US says Iran has lost $10bn in oil revenue due to sanctions

Gas flares from an oil production platform at Iran's Soroush oil fields. The US said a well supplied oil market helps bring Iranian crude exports to zero. (Reuters file photo)
Updated 13 March 2019
0

US says Iran has lost $10bn in oil revenue due to sanctions

  • US envoy on Iran, Brian Hook, said Washington the United States is accelerating its plan of bringing Iranian crude exports to zero
  • Washington wants to ensure a stable and well-supplied oil market

HOUSTON: Iran has lost $10 billion in revenue since US sanctions in November have removed about 1.5 million barrels per day (bpd) of Iranian crude from global markets, a US State Department official said on Wednesday.
Brian Hook, the State Department’s special representative on Iran, said in remarks at the CERAWeek energy conference that due to a global oil surplus — in part due to record US production — the United States is accelerating its plan of bringing Iranian crude exports to zero.
US sanctions on Iran and Venezuela, two of the largest oil producers in the Organization of the Petroleum Exporting Countries, and production cuts by OPEC and Russia have boosted global oil prices to near four-month highs.
Iran reached an agreement with world powers in 2015 over its nuclear program which led to the lifting of sanctions in 2016 but US President Donald Trump pulled out of the deal in May last year and reimposed restrictions in November.
Trump “has made it very clear that we need to have a campaign of maximum economic pressure” on Iran, Hook said, “but he also doesn’t want to shock oil markets, he wants to ensure a stable and well-supplied oil market. That policy has not changed.”
The global oil market is looking for signs that Washington may extend sanctions waivers for Iran’s key customers in early May. The United States surprised the market in November last year by allowing eight countries to keep importing Iranian oil — in part causing Brent crude futures, the international benchmark, to fall to near $50 a barrel in late December after surpassing $86 a barrel in October.
The US Energy Information Administration (EIA) has projected that world supply will exceed demand in 2019 by 440,000 bpd, Hook said.
“When you have a better supplied oil market it enables us to accelerate our path to zero. But we also know that there are a lot of variables that go into a well-supplied and stable oil market,” said Hook, a senior policy adviser to US Secretary of State Mike Pompeo.
Washington sanctioned Venezuelan oil exports in January in an effort to oust President Nicolas Maduro and a massive power outage since last week halted crude exports from its primary port, essentially crippling the South American country’s principal industry.
“We are aware that our diplomatic and economic pressure, the timing and the pace of that affects Venezuela’s oil industry,” Hook said.
He said the United States is monitoring global supplies for impact from sanctions. “I’ve met a few times with (Saudi Energy Minister) Khalid Al-Falih over the last year when we knew we were taking a lot of oil, we wanted to ensure that we’re doing this in a responsible way,” he said.
Falih said on Sunday that OPEC’s production-curbing agreement likely would last until at least June. OPEC and its allies agreed late in 2018 to cut output by 1.2 million bpd.


Debut of China’s Nasdaq-style board adds $44bn in market cap

Updated 22 July 2019
0

Debut of China’s Nasdaq-style board adds $44bn in market cap

  • Activity draws attention away from main board

BEIJING: Trading on China’s new Nasdaq-style board for homegrown tech firms hit fever pitch on Monday, with shares up as much as 520 percent in a wild debut that more than doubled the exchange’s combined market capitalization and beat veteran investors’ expectations.

Sixteen of the first batch of 25 companies — ranging from chip-makers to health care firms — increased their already frothy initial public offering (IPO) prices by 136 percent on the STAR Market, operated by the Shanghai Stock Exchange.

The raucous first day of trade tripped the exchange’s circuit breakers that are designed to calm frenzied activity. The weakest performer leapt 84.22 percent. In total, the day saw the creation of around 305 billion yuan ($44.3 billion) in new market capitalization on top of an initial market cap of around 225 billion yuan, according to Reuters’ calculations.

“The price gains are crazier than we expected,” said Stephen Huang, vice president of Shanghai See Truth Investment Management. “These are good companies, but valuations are too high. Buying them now makes no sense.”

Modelled after Nasdaq, and complete with a US-style IPO system, STAR may be China’s boldest attempt at capital market reforms yet. It is also seen driven by Beijing’s ambition to become technologically self-reliant as a prolonged trade war with Washington catches Chinese tech firms in the crossfire.

Trading in Anji Microelectronics Technology (Shanghai) Co. Ltd., a semiconductor firm, was briefly halted twice as the company’s shares hit two circuit breakers — first after rising 30 percent, then after climbing 60 percent from the market open.

HIGHLIGHTS

• 16 of 25 STAR Market firms more than double from IPO price.

• Weakest performer gains 84 percent, average gain of 140 percent.

• STAR may be China’s boldest attempt at capital market reforms yet.

The mechanisms did little to keep Anji shares in check as they soared as much as 520 percent from their IPO price in the morning session. Anji shares ended the day up 400.2 percent from their IPO price, the day’s biggest gain, giving the company a valuation of nearly 242 times 2018 earnings.

Suzhou Harmontronics Automation Technology Co. Ltd., in contrast, triggered its circuit breaker in the opposite direction, falling 30 percent from the market open in early trade before rebounding. But by the market close, the company’s shares were still 94.61 percent higher than their IPO price.

Wild share price swings, partly the result of loose trading rules, had been widely expected. IPOs had been oversubscribed by an average of about 1,700 times among retail investors.

The STAR Market sets no limits on share prices during the first five days of a company’s trading. That compares with a cap of 44 percent on debut on other boards in China.

In subsequent trading sessions, stocks on the new tech board will be allowed to rise or fall a maximum 20 percent in a day, double the 10 percent daily limit on other boards.

Regulators last week cautioned individual investors against “blindly” buying STAR Market stocks, but said big fluctuations were normal.

Looser trading rules were aimed at “giving market players adequate freedom in the game, accelerating the formation of equilibrium prices, and boosting price-setting efficiency,” the Shanghai Stock Exchange (SSE) said in a statement on Friday.

The SSE added that it was normal to see big swings in newly listed tech shares, as such companies typically have uncertain prospects, and are difficult to evaluate.