The possibility of US sanctions over Iran could push oil markets over the edge short-term, with prices rising up to $80 per barrel but the real impact on Iranian crude supplies to the market may be felt six months after the May 12 deadline on the Iran nuclear deal, according to analysts.
The US administration under President Donald Trump is widely expected to walk away from the 2015 pact with Iran and European powers to rein in Tehran’s capabilities to develop nuclear weapons. Known as the Joint Comprehensive Plan of Action (JCPOA), the agreement allowed Iran in principle to develop its ageing energy infrastructure with foreign investment and facilitate slow integration of its long-embargoed economy with the wider financial markets.
A decision to revoke the pact will come at a time of rallying oil prices, buoyed by production declines in Venezuela and steadied by a pact between Opec and members outside the group to prop up the market. The impact of JCPOA’s collapse is expected to add another $5 to Brent’s latest peak of $75 per barrel at the end of April.
“Risk is priced in but when it happens there will be another shock, and not necessarily on that day. It may be a temporary two, three day [rally] but when barrels [start being taken] out of the market, that’s when we start seeing the full impact,” said Iman Nasseri, managing director Middle East at London-based Facts Global Energy.
Iran accounts for around 9.3 per cent of the world’s total oil reserves and the biggest reserves of gas globally. Much of the oil is low-cost and easily extractable and, following the lift of nuclear-related sanctions in 2016, Iran was viewed the last frontier by Big Oil in search of cheap reserves.
Bringing back oil revenues became a priority for the Iranian government, whose economy was crippled by years of sanctions, with its banking sector teetering on the verge of collapse. The removal of sanctions extended a lifeline to the country. Their re-imposition will deprive Iran of much needed foreign currency, which has been drying up over the last couple of months as Iranians anticipated the noose tightening on the government. Iran’s rial has meanwhile seen a freefall against the dollar plunging to 50,000 in February and depreciating further to 60,000 last month.
Since 2016, Iran has since managed to up its production capacity to pre-sanctions levels of 3.9 million barrels per day, with output currently averaging 3.81m bpd in compliance with Opec restrictions. The Islamic Republic, which secured the release of funds frozen during its years of sanctions, also managed to gain market share among key importing nations, with Europe accounting for around 40 per cent of all Iranian crude at the end of last year.
European nations led by France and Germany, signatories to the JCPOA, are among those lobbying with the US administration for the survival of the pact.
A “snapback” of sanctions will not be immediate, but countries importing oil from Iran, which also include China, India and South Korea, would be asked to scale back their supplies - first by 20 per cent and the 40 per cent - over a six month period beginning either in May or in November, said Mr Nasseri.
The period will also give a lifeline for those seeking waivers to continue importing oil from Iran or secure investments currently parked in the country.
“If Trump is going to give waivers to European countries, who have increased their imports from Iran to 600,000 to 700,000 barrels per day, all of this will contribute to the impact of sanctions on Iran to supply all over the world,” said Mr Nasseri.
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Read more:
US approach to sanctions puts oil market at risk
Oil prices hit almost four-year high on Opec cuts and US Iran sanctions
Business Extra Podcast: What's next for the oil price rally?
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While a psychological impact on the oil markets is fairly certain, oil companies currently pursuing investment opportunities in Iran will look to secure their prospects for the foreseeable future.
The National reported in March that French major Total, which along with China National Petroleum Corporation and local Petropars signed a $4.8bn deal in 2016 to develop phase 11 of Iran's South Pars gasfield, will look to seek a waiver from the Trump administration.
The rapport developed between French President Emmanuel Macron and Mr Trump last month could lead to Total securing its assets in Iran, said Homayoun Falakshahi, an upstream analyst on the country at energy consultancy Wood Mackenzie.
While Total would probably keep its Iranian deal, other opportunities pursued by the company following the lift of nuclear-related sanctions such as investment in an Iran LNG project would largely be scaled back.
“If they get a waiver to go ahead with the South Pars project, that would be considered good enough for them and, in the near future, I don’t see them coming back to pursue more opportunities,” said Mr Falakshahi.
“I think the image that would reflect towards the US wouldn’t really be appreciated,” he said.
Also up in the air are Total’s plans to invest up to $2 billion in the Iranian petrochemicals industry, for which it was said to have neared an agreement mid-2017.
The uncertainty over investing in the Iranian energy sector could open the door for more “mid-sized European companies like OMV in Austria or Wintershall in Germany” said Mr Falakshahi. However, the big oil majors that pre-qualified to compete in developing sizeable onshore oilfields, particularly those on the border with Iraq such as Azadegan, may keep away should the US leave the nuclear deal.
“If the US exits the nuclear deal, that will open the doors for Chinese companies and maybe Russian as well to come and operate,” said Mr Falakshahi.
Iran, meanwhile, has boosted exports to record levels, exporting 2.6 million bpd in April to customers in Asia and Europe ahead of the looming deadline, according to state petroleum news agency Shana.
Should the Trump administration scrap the deal, Iran will probably suffer a cut of 500,000 bpd, half of what it was penalised for during the 2012 sanctions.
“Obviously it’s going to have an impact, if up to half a million barrels per day are taken out of the market,” said Mr Falakshahi.
“All this is going to excite the market, so the prices will go up but to what extent we don’t know."
COMPANY PROFILE
Initial investment: Undisclosed
Investment stage: Series A
Investors: Core42
Current number of staff: 47
UAE currency: the story behind the money in your pockets
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Read more about the coronavirus
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
Day 5, Abu Dhabi Test: At a glance
Moment of the day When Dilruwan Perera dismissed Yasir Shah to end Pakistan’s limp resistance, the Sri Lankans charged around the field with the fevered delirium of a side not used to winning. Trouble was, they had not. The delivery was deemed a no ball. Sri Lanka had a nervy wait, but it was merely a stay of execution for the beleaguered hosts.
Stat of the day – 5 Pakistan have lost all 10 wickets on the fifth day of a Test five times since the start of 2016. It is an alarming departure for a side who had apparently erased regular collapses from their resume. “The only thing I can say, it’s not a mitigating excuse at all, but that’s a young batting line up, obviously trying to find their way,” said Mickey Arthur, Pakistan’s coach.
The verdict Test matches in the UAE are known for speeding up on the last two days, but this was extreme. The first two innings of this Test took 11 sessions to complete. The remaining two were done in less than four. The nature of Pakistan’s capitulation at the end showed just how difficult the transition is going to be in the post Misbah-ul-Haq era.
More from Neighbourhood Watch
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
Zayed Sustainability Prize
More coverage from the Future Forum
AI traffic lights to ease congestion at seven points to Sheikh Zayed bin Sultan Street
The seven points are:
Shakhbout bin Sultan Street
Dhafeer Street
Hadbat Al Ghubainah Street (outbound)
Salama bint Butti Street
Al Dhafra Street
Rabdan Street
Umm Yifina Street exit (inbound)
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David Haye record
Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4
More from Rashmee Roshan Lall
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
The Orwell Prize for Political Writing
Twelve books were longlisted for The Orwell Prize for Political Writing. The non-fiction works cover various themes from education, gender bias, and the environment to surveillance and political power. Some of the books that made it to the non-fiction longlist include:
- Appeasing Hitler: Chamberlain, Churchill and the Road to War by Tim Bouverie
- Some Kids I Taught and What They Taught Me by Kate Clanchy
- Invisible Women: Exposing Data Bias in a World Designed for Men by Caroline Criado Perez
- Follow Me, Akhi: The Online World of British Muslims by Hussein Kesvani
- Guest House for Young Widows: Among the Women of ISIS by Azadeh Moaveni
The specs: 2018 Nissan Patrol Nismo
Price: base / as tested: Dh382,000
Engine: 5.6-litre V8
Gearbox: Seven-speed automatic
Power: 428hp @ 5,800rpm
Torque: 560Nm @ 3,600rpm
Fuel economy, combined: 12.7L / 100km
The specs
Engine: 2.0-litre 4-cyl turbo
Power: 201hp at 5,200rpm
Torque: 320Nm at 1,750-4,000rpm
Transmission: 6-speed auto
Fuel consumption: 8.7L/100km
Price: Dh133,900
On sale: now
Ruwais timeline
1971 Abu Dhabi National Oil Company established
1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants
1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed
1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.
1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex
2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea
2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd
2014 Ruwais 261-outlet shopping mall opens
2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies
2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export
2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex.
2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery
2018 NMC Healthcare selected to manage operations of Ruwais Hospital
2018 Adnoc announces new downstream strategy at event in Abu Dhabi on May 13
Source: The National
Brief scoreline:
Manchester United 0
Manchester City 2
Bernardo Silva 54', Sane 66'
Match info
Karnataka Tuskers 110-3
J Charles 35, M Pretorius 1-19, Z Khan 0-16
Deccan Gladiators 111-5 in 8.3 overs
K Pollard 45*, S Zadran 2-18
Killing of Qassem Suleimani
Tuesday's fixtures
Kyrgyzstan v Qatar, 5.45pm
The biog
Siblings: five brothers and one sister
Education: Bachelors in Political Science at the University of Minnesota
Interests: Swimming, tennis and the gym
Favourite place: UAE
Favourite packet food on the trip: pasta primavera
What he did to pass the time during the trip: listen to audio books
The Settlers
Director: Louis Theroux
Starring: Daniella Weiss, Ari Abramowitz
Rating: 5/5
Evacuations to France hit by controversy
- Over 500 Gazans have been evacuated to France since November 2023
- Evacuations were paused after a student already in France posted anti-Semitic content and was subsequently expelled to Qatar
- The Foreign Ministry launched a review to determine how authorities failed to detect the posts before her entry
- Artists and researchers fall under a programme called Pause that began in 2017
- It has benefited more than 700 people from 44 countries, including Syria, Turkey, Iran, and Sudan
- Since the start of the Gaza war, it has also included 45 Gazan beneficiaries
- Unlike students, they are allowed to bring their families to France
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
MATCH INFO
What: Brazil v South Korea
When: Tonight, 5.30pm
Where: Mohamed bin Zayed Stadium, Abu Dhabi
Tickets: www.ticketmaster.ae
Australia squads
ODI: Tim Paine (capt), Aaron Finch (vice-capt), Ashton Agar, Alex Carey, Josh Hazlewood, Travis Head, Nathan Lyon, Glenn Maxwell, Shaun Marsh, Jhye Richardson, Kane Richardson, D’Arcy Short, Billy Stanlake, Marcus Stoinis, Andrew Tye.
T20: Aaron Finch (capt), Alex Carey (vice-capt), Ashton Agar, Travis Head, Nic Maddinson, Glenn Maxwell, Jhye Richardson, Kane Richardson, D’Arcy Short, Billy Stanlake, Marcus Stoinis, Mitchell Swepson, Andrew Tye, Jack Wildermuth.
Mohammed bin Zayed Majlis
World Cricket League Division 2
In Windhoek, Namibia - Top two teams qualify for the World Cup Qualifier in Zimbabwe, which starts on March 4.
UAE fixtures
Thursday February 8, v Kenya; Friday February 9, v Canada; Sunday February 11, v Nepal; Monday February 12, v Oman; Wednesday February 14, v Namibia; Thursday February 15, final
Petrarch: Everywhere a Wanderer
Christopher Celenza,
Reaktion Books
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Key fixtures from January 5-7
Watford v Bristol City
Liverpool v Everton
Brighton v Crystal Palace
Bournemouth v AFC Fylde or Wigan
Coventry v Stoke City
Nottingham Forest v Arsenal
Manchester United v Derby
Forest Green or Exeter v West Brom
Tottenham v AFC Wimbledon
Fleetwood or Hereford v Leicester City
Manchester City v Burnley
Shrewsbury v West Ham United
Wolves v Swansea City
Newcastle United v Luton Town
Fulham v Southampton
Norwich City v Chelsea
The biog
Favourite Quote: “Real victories are those that protect human life, not those that result from its destruction emerge from its ashes,” by The late king Hussain of Jordan.
Favourite Hobby: Writing and cooking
Favourite Book: The Prophet by Gibran Khalil Gibran
Killing of Qassem Suleimani
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COMPANY PROFILE
Name: Akeed
Based: Muscat
Launch year: 2018
Number of employees: 40
Sector: Online food delivery
Funding: Raised $3.2m since inception
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COMPANY PROFILE
Company name: Letstango.com
Started: June 2013
Founder: Alex Tchablakian
Based: Dubai
Industry: e-commerce
Initial investment: Dh10 million
Investors: Self-funded
Total customers: 300,000 unique customers every month
Killing of Qassem Suleimani
VEZEETA PROFILE
Date started: 2012
Founder: Amir Barsoum
Based: Dubai, UAE
Sector: HealthTech / MedTech
Size: 300 employees
Funding: $22.6 million (as of September 2018)
Investors: Technology Development Fund, Silicon Badia, Beco Capital, Vostok New Ventures, Endeavour Catalyst, Crescent Enterprises’ CE-Ventures, Saudi Technology Ventures and IFC
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
Various Artists
Habibi Funk: An Eclectic Selection Of Music From The Arab World (Habibi Funk)
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
HIJRA
Starring: Lamar Faden, Khairiah Nathmy, Nawaf Al-Dhufairy
Director: Shahad Ameen
Rating: 3/5
UAE currency: the story behind the money in your pockets
War 2
Director: Ayan Mukerji
Stars: Hrithik Roshan, NTR, Kiara Advani, Ashutosh Rana
Rating: 2/5
SERIE A FIXTURES
All times UAE ( 4 GMT)
Saturday
Roma v Udinese (5pm)
SPAL v Napoli (8pm)
Juventus v Torino (10.45pm)
Sunday
Sampdoria v AC Milan (2.30pm)
Inter Milan v Genoa (5pm)
Crotone v Benevento (5pm)
Verona v Lazio (5pm)
Cagliari v Chievo (5pm)
Sassuolo v Bologna (8pm)
Fiorentina v Atalanta (10.45pm)
MATCH INFO
Uefa Champions League last 16, second leg
Liverpool (0) v Atletico Madrid (1)
Venue: Anfield
Kick-off: Thursday, March 12, midnight
Live: On beIN Sports HD
