Brent Crude Price: Comprehensive Analysis and Its Impact on the Saudi Market

Brent crude is a type of crude oil extracted from the North Sea, and it is one of the most important global benchmarks for oil pricing. Brent crude is used as a standard for pricing approximately two-thirds of the oil supplies traded worldwide, a significant figure considering the size of the global energy market. The choice of Brent as a reference measure is due to several factors, including its ease of transport, quality (characterized by its light weight and moderate sulfur content), and its prevalence in European and Asian markets. The importance of Brent crude lies in its ability to enable market participants to determine the prices of spot and future oil contracts, making it a pivotal element in international financial and economic markets. At the same time, Brent price reflects the balance of global supply and demand and is directly influenced by geopolitical, economic, and technological factors. It is also used to price a large number of other oil derivatives and is considered a key indicator in determining global energy costs. In the global economy, Brent crude price is viewed as an indicator of macroeconomic health; when prices are high, it often indicates strong demand or limited supply, supporting revenues for producing countries, while a sharp decline may reflect a slowdown in economic activity or an oversupply. For the Saudi market, the connection between government revenues and Brent price makes monitoring it essential for both investors and financial decision-makers, extending its impact across all economic sectors, from energy to construction and banking.

The price of Brent crude has undergone significant developments over the past decades, influenced by a wide range of political, economic, and technical factors. In the 1970s, oil prices were characterized by instability due to global oil crises, while the 1980s and 1990s saw fluctuations linked to wars and oil embargoes. Over the last two decades, new factors have emerged, such as technological advancements in shale oil extraction, changes in OPEC policies, and global economic shifts. In recent years, particularly since 2020, the COVID-19 pandemic had a massive impact on the energy market, with prices plummeting to record lows as global economic activity halted, only to recover gradually with the return of demand. In 2023, Brent crude price reached a historical peak exceeding $90 per barrel, driven by increased global demand and supply constraints from OPEC+, although this trend did not last long. The year 2024 witnessed a gradual decline in prices, influenced by a slowdown in global economic growth, especially in China, and rising global oil inventories. By July 2025, the average price of Brent crude stabilized at $71.04 per barrel, marking a decline of about $14 from the same period the previous year. This decline reflects a series of changes in production policies and concerns related to global economic recession. Understanding the evolution of Brent crude price over time is essential for analyzing future trends, as it illustrates how structural and cyclical factors interact in the oil market and how they cast shadows on national economies, especially those heavily reliant on oil revenues like Saudi Arabia.

Brent crude price is influenced by a complex array of global factors that interact to determine market trends. Among the most prominent of these factors are global supply and demand, where rising demand (particularly from major economies like China, India, and the United States) leads to higher prices, while an oversupply exerts downward pressure. OPEC+ plays a pivotal role through its decisions regarding production quotas; whenever it decides to cut production to stabilize prices, Brent crude rises, and vice versa. Geopolitical tensions, especially in oil-producing regions like the Middle East, can lead to sudden price spikes due to fears of supply disruptions. On the other hand, technological developments in the energy sector, such as the expansion of shale oil production in the United States, have contributed to increased global supply and thus pressured prices downward. Additionally, global energy policies and countries' shifts toward clean energy and reducing reliance on fossil fuels create future pressures on oil prices. Changes in currency exchange rates, particularly the US dollar, also affect oil pricing, as most international transactions are conducted in dollars. Finally, global economic crises (such as the COVID-19 pandemic or financial crises) impact oil prices by hitting global demand. All these factors, collectively or individually, explain the reason for periodic fluctuations and surprises in Brent crude price, making its monitoring vital for decision-makers and investors in both international and local financial markets.

The period between 2024 and 2025 was marked by notable fluctuations in Brent crude price, as the market faced renewed challenges regarding demand and supply. According to Statista data, the average Brent crude price in July 2025 was approximately $71.04 per barrel, down about $14 from the same month in 2024, which recorded nearly $85 per barrel. This decline resulted from a slowdown in the global economy, particularly in China, and the accumulation of oil inventories among major consumers. During the second half of 2024, the market experienced a state of anticipation due to OPEC+ decisions to extend production cuts, which kept prices within the range of $70–75 per barrel by the end of the year. This trend continued into early 2025, where prices faced additional pressures from declining demand in emerging markets and market hesitance regarding global growth forecasts. Despite these declines, prices did not experience a significant collapse but remained within a range that reflects a balance of interests between producers and consumers. It is also noteworthy that Saudi Aramco's decisions regarding official prices for petroleum products influenced price movements, as it reduced prices directed at Asia in December 2025 in direct response to slowing demand. In summary, the data from 2024–2025 reflected Brent crude price's sensitivity to changes in global economic conditions and underscored the importance of monitoring economic indicators, inventory reports, and decisions by major producers to better understand market dynamics.

Brent crude prices play a pivotal role in shaping the contours of the Saudi economy, given the Kingdom's heavy reliance on oil revenues as a primary source of national income. An increase in Brent price directly reflects on government revenues, as oil export returns multiply, granting the government greater flexibility in spending on infrastructure projects and social and economic development. This increase leads to enhanced liquidity in the local market and stimulates growth in vital sectors such as construction, housing, transportation, and financial services. On the public budget front, high prices enable the government to finance deficits or even achieve surpluses, allowing for expanded investments and the development of new sectors within the framework of Saudi Vision 2030. Conversely, a decline in Brent crude price exerts pressure on public finances and may prompt authorities to reconsider spending priorities, implement structural reforms, or resort to borrowing or using cash reserves. Additionally, falling prices affect investor expectations and limit growth in non-oil sectors linked to government spending. The impact is clearly seen in the Saudi stock market (Tadawul), where general indices, especially shares of major companies in energy and banking, are significantly affected by fluctuations in oil prices. The influence of Brent price extends to the financial and investment policy planning of the Kingdom, making its close monitoring essential for all economic actors in Saudi Arabia.

Brent crude price indirectly yet crucially impacts the Saudi stock market (Tadawul), as most major companies in the market are linked in one way or another to the performance of the oil economy. When Brent crude price rises, investor confidence in the Saudi government's ability to finance its projects and expand public spending increases, positively reflecting on market indicators, such as the TASI index, and encouraging the flow of local and foreign investments. Energy companies, petrochemicals, banks, and construction sectors all benefit from the favorable financial environment resulting from increased oil returns. For instance, the period of rising prices in 2023 saw a notable improvement in the performance of leading stocks, with strong profits and generous distributions to shareholders. Conversely, a decline in Brent crude price may reduce expectations for government returns, which could negatively impact spending and support plans, leading to decreased liquidity in the market and lower stock valuations, especially in sectors directly linked to government spending or overall demand. On the other hand, price fluctuations affect investor sentiment, as many prefer to wait during periods of volatility, increasing the severity of declines or slowing recovery. Hence, monitoring Brent crude price and its future indicators is considered one of the essential tools for analyzing trends in the Saudi stock market and developing risk management strategies and diversifying investment portfolios.

The cement sector in Saudi Arabia is one of the vital sectors, playing a pivotal role in construction and development activities and serving as an indicator of economic activity in the Kingdom. This sector is indirectly influenced by Brent crude price, as rising oil prices enhance government revenues and support spending on infrastructure projects, thereby increasing domestic demand for cement. Saudi Arabia is one of the largest cement consumers globally, driven by national housing programs and major developmental projects under Vision 2030, such as industrial cities and NEOM projects. In recent years, the sector has seen significant expansions in production capacity, with companies investing in new production lines to meet expected demand. Additionally, competition among companies is strong, with several major players such as Hail Cement, Yamama Cement, and Saudi Cement Company. On the other hand, cement companies face challenges related to energy and transportation costs, which are also influenced by global oil prices. When oil prices rise significantly, production and transportation costs may increase, putting pressure on profit margins. Conversely, stable or moderately rising prices support sector growth through increased overall demand. Furthermore, government policies aimed at supporting local manufacturing and providing energy at competitive prices contribute to enhancing the competitiveness of cement companies. Ultimately, the Saudi cement sector remains sensitive to fluctuations in oil prices, with clear benefits during periods of oil booms and additional challenges during sharp declines.

Hail Cement Company is one of the major companies listed on the Saudi financial market (Tadawul), with the symbol 3001, and plays a strategic role in meeting the increasing demand for cement in the northern region of the Kingdom. During the period 2024–2025, the company's stock performance was characterized by relative stability with some minor fluctuations, as its price ranged around moderate market averages (estimated between 6 to 8 riyals per share, with a paid capital of nearly one billion riyals). The company's market value, estimated at several billion riyals, reflects its position in the sector. Financially, the company's price-to-earnings (P/E) ratio is an important indicator, estimated to range between 8–12 times depending on the annual earnings per share, which may reach around 0.5 to 0.6 riyals per share. This ratio reflects the market's valuation of the company's performance and its ability to achieve stable profits, especially in a competitive environment and amid changes in production costs. Regarding cash distributions, the company maintained a moderate distribution policy, with the cash yield for shareholders in 2023–2024 being a good percentage of the stock price, aligning with the company's strategy to return part of the profits to investors while retaining a portion to finance future expansions. Hail Cement's performance is indirectly influenced by Brent crude price through its impact on the volume of government spending and construction projects, which raises domestic demand for cement and enhances revenues and profits. Additionally, energy costs play a role in determining profit margins, making monitoring oil prices essential for managing the company's financial risks.

The cement sector in Saudi Arabia is characterized by strong competition among several major companies distributed geographically to cover all regions of the Kingdom. Among the prominent competitors of Hail Cement are Saudi Cement Company (symbol 3002), Yamama Cement (3021), Northern Cement (3004), Southern Cement (3024), and Qassim Cement (3007), in addition to other companies such as Eastern Cement (3003) and Al-Jouf Cement (3005). The strategies of these companies vary between expanding production capacity, improving product quality, and offering competitive prices. Factors such as factory location, proximity to demand centers, energy efficiency, and transportation costs play a crucial role in enhancing each company's competitiveness. For example, Hail Cement benefits from its location in the northern region, enabling it to efficiently meet demand in areas such as Hail, Al-Jouf, and northwestern Saudi Arabia. Companies face challenges related to fluctuations in local demand, especially during construction booms or recessions. Additionally, government support through clinker import facilitation or providing energy at competitive prices affects profit margins. Regionally, companies face limited competition from producers in Jordan or Morocco; however, tariffs and local industrial promotion policies reduce the impact of imports. Overall, the dynamics of competition in the sector reflect the importance of adapting to changes in demand, controlling costs, and investing in modern technologies to ensure sustainability and superiority in a changing market.

Despite the significant opportunities provided by strong domestic demand and massive government projects, the cement sector in Saudi Arabia faces several challenges related to fluctuations in Brent crude prices. Among the most prominent of these challenges are rising energy and transportation costs in the event of global oil price increases, which pressure profit margins. Additionally, an oversupply resulting from cement companies' expansions may lead to a decline in local prices if not accompanied by demand growth. On the other hand, intense competition among companies necessitates a focus on improving production efficiency and investing in environmentally friendly technologies, especially amid increasing regulatory pressures to reduce carbon emissions. Regarding opportunities, continued government spending on infrastructure projects and the development of smart cities supports sector growth, while policies supporting local manufacturing and customs facilitation stimulate expansion and investment. The trend toward producing environmentally friendly cement represents an opportunity for companies investing in modern technologies, enabling them to stand out in the local and regional market. The Saudi cement sector is poised to benefit from Vision 2030 projects that require massive quantities of construction materials; however, success requires effective cost management and keeping pace with regulatory and technological developments.

Geopolitical and economic factors play a prominent role in determining Brent crude price trends, as regional or global tensions can lead to sudden price changes. For example, any escalation in the Middle East, a region rich in oil, often leads to price increases due to fears of supply disruptions. OPEC+ decisions, which include major producers worldwide, directly affect the volume of supply; reducing production leads to higher prices, while increasing production exerts downward pressure. Economically, growth rates in major economies like China and the United States affect global oil demand, which reflects on Brent price. Monetary policies and global interest rates also influence through their impact on the value of the US dollar and financing costs. In 2024–2025, trade tensions between major economic powers and a slowdown in growth in China led to reduced demand, while production cuts from OPEC+ helped mitigate price deterioration. Additionally, changes in energy policies and the transition of economies toward clean energies have begun to cast shadows on future oil demand forecasts. All these factors make monitoring global geopolitical and economic developments essential for understanding Brent crude price dynamics and predicting its future trends.

The global oil market witnessed significant fluctuations during 2024–2025 due to the interplay of economic, political, and technical factors. Among the most notable developments was OPEC+'s continued policy of production cuts to limit price declines, with these cuts being extended several times during 2024, helping stabilize prices within a moderate range despite pressures from weak demand. Additionally, pricing adjustments made by Saudi Aramco, particularly the reduction of official prices for petroleum products directed at Asia at the end of 2025, reflected a direct response to the slowdown in Chinese economic growth and rising global inventories. On the other hand, the region did not experience sharp geopolitical escalations that fundamentally affected prices; however, a state of anticipation remained prevalent in the markets. On the demand side, concerns about global economic slowdown, especially in emerging markets, persisted, and developments in alternative energy impacted future oil consumption forecasts. Conversely, government policies in producing countries contributed to adjusting production levels to actual demand, preventing sharp price collapses. These developments indicate the importance of flexibility in production policies and monitoring global economic indicators to foresee Brent crude price movements in the near future.

The Saudi cement sector continued to implement significant expansion plans during 2024–2025, supported by government infrastructure projects and national housing programs. Companies like Hail Cement announced plans to increase production capacity, benefiting from expectations of sustained high demand for cement in light of major projects like NEOM and the development of industrial cities. Financially, reports from 2023–2024 showed profit growth for most companies, driven by improved sales and rising local prices for products. However, the sector faces increasing environmental challenges, as regulatory pressures to reduce carbon emissions and improve energy efficiency grow. Some companies have responded to these challenges by investing in cleaner production technologies and adopting sustainable industrial practices. The sector has also seen legislative adjustments aimed at enhancing competitiveness and product quality, including modifying cement specifications and protecting the local market from imports. Amid these developments, the cement sector remains poised to benefit from the construction momentum in the Kingdom, provided it adapts to regulatory changes and invests in environmental innovation to maintain its competitiveness and sustainability.

Brent crude is not the only benchmark in the global oil market; it shares this role with West Texas Intermediate (WTI) and Dubai crude. Brent differs from WTI in terms of production area; while Brent is extracted from the North Sea, WTI comes from US fields and is often priced slightly lower than Brent due to differences in quality, transportation, and storage costs. WTI features a lower sulfur content and is the benchmark for the US market, while Brent is used as a primary indicator in Europe and Asia. Dubai crude, in turn, is used as a pricing benchmark for oil in the Gulf and Asia, characterized by a quality that falls between Brent and WTI, and is subject to specific fluctuations related to supply and demand in Asian markets. The price differentials between these benchmarks are determined based on factors such as shipping costs, storage policies, geographical differences, and local pressures in each region. Globally, Brent is the most widely used benchmark for pricing international oil transactions, making it a fundamental reference for financial markets and OPEC countries. Monitoring the differences between these benchmarks provides investors and decision-makers with clearer insights into market trends and helps in understanding the dynamics of oil trade and future price forecasts.