Japan, South Korea plan to resume Iran oil imports from January

US earlier reinstated its sanctions on Iran, after it withdrew from the 2015 nuclear deal in May. (File/AFP)
Updated 19 November 2018
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Japan, South Korea plan to resume Iran oil imports from January

  • Japan and South Korea were among the countries issued with a waiver from the US, after it reinstated sanctions on Iran
  • Both countries temporarily halted Iranian oil loading around mid-September

TOKYO/SEOUL: Refiners in Japan and South Korea are looking to resume Iranian oil imports from January after receiving waivers from US sanctions on Tehran, sources familiar with the matter said.
The unexpected resurgence in Iranian oil imports due to the waivers has helped push spot prices for Middle East crude and condensate to their lowest in more than a year.
The United States in November granted exemptions to eight countries, allowing them to import some Iranian crude for another 180 days. Japan and South Korea were among the top five buyers of Iranian crude and condensate before they stopped imports in the third quarter ahead of the sanctions.
South Korean refiners are set to hold their Iranian oil imports at zero until the end of the year, and they may resume shipments in late January or early February as buyers are in talks with Iran to sign new contracts, industry sources said.
“They are seeking to get the best price and are in talks with Iran,” said a source with direct knowledge of the matter.
Most tankers are booked until December, so South Korea may load Iran oil shipments in January at the earliest, he said.
It takes about 25 days for oil shipments from Iran to arrive at South Korea. Iran also has the option of selling oil from storage in Dalian, China, which would shorten delivery time.
Last week, a South Korean delegation was in Iran to negotiate for 2019 supplies of mainly South Pars condensate.
“There are some issues to be cleared like payment. We are not able to buy it at the moment and are not rushing,” a second source said. “Iran is also trying not to sell it cheaper. We ... won’t import Iran oil until perhaps after January.”
The sources declined to be named due to the sensitivity of the matter.
Japan
Fuji Oil Co, one of Japan’s top Iranian oil buyers, plans to resume Iran crude liftings from January as well, and is also looking to buy condensate.
Fuji Oil was considering whether to sign a new contract for Iranian crude, its top executive said last week, adding that oil from Iran is competitively priced against rival grades.
Japan’s largest refiner, JXTG Holdings, said earlier this month it may resume Iranian oil loadings from December.
But while Japanese buyers are likely to buy Iranian oil through February loadings, they may not take the crude from March onwards, as they wait for the government to extend sovereign ship insurance into the new financial year that starts on April 1, industry sources familiar with the matter said.
Started in 2012 to counter sanctions on Iranian oil, Japan’s sovereign insurance scheme covers any shortfalls from Protection & Indemnity (P&I) insurance for ships carrying crude from Iran to Japan.
The Japanese government has declined to give information on the volumes of Iranian imports that would be allowed under the 180-day exemption period.
Some sources said the sanctions waiver may allow Japan to buy around 100,000 barrels per day (bpd) of Iranian oil. That marks a significant reduction for buyers that took about 165,000 bpd of Iranian oil in January-September.
Japan joined South Korea in temporarily halting Iranian oil loading around mid-September.


To fight off unemployment, Iraqi youth plant start-up seeds

Updated 5 min 14 sec ago
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To fight off unemployment, Iraqi youth plant start-up seeds

  • Iraqi entrepreneurs are taking on staggering unemployment by establishing their own start-ups
  • Under current legislation, private sector employees are not offered the same labor protections or social benefits as those in the public sector
BAGHDAD: Stuck between an endless waitlist for a government job and a frail private sector, Iraqi entrepreneurs are taking on staggering unemployment by establishing their own start-ups.
The first murmurs of this creative spirit were felt in 2013, but the Daesh group’s sweep across a third of the country the following year put many projects on hold.
Now, with Daesh defeated, co-working spaces and incubators are flourishing in a country whose unemployment rate hovers around 10 percent but whose public sector is too bloated to hire.
Many self-starters begin their journey at an aptly named glass building in central Baghdad: The Station.
There, they sip on coffee, peruse floor-to-ceiling bookshelves for ideas and grab a seat at clusters of desks where other stylish Iraqis click away at their laptops.
“We’re trying to create a new generation with a different state of mind,” said executive director Haidar Hamzoz.
“We want to tell youth that they can start their own project, achieve their dreams and not just be happy in a government job they didn’t even want,” he said.
Youth make up around 60 percent of Iraq’s nearly 40 million people.
After graduating from university, many spend years waiting to be appointed to a job in the government, Iraq’s biggest employer.
Four out of five jobs created in Iraq in recent years are in the public sector, according to the World Bank.
And in its 2019 budget, the government proposed $52 billion in salaries, pensions, and social security for its workers — a 15 percent jump from 2018 and more than half the total budget.
But with graduates entering the workforce faster than jobs are created, many still wait indefinitely for work.
Among youth, 17 percent of men and a whopping 27 percent of women are unemployed, the World Bank says.
When Daesh declared Mosul its seat of power in Iraq back in 2014, resident Saleh Mahmud was forced to shutter the city’s incubator for would-be entrepreneurs.
With Mosul now cautiously rebuilding after the militants were ousted in 2017, Mahmud is back in business.
“Around 600-700 youth have already passed by Mosul Space” to attend a seminar or seek out resources as they start their own ventures, said the 23-year-old.
He was inspired after watching fellow Mosul University graduates hopelessly “try to hunt down a connection to get a job in the public sphere.”
“A university education isn’t something that gets you a fulfilling job,” he said.
Another start-up, Dakkakena, is capitalizing on Mosul’s rebuilding spirit, too.
The online shopping service delivers a lorry-full of home goods every day to at least a dozen families refurnishing after the war.
“On the web, we can sell things for cheaper than stores because we have fewer costs, like no showrooms,” said founder Yussef Al-Noaime, 27.
Noaime fled Daesh to the Netherlands, where he was introduced to e-commerce. When he returned home, the computer engineer partnered with another local to found their venture.
A similar service, Miswag, was set-up in the capital Baghdad in 2014 and last year reported hundreds of thousands of dollars in profits.
On an autumn day, some 70 young Iraqi innovators converged for a three-day workshop in Baghdad on founding start-ups.
They flitted among round tables planning projects, their Arabic conversations sprinkled with English terms.
“What we’re doing is showing youth what entrepreneurship is — not necessarily so they succeed, but so they at least try,” said organizer Ibrahim Al-Zarari.
He said attendees should understand two things: first, that the public sector is saturated. And second, that oil isn’t the only resource on which Iraq — OPEC’s second-largest producer — should capitalize.
More than 65 percent of Iraq’s GDP and nearly 90 percent of state revenues hail from the oil sector. Many youths turn to it for work, but it only employs one percent of the workforce.
Widespread corruption and bureaucracy also weaken Iraq’s appeal for private investors. The World Bank ranks it 168th out of 190 for states with a good business environment.
Under current legislation, private sector employees are not offered the same labor protections or social benefits as those in the public sector.
And Iraq’s stuttering banking industry appears too cautious to dive in, said Tamara Raad, 26, who researches start-ups.
“The banks have a role to play. They must make loans without interest and help young entrepreneurs,” she said.
Banks or no banks, Mahmud in Mosul is already planning how he’ll grow his business in 2019.
“We will open a new, larger space for new gatherings,” he said excitedly, to bring together returning designers, developers and other inventors.