World prepares for US sanctions on Iran

Iranians monitor the stock market at the stock exchange in Tehran on May 8, 2018. Renewed nuclear sanctions would certainly cause severe problems for Iran's economy, but much of the damage has already been done by the uncertainty created by the US and myriad home-grown problems. (AFP / ATTA KENARE)
Updated 12 May 2018
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World prepares for US sanctions on Iran

  • Global shipping companies, traders, insurers and banks look at pulling the plug on business with Tehran after Donald Trump’s decision to reimpose sanctions on Iran.
  • Reuters cites sources at global trading companies predicting an imminent drop in Iranian exports due to banking issues, such as availability of trade finance.

LONDON:  US President Donald Trump’s decision to reimpose sanctions on Iran is forcing global shipping companies, traders, insurers and banks to look at pulling the plug on business with Tehran, it emerged yesterday.

Swiss-headquartered private shipping group MSC said it would “comply with the (sanctions) timetable set out by the US government.”

Denmark’s Maersk Line said it had ceased acceptance of the specific cargoes blacklisted by the US Treasury this week.

On May 9, President Donald Trump broke with his European allies to announce US withdrawal from the international nuclear agreement with Tehran brokered by President Obama. Trump disclosed a phased reimposition of punitive sanctions, which will further damage an already weakened Iranian economy.

Among other things, Washington is imposing sanctions on the direct or indirect sale, supply, or transfer to or from Iran of graphite and raw or semi-finished metals such as aluminium and steel, and coal, Reuters reported. The US will separately re-impose sanctions on the provision of insurance and reinsurance.

Reuters cited sources at global trading companies predicting an imminent drop in Iranian exports due to banking issues, such as availability of trade finance.

A potential decline in oil volumes due to the sanctions could add to upward pressure on oil prices, which have gained almost 20 percent to around $78 per barrel since January. 

The price rise has also been bolstered by a decision by OPEC and Russia to cap production to reduce inventories that had built up during the boom that came to a halt in 2014.

Middle Eastern oil-producing countries have benefited this year from rising oil revenues, giving them headroom to increase spending to stimulate economies that faced austerity in the wake of the collapse of the crude price four years ago. 

Saudi Arabia’s first-quarter statement revealed increased government spending and a jump in central government receipts from new taxes, including VAT.


Israel reopens its only goods crossing with Gaza

Updated 33 min 59 sec ago
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Israel reopens its only goods crossing with Gaza

  • Dozens of trucks carrying various types of goods, including fuel, began passing into the blockaded Palestinian enclave
  • Both Israeli and Palestinian officials confirmed the crossing had reopened

GAZA CITY, Palestinian Territories: Israel reopened its only goods crossing with the Gaza Strip on Wednesday in response to relative calm on the border after months of tensions prompted a blockade on most goods from July 9.

An AFP journalist at the Kerem Shalom crossing said dozens of trucks carrying various types of goods, including fuel, began passing into the blockaded Palestinian enclave run by Hamas.

Both Israeli and Palestinian officials confirmed the reopening of the crossing, a key lifeline for Gazans and their crippled economy.

Israel also returned the fishing zone it enforces off the Gaza Strip to nine nautical miles in the south of the enclave. The limit is six nautical miles in the north, which borders Israel.

Israeli authorities announced on July 9 that the goods crossing was being closed to most deliveries, partly in response to kites and balloons being flown across the border carrying firebombs to burn Israeli farmland.

Food and medicines have been allowed through, but fuel had been intermittently blocked, including since August 2. All other goods were turned away.

The fuel ban exacerbated an electricity crisis in the Gaza Strip, which already suffers from severe power shortages and relies on generators in many cases.

Gaza border protests broke out on March 30 and have led to months of tension that have also seen several military flare-ups.

At least 169 Palestinians have been killed in Gaza by Israeli fire since March 30, mostly during clashes and protests.

One Israeli soldier was shot dead by a Palestinian sniper in July.

Palestinian militants in Gaza and Israel have fought three wars since 2008.