Gulf oil exporters will need to fight harder for market share in Asia and will suffer a drop in prices as a result of pressure from fresh supplies from Russia and eventually Iraq, an oil markets expert said yesterday.
The region's oil sellers are facing a raft of challenges in East Asia, their biggest market, as consumption in Japan decreases, new Russian crude establishes a foothold and Iraq looks to ramp up its production as much as five-fold in six years, said Jorge Montepeque, the global editorial director of market reports at Platts, a US-based oil pricing service used by exporters around the world.
The new challenges have the potential to reduce the Gulf producers' market share and the premium they have long been able to command for their oil in Asian markets, he said. "It's playing to their insecurities, they also see the Iraqis coming in," he said of Gulf exporters. "If you were to combine the rate of growth in China with the rate of contraction in Japan, you get a picture that maybe the rate of growth in north-east Asia is not that much." Japan, the biggest market for Abu Dhabi and a major importer of Gulf oil, will shrink steadily as economic growth slows and its population declines, he said, leading to battles for dwindling market share.
The most immediate threat is Russia, which completed an oil terminal and pipeline at the end of last year that allow it to move crude thousands of kilometres from its interior and export it from Kozmino, a port on its east coast near Vladivostock, which is close to Japan, South Korea and China.
The port has the capacity to export 300,000 barrels per day (bpd), a figure that could rise to 1 million bpd with expansions in four years. Before the completion of the US$12 billion (Dh44.07bn) project, almost all Russian crude was exported west to Europe. The new supply, called Eastern Siberia Pacific Ocean (ESPO) crude, competes directly with Gulf crude, but is cheaper and takes three to four days to bring to market, instead of three to four weeks for Gulf oil. "The Asian buyers have been in an area where there's not a lot of local oil and the price reflects that cost of transport," Mr Montepeque said. "The Asian premium is going to be subjected to some downwards pressure - it's not going to disappear." Mr Montepeque said the ESPO oil costs about $0.75 less per barrel to transport, which appears insignificant but is crucial for refiners, who are today struggling to make a profit of $1 to $3 per barrel.
Asian refiners had already felt the effect of the ESPO crude on the market, said an oil trader based in Singapore who declined to be named. "Three or four months ago, no one had heard of ESPO crude," he said. "Now they are all talking about it."
@Email:cstanton@thenational.ae
PSL FINAL
Multan Sultans v Peshawar Zalmi
8pm, Thursday
Zayed Cricket Stadium, Abu Dhabi
All%20We%20Imagine%20as%20Light
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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Scoreline
Man Utd 2 Pogba 27', Martial 49'
Everton 1 Sigurdsson 77'
Omar Yabroudi's factfile
Born: October 20, 1989, Sharjah
Education: Bachelor of Science and Football, Liverpool John Moores University
2010: Accrington Stanley FC, internship
2010-2012: Crystal Palace, performance analyst with U-18 academy
2012-2015: Barnet FC, first-team performance analyst/head of recruitment
2015-2017: Nottingham Forest, head of recruitment
2018-present: Crystal Palace, player recruitment manager
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
The%20specs
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Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
MATCH INFO
Newcastle United 3
Gayle (23'), Perez (59', 63')
Chelsea 0
Ashes 2019 schedule
August 1-5: First Test, Edgbaston
August 14-18: Second Test, Lord's
August 22-26: Third Test, Headingley
September 4-8: Fourth Test, Old Trafford
September 12-16: Fifth Test, Oval
if you go
The flights
Etihad, Emirates and Singapore Airlines fly direct from the UAE to Singapore from Dh2,265 return including taxes. The flight takes about 7 hours.
The hotel
Rooms at the M Social Singapore cost from SG $179 (Dh488) per night including taxes.
The tour
Makan Makan Walking group tours costs from SG $90 (Dh245) per person for about three hours. Tailor-made tours can be arranged. For details go to www.woknstroll.com.sg
KILLING OF QASSEM SULEIMANI
Company%20Profile
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The years Ramadan fell in May
Killing of Qassem Suleimani
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
Types of bank fraud
1) Phishing
Fraudsters send an unsolicited email that appears to be from a financial institution or online retailer. The hoax email requests that you provide sensitive information, often by clicking on to a link leading to a fake website.
2) Smishing
The SMS equivalent of phishing. Fraudsters falsify the telephone number through “text spoofing,” so that it appears to be a genuine text from the bank.
3) Vishing
The telephone equivalent of phishing and smishing. Fraudsters may pose as bank staff, police or government officials. They may persuade the consumer to transfer money or divulge personal information.
4) SIM swap
Fraudsters duplicate the SIM of your mobile number without your knowledge or authorisation, allowing them to conduct financial transactions with your bank.
5) Identity theft
Someone illegally obtains your confidential information, through various ways, such as theft of your wallet, bank and utility bill statements, computer intrusion and social networks.
6) Prize scams
Fraudsters claiming to be authorised representatives from well-known organisations (such as Etisalat, du, Dubai Shopping Festival, Expo2020, Lulu Hypermarket etc) contact victims to tell them they have won a cash prize and request them to share confidential banking details to transfer the prize money.
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)
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