Severe Weather and Rising Oil Prices Impact Saudi Arabia

Saudi Arabia is currently experiencing severe weather conditions, with the National Center of Meteorology (NCM) issuing Red Alerts across several regions. The most intense weather has hit Jeddah, where flash floods, hail, thunderstorms, and strong winds have caused disruptions. From 6:00 AM AST on January 6 to 3:00 PM AST, heavy rains and wind speeds up to 60 km/h (37 mph) have battered the area, alongside high waves exceeding 2 meters (6.6 feet).

Similar warnings are in effect for Makkah, Riyadh, and Al-Baha, with forecasts of torrential rains, hailstorms, and thunderstorms continuing until January 8. These weather conditions have caused hazardous travel, reduced visibility, and widespread flooding.

In response, the Crisis and Disaster Management Center in Makkah has urged residents to stay indoors and avoid flood-prone areas. The Saudi Red Crescent Authority has declared full operational readiness, with over 1,400 staff members and 149 emergency vehicles, including air rescue units, to provide immediate medical assistance.

Meanwhile, the General Directorate of Civil Defense is advising the public to stay indoors during thunderstorms, avoid valleys and low-lying areas, and refrain from swimming in dangerous conditions. Authorities have also deployed rapid-response teams and reinforced flood defenses across the region.

Saudi Oil Price Increase Amid Ongoing Weather Crisis

While the weather continues to create challenges, Saudi Arabia is also navigating global economic pressures, including rising crude oil prices. The Saudi Arabian Oil Company (Aramco) has raised the price of Arab Light crude for Asia by $0.60 per barrel, bringing it to a premium of $1.50 per barrel above the Oman/Dubai average. This price increase comes as OPEC+ continues its cuts to oil production, and Iran and Russia face supply constraints due to tightening sanctions.

The move to increase prices exceeds previous expectations, with analysts predicting only a $0.10-per-barrel increase. As a result, Middle Eastern oil has become increasingly sought after by major buyers, particularly in China and India, as the global supply shrinks. This price hike follows the OPEC+ decision to delay easing the production cuts until April 2025, which has further pushed prices upward.