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L&T secures ₹15,000 cr power orders across India, West Asia

Larsen & Toubro (L&T) is expanding its footprint in the power infrastructure market after winning a series of transmission and distribution contracts worth ₹10,000 crore to ₹15,000 crore across India and West Asia.

The fresh orders underline the growing demand for electricity networks capable of handling rising power consumption as well as the rapid addition of renewable energy capacity. L&T said its Power Transmission & Distribution business has secured the contracts in India, Saudi Arabia and the United Arab Emirates.

The projects span different parts of the electricity value chain, including high-voltage transmission systems, substations and associated infrastructure. Together, they give the engineering major a sizeable new pipeline at a time when grid investment is becoming increasingly important to energy companies and governments.

A major part of the international order intake comes from Saudi Arabia, where L&T has won contracts involving 380 kV transmission lines and substations. The projects are expected to support the kingdom’s expanding electricity network and improve the movement of power from new generation facilities to consumption centres.

Saudi Arabia is investing heavily in renewable energy as part of its broader economic diversification programme. Large solar projects are being developed across the country, creating a parallel need for transmission infrastructure. Power generated in remote locations needs to be transported efficiently to cities, industries and other major demand centres.

L&T‘s Saudi business has already built a presence in the country’s power sector, and the latest contracts deepen that relationship. The company’s experience in large-scale engineering, procurement and construction projects gives it an opportunity to participate in the kingdom’s continuing infrastructure spending.

The United Arab Emirates has also contributed to the new order pipeline. L&T has received contracts for the construction of 132/11 kV substations and associated cabling work. Such facilities are essential for stepping down electricity to distribution levels before it reaches consumers and businesses.

The UAE is simultaneously investing in power reliability, new infrastructure and cleaner sources of energy. That combination is creating demand for modern transmission and distribution networks.

India remains another important market for the business. L&T has secured a project from a private-sector developer to establish a transmission system in Visakhapatnam, including transmission lines and substations.

The domestic project comes against the backdrop of India’s rapidly changing electricity landscape. Electricity demand is rising as industrial production expands, cities grow and more households and businesses adopt electricity-intensive technologies. At the same time, the country is adding large amounts of solar and wind capacity.

That combination is putting greater pressure on the power grid. New generation capacity alone cannot solve the problem unless adequate transmission infrastructure is available to carry electricity to areas where it is needed.

This is where L&T sees a long-term opportunity. Its PT&D business works across transmission, substations, distribution networks and related power infrastructure, giving it exposure to multiple stages of grid development.

The latest order wins also show how the company’s international strategy is complementing its domestic business. India provides a large and growing market, while countries in West Asia are committing significant capital to infrastructure modernisation and energy diversification.

The Middle East is particularly attractive for Indian engineering companies because governments in the region are moving beyond traditional oil and gas investments. Saudi Arabia and the UAE are developing renewable-energy projects, smart infrastructure and modern electricity networks as they prepare for changing energy needs.

Transmission systems are becoming even more important as renewable energy accounts for a larger share of electricity generation. Solar and wind projects tend to be located where natural resources are strongest, which can be far from population centres. This requires high-capacity transmission corridors to connect generation with demand.

Grid flexibility is another emerging requirement. Renewable power generation can vary according to sunlight and wind conditions, making it necessary for electricity networks to handle changing flows. New substations and transmission infrastructure can help improve the resilience and efficiency of the wider grid.

L&T’s latest contracts come as the company continues to build a large order book across infrastructure and engineering segments. Large-ticket EPC contracts provide revenue visibility while allowing the company to leverage its project-management and engineering capabilities across geographies.

The orders are also strategically relevant because they are spread across three markets rather than being concentrated in one location. Such diversification can help L&T balance variations in infrastructure spending across individual countries.

The company expects the energy transition to generate sustained demand for transmission and distribution infrastructure. As governments increase investments in renewable energy, the supporting grid will need to expand alongside generation.

That could make power transmission one of the most important infrastructure opportunities of the coming years. India’s renewable-energy ambitions and West Asia’s push for economic and energy diversification are both creating a need for large-scale grid investments.

L&T’s latest contracts place its Power Transmission & Distribution business at the centre of that opportunity. The immediate benefit is a new ₹10,000-15,000 crore order pipeline. The longer-term opportunity lies in participating in the infrastructure needed to move cleaner and more reliable electricity across some of the world’s fastest-growing power markets.

 

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OPEC cuts oil demand forecast as Saudi output falls

OPEC has cut its forecast for global oil demand growth this year, even as the market faces a much bigger concern on the supply side. The latest report comes as Brent crude climbs above $100 a barrel, with attacks and shipping disruptions across the Middle East making it harder for oil producers to get supplies to international markets.

The Organisation of the Petroleum Exporting Countries now expects global oil demand to grow by 380,000 barrels per day (bpd) in 2026, down from its previous estimate of 580,000 bpd. This is the fifth consecutive downward revision to its demand-growth forecast.

OPEC has taken a relatively less pessimistic view of oil consumption than the International Energy Agency (IEA). While OPEC still expects demand to rise this year, the IEA now forecasts a decline of 2.5 million bpd in global oil demand in 2026 as high fuel prices and supply disruptions weigh on consumers and businesses.

The latest OPEC report has arrived at a difficult time for the oil market. Brent crude moved above $100 this week for the first time since July and briefly climbed above $107. The rise reflects fears that the disruption to Middle East oil flows could last much longer than initially expected.

A major part of the problem is coming from Saudi Arabia, OPEC’s largest producer and the world’s biggest oil exporter.

According to figures submitted by Saudi Arabia to OPEC, the kingdom produced about 6.24 million bpd in August. That was down around 1.9 million bpd, or 23%, from July and represented its lowest monthly production level this year.

The decline has been linked to attacks and threats by Iran-backed Houthi forces in Yemen. The group announced a maritime blockade against Saudi ports on the country’s western coast in late July. Attacks on shipping and energy infrastructure have since disrupted one of the alternative routes Saudi Arabia was using to move crude after the Strait of Hormuz became increasingly difficult to use.

Saudi Arabia had been relying more heavily on its East-West pipeline to move crude from its oil-producing areas to Yanbu on the Red Sea. The route was meant to reduce the country’s dependence on shipments through the Gulf. But the growing threat around the Red Sea and Bab el-Mandeb has made that alternative route increasingly difficult as well.

The impact has been visible in Saudi crude exports. Shipments fell to around 3.1 million bpd in August from about 5.1 million bpd in July, according to shipping data cited in the latest reports. That was the lowest level since at least 2013.

The IEA has offered an even more severe assessment of the disruption. It estimates that Saudi Arabia’s actual crude supply fell to around 6 million bpd in August, the lowest level in more than three decades. The agency has also cut its 2026 forecast for Saudi crude supply by 885,000 bpd because it expects the recovery of Middle East production to take longer.

The wider OPEC picture is mixed. Total crude production from OPEC members increased by about 346,000 bpd in August to 24.08 million bpd, helped by higher Iraqi output. But Iranian production fell by around 399,000 bpd to 2.1 million bpd amid restrictions on shipments.

This means the global oil market is dealing with two opposing forces. Demand is weakening, which would normally put downward pressure on crude prices. But supply disruptions are proving powerful enough to push prices higher.

That tension is also visible in the difference between OPEC and IEA forecasts. OPEC expects demand to grow modestly in 2026 and sees a stronger recovery next year, raising its 2027 demand-growth forecast to 2.36 million bpd from 2.16 million bpd earlier.

The IEA is much more cautious. It expects global oil supply to fall by 5.7 million bpd in 2026, around 6%, while global demand is expected to decline by 2.5 million bpd. Global inventories also fell sharply in August, adding another layer of risk if supply disruptions continue.

The immediate concern for consumers is the price of fuel. Crude oil is only one part of the final price paid for petrol, diesel and other petroleum products, but a prolonged rise in crude can eventually feed into transportation, manufacturing and logistics costs.

Oil-importing countries such as India are particularly exposed. Higher crude prices can increase the import bill, put pressure on the rupee and make it harder to contain inflation. Companies with high fuel and transportation costs may also see their profit margins come under pressure.

Financial markets are watching the situation closely because expensive oil can complicate central-bank decisions. If higher energy prices keep inflation elevated, investors may reduce expectations for interest-rate cuts. That can affect bonds, equities and currencies at the same time.

The supply situation could become even more important if attacks continue around the Red Sea and Gulf shipping routes. The IEA now expects a normalisation of Middle East oil flows to stretch into 2027, rather than returning quickly.

Oil prices could therefore remain volatile even if global demand slows. A reduction in geopolitical tensions could bring prices down quickly, but another major disruption could push Brent higher.

The latest OPEC report ultimately highlights a difficult oil-market reality: weaker demand is no longer enough to guarantee lower prices. With Saudi production sharply reduced and important export routes under threat, the market is increasingly focused on how much crude can actually reach consumers.

That makes the next developments in the Middle East crucial for oil prices, inflation and the broader global economy.

 

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Saudi Arabia slashes crude prices

Saudi Arabia has announced its biggest crude oil price cut for Asian buyers in more than two decades, signalling growing pressure in global oil markets amid rising supplies and uncertain demand.

State-owned oil giant Saudi Aramco has reduced the official selling price (OSP) of its flagship Arab Light crude for August deliveries to Asia by around $1.10 per barrel. The cut brings the premium over the regional benchmark to its lowest level in years and marks one of the sharpest price reductions since the early 2000s.

The move comes as oil-producing countries face a changing market environment, with global supply increasing and demand growth showing signs of slowing. Higher output from major producers, including members of the OPEC+ alliance, has added pressure on prices, forcing Saudi Arabia to adjust pricing to remain competitive in key Asian markets.

Asia remains the largest market for Saudi crude, with countries such as China, India, Japan and South Korea among its biggest customers. The latest reduction is seen as an effort to protect market share while responding to shifting supply-demand dynamics.

The price cut reflects Saudi Arabia’s attempt to balance two competing priorities, maintaining revenues while ensuring its crude remains attractive to buyers. The kingdom has traditionally used official selling prices as a tool to influence market sentiment and manage competition among oil suppliers.

The reduction also comes despite efforts by OPEC+ producers to manage output and support crude prices. However, increasing production levels and concerns over economic growth have limited the effectiveness of supply controls.

For major oil-importing countries such as India, lower crude prices could provide some relief by reducing import costs and easing pressure on inflation. Cheaper crude can also help lower fuel-related expenses for businesses and consumers.

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Saudi Arabia sets $19.50 oil premium

Saudi Arabia has raised its official selling price of crude oil for Asian buyers to a record premium of $19.50 per barrel, underscoring the growing impact of geopolitical tensions in the Middle East. The sharp increase comes as instability around the Strait of Hormuz fuels fears of supply disruptions in one of the world’s most vital oil transit routes.

The Strait of Hormuz is a crucial passage for global oil shipments, and any threat to its operations quickly affects energy markets. Ongoing tensions linked to Iran have heightened uncertainty over the safety of oil flows, prompting producers to add a significant risk premium to prices. As a result, crude markets have become highly volatile.

The increase in crude prices is expected to have wider economic consequences. Higher fuel costs typically lead to increased transportation and production expenses, which can drive up the prices of goods and services. This adds to inflationary pressures already affecting many economies.

Financial experts have warned about the broader risks. JPMorgan CEO Jamie Dimon noted that an extended conflict involving Iran could lead to sustained inflation and force central banks to keep interest rates higher for longer. This could slow economic growth and create further uncertainty in financial markets.

Also Read: Jamie Dimon flags Iran war risk to inflation

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Trump eyes F-35 jets sale to Saudi Arabia

US President Trump plans to sell Saudi Arabia advanced F-35 fighter jets, days before Crown Prince Mohammed bin Salman’s White House visit.

Trump described Saudi Arabia as a “great ally” and said the sale is in line with strengthening US-Saudi ties. If completed, Saudi Arabia would become the first Arab country to acquire F-35 jets.

The deal raises concerns about maintaining Israel’s long-standing military edge in the Middle East. Israeli officials have warned that selling such advanced jets could trigger a regional arms race and weaken their aerial superiority.

The F-35, built by Lockheed Martin, is considered one of the most sophisticated fighter jets in the world, featuring stealth technology and advanced systems. Previous US administrations have ensured that arms sales to Arab nations do not compromise Israel’s qualitative military advantage.

The potential sale comes amid Trump’s broader Middle East strategy, which includes encouraging stronger relations between Arab nations and Israel under the Abraham Accords. Congress retains the power to block the sale, and the deal’s progress will be closely watched internationally.

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