At least some buyers of Iranian supplies in the world’s biggest oil market are considering acquiescing to US President Donald Trump’s demands.
As the American administration piles pressure on its allies to entirely halt purchases of Iranian supplies, Japan's Fuji Oil and Taiwan's Formosa Petrochemical Corporation are considering ending imports from the Opec member -- though they are yet to make a final decision. South Korea has already put some imports on hold while Emirates National Oil Company in the UAE is trying alternatives to cargoes from the Islamic Republic.
The US wants allies to end all imports of Iranian oil by a November 4 deadline and isn’t offering extensions or waivers to that timeline, as it targets the Gulf state’s economic lifeline with sanctions over its nuclear programme. It’s boosted speculation that a global shortage will be exacerbated, lifting prices. Fuji Oil will likely replace its cargoes with those from Saudi Arabia, Qatar and Abu Dhabi while Formosa may opt for Saudi and Iraqi crude.
“We are preparing for different scenarios, the worst-case being a total ban on Iranian imports,” Formosa spokesman Lin Keh-Yen said by phone. “Iranian crude imports make up a small portion of FPCC’s total purchases; any loss in Iranian oil can be replaced with other grades from the spot market.”
Any lost barrels could help Saudi Arabia -- Tehran’s main regional rival -- recover market share in Asia that shrank after Opec began output curbs last year to reduce a global glut. Now, the Middle East nation is said to be planning to pump record volumes to fulfill its pledge to fill any supply gaps. Yet, that may strain its spare capacity at a time when the oil market is already coping with the collapse of Venezuela’s oil industry and turmoil in Libya.
Oil futures in New York rose 3.2 per cent on Wednesday to close at the highest level since 2014, while Brent crude added 1.7 per cent in London.
Fuji Oil will decide on the Iranian purchases after holding discussions with the government and other Japanese refiners, spokesman Takaaki Sobue said on Wednesday. Formosa Petrochemical will make a final decision after meeting with refinery executives and Taiwanese government officials in the coming weeks, said people with knowledge of the matter, asking not to be identified as the information is private.
JXTG Holdings, Japan’s biggest refiner, plans to follow its government’s guidance on the sanctions, and if the refiner has to end Iranian purchases, it’ll ensure stable supply from other sources including in the Middle East, West Africa and potentially the US, a company spokesman said.
Government negotiations with the US are ongoing, Takashi Yamada, director of petroleum policy at Japan’s economy, trade and industry ministry said last week.
Refiners in South Korea, one of Iran’s leading customers, are shunning a type of oil known as condensate from the Middle East nation to feed the nation’s petrochemical plants. SK Innovation Company, Hanwha Total Petrochemical Company, and Hyundai Oilbank Company have all rushed to procure supply of an alternative -- naphtha -- instead.
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An official at South Korea’s trade, industry and energy ministry said last week that the US expressed its willingness to take a hard-line approach in imposing sanctions on Iran, and declined to comment on discussions about oil trade.
South Korea’s government is in ongoing talks with the US to seek an exemption to minimise any impact from the suspension of Iranian crude imports, the Asian nation’s of trade, industry and energy ministry said in an emailed statement on Wednesday.
Meanwhile, the UAE's ENOC bought Equatorial Guinea’s Alba and the US' Eagle Ford condensate as it sought to run its facility in Jebel Ali. It predominantly used Iranian South Pars and Qatari condensate when the US had imposed sanctions on the Gulf state earlier this decade.
At the heart of the problem for Iran’s biggest customers is a US threat to cut off access to the American banking system for foreign financial institutions that settle trades with the Middle East nation’s central bank. President Trump last month announced he was quitting a 2015 nuclear accord between world powers and the Islamic Republic that had called for it to curb its nuclear programme in return for the easing of sanctions.
Much will depend on what is done by China and India, Iran’s two biggest oil customers. While Beijing has held strategic talks with the Middle East nation, it hasn’t disclosed whether it might scale back imports in light of renewed US sanctions. When the restrictions were in place earlier this decade, the Asian nations had persisted with purchases from the Islamic Republic in spite of American criticism.
Meanwhile, Indian Oil Minister Dharmendra Pradhan said that while the country has yet to make a call on crude oil imports from Iran, any policy decision on the issue will be guided by its own interests.
“India is a stable market and a mature democracy. We have a vigilant leadership. We go by our interests,” Mr Pradhan told reporters in Mumbai on Thursday.
India plans to seek some exemptions to continue Iranian oil imports, and is looking at alternate payment mechanisms, two government officials said earlier this month, asking not to be identified citing internal policy.
There haven’t been any discussions with the government so far, said R Ramachandran, director of refineries at India’s Bharat Petroleum Corporation, adding that its imports from Iran are of a “very small quantity.”
“It’s a call the government will have to take and we will be guided by that decision,” said Arun Kumar Sharma, finance director of Indian Oil Corporation, the country’s biggest refiner. “Finding an alternate supply source, if at all, won’t be a problem. In the global market of oil, sources are plenty.”
The specs
Engine: 2x201bhp AC Permanent-magnetic electric
Transmission: n/a
Power: 402bhp
Torque: 659Nm
Price estimate: Dh200,000
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%3Cp%3E%3Cstrong%3ECompany%20name%3A%20%3C%2Fstrong%3EHayvn%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2018%3Cbr%3E%3Cstrong%3EFounders%3A%20%3C%2Fstrong%3EChristopher%20Flinos%2C%20Ahmed%20Ismail%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EAbu%20Dhabi%2C%20UAE%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3Efinancial%3Cbr%3E%3Cstrong%3EInitial%20investment%3A%20%3C%2Fstrong%3Eundisclosed%3Cbr%3E%3Cstrong%3ESize%3A%3C%2Fstrong%3E%2044%20employees%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3Eseries%20B%20in%20the%20second%20half%20of%202023%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EHilbert%20Capital%2C%20Red%20Acre%20Ventures%3C%2Fp%3E%0A
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Developer: Treyarch, Raven Software
Publisher: Activision
Console: PlayStation 4 & 5, Windows, Xbox One & Series X/S
Rating: 3.5/5
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
The specs
Engine: 4-litre twin-turbo V8
Transmission: nine-speed
Power: 542bhp
Torque: 700Nm
Price: Dh848,000
On sale: now
Killing of Qassem Suleimani
if you go
The flights
Emirates flies to Delhi with fares starting from around Dh760 return, while Etihad fares cost about Dh783 return. From Delhi, there are connecting flights to Lucknow.
Where to stay
It is advisable to stay in Lucknow and make a day trip to Kannauj. A stay at the Lebua Lucknow hotel, a traditional Lucknowi mansion, is recommended. Prices start from Dh300 per night (excluding taxes).
Tips for entertaining with ease
· Set the table the night before. It’s a small job but it will make you feel more organised once done.
· As the host, your mood sets the tone. If people arrive to find you red-faced and harried, they’re not going to relax until you do. Take a deep breath and try to exude calm energy.
· Guests tend to turn up thirsty. Fill a big jug with iced water and lemon or lime slices and encourage people to help themselves.
· Have some background music on to help create a bit of ambience and fill any initial lulls in conversations.
· The meal certainly doesn’t need to be ready the moment your guests step through the door, but if there’s a nibble or two that can be passed around it will ward off hunger pangs and buy you a bit more time in the kitchen.
· You absolutely don’t have to make every element of the brunch from scratch. Take inspiration from our ideas for ready-made extras and by all means pick up a store-bought dessert.
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.
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
