A firefighter working to extinguish a fire at an oil depot in the Smolensk region in Russia. AFP
A firefighter working to extinguish a fire at an oil depot in the Smolensk region in Russia. AFP
A firefighter working to extinguish a fire at an oil depot in the Smolensk region in Russia. AFP
A firefighter working to extinguish a fire at an oil depot in the Smolensk region in Russia. AFP

Business

Energy

The delicately balanced Jenga tower of energy security

  • English
  • Arabic
Robin M. Mills is chief executive of Qamar Energy, and author of The Myth of the Oil Crisis

April 29, 2024

In the game of Jenga, players remove wooden blocks from a teetering tower, until the final misjudgment makes it collapse.

Global oil security appears solid enough today, but several bricks have gone, making it more vulnerable than it appears. Friday night’s lethal attack on a gas facility in Iraq’s Kurdistan region is another wobble in the edifice.

Since the 1973 oil embargo, the US, Europe and Japan have been intensely aware of threats to the flow of oil from the Middle East, the world’s key exporting region.

The outbreak of the Iranian Revolution and Iran-Iraq War in 1980-1988, Saddam Hussein’s invasion of Kuwait in 1990 and the Libyan uprising of 2011 all led to the disruption of supplies.

But the US, at least, has grown much more relaxed about its oil supplies, with the rise of shale production and its conversion from the world’s biggest oil importer to a significant exporter of oil and gas.

Last year saw unexpectedly strong growth in shale output, with further stepping up of Western Hemisphere output in Brazil and Guyana.

Opec spare capacity is also ample in aggregate – though nearly all concentrated in Saudi Arabia, the UAE and Iraq.

These developments have papered over rising vulnerabilities elsewhere. Energy security rests on diversity of supply sources and transit routes. Now the bricks are being pulled out, one by one.

First, the Iran-orchestrated drone and missile attack on the Abqaiq and Khurais oil facilities in Saudi Arabia in September 2019, cutting up to 5.7 million barrels per day of production. Although the strike appeared designed not to cause permanent damage and operations were restored quite quickly, then US president Donald Trump said: “That was an attack on Saudi Arabia, that wasn’t an attack on us,” and the US ultimately did not respond.

Second, Russia’s invasion of Ukraine in March 2022, followed by a European ban on importing its oil. This led Russian oil exports to reorient almost entirely to Turkey, India and China – the latter two usually requiring passage through the Suez Canal and Red Sea.

More recently, Ukraine has responded to Russian attacks on its cities and foot-dragging by its western supporters by striking most refineries in western Russia with drones. The latest case is the Slavyansk refinery in the Krasnodar region, which was set on fire on Saturday.

Ukrainian rescuers at the site of a rocket attack on a residential building in Dnipro, south-eastern Ukraine. EPA
Ukrainian rescuers at the site of a rocket attack on a residential building in Dnipro, south-eastern Ukraine. EPA
Rescues carry a person wounded by a Russian missile strike in Dnipro. Reuters
Rescues carry a person wounded by a Russian missile strike in Dnipro. Reuters
Rescuers tackle a blaze at a building struck by Russian bombs, in Dnipro. AP
Rescuers tackle a blaze at a building struck by Russian bombs, in Dnipro. AP
An apartment building hit by a Russian missile strike in Dnipro. Reuters
An apartment building hit by a Russian missile strike in Dnipro. Reuters
Ukrainian soldiers fire at Russian positions near the town of Kupyansk, Kharkiv Region. AFP
Ukrainian soldiers fire at Russian positions near the town of Kupyansk, Kharkiv Region. AFP
A building destroyed by a Russian air strike in the front-line town of Orikhiv. AP
A building destroyed by a Russian air strike in the front-line town of Orikhiv. AP
A dog stands on the rubble as rescuers work at the site of a destroyed building during a Russian missile strike in Chernihiv. Reuters
A dog stands on the rubble as rescuers work at the site of a destroyed building during a Russian missile strike in Chernihiv. Reuters
A Ukrainian serviceman works on an FPV drone in a workshop in the Donetsk region. Reuters
A Ukrainian serviceman works on an FPV drone in a workshop in the Donetsk region. Reuters
Local resident Kateryna, 77-years-old, walks with a litter of puppies, which she feeds in the yard of her bomb-damaged apartment block in the town of Kurakhove. AFP
Local resident Kateryna, 77-years-old, walks with a litter of puppies, which she feeds in the yard of her bomb-damaged apartment block in the town of Kurakhove. AFP
Ukrainian rescuers at the scene of a missile strike near a residential building, in Zaporizhzhia. EPA
Ukrainian rescuers at the scene of a missile strike near a residential building, in Zaporizhzhia. EPA
A woman looks at the damage in her flat after debris from a missile strike hit nearby, in Kyiv. EPA
A woman looks at the damage in her flat after debris from a missile strike hit nearby, in Kyiv. EPA
Ukrainian firefighters at the scene of a missile strike in Kyiv. EPA
Ukrainian firefighters at the scene of a missile strike in Kyiv. EPA
Ukrainian servicemen take part in military training at an undisclosed location near the frontline. EPA
Ukrainian servicemen take part in military training at an undisclosed location near the frontline. EPA
Ukrainian troops run near the site of a rocket attack on an industrial building, in Kharkiv. EPA
Ukrainian troops run near the site of a rocket attack on an industrial building, in Kharkiv. EPA
A pilot operates a drone at a training ground in the Kyiv region. AFP
A pilot operates a drone at a training ground in the Kyiv region. AFP
Ukrainian and Russian soldiers are depicted in a tug-of-war on a memorial in Izium, Kharkiv region. AP
Ukrainian and Russian soldiers are depicted in a tug-of-war on a memorial in Izium, Kharkiv region. AP
A man looks at his home in a damaged apartment building in Izium, Kharkiv. AP
A man looks at his home in a damaged apartment building in Izium, Kharkiv. AP
Ukrainian civilian women are trained to use weapons, in Kyiv. AFP
Ukrainian civilian women are trained to use weapons, in Kyiv. AFP
A Ukrainian soldier mans a position as new recruits receive training at an undisclosed location in the Donetsk region. EPA
A Ukrainian soldier mans a position as new recruits receive training at an undisclosed location in the Donetsk region. EPA
A man pays tribute at a makeshift memorial for fallen Ukrainian soldiers, at the Independence Square in Kyiv. AFP
A man pays tribute at a makeshift memorial for fallen Ukrainian soldiers, at the Independence Square in Kyiv. AFP
An emergency worker at the scene of a Russian attack in Odesa. AP
An emergency worker at the scene of a Russian attack in Odesa. AP
Ukrainian recruits are trained by members of the Danish military, in the east of England. AP
Ukrainian recruits are trained by members of the Danish military, in the east of England. AP
Danylo, commander of an engineering and sapper company of the Ukrainian Armed Forces, inspects pyramidal anti-tank obstacles known as 'dragon's teeth' before installing them into a new fortification line in Zaporizhzhia region. Reuters
Danylo, commander of an engineering and sapper company of the Ukrainian Armed Forces, inspects pyramidal anti-tank obstacles known as 'dragon's teeth' before installing them into a new fortification line in Zaporizhzhia region. Reuters

Third, the closure of the Iraq-Turkey pipeline in March 2023, following an arbitration judgment against Ankara over use of the line by Iraq’s semi-autonomous Kurdistan Region.

Although Turkey has consented to resume operations, a reopening now hangs on a knotty agreement between Kurdistan and the federal government in Baghdad.

The pipeline, with nominal capacity of up to 1.6 million bpd, and about 450,000 bpd of usable capacity in the short term, is Iraq’s only alternative to the Gulf for exports.

Fourth, the effective closure of the southern Red Sea to much marine traffic, following a series of attacks on shipping by Houthi forces in Yemen. Defensive measures and strikes on Houthi positions by American, British and other forces may have reduced the frequency of attacks, but sailors are still not keen to risk the passage.

On Thursday, a tanker carrying Russian oil to India was hit by a missile, though it was able to continue its journey after suffering minor damage. Europe is very reliant on Middle Eastern oil now, replacing previous Russian supplies, but much of this has to take the long route around the Cape of Good Hope rather than through Suez.

The fifth problem is half a world from the Middle East. US waivers for sanctions had led to a significant recovery in Venezuela’s output, which more than doubled from its nadir in mid-2020. But, growing frustrated with perceived intransigence from President Nicolás Maduro over holding fair elections in July, the US ended general sanctions exemptions this month.

Sixth comes Iran, never far from energy security worries, but brought back to prominence by Israel’s campaign in Gaza.

After the US, Iran has been the biggest contributor to global production growth, adding about 1.3 million bpd between late 2020 and this March. This was the result of better Iranian expertise in avoiding US sanctions, and slackened enforcement, as US President Joe Biden’s administration initially sought a resumption of talks. Then most of the US sanctions team turned their attention to Russia instead.

But after the tit-for-tat attacks between Iran and Israel in recent weeks, the US imposed yet more sanctions on Tehran. Measures passed in the House of Representatives last week could expand restrictions to ports, ship, refineries and Chinese financial institutions dealing with Iranian oil, which could greatly escalate tensions with Beijing. Nevertheless, they may herald a return to intensive US efforts to cut back on Iran’s exports.

The perpetrators and motives for the explosion at Khor Mor are not clear. The interruption to its gas supplies mainly damages the Iraqi Kurdistan region. But it is a reminder that oil exports from Iraq, about 3.4 million bpd currently, are very vulnerable in the case of conflict.

A full-blown closure of the Strait of Hormuz, long the nightmare of energy security experts, still appears unlikely. Iran is as reliant on this narrow waterway as most of its neighbours. But in the event of deepening hostilities with Israel, particularly if the US became directly involved, more threat to shipping and energy infrastructure is likely. Or, Iran’s own oil facilities might be targeted. Tehran blamed two explosions on its gas pipelines in February on Israeli sabotage.

The proliferation of aerial – and marine – drones makes such a campaign more feasible than when Iran was reliant on speedboats, mines and inaccurate missiles. Saudi Arabia can use its east-west pipeline to divert some exports to the Red Sea, but the Houthi threat now makes it harder to access Asia from here.

Oil prices have not reacted much to these worries; they even fell after Iran’s drone and missile armada against Israel caused little damage.

It is indeed hard to trade a low-probability but high-consequence all-out war, although a few traders took a flutter on $250 per barrel options.

But after a string of geopolitical shocks, energy security is more fragile than a Brent crude price below $90 per barrel suggests.

Robin M. Mills is chief executive of Qamar Energy, and author of The Myth of the Oil Crisis

On Women's Day
The smuggler

Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple. 
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.

Khouli conviction

Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.

For sale

A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.

- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico

- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000

- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950

Normal People

Sally Rooney, Faber & Faber
 

Real estate tokenisation project

Dubai launched the pilot phase of its real estate tokenisation project last month.

The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.

Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.

ETFs explained

Exhchange traded funds are bought and sold like shares, but operate as index-tracking funds, passively following their chosen indices, such as the S&P 500, FTSE 100 and the FTSE All World, plus a vast range of smaller exchanges and commodities, such as gold, silver, copper sugar, coffee and oil.

ETFs have zero upfront fees and annual charges as low as 0.07 per cent a year, which means you get to keep more of your returns, as actively managed funds can charge as much as 1.5 per cent a year.

There are thousands to choose from, with the five biggest providers BlackRock’s iShares range, Vanguard, State Street Global Advisors SPDR ETFs, Deutsche Bank AWM X-trackers and Invesco PowerShares.

Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3EName%3A%20%3C%2Fstrong%3ESmartCrowd%0D%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2018%0D%3Cbr%3E%3Cstrong%3EFounder%3A%20%3C%2Fstrong%3ESiddiq%20Farid%20and%20Musfique%20Ahmed%0D%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EDubai%0D%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EFinTech%20%2F%20PropTech%0D%3Cbr%3E%3Cstrong%3EInitial%20investment%3A%20%3C%2Fstrong%3E%24650%2C000%0D%3Cbr%3E%3Cstrong%3ECurrent%20number%20of%20staff%3A%3C%2Fstrong%3E%2035%0D%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3ESeries%20A%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EVarious%20institutional%20investors%20and%20notable%20angel%20investors%20(500%20MENA%2C%20Shurooq%2C%20Mada%2C%20Seedstar%2C%20Tricap)%3C%2Fp%3E%0A
UAE currency: the story behind the money in your pockets
ESSENTIALS

The flights

Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.

The hotels

Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.

The tours

A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages. 

UK%20record%20temperature
%3Cp%3E38.7C%20(101.7F)%20set%20in%20Cambridge%20in%202019%3C%2Fp%3E%0A
MATCH INFO

Uefa Champions League semi-finals, second leg:

Liverpool (0) v Barcelona (3), Tuesday, 11pm UAE

Game is on BeIN Sports

Cryopreservation: A timeline
  1. Keyhole surgery under general anaesthetic
  2. Ovarian tissue surgically removed
  3. Tissue processed in a high-tech facility
  4. Tissue re-implanted at a time of the patient’s choosing
  5. Full hormone production regained within 4-6 months

Janet Yellen's Firsts

  • In 2014, she became the first woman to lead the US Federal Reserve 
  • In 1999, she became the first female chair of the White House Council of Economic Advisers 
While you're here
Killing of Qassem Suleimani
PROFILE BOX

Company name: Overwrite.ai

Founder: Ayman Alashkar

Started: Established in 2020

Based: Dubai International Financial Centre, Dubai

Sector: PropTech

Initial investment: Self-funded by founder

Funding stage: Seed funding, in talks with angel investors

The%20new%20Turing%20Test
%3Cp%3EThe%20Coffee%20Test%3C%2Fp%3E%0A%3Cp%3E%3Cem%3EA%20machine%20is%20required%20to%20enter%20an%20average%20American%20home%20and%20figure%20out%20how%20to%20make%20coffee%3A%20find%20the%20coffee%20machine%2C%20find%20the%20coffee%2C%20add%20water%2C%20find%20a%20mug%20and%20brew%20the%20coffee%20by%20pushing%20the%20proper%20buttons.%3C%2Fem%3E%3C%2Fp%3E%0A%3Cp%3EProposed%20by%20Steve%20Wozniak%2C%20Apple%20co-founder%3C%2Fp%3E%0A
Sole survivors
  • Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
  • George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
  • Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
  • Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Ferrari 12Cilindri specs

Engine: naturally aspirated 6.5-liter V12

Power: 819hp

Torque: 678Nm at 7,250rpm

Price: From Dh1,700,000

Available: Now

While you're here
PROFILE OF STARZPLAY

Date started: 2014

Founders: Maaz Sheikh, Danny Bates

Based: Dubai, UAE

Sector: Entertainment/Streaming Video On Demand

Number of employees: 125

Investors/Investment amount: $125 million. Major investors include Starz/Lionsgate, State Street, SEQ and Delta Partners

Non-oil%20trade
%3Cp%3ENon-oil%20trade%20between%20the%20UAE%20and%20Japan%20grew%20by%2034%20per%20cent%20over%20the%20past%20two%20years%2C%20according%20to%20data%20from%20the%20Federal%20Competitiveness%20and%20Statistics%20Centre.%C2%A0%3C%2Fp%3E%0A%3Cp%3EIn%2010%20years%2C%20it%20has%20reached%20a%20total%20of%20Dh524.4%20billion.%C2%A0%3C%2Fp%3E%0A%3Cp%3ECars%20topped%20the%20list%20of%20the%20top%20five%20commodities%20re-exported%20to%20Japan%20in%202022%2C%20with%20a%20value%20of%20Dh1.3%20billion.%C2%A0%3C%2Fp%3E%0A%3Cp%3EJewellery%20and%20ornaments%20amounted%20to%20Dh150%20million%20while%20precious%20metal%20scraps%20amounted%20to%20Dh105%20million.%C2%A0%3C%2Fp%3E%0A%3Cp%3ERaw%20aluminium%20was%20ranked%20first%20among%20the%20top%20five%20commodities%20exported%20to%20Japan.%C2%A0%3C%2Fp%3E%0A%3Cp%3ETop%20of%20the%20list%20of%20commodities%20imported%20from%20Japan%20in%202022%20was%20cars%2C%20with%20a%20value%20of%20Dh20.08%20billion.%3C%2Fp%3E%0A
HAJJAN
%3Cp%3EDirector%3A%20Abu%20Bakr%20Shawky%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cbr%3EStarring%3A%20Omar%20Alatawi%2C%20Tulin%20Essam%2C%20Ibrahim%20Al-Hasawi%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cbr%3ERating%3A%204%2F5%3C%2Fp%3E%0A
Sholto Byrnes on Myanmar politics
EA Sports FC 26

Publisher: EA Sports

Consoles: PC, PlayStation 4/5, Xbox Series X/S

Rating: 3/5

COMPANY%20PROFILE%20
%3Cp%3E%3Cstrong%3ECompany%20name%3A%20%3C%2Fstrong%3ETerra%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202021%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3EFounder%3A%3C%2Fstrong%3E%20Hussam%20Zammar%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20Mobility%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20Pre-seed%20funding%20of%20%241%20million%3Cbr%3E%3C%2Fp%3E%0A
Election pledges on migration

CDU: "Now is the time to control the German borders and enforce strict border rejections" 

SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom" 

The years Ramadan fell in May

1987

1954

1921

1888

More on G20 meeting
JAPAN SQUAD

Goalkeepers: Masaaki Higashiguchi, Shuichi Gonda, Daniel Schmidt
Defenders: Yuto Nagatomo, Tomoaki Makino, Maya Yoshida, Sho Sasaki, Hiroki Sakai, Sei Muroya, Genta Miura, Takehiro Tomiyasu
Midfielders: Toshihiro Aoyama, Genki Haraguchi, Gaku Shibasaki, Wataru Endo, Junya Ito, Shoya Nakajima, Takumi Minamino, Hidemasa Morita, Ritsu Doan
Forwards: Yuya Osako, Takuma Asano, Koya Kitagawa

Updated: November 21, 2024, 12:34 PM`
EnergyIranIsraelRussia