2025-05-11 09:02

Saudi-Israel normalization stalled due to Gaza conflict Focus on $1 trillion investments, arms deals, and AI collaborations Trump’s visit aims to counter China’s rising clout in region WASHINGTON/DUBAI, May 11 (Reuters) - (This May 11 story has been refiled to fix a typo in paragraph 1) When U.S. President Donald Trump lands in Riyadh on Tuesday, he will be greeted with opulent ceremonies, gilded palaces and the prospect of $1 trillion in investments. But the raging war in Gaza has denied him one goal he has long craved: Saudi-Israel normalisation. Sign up here. Behind the scenes, U.S. officials are quietly pressing Israel to agree to an immediate ceasefire in Gaza - one of Saudi Arabia's preconditions for any re-start of normalization talks, said two Gulf sources close to official circles and a U.S. official. Trump's Middle East envoy Steve Witkoff told an audience at the Israeli embassy in Washington this week that he imminently expected progress on expanding the Abraham Accords, a set of deals brokered by Trump in his first term under which Arab states including the UAE, Bahrain, Sudan and Morocco recognised Israel. “We think we will have some or a lot of announcements very, very shortly, which we hope will yield progress by next year,” Witkoff said in a video of his speech. He is expected to accompany Trump on his visit to the Middle East. However, opposition by Israeli Prime Minister Benjamin Netanyahu to a permanent stop to the war or to the creation of a Palestinian state make progress on similar talks with Riyadh unlikely, two of the sources said. Saudi Arabia does not recognize Israel as legitimate, meaning the Middle East's two most advanced economies and military powers do not have formal diplomatic ties. Supporters of normalising relations say it would bring stability and prosperity to the region, while countering Iran's influence. Establishing ties has become especially toxic for Saudi Arabia, the birthplace of Islam, since the start of Israel's war in Gaza. As such, the issue, central to bilateral talks in Trump's first term, has effectively been delinked from economic and other security matters between Washington and the kingdom, according to six other sources Reuters spoke with for this story, including two Saudi and two U.S. officials. The people all asked to remain anonymous to speak about sensitive diplomatic conversations. Saudi Arabia's de facto ruler, Crown Prince Mohammed bin Salman, needs the Gaza war to end and a credible path to a Palestinian state "before he re-engages with the issue of normalization," said Dennis Ross, a former U.S. negotiator. In the meantime, Washington and Riyadh will focus Trump's trip largely on the economic partnership and other regional matters, according to the six sources. Lucrative investments such as major deals in arms, mega-projects and artificial intelligence are in play, officials from both sides stressed. The approach was cemented in diplomatic talks between Saudi and U.S. officials ahead of the trip, the first formal state visit of Trump's second term, they said. Trump's stated aim is to secure a trillion-dollar investment in U.S. companies, building on an initial commitment of $600 billion pledged by the crown prince. The wealthy kingdom, the world's top oil exporter, knows the ritual well: dazzle the guest, secure the favor. The goal, the sources told Reuters, is to evade diplomatic landmines and perhaps, one said, to win concessions from Trump on the Gaza war and its aftermath. "The Trump administration wants this trip to be a big deal. That means lots of splashy deal announcements and collaborations that can be sold as being good for America," said Robert Mogielnicki, senior resident scholar at the Arab Gulf States Institute, a think tank in Washington. "Normalizing ties with Israel is a much heavier lift than rolling out the red carpet for President Trump and announcing investment deals,” he said. A State Department spokesperson declined to comment on any understanding reached ahead of the trip, saying Trump "will look to strengthen ties between the United States and our Arab Gulf partners during the visits." The Saudi government communications office did not reply to a request for comment. COURTING THE KINGDOM Before Hamas launched its Oct.7 attacks on Israel - killing 1,200 people and sparking the devastating Israeli offensive into Gaza - the crown prince was finalising a landmark diplomatic agreement: a U.S. defense pact in exchange for Riyadh recognising Israel. But the scale of Israel’s campaign, killing 52,000 people and displacing 1.9 million in Gaza, forced a pause in the talks. Bin Salman accused Israel of genocide. Frustrated by the impact of Gaza's prolonged crisis on normalization efforts, Trump could use his visit to unveil a U.S. framework to end the 18-month war, the two Gulf sources said. The plan could create a transitional government and new security arrangements for post-war Gaza - potentially reshaping regional diplomacy and opening the door to future normalization talks, they said. Underscoring the high-stakes diplomacy underway, Trump met privately with Israeli Strategic Affairs Minister Ron Dermer on Thursday to discuss the war and nuclear talks with Iran, Axios reported. The U.S. State Department did not immediately respond to questions about Trump's discussions on Gaza. Trump conspicuously has not announced a visit to Israel as part of his tour of the region. Two diplomats noted the U.S. president has recently refrained from talking about his "Gaza Riviera" plan that enraged the Arab world with the suggestion of resettling the entire Gazan population and U.S. ownership of the strip. In the build up to the trip, Washington has taken a number of actions that are positive for Saudi Arabia. An agreement to stop U.S. bombing of the Houthis in Yemen is in line with a Saudi ceasefire there. Washington has also delinked civil nuclear talks from the normalisation question. The stalled Saudi-U.S. defense pact, initially conceived as a formal treaty, was revived in the scaled back form of security guarantees late in the Biden presidency to bypass congressional opposition. The Trump administration has now picked up those talks, along with the discussions about a civilian nuclear agreement, three of the sources said, while cautioning that it will take time to define terms. CHINA INFLUENCE Trump's Saudi trip is his first formal state visit and second foreign trip since his re-election, after attending the pope's funeral in Rome. He will also visit Qatar and the United Arab Emirates. Beneath the showmanship of Trump's visits, diplomats say, lie also a calculated U.S. effort to reassert influence and reshape economic alignments in a region where Beijing - Washington's chief economic rival - has steadily expanded its foothold at the heart of the petrodollar system. Trump’s first trip abroad in his first term also began in Riyadh, where he unveiled $350 billion in Saudi investments. Trump commands deep trust from the Saudi leadership, rooted in the close ties during his first term - a period defined by large arms deals and steadfast U.S. backing for Bin Salman, even as global outrage erupted over the killing of columnist Jamal Khashoggi by Saudi agents in Istanbul. Saudi Arabia and its Gulf allies now plan to urge Trump to ease U.S. regulations that have increasingly deterred foreign investment, particularly in sectors deemed part of America’s “critical national infrastructure,” five industry sources said. In meetings with U.S. officials, Saudi ministers will advocate for a more business-friendly climate, especially at a time when China is aggressively courting Gulf capital, the industry sources said. While countering China’s economic rise may top Trump’s foreign policy agenda, it won't be easy in Saudi Arabia. Since the launch of Vision 2030, China has become integral to the kingdom's plans, dominating sectors from energy and infrastructure to renewables. https://www.reuters.com/world/prospects-saudi-ties-israel-elusive-trump-seeks-1-trillion-bonanza-2025-05-11/

2025-05-11 06:54

Q1 profit falls to $26.01 billion, beating median estimate Dividends $21.36 billion; performance-linked dividends cut 98% Free cash flow drops 15.8%, capex rises 15.9% to $12.5 billion DUBAI, May 11 (Reuters) - Saudi oil giant Aramco (2222.SE) , opens new tab, a longtime cash cow for the kingdom, reported a 4.6% drop in first-quarter profit on Sunday due to lower sales and higher operating costs as economic uncertainty hit crude markets. The world's top oil exporter reported net profit of 97.54 billion riyals ($26.01 billion) in the three months ended March 31, which beat a company-provided median estimate from 16 analysts of $25.36 billion. Sign up here. The shares were up 0.64% to 25.00 riyals as of 0754 GMT, though down 10.9% so far this year. Aramco confirmed total dividends of $21.36 billion for the first quarter, $219 million of which was performance-linked dividends, a mechanism introduced after a windfall from oil prices in 2022 following Russia's invasion of Ukraine. Saudi Arabia for decades has relied on Aramco's generous payouts, which also include royalties and taxes, to fuel its growth. Oil generated 62% of government revenue last year and the International Monetary Fund has estimated Saudi Arabia needs oil at $92.3 this year to balance its budget. The results were released before U.S. President Donald Trump's visit to the kingdom on Tuesday. His trade war with China has spooked global markets and sent crude prices tumbling amid fears of a global economic slowdown. "Global trade dynamics affected energy markets in the first quarter of 2025, with economic uncertainty impacting oil prices," Chief Executive Amin Nasser said in a statement, adding Aramco's results showed the value of its low-cost operations. "Such periods also highlight the importance of disciplined capital planning and execution while we continue to take a long-term view. In volatile times Aramco's resilience underpins both our financial performance and our sustainable and progressive base dividend." Trump's imposition of tariffs escalated sharply in early April, meaning the impact of his biggest trade policies were not reflected in the first-quarter results. LOWER PRICES HURT Global crude benchmark Brent has been on a largely downward trajectory since a 2025 high of $82.03 in January. It closed at $63.91 on Friday. Aramco had said in March it expected to declare total dividends of $85.4 billion in 2025, down sharply from last year's payout of over $124 billion, which was based on 2023 and 2024 earnings. The performance-linked payout, which last year totalled $43.1 billion, was slashed roughly 98% as free cash flow dried up. The kingdom in recent years has been pouring vast sums into projects to diversify the economy away from oil under a programme called Vision 2030. Recently it has been building or renovating 15 stadiums for the 2034 World Cup, the most high-profile of several showpiece events Saudi Arabia will host in coming years. Amid lower oil prices, some of the kingdom's lofty ambitions, including a futuristic city in the desert, have been scaled back to prioritise completing projects essential to hosting global sporting events over the next decade as rising costs weigh, sources told Reuters in November. The Saudi government directly owns roughly 81.5% of Aramco, while its sovereign wealth fund PIF controls an additional 16% stake. "The sharp fall in the oil price makes the financing outlook for both the fiscal shortfall and Vision 2030 significantly more challenging," said Monica Malik, chief economist at Abu Dhabi Commercial Bank, adding weaker Aramco profits already reflected in a wider budget deficit in the first quarter. Aramco's free cash flow was $19.2 billion in the first quarter, down 15.8% from a year ago. Performance-linked payouts are linked to free cash flow. Capital expenditure was just over $12.5 billion in the first quarter, up 15.9% from a year before. Aramco had outlined capital investments, which includes capex and external investments, of between $52 billion and $58 billion in 2025. Capex was $50.4 billion last year. HIGHER OUTPUT COMING The de facto Saudi-led Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, known together as OPEC+, have been curtailing output since 2022 to support prices amid rising output from other producers. The kingdom, which has production capacity of around 12 million bpd, had shouldered the largest share of the cuts. OPEC+ agreed to boost output by 411,000 barrels per day in May and the same volume in June. That will increase the kingdom's production to nearly 9.37 million bpd from roughly 9 million bpd before May. CEO Nasser had previously touted the kingdom's spare output capacity, the largest in the world, saying it could be activated in a matter of weeks. Trump had publicly called on Riyadh and OPEC to reduce oil prices, as he did during his first term. He has also said Riyadh should "round up" investments in the U.S. to $1 trillion after the kingdom said it wants to put $600 billion into expanded investment and trade with the U.S. over the next four years. ($1 = 3.7507 riyals) https://www.reuters.com/business/energy/aramco-reports-drop-first-quarter-profit-2025-05-11/

2025-05-11 03:29

SHENZHEN, China, May 11 (Reuters) - China's car sales in April rose for a third month, up 14.8% from a year earlier, as government-subsidised auto trade-ins mitigated the impact of U.S. tariffs on consumer sentiment. Passenger vehicle sales totalled 1.78 million units last month and for the first four months of 2025 were up 8.2% from the same period a year earlier at 6.97 million units, data from the China Passenger Car Association (CPCA) showed on Sunday. Sign up here. Sales of electric vehicles and plug-in hybrids, known collectively as new energy vehicles, increased 33.9% year-on-year to make up 50.8% of total car sales last month. A government scheme that hands out larger subsides to trade-ins of old cars for NEVs than for gasoline vehicles had covered 2.71 million cars as of April 24, official data showed, cushioning the impact on Chinese consumer confidence as the increase in U.S. tariffs on Chinese exports disrupt trade between the world's two largest economies. Car exports slid 2.2% in April from a year earlier, extending an 8% decline in March, CPCA data showed. For domestic buyers, however, automated-driving systems are fading as a catalyst for sales, according to the association. The focus of a years-long price war in the world's largest auto market shifted toward next-generation automated-driving features after BYD (002594.SZ) , opens new tab announced in February to offer its "God's Eye" driver-assistance system as free standard equipment across its lineup. But the fervour to tout driver-assistance systems is cooling following a government crackdown on marketing terms using "smart" or "autonomous" to describe their technology after a fatal crash involving a Xiaomi (1810.HK) , opens new tab SU7 sedan in March. The EV caught fire after hitting a cement pole, seconds after the driver tried to assume control from the car's assisted-driving system. https://www.reuters.com/business/autos-transportation/chinas-car-sales-rise-148-april-2025-05-11/

2025-05-10 23:51

Talks in Geneva aim to defuse trade war disrupting global economy Expectations were low for major breakthrough amid US-China distrust Discussions to continue on Sunday China determined to defend international fairness, Xinhua says GENEVA/WASHINGTON, May 10 (Reuters) - U.S. President Donald Trump hailed talks with China in Switzerland on Saturday, saying the two sides had negotiated "a total reset ... in a friendly, but constructive, manner." "A very good meeting today with China, in Switzerland. Many things discussed, much agreed to," Trump posted on his Truth Social platform. Sign up here. Trump added: "We want to see, for the good of both China and the U.S., an opening up of China to American business. GREAT PROGRESS MADE!!!" He did not elaborate on the progress. Earlier, top U.S. and Chinese officials wrapped up the first day of talks in Geneva aimed at defusing a trade war that threatens to hammer the global economy and planned to resume negotiations on Sunday, a source close to the discussions said. Chinese Vice Premier He Lifeng met for about eight hours with U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer in their first face-to-face meeting since the world's two largest economies heaped tariffs well above 100% on each other's goods. Neither side made any statements afterwards about the substance of the discussions nor signaled any specific progress towards reducing crushing tariffs as meetings at the residence of Switzerland's ambassador to the U.N. concluded at about 8 p.m. local time (1800 GMT). Bessent, Greer and He were meeting in Geneva after weeks of growing tensions prompted by Trump's tariff blitz starting in February and retaliation from Beijing that has brought nearly $600 billion in annual bilateral trade to a virtual standstill. The trade dispute, combined with Trump's decision last month to impose duties on dozens of other countries, has disrupted supply chains, unsettled financial markets and stoked fears of a sharp global downturn. UNDISCLOSED LOCATION The location of the talks in the Swiss diplomatic hub was never made public. However, witnesses saw both delegations returning after a lunch break to the gated U.N. ambassador's villa, which has its own private park overlooking Lake Geneva in the leafy suburb of Cologny. Earlier, U.S. officials including Bessent and Greer smiled as they left their hotel on the way to the talks, wearing red ties and American flags on their lapels. Bessent declined to speak to reporters. At the same time, Mercedes vans with tinted windows were seen leaving a hotel where the Chinese delegation was staying on the lakeside as runners preparing for a weekend marathon warmed up in the sunshine. Washington is seeking to reduce its $295 billion goods trade deficit with Beijing and persuade China to renounce what the United States says is a mercantilist economic model and contribute more to global consumption, a shift that would require politically sensitive domestic reforms. Beijing has pushed back against what it sees as external interference. It wants Washington to lower tariffs, clarify what it wants China to buy more of, and treat it as an equal on the world stage. China's official Xinhua News Agency said in a commentary on Saturday that the United States' "reckless abuse of tariffs" had destabilized the global economic order, but added that the negotiations represented "a positive and necessary step to resolve disagreements and avert further escalation." "Whether the road ahead involves negotiation or confrontation, one thing is clear: China's determination to safeguard its development interests is unshakable, and its stance on maintaining the global economic and trade order remains unwavering," Xinhua said. LOW EXPECTATIONS With distrust running high, both sides have been keen not to appear weak, and economic analysts have low expectations of a breakthrough. Trump said on Friday that an 80% tariff on Chinese goods "seems right", suggesting for the first time a specific alternative to the 145% levies he has imposed on Chinese imports. He has suggested the discussions were initiated by China. Beijing said the U.S. requested the discussions and that China's policy of opposing U.S. tariffs had not changed. China could be looking for the same 90-day waiver on tariffs that Washington has given other countries as negotiations take place, while any kind of tariff reduction and follow-up talks would be seen as positive by investors. Swiss Economy Minister Guy Parmelin met both parties in Geneva on Friday and said the fact that the talks were taking place was already a success. "If a road map can emerge and they decide to continue discussions, that will lower the tensions," he told reporters on Friday, saying talks could continue into Sunday or even Monday. Switzerland helped to broker the meeting during recent visits by Swiss politicians to China and the United States. China's He is also provisionally scheduled to meet the director-general of the World Trade Organization, Ngozi Okonjo-Iweala, during his stay, a spokesperson for the Geneva-based watchdog said. She has welcomed the talks "as a positive and constructive step towards de-escalation", calling for sustained dialogue between the two top economies. Since taking office in January, Trump has increased tariffs on Chinese imports to 145%, citing unfair trade practices and accusing Beijing of failing to curb the export of chemicals used to produce fentanyl, a lethal synthetic opioid. China retaliated with 125% retaliatory tariffs, and said it would not bow to "imperialists" and bullies. https://www.reuters.com/world/china/china-us-trade-talks-begin-geneva-2025-05-10/

2025-05-10 22:37

May 9 (Reuters) - (This May 9 story has been corrected to remove references to company ownership in paragraphs 2 and 10) Twangiza Mining, a gold miner operating in the rebel-controlled South Kivu Province in the eastern Democratic Republic of Congo, said it has been ordered to suspend operations by the rebel administration, according to a company-wide letter seen by Reuters. Sign up here. The company informed employees of an immediate work stoppage in the letter dated May 8. "Following directives from the new administration in place in South Kivu Province, Twangiza Mining is obliged to suspend its activities," the letter signed by General Director Chao Xianfeng said, adding that equipment and vehicles were being placed on standby mode. The decision highlights tensions over resource control in Congo's mineral-rich eastern regions, where M23 rebel advances have placed strategic mining assets under new administration, creating uncertainty for international operators and commodity markets. The Rwanda-backed rebels seized control of Congo's two mineral-rich eastern provinces earlier this year, and are solidifying their control over the captured territories. Manu Birato, who was recently installed as M23 governor of the South Kivu Province, said Twangiza Mining must adapt to new regulations and pay taxes they have not been paying. "We are in talks with them and showing them that from now on they must start paying taxes," Birato told Reuters. "The country had received absolutely nothing in taxes from this company. The money went into private coffers," he said, adding that the administration had not ordered the shutdown of operations. "We told them they had to start paying taxes. They are having a hard time adjusting to this new requirement, given that they were used to paying nothing," Birato said. A spokesperson for Twangiza declined to comment on Birato's assertions. https://www.reuters.com/world/china/congo-gold-miner-halts-operations-tax-dispute-with-m23-rebel-administration-2025-05-09/

2025-05-10 17:25

NEW DELHI, May 10 (Reuters) - India has removed the chairman of the Solar Energy Corp of India (SECI) with immediate effect, the federal ministry of personnel said in a notice on Saturday, just over a month ahead of the scheduled end of his tenure. The former top bureaucrat at India's environment ministry was appointed SECI chairman in June 2023, and was scheduled to end his tenure as SECI chief next month. Sign up here. The government did not provide a reason for dismissing Rameshwar Prasad Gupta. Gupta declined comment. During Gupta's tenure, SECI had barred India's Reliance Power from participating in competitive tenders for renewable energy projects. It withdrew the order a month later in December after a court directive. SECI also came under fire last year for a solar deal involving SECI and billionaire Gautam Adani, which was signed before Gupta became chairman. U.S. prosecutors had indicted Adani and seven other executives in November for alleged involvement in a bribery and securities fraud scheme. Adani had denied the allegations as baseless, and SECI denied any wrongdoing. He had also announced last year SECI's plans to go public, but said it had yet to take a final call on the size of the initial public offering. https://www.reuters.com/world/india/india-dismisses-state-run-clean-energy-agency-chairman-2025-05-10/