Aramco CEO Sees ‘Good’ China Oil Demand Driving Growth

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Aramco CEO Sees ‘Good’ China Oil Demand Driving Growth

China is still driving growth in global oil demand, the head of Saudi Aramco said, dismissing concerns about peaking consumption in the world’s biggest energy user. “We still see good demand coming out of China,” Aramco’s Chief Executive Officer Amin Nasser said in a Bloomberg television interview in Davos. The country, along with India, make […]

China is still driving growth in global oil demand, the head of Saudi Aramco said, dismissing concerns about peaking consumption in the world’s biggest energy user.

“We still see good demand coming out of China,” Aramco’s Chief Executive Officer Amin Nasser said in a Bloomberg television interview in Davos. The country, along with India, make up about 40% of the rise in global consumption and, “demand is increasing year on year.”

Aramco has long been positive about demand in China, its largest market and a target for major investments, even as the Asian nation was sluggish to recover from the coronavirus pandemic. Nasser’s said back in October that he was bullish on China after a series of government stimulus measures aimed at reviving the economy.

The optimism contrasts with signals of a slowdown, with even the country’s largest energy producer, China National Petroleum Corp., predicting oil demand may cease growing after 2025 as a shift toward electric vehicles gathers pace. Nasser said that while the EV push will erode gasoline demand, the country’s appetite for chemicals produced from oil will keep expanding.

“Even with the transition and going to electric vehicles, you need oil as a feedstock to produce the materials that would be required for any transition,” Nasser said. “The growth is still there.”

Aramco has invested in several refineries in China that can churn out more chemical products and less transport fuel. The company aims to take stakes 10%-20% in such projects while securing contracts to supply about 60% of the facility’s oil needs, thereby locking in long-term demand, Nasser said.

Oil Slowdown

Last year, Asia’s biggest economy increased oil use by just 180,000 barrels a day — less than a fifth of the rise seen in 2023 — as it grappled with an array of economic challenges, according to the International Energy Agency. Growth will pick up marginally to 220,000 barrels a day in 2025, the Paris-based IEA predicts, while remaining capped by signs of a deepening deflationary spiral.

The Chinese weakness was partly responsible for the 3% decline in oil prices last year, outweighing geopolitical risks in the Middle East. Crude in London has increased 6% this month following aggressive US sanctions on Russia.

Those restrictions are already starting to tighten the oil market, Nasser said. But it’s too early to see if the prospect of sanctions obstructing the flow of some 2 million barrels of daily Russian seaborne crude will have a lasting impact, he said.

Nasser expects global oil demand to rise by about 1.3 million barrels a day this year to 106 million a day. That’s slightly higher than the 1.05 million barrel-a-day growth forecast by the International Energy Agency.

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Microsoft tells communities it will ‘pay its way’ as AI data center resource usage sparks backlash

It will work with utilities and public commissions to set the rates it pays high enough to cover data center electricity costs (including build-outs, additions, and active use). “Our goal is straightforward: To ensure that the electricity cost of serving our data centers is not passed on to residential customers,” Smith emphasized. For example, the company is supporting a new rate structure Wisconsin that would charge a class of “very large customers,” including data centers, the true cost of the electricity required to serve them. It will collaborate “early, closely, and transparently” with local utilities to add electricity and supporting infrastructure to existing grids when needed. For instance, Microsoft has contracted with the Midcontinent Independent System Operator (MISO) to add 7.9GW of new electricity generation to the grid, “more than double our current consumption,” Smith noted. It will pursue ways to make data centers more efficient. For example, it is already experimenting with AI to improve planning, extract more electricity from existing infrastructure, improve system resilience, and speed development of new infrastructure and technologies (like nuclear energy). It will advocate for state and national public policies that ensure electricity access that is affordable, reliable, and sustainable in neighboring communities. Microsoft previously established priorities for electricity policy advocacy, Smith noted, but “progress has been uneven. This needs to change.” Microsoft is similarly committed when it comes to data center water use, promising four actions: Reducing the overall amount of water its data centers use, initially improving it by 40% by 2030. The company is exploring innovations in cooling, including closed-loop systems that recirculate cooling liquids. It will collaborate with local utilities to map out water, wastewater, and pressure needs, and will “fully fund” infrastructure required for growth. For instance, in Quincy, Washington, Microsoft helped construct a water reuse utility that recirculates

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HGP’s plan includes a revenue share with the government, and the company would create a decommissioning fund, according to Bloomberg. The alternative? After a lengthy decommissioning process, the reactors are shipped to a remote storage facility in Washington state together dust along with dozens of other retired nuclear reactors. So the carrier itself isn’t going to be turned into a data center, but its power plants are being proposed for a data center on land. And even with the lengthening decommissioning process, that’s still faster than building a nuclear power plant from scratch. Don’t hold your breath, says Kristen Vosmaer, managing director, JLL Work Dynamics Data Center team. The idea of converting USS Nimitz’s nuclear reactors to power AI data centers sounds compelling but faces insurmountable obstacles, he argues. “Naval reactors use weapons-grade uranium that civilian entities cannot legally possess, and the Nuclear Regulatory Commission has no pathway to license such facilities. Even setting aside the fuel issue, these military-designed systems would require complete reconstruction to meet civilian safety standards, eliminating any cost advantages over purpose-built nuclear plants,” Vosmaer said. The maritime concept itself, however, does have some merit, said Vosmaer. “Ocean cooling can reduce energy consumption compared to land-based data centers, and floating platforms offer positioning flexibility that fixed facilities cannot match,” Vosmaer said.

What exactly is an AI factory?

Others, however, seem to use the word to mean something smaller than a data center, referring more to the servers, software, and other systems used to run AI. For example, the AWS AI Factory is a combination of hardware and software that runs on-premises but is managed by AWS and comes with AWS services such as Bedrock, networking, storage and databases, and security. At Lenovo, AI factories appear to be packaged servers designed to be used for AI. “We’re looking at the architecture being a fixed number of racks, all working together as one design,” said Scott Tease, vice president and general manager of AI and high-performance computing at Lenovo’s infrastructure solutions group. That number of racks? Anything from a single rack to hundreds, he told Computerworld. Each rack is a little bigger than a refrigerator, comes fully assembled, and is often fully preconfigured for the customer’s use case. “Once it arrives at the customer site, we’ll have service personnel connect power and networking,” Tease said. For others, the AI factory concept is more about the software.

Meta establishes Meta Compute to lead AI infrastructure buildout

At that scale, infrastructure constraints are becoming a binding limit on AI expansion, influencing decisions like where new data centers can be built and how they are interconnected. The announcement follows Meta’s recent landmark agreements with Vistra, TerraPower, and Oklo aimed at supporting access to up to 6.6 gigawatts of nuclear energy to fuel its Ohio and Pennsylvania data center clusters. Implications for hyperscale networking Analysts say Meta’s approach indicates how hyperscalers are increasingly treating networking and interconnect strategy as first-order concerns in the AI race. Tulika Sheel, senior vice president at Kadence International, said that Meta’s initiative signals that hyperscale networking will need to evolve rapidly to handle massive internal data flows with high bandwidth and ultra-low latency. “As data centers grow in size and GPU density, pressure on networking and optical supply chains will intensify, driving demand for more advanced interconnects and faster fiber,” Sheel added. Others pointed to the potential architectural shifts from this. “Meta is using Disaggregated Scheduled Fabric and Non-Scheduled Fabric, along with new 51 Tbps switches and Ethernet for Scale-Up Networking, which is intensifying pressure on switch silicon, optical modules, and open rack standards,” said Biswajeet Mahapatra, principal analyst at Forrester. “This shift is forcing the ecosystem to deliver faster optical interconnects and greater fiber capacity, as Meta targets significant backbone growth and more specialized short-reach and coherent optical technologies to support cluster expansion.” The network is no longer a secondary pipe but a primary constraint. Next-generation connectivity, Sheel said, is becoming as critical as access to compute itself, as hyperscalers look to avoid network bottlenecks in large-scale AI deployments.

AI, edge, and security: Shaping the need for modern infrastructure management

The rapidly evolving IT landscape, driven by artificial intelligence (AI), edge computing, and rising security threats, presents unprecedented challenges in managing compute infrastructure. Traditional management tools struggle to provide the necessary scalability, visibility, and automation to keep up with business demand, leading to inefficiencies and increased business risk. Yet organizations need their IT departments to be strategic business partners that enable innovation and drive growth. To realize that goal, IT leaders should rethink the status quo and free up their teams’ time by adopting a unified approach to managing infrastructure that supports both traditional and AI workloads. It’s a strategy that enables companies to simplify IT operations and improve IT job satisfaction. 5 IT management challenges of the AI era Cisco recently commissioned Forrester Consulting to conduct a Total Economic Impact™ analysis of Cisco Intersight. This IT operations platform provides visibility, control, and automation capabilities for the Cisco Unified Computing System (Cisco UCS), including Cisco converged, hyperconverged, and AI-ready infrastructure solutions across data centers, colocation facilities, and edge environments. Intersight uses a unified policy-driven approach to infrastructure management and integrates with leading operating systems, storage providers, hypervisors, and third-party IT service management and security tools. The Forrester study first uncovered the issues IT groups are facing: Difficulty scaling: Manual, repetitive processes cause lengthy IT compute infrastructure build and deployment times. This challenge is particularly acute for organizations that need to evolve infrastructure to support traditional and AI workloads across data centers and distributed edge environments. Architectural specialization and AI workloads: AI is altering infrastructure requirements, Forrester found. Companies design systems to support specific AI workloads — such as data preparation, model training, and inferencing — and each demands specialized compute, storage, and networking capabilities. Some require custom chip sets and purpose-built infrastructure, such as for edge computing and low-latency applications.

DCF Poll: Analyzing AI Data Center Growth

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Microsoft will invest $80B in AI data centers in fiscal 2025

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