Oil rises on Iran sanctions and lower US stockpiles

An oil well pump jack is seen at an oil field supply yard near Denver, Colorado, U.S., February 2, 2015. (Reuters)
Updated 30 August 2018
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Oil rises on Iran sanctions and lower US stockpiles

LONDON: Oil prices extended gains yesterday as the market considered the impact of reduced Iranian exports and a fall in
US stockpiles.

Brent crude gained more than 50 cents a barrel at $77.64 by midday in London, taking its weekly gain to almost 10 percent.

US light crude was 40 cents higher at about $69.91.

“The oil market is once again tightening after a short period in late June and early July when it was likely oversupplied,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. “Iranian oil export declines are already visible well in advance of US oil-related sanctions.”

Most of Iran’s customers are already facing difficulties in buying the country’s crude even before sanctions are imposed on Nov. 4, Bloomberg reported on Thursday.

India and China’s combined purchases of Iranian oil could drop about 23 percent to almost 1 million barrels a day amid the US restrictions, ESAI Energy said. 

OPEC is set to discuss the impact of the decline in Iranian crude on global energy markets when it meets in December — more than a month after the oil sanctions come into effect.

“A sudden drop in Iranian crude shipments from the market will cause big shortages and a negative impact on oil prices,” he said, referring to a possible increase in prices,” Alaa Al-Yasiri the head of Iraq’s state-oil marketer SOMO, told Reuters on Wednesday. “It’s very difficult to predict what’s going to happen in next OPEC meeting but producers must find ways to make up for Iranian crude that the market will lose. The major issue during the next OPEC meeting will be are producers really ready to pump more oil to compensate Iran’s share?”

Ongoing concerns over supplies from Venezuela as well as declining US oil inventories have stengthened claims that the global oil market is tightening once again.

US commercial crude inventories fell by 2.6 million barrels in the week to Aug. 24, to 405.79 million barrels, the Energy Information Administration said on Wednesday. That was more than forecast.

Still, current US sanctions on Iran are unlikely to stop Iranian oil exports completely, a long-time adviser at Saudi Arabia’s Energy Ministry said on Tuesday, adding Iran would be unable to close the straits of Hormuz and Bab Al-Mandab even partially.

Speaking at an oil conference in the Norwegian city of Stavanger, Ibrahim Al-Muhanna said that Iran would be the first to lose out from any move to block those major shipping routes and that any such action would trigger further sanctions on Iran.

Iran has said if it cannot sell its oil due to US pressure, then no other regional country will be allowed to do so either, threatening to block the Strait of Hormuz.

“The amount of oil going through the Strait of Hormuz is so large. There’s more than 18 million barrels a day, about two-thirds of world maritime oil trade. Meaning, cutting oil from there will lead to an acute oil shortage and prices will skyrocket,” Muhanna said.


Philippines’ richest man Henry Sy dead at 94

Updated 19 January 2019
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Philippines’ richest man Henry Sy dead at 94

  • Henry Sy had a net worth of $19 billion as of Friday, according to Forbes.com
  • Sy helped create mall culture in the Philippines

MANILA: The Philippines’ wealthiest man Henry Sy, who rose from being a penniless Chinese immigrant to leading a multi-billion dollar business empire, died on Saturday, his conglomerate has announced.
The 94-year-old, from the Chinese city of Xiamen, made his fortune with a Philippine shopping center conglomerate that has put up some of the largest malls in the world.
However his holdings also included banks, hotels and real estate in the Philippines, as well as shopping centers in China.
He had a net worth of $19 billion as of Friday, according to Forbes.com.
Forbes said he was the 52nd richest person in the world last year, beating out bold name tycoons like Elon Musk, Rupert Murdoch and George Soros.
“Henry Sy ... passed away peacefully in his sleep early Saturday morning. There are no further details at the moment,” his SM group said in a statement.
Sy put up his first shoe store in downtown Manila in 1956, a business which later grew into a diversified empire.
He stepped down as chairman of his holding firm in 2017, assuming the title of “chairman emeritus” and leaving trusted allies as well as his children in charge of his empire.
It was a long journey for a man who came to the Philippines as a boy to work in his immigrant father’s variety store.
“Our store was so small it had no back or second floor, we just slept on the counter late at night after the store was closed,” he told the Philippine Star newspaper in 2006.
After their shop was destroyed during World War II, Sy’s father returned to China but Henry chose to stay in the Philippines.
He got a commerce degree from a Manila university and started selling shoes in a shop which would later grow into a chain named “ShoeMart.”
By 1972, his shops had branched out into selling all manner of goods, prompting the name to be changed to SM Department Store.
But it was in 1985 that Sy made history when he opened his first “Supermall” in Manila.
Spanning over 424,000 square meters (4.6 million square feet), the mall included dozens of stores, numerous cinemas, restaurants, banks and other attractions that made it a one-stop shop for millions of Filipinos.
This was just the start, as more of Sy’s mammoth malls popped up across the country, some even containing ice skating rinks, a rarity in the tropical country.
Sy helped create mall culture in the Philippines, where steamy temperatures and the regular threat of torrential downpours can make outdoor shopping uncomfortable.
Sy’s holding company, SM Investments Corp. opened its first mall in China in 2001 and has been expanding there as well.
By 2018, SM said it had 70 malls in the Philippines and seven in China as well as six hotels and eight office buildings.
Sy’s empire has earned its share of criticism from labor groups, who say it uses thousands of contractual hires to avoid paying higher wages and benefits that permanent workers are entitled to.
SM officials have insisted that they do not engage in so-called “contractualization,” but say they hire “seasonal” workers for peak periods like Christmas, back-to-school and even weekends.