China’s energy trade with Middle East set to surge since Beijing brokered last year’s Iran-Saudi deal, UBS says

Name: China, Iran pledge to deepen cooperation as both grapple with strained US ties
Uploaded: 2024-04-15T23:00:36.000Z
Duration: 3 min 11 s
Description: China, Iran pledge to deepen cooperation as both grapple with strained US ties

‘We believe the Beijing Accord of March 2023 has significant economic and market implications that investors may have overlooked,’ says the Swiss bank

Report says energy-related trade between China and the Middle East could raise the aggregate trade value of both regions by 11 per cent in 2030

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‘We believe the Beijing Accord of March 2023 has significant economic and market implications that investors may have overlooked,’ UBS said in its analysis. Photo: TNS

Yujie Xue

Published: 7:00am, 16 Apr 2024Updated: 7:56pm, 16 Apr 2024

Energy-related trade between China and the Middle East is likely to increase significantly and reshape the sector globally in the wake of the Saudi-Iran peace deal brokered by China last year, according to Swiss bank UBS.

By 2030 trade between the two will have risen by US$423 billion annually, with renewables and petrochemicals accounting for US$77 billion and US$325 billion, respectively, according to Ken Liu, head of China and Hong Kong renewables, utilities and energy research at UBS Investment Bank.

“We believe the Beijing Accord of March 2023 has significant economic and market implications that investors may have overlooked,” he said in an analysis on Monday.

“We see energy representing a more trade-focused collaboration than seen to date, with likely more immediate monetisation potential and thus a quicker potential impact on share prices.”

In March 2023, Iran, Saudi Arabia, and China issued a joint statement announcing an agreement to restore diplomatic ties between the two Middle Eastern countries after years of hostility. The deal was brokered by China after four days of undisclosed negotiations among top officials from the two countries in Beijing.

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China, Iran pledge to deepen cooperation as both grapple with strained US ties

In the six months immediately after the deal was signed, Saudi Arabia invested US$16 billion in the Chinese energy sector, according to data compiled by UBS.