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
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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.


Saudi consumers splashing the cash once more, says Mastercard boss

Updated 6 min 48 sec ago
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Saudi consumers splashing the cash once more, says Mastercard boss

  • J.K. Khalil: We have seen an overall relaxation in the economy. It’s not yet back to previous levels, but there has been a positive trend reversal
  • J.K. Khalil: We are expecting the second quarter to be better than the first, and we are confident that will happen

RIYADH: Saudi Arabian consumers are increasingly spending cash — and using their credit cards online — after a period of relative parsimony, the head of one of the biggest providers of consumer payment systems told Arab News.

J.K. Khalil, the general manager of Mastercard in Saudi Arabia and Bahrain, said that there has been an appreciable pickup in consumer spending in the first quarter of 2019, in contrast to the slump that followed the introduction of value-added tax last year.

Speaking on the sidelines of the Financial Sector Conference in Riyadh, Khalil said: “There are positive signals that last year’s situation is being reversed. We have seen an overall relaxation in the economy. It’s not yet back to previous levels, but there has been a positive trend reversal.”

Khalil described the upturn as a “positive single-digit increase.”

The Mastercard regional boss said that the trend would continue. “We are expecting the second quarter to be better than the first, and we are confident that will happen,” he said.

A lot of the upturn has been in the form of online transactions, he said. “We are seeing an increase not just in the physical retail space, but also online. Consumers see increasingly that cards can be used online and offline,” Khalil added.

Some 30 million debit cards are now used for e-commerce transactions in the Kingdom, Khalil said.

Mastercard’s optimistic view was echoed by several participants at the Financial Sector Conference. Finance Minister Mohammed Al-Jadaan opened the first day of the event with the surprise announcement that the Kingdom’s budget had recorded its first quarterly surplus in five years.

Mohammed Al-Tuwaijri, the minister for economy and planning, said on Thursday that unemployment was down in the Kingdom, even though there were a large number of new entrants to the jobs market.

Elsewhere at the event, which closed on Thursday, there were expressions that the Kingdom had “turned the corner” from the downturn that hit after the collapse in oil prices in 2014. One operator of a major retail chain, who asked not to be identified, said that footfall in the capital’s malls was ahead of last year, and the trend was expected to continue this year.