Turkey-Iran central banks ‘agree to trade in local currencies’

Turkish Prime Minister Binali Yildirim (R) and Iran's First Vice President Eshaq Jahangiri (L) shake hands as they hold a joint press conference at Cankaya Palace in Ankara on October 19, 2017. (AFP)
Updated 19 October 2017
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Turkey-Iran central banks ‘agree to trade in local currencies’

ISTANBUL: Turkey and Iran’s central banks have formally agreed to trade in their local currencies, Prime Minister Binali Yildirim said on Thursday in a move aimed at increasing bilateral trade.
Under the deal, the Iranian rial and Turkish lira will be easily converted to help reduce the costs of currency conversion and transfer for traders. The countries had been using euros.
“Trading with local currencies is the most significant step to improving economic ties. The central banks of both countries agreed on this issue and they will inform other banks about how the deal will be applied,” Yildirim told a joint news conference with Iran’s First Vice President Eshaq Jahangiri.
“Trading in local currencies will be encouraged and this will contribute to making trading easier and increase the trade volume and diversity,” Yildirim added.
Earlier this month, Turkish President Tayyip Erdogan said the deal was aimed at raising Turkish-Iranian trade volume to $30 billion from current $10 billion.
The deal is in line with Iran’s efforts to dodge unilateral US sanctions, which remain intact despite the lifting of international financial sanctions on Tehran last year under a 2015 nuclear deal between Iran and six major powers.
US banks are still forbidden to do business with Iran.
European lenders also face major problems, notably with rules prohibiting transactions with Iran in dollars — the world’s main business currency — from being processed through the US financial system.
Iran has secured banking ties with only a limited number of smaller foreign institutions as major foreign banks are wary of the US sanctions.
“This is an important step to expand the level and volume of trade cooperation between Iran and Turkey,” Jahangiri told the joint news conference.


Global oil demand under threat from cleaner fuel

Updated 14 November 2018
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Global oil demand under threat from cleaner fuel

  • Oil demand is not expected to peak before 2040, the Paris-based IEA said in its 2018 World Energy Outlook
  • The IEA’s central scenario is for demand to grow by about 1 million bpd on average every year to 2025

LONDON: Electric vehicles and more efficient fuel technology will cut transportation demand for oil by 2040 more than previously expected, but the world may still face a supply crunch without enough investment in new production, the International Energy Agency (IEA) said on Tuesday.
Oil demand is not expected to peak before 2040, the Paris-based IEA said in its 2018 World Energy Outlook. The IEA’s central scenario is for demand to grow by about 1 million barrels per day (bpd) on average every year to 2025, before settling at a steadier rate of 250,000 bpd to 2040 when it will peak at 106.3 million bpd.
“In the New Policies Scenario, demand in 2040 has been revised up by more than 1 million bpd compared with last year’s outlook, largely because of faster near-term growth and changes to fuel efficiency policies in the United States,” the agency said.
The IEA believes there will be about 300 million electric vehicles on the road by 2040, no change on its estimate a year ago. But it now expects those vehicles will cut
demand by 3.3 million bpd, up from a previous estimated loss of 2.5 million bpd in its last World Energy Outlook.
“Efficiency measures are even more important to stem oil demand growth: Improvements in the efficiency of the non-electric car fleet avoid over 9 million bpd of oil demand in 2040,” the IEA said.
Oil demand for road transport is expected to reach 44.9 million bpd by 2040, up from 41.2 million bpd in 2017, while industrial and petrochemical demand is forecast to reach 23.3 million bpd by 2040, from 17.8 million bpd in 2017.
All global oil demand growth will stem from developing economies, led by China and India, while demand in advanced economies is expected to drop by more than 400,000 bpd on average each year to 2040, the IEA said.
The IEA, which advises Western governments on energy policy, maintained its forecast for the global car fleet to nearly double by 2040 from today, growing by 80 percent to 2 billion.
On the supply side, the US, already the world’s biggest producer, will dominate output growth to 2025, with an increase of 5.2 million bpd, from current levels of about 11.6 million bpd. From that point onwards, the IEA expects US oil production to decline and the market share of the Organization of the Petroleum Exporting Countries (OPEC) to climb to 45 percent by 2040, from closer to 30 percent today.
New sources of supply will be needed whether or not demand peaks, the agency said.
“The analysis shows oil consumption growing in coming decades, due to rising petrochemicals, trucking and aviation demand. But meeting this growth in the near term means that approvals of conventional oil projects need to double from their
current low levels,” IEA director Fatih Birol said.
“Without such a pick-up in investment, US shale production, which has already been expanding at record pace, would have to add more than 10 million bpd from today to 2025, the equivalent of adding another Russia to global supply in seven years, which would be a historically unprecedented feat.”