Mideast carriers to benefit from lower oil price

An Emirates flight attendant pictured onboard an Airbus A380. Regional carriers have emerged from a tough year. (Shutterstock)
Updated 12 December 2018
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Mideast carriers to benefit from lower oil price

  • IATA expects Mideast airlines to make profits of $800m in 2019
  • Capacity growth expected to slow next year

LONDON: Lower oil prices are expected to boost profits at Middle East airlines in 2019 as a decade of double-digit growth starts to slow.
The 2019 industry outlook from the International Air Transport Association (IATA) is based on an anticipated average oil price of $65 per barrel — lower than the $73 experienced in 2018.
Middle East airlines are expected to report an $800 million net profit in 2019, compared to $600 million in 2018, IATA said on Wednesday.
“We had expected that rising costs would weaken profitability in 2019. But the sharp fall in oil prices and solid GDP growth projections have provided a buffer,” said IATA CEO Alexandre de Juniac. “So we are cautiously optimistic that the run of solid value creation for investors will continue for at least another year.”
Lower oil prices are welcome relief for airlines whose aviation fuel bill can account for a third of overall costs.
IATA said jet fuel prices are expected to average $81.30 per barrel in 2019, lower than the $87.60 per barrel average for 2018.
Middle East carriers have been hurt by a slowdown in regional spending, conflict and overcapacity.
That is expected to lead to a slowdown in capacity growth — projected at 4.1 percent in 2019 compared to 4.7 percent in 2018.


Iran says Japan has started process of importing Iranian oil

Updated 21 January 2019
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Iran says Japan has started process of importing Iranian oil

  • Exemptions have been granted to Iran's biggest oil clients - Japan, China, India, South Korea, Taiwan, Italy, Greece and Turkey
  • Iranian oil accounted for 5.3 percent of Japan's total crude imports in 2018

LONDON: Japan has started the process of importing Iranian oil, which was suspended due to U.S. sanctions, the governor of Iran's central bank said on Monday.
The resumption of oil imports comes after Tokyo was granted a waiver from U.S. sanctions that went into effect in November. Iran is the fourth-largest oil producer among the members of the Organization of the Petroleum Exporting Countries.
"After China, South Korea, India and Turkey, Japan also started the process of importing Iranian oil," Abdolnaser Hemmati was quoted as saying by the state news agency IRNA.
Iran's oil exports have fallen sharply since U.S. President Donald Trump said in May 2018 the United States would withdraw from a pact curtailing Iran's disputed nuclear programme and reimpose sanctions on Tehran.
However, exemptions have been granted to Iran's biggest oil clients - Japan, China, India, South Korea, Taiwan, Italy, Greece and Turkey - which allow them to import some oil for another 180 days.
Iranian oil accounted for 5.3 percent of Japan's total crude imports in 2018.