GCC oil-exporting economies will benefit from higher crude prices and the EU’s efforts to find new energy sources as the bloc looks to reduce its reliance on Russian hydrocarbons, said Bank of America.
With the higher oil windfall “we will see fiscal surpluses in all of the Gulf countries”, this year, said Jean-Michel Saliba, a director and Mena economist at BofA.
Oil prices surged past $130 a barrel on Tuesday, their highest since 2008, after US President Joe Biden announced that the US would ban crude, gas and coal imports from Russia.
The move tightened US sanctions on the world's second-largest energy exporter after its military offensive in Ukraine.
Prices eased after the UAE envoy to the US said the country supports increasing output in tight market conditions.
Brent, the global benchmark for two thirds of the world's oil, hit $116.60 a barrel while West Texas Intermediate, the gauge that tracks US crude, was at $112.60 at 12.39pm UAE time.
The US move to ban Russian oil, about 3 per cent of its crude imports, is intended to freeze the country out of markets and isolate its economy.
Russia supplies about 40 per cent of Europe's gas and 30 per cent of its oil.
The EU has not followed the US with an outright ban but said it will phase-out Russian hydrocarbons by the end of this year and look for alternative sources of oil and gas in the meantime.
BofA expects oil prices to average $110 a barrel this year if the conflict is resolved quickly. However, in the worst-case scenario, where energy supplies are severely affected, the average price may jump to $130 per barrel in 2022.
The higher average oil price reflects extreme volatility and oil at $130 a barrel will put energy, which accounts for 8 per cent of global gross domestic product, “firmly in the place where we are invoking demand destruction”, said Hootan Yazhari, Mena and global frontier market research head at BofA.
The average oil price at such an elevated level is “very detrimental”, he said.
The economic momentum in the broader Mena oil-exporting countries has been picking up, with crude prices surging 67 per cent last year.
For Saudi Arabia, the world’s largest exporter of crude, every $10 increase in the price of a barrel of oil will boost its GDP by 0.5 per cent. If oil averages $110 a barrel, that would translate into a fiscal surplus of 10 per cent of GDP.
Kuwait stands to gain the most in terms of its fiscal balance with higher oil prices and Bahrain the least, Mr Saliba said.
Qatar, one of the world’s biggest natural gas producers, will be a “winner” along with Egypt in the potential supply of gas to the EU. However, the near-term upside is limited as output increases over time to meet demand.
The volatility caused by the Russia-Ukraine crisis could result in a greater push to develop spare capacity in the GCC.
The geopolitical uncertainty in the region will mainly stem from developments related to Iran and talks to revive country's nuclear deal.
Gulf countries have traditionally relied on the sale of hydrocarbons for most of their revenue. However, governments have introduced reforms and economic transformation programmes over the past few years to diversify their economies and reduce their reliance on oil.
“We have not seen the commensurate increase in budget oil price assumptions,” Mr Saliba said. “These remain conservative, which suggest that there is an element of spending control when it comes to budget policies.”
The fiscal reserves of GCC states will receive a boost this year. Saudi Arabia can channel some of the oil windfall to its sovereign fund, the Public Investment Fund, and use it to bridge funding gaps for the mega projects it has lined up as part of its Vision 2030 programme, he said.
The kingdom fiscal surplus this year bodes well for economic growth, Mr Saliba said.
The continuing reforms in the UAE have also boosted its medium-term outlook. The country’s budget remains conservative, with the government aiming for a fiscal balance in 2024.
Furthermore, the introduction of a corporate income tax going forward will “also help in this respect”, he said.
“We think it will also nudge development of the higher value-added sectors [of the economy] over the medium term,” Mr Saliba said.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Results:
6.30pm: Handicap (Turf) | US$175,000 2,410m | Winner: Bin Battuta, Christophe Soumillon (jockey), Saeed bin Suroor (trainer)
7.05pm: UAE 1000 Guineas Trial Conditions (Dirt) | $100,000 | 1,400m | Winner: Al Hayette, Fabrice Veron, Ismail Mohammed
7.40pm: Handicap (T) | $145,000 | 1,000m | Winner: Faatinah, Jim Crowley, David Hayes
8.15pm: Dubawi Stakes Group 3 (D) | $200,000 | 1,200m | Winner: Raven’s Corner, Richard Mullen, Satish Seemar
8.50pm: Singspiel Stakes Group 3 (T) | $200,000 | 1,800m | Winner: Dream Castle, Christophe Soumillon, Saeed bin Suroor
9.25pm: Handicap (T) | $175,000 | 1,400m | Winner: Another Batt, Connor Beasley, George Scott
Killing of Qassem Suleimani
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
MATCH INFO
Cricket World Cup League Two
Oman, UAE, Namibia
Al Amerat, Muscat
Results
Oman beat UAE by five wickets
UAE beat Namibia by eight runs
Namibia beat Oman by 52 runs
UAE beat Namibia by eight wickets
UAE v Oman - abandoned
Oman v Namibia - abandoned
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
BRAZIL%20SQUAD
%3Cp%3EGoalkeepers%3A%20Alisson%2C%20Ederson%2C%20Weverton%3Cbr%3E%3Cbr%3EDefenders%3A%20Dani%20Alves%2C%20Marquinhos%2C%20Thiago%20Silva%2C%20Eder%20Militao%20%2C%20Danilo%2C%20Alex%20Sandro%2C%20Alex%20Telles%2C%20Bremer.%3Cbr%3E%3Cbr%3EMidfielders%3A%20Casemiro%2C%20Fred%2C%20Fabinho%2C%20Bruno%20Guimaraes%2C%20Lucas%20Paqueta%2C%20Everton%20Ribeiro.%3Cbr%3E%3Cbr%3EForwards%3A%20Neymar%2C%20Vinicius%20Junior%2C%20Richarlison%2C%20Raphinha%2C%20Antony%2C%20Gabriel%20Jesus%2C%20Gabriel%20Martinelli%2C%20Pedro%2C%20Rodrygo%3C%2Fp%3E%0A
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Dresos%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%20September%202020%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Vladimir%20Radojevic%20and%20Aleksandar%20Jankovic%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%2C%20UAE%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20Fashion%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFunding%3A%3C%2Fstrong%3E%20%24285%2C000%3B%20%24500%2C000%20currently%20being%20raised%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Crowdfunding%2C%20family%2C%20friends%20and%20self-funding%3C%2Fp%3E%0A
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
ACL Elite (West) - fixtures
Monday, Sept 30
Al Sadd v Esteghlal (8pm)
Persepolis v Pakhtakor (8pm)
Al Wasl v Al Ahli (8pm)
Al Nassr v Al Rayyan (10pm)
Tuesday, Oct 1
Al Hilal v Al Shorta (10pm)
Al Gharafa v Al Ain (10pm)
Match info
Champions League quarter-final, first leg
Liverpool v Porto, Tuesday, 11pm (UAE)
Matches can be watched on BeIN Sports
Things Heard & Seen
Directed by: Shari Springer Berman, Robert Pulcini
Starring: Amanda Seyfried, James Norton
2/5
PROVISIONAL FIXTURE LIST
Premier League
Wednesday, June 17 (Kick-offs uae times) Aston Villa v Sheffield United 9pm; Manchester City v Arsenal 11pm
Friday, June 19 Norwich v Southampton 9pm; Tottenham v Manchester United 11pm
Saturday, June 20 Watford v Leicester 3.30pm; Brighton v Arsenal 6pm; West Ham v Wolves 8.30pm; Bournemouth v Crystal Palace 10.45pm
Sunday, June 21 Newcastle v Sheffield United 2pm; Aston Villa v Chelsea 7.30pm; Everton v Liverpool 10pm
Monday, June 22 Manchester City v Burnley 11pm (Sky)
Tuesday, June 23 Southampton v Arsenal 9pm; Tottenham v West Ham 11.15pm
Wednesday, June 24 Manchester United v Sheffield United 9pm; Newcastle v Aston Villa 9pm; Norwich v Everton 9pm; Liverpool v Crystal Palace 11.15pm
Thursday, June 25 Burnley v Watford 9pm; Leicester v Brighton 9pm; Chelsea v Manchester City 11.15pm; Wolves v Bournemouth 11.15pm
Sunday June 28 Aston Villa vs Wolves 3pm; Watford vs Southampton 7.30pm
Monday June 29 Crystal Palace vs Burnley 11pm
Tuesday June 30 Brighton vs Manchester United 9pm; Sheffield United vs Tottenham 11.15pm
Wednesday July 1 Bournemouth vs Newcastle 9pm; Everton vs Leicester 9pm; West Ham vs Chelsea 11.15pm
Thursday July 2 Arsenal vs Norwich 9pm; Manchester City vs Liverpool 11.15pm
The specs
Engine: 3.6 V6
Transmission: 8-speed auto
Power: 295bhp
Torque: 353Nm
Price: Dh155,000
On sale: now
UAE currency: the story behind the money in your pockets
The biog
Family: He is the youngest of five brothers, of whom two are dentists.
Celebrities he worked on: Fabio Canavaro, Lojain Omran, RedOne, Saber Al Rabai.
Where he works: Liberty Dental Clinic
Three tips from La Perle's performers
1 The kind of water athletes drink is important. Gwilym Hooson, a 28-year-old British performer who is currently recovering from knee surgery, found that out when the company was still in Studio City, training for 12 hours a day. “The physio team was like: ‘Why is everyone getting cramps?’ And then they realised we had to add salt and sugar to the water,” he says.
2 A little chocolate is a good thing. “It’s emergency energy,” says Craig Paul Smith, La Perle’s head coach and former Cirque du Soleil performer, gesturing to an almost-empty open box of mini chocolate bars on his desk backstage.
3 Take chances, says Young, who has worked all over the world, including most recently at Dragone’s show in China. “Every time we go out of our comfort zone, we learn a lot about ourselves,” she says.
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Killing of Qassem Suleimani
Killing of Qassem Suleimani
