, have solidified market expectations for a December rate cut.
CME FedWatch Tool currently prices in an 87% probability of easing from 30% earlier in November.
Core U.S. Personal Consumption Expenditures figures on Friday could provide further cues on the Fed's monetary policy path.
Shifts in U.S. monetary policy have a significant impact on Gulf markets, where most currencies are pegged to the dollar.
In Qatar, the index (.QSI), opens new tab edged 0.1%, helped by a 1.4% rise in the Gulf's biggest lender Qatar National Bank (QNBK.QA), opens new tab.
Saudi Arabia's benchmark index (.TASI), opens new tab dropped 0.5% on a 0.5% fall in Al Rajhi Bank (1120.SE), opens new tab and a 0.9% slide in oil major Saudi Aramco (2222.SE), opens new tab.
Elsewhere, Cherry Trading (4265.SE), opens new tab plunged 5.7% to 26.5 riyals in its debut trade.
"Risk-off" sentiment continues even though the non-oil economy remains backed by solid fundamentals and a positive growth outlook. Neither the rebound in oil prices nor the anticipated December Fed rate cut was enough to lift sentiment, said Daniel Takieddine Co-founder and CEO, Sky Links Capital Group.
"Additionally, liquidity remains constrained due to the high volume of initial public offerings introduced on the market this year."
Oil prices - a catalyst for the Gulf's financial markets - rose 1% as the Caspian Pipeline Consortium halted exports after a major drone attack and U.S.-Venezuela tensions raised concerns about supply, while OPEC+ agreed to leave oil output levels unchanged for the first quarter of 2026.
Brent crude futures advanced 71 cents, or 1.14%, to $63.09 a barrel at 1143 GMT. The contract settled down on Friday for the fourth consecutive month, its longest losing streak since 2023, as expectations for higher global supply weighed on prices.
Crude prices, even after the recent rebound, are still hovering near multi-month lows, putting pressure on the fiscal balances of oil-dependent Gulf nations through lower revenues.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab lost 0.2%, hit by a 2.1% drop in Telecom Egypt (ETEL.CA), opens new tab.
#Saudi Wealth Fund Closes In on Investing in Leonardo Business - Bloomberg
Saudi Wealth Fund Closes In on Investing in Leonardo Business - Bloomberg
Saudi Arabia’s sovereign wealth fund is in advanced talks to invest in Leonardo SpA’s aerostructures unit following months of negotiations, according to people familiar with the matter.
Under the deal being discussed, the two parties would create a global unit for aerostructure works, said the people, asking not to be identified discussing a private matter. The talks between the Italian defense contractor and the kingdom’s Public Investment Fund, reported earlier this year by Bloomberg, are largely complete, they said.
A planned meeting between Italian Prime Minister Giorgia Meloni and Saudi Crown Prince Mohammed bin Salman at a Gulf summit in Bahrain could be pivotal in securing final government approvals, the people said.
Representatives for Leonardo and the Italian government, which owns 30% of the company, declined to comment, while officials at the Saudi fund didn’t immediately respond to a request for comment outside of regular business hours in the country.
Working with Leonardo would give the Gulf state greater exposure to a key global manufacturing industry as bin Salman seeks to diversify Saudi Arabia’s economy from oil.
For Leonardo, a deal would bring financial support for a division that’s been losing money. It supplies major structural parts for Boeing Co.’s 787 Dreamliner, but suffered losses partly tied to a production slowdown in the US. That has affected activity at Leonardo’s plants, though Boeing is now ramping up output again of the widebody jet.
Leonardo’s aerostructures division employs about 4,000 people in four Italian plants. It had 2024 revenue of €746 million ($784 million).
One possible outcome is for the Italian aerospace firm to build a civil aviation manufacturing plant in Saudi Arabia, Bloomberg reported in February. The Gulf state is also keen to participate in a next-generation fighter jet, a costly project on which the Italian company is working with partners in the UK and Japan.
Italy and Saudi Arabia have recently deepened economic ties. A meeting between the two leaders in January paved the way for deals valued at about $10 billion.
Saudi Arabia’s sovereign wealth fund is in advanced talks to invest in Leonardo SpA’s aerostructures unit following months of negotiations, according to people familiar with the matter.
Under the deal being discussed, the two parties would create a global unit for aerostructure works, said the people, asking not to be identified discussing a private matter. The talks between the Italian defense contractor and the kingdom’s Public Investment Fund, reported earlier this year by Bloomberg, are largely complete, they said.
A planned meeting between Italian Prime Minister Giorgia Meloni and Saudi Crown Prince Mohammed bin Salman at a Gulf summit in Bahrain could be pivotal in securing final government approvals, the people said.
Representatives for Leonardo and the Italian government, which owns 30% of the company, declined to comment, while officials at the Saudi fund didn’t immediately respond to a request for comment outside of regular business hours in the country.
Working with Leonardo would give the Gulf state greater exposure to a key global manufacturing industry as bin Salman seeks to diversify Saudi Arabia’s economy from oil.
For Leonardo, a deal would bring financial support for a division that’s been losing money. It supplies major structural parts for Boeing Co.’s 787 Dreamliner, but suffered losses partly tied to a production slowdown in the US. That has affected activity at Leonardo’s plants, though Boeing is now ramping up output again of the widebody jet.
Leonardo’s aerostructures division employs about 4,000 people in four Italian plants. It had 2024 revenue of €746 million ($784 million).
One possible outcome is for the Italian aerospace firm to build a civil aviation manufacturing plant in Saudi Arabia, Bloomberg reported in February. The Gulf state is also keen to participate in a next-generation fighter jet, a costly project on which the Italian company is working with partners in the UK and Japan.
Italy and Saudi Arabia have recently deepened economic ties. A meeting between the two leaders in January paved the way for deals valued at about $10 billion.
Sunday, 30 November 2025
OPEC+ Sticks With Plans to Pause Output Hikes in Early 2026 - Bloomberg
OPEC+ Sticks With Plans to Pause Output Hikes in Early 2026 - Bloomberg
OPEC+ will stick with plans to pause production increases during the first quarter, amid growing signs of a surplus in global oil markets.
Key members led by Saudi Arabia confirmed the three-month supply pause, first announced at the start of this month, following a set of video conferences on Sunday. They reiterated in a statement that the decision reflected expectations for weaker seasonal market conditions.
The Organization of the Petroleum Exporting Countries and allies also approved a mechanism for its review of members’ individual production capacities, a sensitive process that will help set quotas in 2027. They picked Dallas-based consultant DeGolyer and MacNaughton Corp. for most assessments.
While the pause on output hikes indicates some caution by the alliance after it rapidly revived oil production earlier this year, it still leaves world markets on track for a significant excess in early 2026, which is likely to put further pressure on prices.
“OPEC+ opted to hold fire and maintain its current strategy,” said Jorge Leon, an analyst at consultant Rystad Energy AS. “The message from the group was clear: stability outweighs ambition at a time when the market outlook is deteriorating rapidly.”
Oil futures have declined 15% this year to trade near $63 a barrel in London, as booming supply from the Americas in tandem with the OPEC+ hike exceeds demand growth. The International Energy Agency in Paris predicts a record glut in 2026, while Goldman Sachs Group Inc. and JPMorgan Chase & Co. see futures heading lower.
Freezing production for three months buys OPEC+ some time while it assesses heightened geopolitical risks to supplies from members, as well as renewed efforts to end the war in Ukraine.
President Donald Trump ratcheted up tensions with Venezuela on Saturday by warning that airlines should consider the airspace above and around the country to be closed, as his administration continues to crack down on drug trafficking.
Crude’s pullback comes against the backdrop of Trump’s repeated calls for lower fuel prices amid voter concerns about the cost of living. The president warmly greeted Saudi Crown Prince Mohammed bin Salman at the White House earlier this month, with his administration approving the kingdom’s purchase of F-35 fighter jets and artificial intelligence chips.
Eight key OPEC+ nations stunned oil traders in April when they began to accelerate the return of production halted since 2023. Officials have described the move as Riyadh’s bid to reclaim market share ceded to rivals like US shale drillers, and punish fellow OPEC+ members who had flouted their quotas.
While the Saudis have succeeded in clawing back some market share, the ensuing price slide has challenged the kingdom financially, widening its budget deficit and forcing the scale-back of some flagship economic projects. It’s also straining producers outside OPEC+ like US shale drillers.
OPEC+ has revived about 70% of two layers of production halted in 2023 — at least on paper — leaving about 1.1 million barrels a day of these still to return. The organization left in place another layer of cutbacks for the wider 22-nation group, amounting to roughly 2 million barrels a day, until the end of 2026.
Still, monthly production increases by the sub-group have been smaller than the advertised volumes as some countries compensate for earlier overproduction, and others physically struggle to increase.
Such difficulties are at the heart of the group’s long-term review of members’ production capacity, first announced in May.
Some countries are seeking to have new capacity recognized and others struggle to pump as much as they’re allowed to. Clarifying their full capacity would help align quotas more closely with reality — and make any future cutbacks more credible.
OPEC+ will stick with plans to pause production increases during the first quarter, amid growing signs of a surplus in global oil markets.
Key members led by Saudi Arabia confirmed the three-month supply pause, first announced at the start of this month, following a set of video conferences on Sunday. They reiterated in a statement that the decision reflected expectations for weaker seasonal market conditions.
The Organization of the Petroleum Exporting Countries and allies also approved a mechanism for its review of members’ individual production capacities, a sensitive process that will help set quotas in 2027. They picked Dallas-based consultant DeGolyer and MacNaughton Corp. for most assessments.
While the pause on output hikes indicates some caution by the alliance after it rapidly revived oil production earlier this year, it still leaves world markets on track for a significant excess in early 2026, which is likely to put further pressure on prices.
“OPEC+ opted to hold fire and maintain its current strategy,” said Jorge Leon, an analyst at consultant Rystad Energy AS. “The message from the group was clear: stability outweighs ambition at a time when the market outlook is deteriorating rapidly.”
Oil futures have declined 15% this year to trade near $63 a barrel in London, as booming supply from the Americas in tandem with the OPEC+ hike exceeds demand growth. The International Energy Agency in Paris predicts a record glut in 2026, while Goldman Sachs Group Inc. and JPMorgan Chase & Co. see futures heading lower.
Freezing production for three months buys OPEC+ some time while it assesses heightened geopolitical risks to supplies from members, as well as renewed efforts to end the war in Ukraine.
President Donald Trump ratcheted up tensions with Venezuela on Saturday by warning that airlines should consider the airspace above and around the country to be closed, as his administration continues to crack down on drug trafficking.
Crude’s pullback comes against the backdrop of Trump’s repeated calls for lower fuel prices amid voter concerns about the cost of living. The president warmly greeted Saudi Crown Prince Mohammed bin Salman at the White House earlier this month, with his administration approving the kingdom’s purchase of F-35 fighter jets and artificial intelligence chips.
Eight key OPEC+ nations stunned oil traders in April when they began to accelerate the return of production halted since 2023. Officials have described the move as Riyadh’s bid to reclaim market share ceded to rivals like US shale drillers, and punish fellow OPEC+ members who had flouted their quotas.
While the Saudis have succeeded in clawing back some market share, the ensuing price slide has challenged the kingdom financially, widening its budget deficit and forcing the scale-back of some flagship economic projects. It’s also straining producers outside OPEC+ like US shale drillers.
OPEC+ has revived about 70% of two layers of production halted in 2023 — at least on paper — leaving about 1.1 million barrels a day of these still to return. The organization left in place another layer of cutbacks for the wider 22-nation group, amounting to roughly 2 million barrels a day, until the end of 2026.
Still, monthly production increases by the sub-group have been smaller than the advertised volumes as some countries compensate for earlier overproduction, and others physically struggle to increase.
Such difficulties are at the heart of the group’s long-term review of members’ production capacity, first announced in May.
Some countries are seeking to have new capacity recognized and others struggle to pump as much as they’re allowed to. Clarifying their full capacity would help align quotas more closely with reality — and make any future cutbacks more credible.
Gulf bourses mixed on weak oil prices, Fed easing hopes | Reuters
Gulf bourses mixed on weak oil prices, Fed easing hopes | Reuters
Stock markets in the Gulf ended mixed on Sunday following an easing in crude prices on Friday while anticipation of a U.S. Federal Reserve rate cut next month underpinned sentiment.
Crude futures fell marginally on Friday as investors considered oil's geopolitical risk premium amid drawn-out Russia-Ukraine peace talks.
OPEC+ will likely leave oil output levels unchanged at its meetings on Sunday, four OPEC+ sources said as the producer group slows down its push to regain market share amid fears of a .
Saudi Arabia's benchmark share index (.TASI), opens new tab slipped 0.5%, with Saudi Arabian Mining Company (1211.SE), opens new tab losing 2.2% and oil giant Saudi Aramco (2222.SE), opens new tab down 0.4%.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab advanced 1.7%, with Talaat Moustafa Group Holding (TMGH.CA), opens new tab jumping 6.2%.
Stock markets in the Gulf ended mixed on Sunday following an easing in crude prices on Friday while anticipation of a U.S. Federal Reserve rate cut next month underpinned sentiment.
Crude futures fell marginally on Friday as investors considered oil's geopolitical risk premium amid drawn-out Russia-Ukraine peace talks.
OPEC+ will likely leave oil output levels unchanged at its meetings on Sunday, four OPEC+ sources said as the producer group slows down its push to regain market share amid fears of a .
Saudi Arabia's benchmark share index (.TASI), opens new tab slipped 0.5%, with Saudi Arabian Mining Company (1211.SE), opens new tab losing 2.2% and oil giant Saudi Aramco (2222.SE), opens new tab down 0.4%.
In Qatar, the main share index (.QSI), opens new tab eased 0.3%, with Qatar National Bank (QNBK.QA), opens new tab, the Gulf's biggest lender by assets, down 1.1%.
Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab advanced 1.7%, with Talaat Moustafa Group Holding (TMGH.CA), opens new tab jumping 6.2%.
Friday, 28 November 2025
#UAE stock markets edge higher on rising oil prices, Fed rate cut hopes | Reuters
UAE stock markets edge higher on rising oil prices, Fed rate cut hopes | Reuters
Stock markets in the United Arab Emirates edged higher on Friday, buoyed by rising oil prices and growing expectations of a U.S. Federal Reserve rate cut next month.
While the Fed has maintained a cautious tone on further monetary easing amid a dearth of economic data caused by the prolonged U.S. government shutdown, several influential policymakers have signalled openness to additional cuts.
Recent comments from New York Fed President John Williams and Governor Christopher Waller, suggesting a December move may be warranted, have strengthened dovish market bets.
Dubai's benchmark index (.DFMGI), opens new tab rose 0.4% to 5,837, extending gains from the previous session, lifted by real estate and utilities stocks.
Blue-chip developer Emaar Properties (EMAR.DU), opens new tab added 0.8%, while its unit Emaar Development (EMAARDEV.DU), opens new tab advanced 2.1%. Dubai Electricity and Water Authority (DEWAA.DU), opens new tab, the state-owned utility, climbed 1.9%.
Abu Dhabi's benchmark index (.FTFADGI), opens new tab gained 0.4% to 9,747, snapping a five-session losing streak. First Abu Dhabi Bank (FAB.AD), opens new tab edged up 0.1%, while Abu Dhabi Commercial Bank (ADCB.AD), opens new tab jumped 4.8%, marking its sharpest intraday gain in over two months.
![](data:image/svg+xml,%3Csvg xmlns="http://www.w3.org/2000/svg" width="16" height="16" fill="%2331bad2" viewBox="0 0 16 16"%3E%3Cpath d="M8.982 1.566a1.13 1.13 0 0 0-1.96 0L.165 13.233c-.457.778.091 1.767.98 1.767h13.713c.889 0 1.438-.99.98-1.767L8.982 1.566zM8 5c.535 0 .954.462.9.995l-.35 3.507a.552.552 0 0 1-1.1 0L7.1 5.995A.905.905 0 0 1 8 5zm.002 6a1 1 0 1 1 0 2 1 1 0 0 1 0-2z"/%3E%3C/svg%3E)
For November, Dubai's index fell 3.7%, its steepest monthly decline this year after March, while Abu Dhabi's benchmark shed 3.5%, according to LSEG data.
Stock markets in the United Arab Emirates edged higher on Friday, buoyed by rising oil prices and growing expectations of a U.S. Federal Reserve rate cut next month.
While the Fed has maintained a cautious tone on further monetary easing amid a dearth of economic data caused by the prolonged U.S. government shutdown, several influential policymakers have signalled openness to additional cuts.
Recent comments from New York Fed President John Williams and Governor Christopher Waller, suggesting a December move may be warranted, have strengthened dovish market bets.
Dubai's benchmark index (.DFMGI), opens new tab rose 0.4% to 5,837, extending gains from the previous session, lifted by real estate and utilities stocks.
Blue-chip developer Emaar Properties (EMAR.DU), opens new tab added 0.8%, while its unit Emaar Development (EMAARDEV.DU), opens new tab advanced 2.1%. Dubai Electricity and Water Authority (DEWAA.DU), opens new tab, the state-owned utility, climbed 1.9%.
Abu Dhabi's benchmark index (.FTFADGI), opens new tab gained 0.4% to 9,747, snapping a five-session losing streak. First Abu Dhabi Bank (FAB.AD), opens new tab edged up 0.1%, while Abu Dhabi Commercial Bank (ADCB.AD), opens new tab jumped 4.8%, marking its sharpest intraday gain in over two months.
For November, Dubai's index fell 3.7%, its steepest monthly decline this year after March, while Abu Dhabi's benchmark shed 3.5%, according to LSEG data.
OPEC+ Needs to Clean Up Its Own Oil Numbers - Bloomberg
OPEC+ Needs to Clean Up Its Own Oil Numbers - Bloomberg
Pity, OPEC doesn’t have an in-house bard anymore; still, its members engage in the same deception. For several quarters, rather than face the problem, the cartel has obfuscated. If it has any hope of regaining control of the market’s narrative — let alone of the market itself — it needs to clean up its act. Fortunately, there are signs inside the group it’s now recognizing the urgency of the problem.
OPEC+, as the group is known after it formed a loose coalition with Russia, Kazakhstan and several others, typically acts when it feels the heat. And, oh boy, it’s hot: On a monthly average basis, Brent will end November at $63.50 a barrel, the lowest month in four and a half years. Further falls are likely in 2026, particularly if Ukraine and Russia seal a peace deal
While OPEC+ may need to cut production next year, it first needs to restore its own credibility.
The first step is about how much each of its members pump. Never in recent history has the oil market has been skeptical of self-reported production levels. Doubts are also rife about the estimates compiled by a group of independent data providers called the “OPEC secondary sources,” which are also published monthly by the cartel. The data providers came under huge pressure from Saudi Arabia earlier this year to change their methodology, which briefly showed that Riyadh was pumping more than it was.
Likewise, the UAE officially pumps 3.3 million barrels a day; trust what traders and independent tanker trackers say, and it’s closer to — if not higher than — 4 million.
The problem is exacerbated by a quirk of how OPEC measures output. The group doesn’t count total oil production of its members, but a smaller segment of what’s technically called crude. Other liquids from oil wells, called condensates and natural gas liquids, are typically excluded. Unsurprisingly, OPEC nations have invested billions to use the loophole to bypass official production limits. Last year, OPEC+ pumped 40.9 million barrels of crude, which was subjected to quotas, plus another 8.5 million barrels a day of other liquids, which weren’t under any limits.
For next year, OPEC+ anticipates that its outside-the-quotas output will increase by 200,000 barrels a day to 8.8 million, further stressing an oversupplied market. And the trend will likely continue, as the Saudis and UAE prioritize non-crude oil liquids production.
The second step is to align actual production with quotas. OPEC+ nations typically cheat on their limits. Kazakhstan is a notorious violator, having pumped above its assigned level for all of 2025. Iraq and the United Arab Emirates are on it, too; so is Kuwait and even tiny Gabon.
To solve the cheating problem, OPEC has created another obfuscation mechanism, which it calls “compensation.” OPEC nations that overproduce are told to compensate for their misbehavior later, reducing production temporarily. Unsurprisingly, the compensation mechanism has become a parody of itself, with countries not only cheating on their quotas, but on their compensation promises too, triggering even further compensations, which trigger even more compensation-dodging.
What should OPEC do? First, start publishing accurate data that includes not only crude but other liquids. Better to acknowledge past “error,” even if that entails confessing that the group misled the market in the pas. Then, its members should adhere to whatever output level is agreed with a set of realistic production quotas.
The Sunday meeting will probably involve discussion of an output audit, which has been on the table since 2023. The latest efforts put a new audit in 2027 — too late to manage the impending surplus. That’s why there’s debate behind closed doors about fast-tracking the audit to 2026, if possible, by the first half or even the first quarter. There are, of course, complications beyond scheduling: Some members, notably Russia, Venezuela and Iran, object to the involvement of US companies because they are themselves under American sanctions.
Ideally, the quotas should cover every member, rather than a subset of nations. Currently, OPEC+ has a hodgepodge of production targets. The key one covers only eight nations. Another covers a few more countries. And Libya, Venezuela and Iran are largely excluded of targets. Rather than having multiple layers, OPEC+ should revert to what it did only five years ago, with a single layer.
The clock is ticking. Oil prices are melting down. For now, OPEC+ may wait to seek clarity about a Russia-Ukraine peace deal and the US gunboat diplomacy toward Venezuela. But its next move, perhaps when West Texas Intermediate crude approaches $50 a barrel, is likely an output cut. Back in the 1980s, Sheik al-Otaiba saw what was inevitably coming and what was needed, and put his oil thoughts into another poem:
On the eve of a contentious OPEC meeting in the 1980s, one of the cartel’s top officials penned a poem that caused quite a stir among his colleagues. As the group meets on Sunday facing the danger of an oil price crash in 2026, his verses remain as relevant and as controversial four decades later.
The furor provoked by Sheik Mana al-Otaiba, then oil minister of the United Arab Emirates by day and published poet by night1, wasn’t about the need to cut output. Rather, it was about his reference to “error and violation” — poetic license for the lies and cheating that plagued the group.“If you seek to retain stable prices
It will entail some great sacrifices
Lower further your production ceiling
And ban error and violation.”
Pity, OPEC doesn’t have an in-house bard anymore; still, its members engage in the same deception. For several quarters, rather than face the problem, the cartel has obfuscated. If it has any hope of regaining control of the market’s narrative — let alone of the market itself — it needs to clean up its act. Fortunately, there are signs inside the group it’s now recognizing the urgency of the problem.
OPEC+, as the group is known after it formed a loose coalition with Russia, Kazakhstan and several others, typically acts when it feels the heat. And, oh boy, it’s hot: On a monthly average basis, Brent will end November at $63.50 a barrel, the lowest month in four and a half years. Further falls are likely in 2026, particularly if Ukraine and Russia seal a peace deal
While OPEC+ may need to cut production next year, it first needs to restore its own credibility.
The first step is about how much each of its members pump. Never in recent history has the oil market has been skeptical of self-reported production levels. Doubts are also rife about the estimates compiled by a group of independent data providers called the “OPEC secondary sources,” which are also published monthly by the cartel. The data providers came under huge pressure from Saudi Arabia earlier this year to change their methodology, which briefly showed that Riyadh was pumping more than it was.
Likewise, the UAE officially pumps 3.3 million barrels a day; trust what traders and independent tanker trackers say, and it’s closer to — if not higher than — 4 million.
The problem is exacerbated by a quirk of how OPEC measures output. The group doesn’t count total oil production of its members, but a smaller segment of what’s technically called crude. Other liquids from oil wells, called condensates and natural gas liquids, are typically excluded. Unsurprisingly, OPEC nations have invested billions to use the loophole to bypass official production limits. Last year, OPEC+ pumped 40.9 million barrels of crude, which was subjected to quotas, plus another 8.5 million barrels a day of other liquids, which weren’t under any limits.
For next year, OPEC+ anticipates that its outside-the-quotas output will increase by 200,000 barrels a day to 8.8 million, further stressing an oversupplied market. And the trend will likely continue, as the Saudis and UAE prioritize non-crude oil liquids production.
The second step is to align actual production with quotas. OPEC+ nations typically cheat on their limits. Kazakhstan is a notorious violator, having pumped above its assigned level for all of 2025. Iraq and the United Arab Emirates are on it, too; so is Kuwait and even tiny Gabon.
To solve the cheating problem, OPEC has created another obfuscation mechanism, which it calls “compensation.” OPEC nations that overproduce are told to compensate for their misbehavior later, reducing production temporarily. Unsurprisingly, the compensation mechanism has become a parody of itself, with countries not only cheating on their quotas, but on their compensation promises too, triggering even further compensations, which trigger even more compensation-dodging.
What should OPEC do? First, start publishing accurate data that includes not only crude but other liquids. Better to acknowledge past “error,” even if that entails confessing that the group misled the market in the pas. Then, its members should adhere to whatever output level is agreed with a set of realistic production quotas.
The Sunday meeting will probably involve discussion of an output audit, which has been on the table since 2023. The latest efforts put a new audit in 2027 — too late to manage the impending surplus. That’s why there’s debate behind closed doors about fast-tracking the audit to 2026, if possible, by the first half or even the first quarter. There are, of course, complications beyond scheduling: Some members, notably Russia, Venezuela and Iran, object to the involvement of US companies because they are themselves under American sanctions.
Ideally, the quotas should cover every member, rather than a subset of nations. Currently, OPEC+ has a hodgepodge of production targets. The key one covers only eight nations. Another covers a few more countries. And Libya, Venezuela and Iran are largely excluded of targets. Rather than having multiple layers, OPEC+ should revert to what it did only five years ago, with a single layer.
The clock is ticking. Oil prices are melting down. For now, OPEC+ may wait to seek clarity about a Russia-Ukraine peace deal and the US gunboat diplomacy toward Venezuela. But its next move, perhaps when West Texas Intermediate crude approaches $50 a barrel, is likely an output cut. Back in the 1980s, Sheik al-Otaiba saw what was inevitably coming and what was needed, and put his oil thoughts into another poem:
“The price of oil is failing down
Reduction does now look inevitable.
So let us discuss clear quotas
Though discussions may seem impossible,
the least of evils seems the best,
Thus choice rest with what is acceptable.”
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