Industry

Nayef Bou Chaaya, vice president, Middle East, Turkey & Central Asia, AVEVA.

The Strait of Hormuz crisis shows how vulnerable the supply chain is to geopolitics, making agility and resilience impossible to ignore, writes Nayef Bou Chaaya, vice president, Middle East, Turkey & Central Asia at AVEVA

The oil industry began the year determined to boost crude production to cover a looming global supply-demand gap. Yet on February 28, that challenge became far more acute than anyone could have predicted.

The onset of the US-Israel-Iran war and the ensuing Strait of Hormuz crisis has completely changed the mood inside the oil industry. The world is facing prolonged higher-for-longer oil prices where every barrel suddenly matters more, and every operational inefficiency starts eating directly into profits.

At the peak of the disruption, the market was dealing with the loss of around 12 million barrels per day of crude supply, according to Rystad Energy. That is roughly 11% of total global oil demand. On an annualized basis, it equates to more than four billion barrels of supply either trapped, delayed or prevented from reaching the market efficiently.

Oil prices had jumped from around USUS$80 per barrel before the conflict to above US$100. Some analysts project prices could still edge to $180 by the end of the year. That has created a rare profit window for producers outside the Middle East, who are trying to strike while the iron is hot and get as much as possible out of existing infrastructure while conditions remain favourable.

This is not just about drilling more wells

As time is of the essence – both for countries keen to get more supply and for oil majors who want to make the most of high prices – the focus is now on optimis

ing every drop.

Small improvements in uptime, throughput or refinery performance that might once have had limited commercial impact can now translate into millions of dollars in additional revenue. A compressor failure or unplanned shutdown that was once a routine maintenance headache is now enormously costly.

This is where predictive analytics can have an outsized impact, enabling producers to constantly monitor assets and catch problems before they escalate into equipment failure or shutdowns. The current geopolitical environment has only turbocharged this shift, accelerating the move towards industrial AI and integrated operational systems across the sector.

Rystad Energy estimates AI and digital technologies will create close to US$500 billion in cumulative value for exploration and production (E&P) companies between 2026 and 2030.

Not all crude is equal

Refiners are also dealing with another major challenge: crude availability has become much more unpredictable.

Refineries use blends and slates sourced from multiple regions, which all have different properties and refining characteristics. Texas crude behaves differently from Saudi crude. Saudi crude behaves differently from Abu Dhabi crude. Venezuelan crude behaves differently again.

In stable market conditions, those crude slates are relatively predictable. However, refiners are now forced to change their crude oil slate because certain crude streams are no longer accessible. This creates a much more complicated optimisation problem.

Historically, engineering teams would run a limited number of operational scenarios manually. Now industrial AI systems can run thousands of crude blend combinations simultaneously while incorporating crude prices, refined product prices, electricity costs, operational constraints and regional market demand – determining in near real-time exactly which combination will generate the highest profitability possible.

AI augments human strategy

Importantly, the industry is not treating AI as some magical black box replacing engineering expertise. Inside oil and gas, there is still a very strong understanding that AI is only as good as the underlying engineering models feeding it.

AI is extremely good at interpreting data, however, the actual engineering calculations still need to come from first-principles engineering models and thermodynamics.

I like to use a comparative aviation analogy. For example, let’s say passengers boarded a plane and someone announced that AI would be flying the entire flight. Most people would probably get off right away.

Yet, modern aviation already relies heavily on automation. Pilots still handle take-off, landing, direction, speed and oversight while automated systems manage most of the journey in between. Industrial AI is evolving in a similar manner.

Human operators still define objectives, constraints and desired outcomes while AI handles huge amounts of analytical work and scenario modelling faster than humans can manually. This practice matters in a conservative industry where operational mistakes carry enormous financial and safety consequences.

Counting the cost

Production accounting systems are also becoming strategically more important because relatively small discrepancies in incoming or outgoing shipments can seriously affect margins when oil prices are high. If a company purchases one million barrels but only receives 990,000, the financial implications suddenly become much more significant.

In sum, what this all means is that the market is increasingly rewarding operational integration as much as production scale.

While longer term, the industry will continue investing in energy diversification, right now the challenge is more immediate: keeping the world moving during one of the most volatile commodity environments in decades – and making every barrel count.

No one knows when this window will close – or when the next one will open.

Coverage across the materials supply chain. (Image source: Yokogawa)

Yokogawa Electric Corporation has entered into a distribution agreement with France-based BuyCo, a provider of a software as a service (SaaS) solution for the management of the transport of shipping containers

Under this agreement, Yokogawa will offer BuyCo’s Transportation Management System (TMS) to companies primarily in the materials industry, leveraging its extensive expertise in supporting manufacturing operations to optimise entire supply chains.

Complex supply chains

In recent years, the materials sector has had to contend with rising complexity in global supply chains, heightened geopolitical risks, and stricter environmental regulations, especially in the chemicals industry. Rising transportation costs and the need to manage and reduce greenhouse gas emissions and respond to fluctuations in demand have become key management concerns. However, in many cases, companies in these industries have not taken an integrated approach to optimise their production and logistics operations. This, combined with the need to comply with regulations on hazardous materials and handle diverse cargo types, has made it difficult to manage entire supply chains in an integrated and holistic fashion.

While Yokogawa has focused on supporting the automation and optimisation of operations at individual plants in the process industries, the company is expanding the scope of its support through consulting services and digital solutions that address challenges across end-to-end supply chains connecting multiple facilities. This agreement with BuyCo represents a major step in that direction, focused on container transport management.

In developing its container transport management platform, BuyCo makes use of its extensive experience in the maritime industry. This SaaS solution enables the centralised management of container transport data, supports shipment planning and booking, visualises shipping operations in real time, and facilitates information sharing among stakeholders. Based on cargo data, it assists in selecting shipping lines and transport routes and allows real-time door-to-door tracking.

By adopting this platform, companies can reduce logistics costs and inventory levels while improving their on-time delivery performance. It also helps mitigate the risk of cargo quality deterioration and contributes to the visualisation and reduction of the emissions of CO₂. Currently, over 12,000 users around the world rely on this platform.

Carl Lauron, the founder and CEO of BuyCo, commented, “We are delighted to augment the Yokogawa offering, enabling them to close the gap between production and logistics. With BuyCo's container shipping platform, manufacturers can optimise their entire supply chain, including the international transportation aspects. The partnership between Yokogawa and BuyCo enables manufacturers to impact transportation costs, effectiveness and sustainability.”

Naohisa Endo, a Yokogawa executive officer and head of the company’s Materials Business Headquarters, stated, “By leveraging BuyCo’s container transport management platform, we will strengthen initiatives to optimise supply chains for the materials industry. Building on our strengths in measuring and connecting, we aim to achieve integrated optimisation spanning everything from our customers’ production operations to international logistics. Looking ahead, we intend to evolve this into a comprehensive supply chain management solution that integrates demand forecasting, inventory optimisation, and more.”

The KBR award follows the coming onstream of the Marjan crude oil increment. (Image source: Adobe Stock)

KBR has been awarded a project by Aramco to support the upgrade of facilities across the Marjan offshore field off the eastern coast of Saudi Arabia

Under the contract, KBR will provide engineering and project execution services to support key offshore processing, gas compression, and power infrastructure facilities within the Marjan field.

The project is expected to maintain the Marjan field's production capacity through recent field developments. It is also expected to help advance associated gas processing capabilities and strengthen long-term performance of critical offshore assets through the integration of digital technologies, automation, and power system enhancements.

"For KBR, this award reflects our long project execution relationship with Aramco," said Jay Ibrahim, president, Sustainable Technology Solutions, KBR. "By combining our deep offshore engineering expertise with advanced automation and digital integration, we aim to help achieve Aramco’s expectations."

The engineering work is expected to be executed primarily from KBR's Houston and Al-Khobar offices, leveraging the company's decades of experience delivering complex offshore energy infrastructure projects in the Middle East and around the world. The company has a longstanding involvement in the Middle East, where it has supported major energy projects by delivering engineering, technology and programme management solutions .

About the Marjan field expansion

The KBR award follows the coming onstream of the Marjan crude oil increment, which has added 300,000 bpd of capacity. In 2018, Aramco awarded US$18bn in contracts to support the wider Marjan and Berri oilfields in increasing production capacity by 550,000 bpd of oil and 2.5bscfd of gas. The Marjan portion included a new offshore gas-oil separation plant, 24 offshore oil, gas and water-injection platforms, and expanded onshore processing infrastructure.

The Tanajib Gas Plant, part of the Marjan development program, began operations in December 2025 and is expected to process 2.6bn standard cubic feet per day of raw gas from the Marjan and Zuluf fields by this year. One of the largest gas plants in the world, it will play an important role in supporting Aramco’s gas development plans, with the aim of boosting gas production by 80% by 2030 compared to 2021 levels. In addition to helping meet rising demand for natural gas, and enhancing supplies to national industries, Aramco’s gas growth strategy supports efforts to achieve a more optimal energy mix for domestic electricity production. It also advances the Kingdom’s liquid fuel displacement programme, complements the Kingdom’s 2060 net-zero ambition, reinforces energy security and contributes to building a diverse national economy. 

Offshore developments

The Middle East’s offshore developments are providing fertile opportunities for contractors and engineering companies with experience of delivering large and complex offshore projects in the region. Despite the current conflict in the Middle East, the region’s operators continue to push ahead with major offshore developments, such as ADNOC’s Ghasha offshore sour gas development and the Umm Shaif Gas Cap, Aramco’s Marjan and Zuluf increments and Kuwait Oil Company’s recent significant offshore discoveries.

A TAKRAF Mobile Stacking Bridge forms part of an integrated dry tailings solution that combines bulk material handling, water recovery and sustainable tailings management. (Image source: TAKRAF)

With a growing regional presence and integrated solutions spanning mining, minerals processing and bulk material handling, TAKRAF Group is helping advance efficient, sustainable industrial value chains across the Middle East

Across the Middle East, mining is emerging as a key pillar of economic diversification and industrial development. In Saudi Arabia particularly, Vision 2030 is accelerating investment across the mining and minerals processing value chain. The Kingdom’s ambition extends beyond identifying and extracting mineral resources to developing integrated processing and downstream capabilities within Saudi Arabia.

The focus is increasingly shifting toward the development of integrated, efficient and sustainable value chains that support long-term industrial growth. As projects become larger and more complex, operators are seeking partners capable of delivering technologies and expertise across the entire mining lifecycle while helping address challenges such as water scarcity, energy efficiency, environmental performance and overall project economics. These priorities are especially relevant in a region where responsible resource development must go hand in hand with operational excellence.

To support this transformation, TAKRAF Group has strengthened its commitment to the Middle East through the establishment of TAKRAF Saudi Arabia and a regional office in Riyadh. This local presence enables closer collaboration with customers while combining regional market understanding with technologies and engineering expertise proven in some of the world's most demanding mining operations. The Riyadh office provides a regional base for customer engagement, project development and technical support across Saudi Arabia and the wider Middle East.

A key differentiator for TAKRAF Group is its ability to address the complete mining and minerals processing value chain rather than providing individual pieces of equipment. Through the combined strengths of TAKRAF and DELKOR, customers can access solutions spanning crushing, conveying and high-capacity bulk material handling through to flotation, thickening, filtration, water recovery and dry stack tailings management. This integrated approach can improve recovery and plant availability, increase water reuse, support reliable high-volume material handling and reduce execution risk while optimizing long-term operating and maintenance costs.

The growing emphasis on water recovery and responsible tailings management is particularly significant across the Middle East. As mining developments advance in increasingly water-constrained environments, technologies that maximize water reuse while supporting safe and sustainable operations are becoming essential. At the same time, demand continues to grow for efficient bulk material handling systems capable of supporting large-scale mining, processing and export operations.

Beyond mining, many of the engineering challenges associated with moving, storing and processing bulk materials are equally relevant to other industrial sectors. TAKRAF's experience in applications such as petroleum coke handling, sulfur storage and export systems, petrochemical material handling and oil sands crushing demonstrates how technologies originally developed for mining can support broader industrial value chains. These capabilities provide opportunities to contribute to the wider industrial and energy ecosystem that is evolving across the Middle East.

As investment across mining, processing and industrial infrastructure continues to accelerate, TAKRAF Group remains committed to supporting customers with high-capacity bulk material handling systems, integrated minerals processing solutions, water recovery and tailings technologies and proven project execution expertise. The broader Tenova group extends these capabilities into hydrometallurgy, downstream metals technologies and decarbonization, enabling engagement across a wider portion of the industrial value chain while supporting the region's long-term economic ambitions.

For more information on TAKRAF Group visit www.takraf.com or be in touch at This email address is being protected from spambots. You need JavaScript enabled to view it..

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