Iran says US-caused oil spike will slow growth, add to tariff impact

While Trump has accused the Organization of the Petroleum Exporting Countries of driving up oil prices. (Shutterstock)
Updated 15 July 2018

Iran says US-caused oil spike will slow growth, add to tariff impact

  • The comments underline the still-simmering tensions after OPEC’s meeting last month
  • Saudi Arabia said the deal allowed countries able to produce more, such as itself

LONDON: A rise in oil prices caused by the United States’ sanctions policies will hurt economic growth in China, Europe and other consumers, much like President Donald Trump’s trade measures, a top Iranian official said on Thursday.
Iran’s OPEC governor also told Reuters the rise in oil output by OPEC and its allies, after pressure by Trump to do so, was only 170,000 barrels per day (bpd) in June and would not grow much in 2019, also weighing on economic growth.
While Trump has accused the Organization of the Petroleum Exporting Countries of driving up oil prices, Iran, OPEC’s third-largest producer, says the United States has caused this by imposing sanctions on Iran and fellow OPEC member Venezuela.
“The higher oil prices Trump is causing are leading to a higher energy bill in the EU, Japan, China and India, impacting their economic growth just like the tariffs imposed upon them, also enabling Saudi Arabia and the UAE to pay their arms bill to the US,” Iran’s Hossein Kazempour Ardebili said.
The comments underline the still-simmering tensions after OPEC’s meeting last month, when the group agreed to return to full compliance with earlier agreed oil output cuts, after months of underproduction by OPEC countries including Venezuela.
Saudi Arabia said the deal allowed countries able to produce more, such as itself, to go ahead and do so, to make up for shortfalls elsewhere. Iran strongly disagreed and criticized Saudi plans to boost output.
Kazempour said Trump may be disappointed by the scale of the production increase so far and voiced skepticism Saudi Arabia and Russia could add much more oil in 2019.
“These days Saudi Arabia are supplying out of stocks not additional production,” he said. “Russia is also unable to do much not even 200,000 barrels per day — all are talking few barrels next year and the world economy will shrink and all indexes will be down.”
“The June versus May increase in OPEC and non-OPEC production was only 170,000 bpd. Does this surprise you, Mr.President?“
The International Energy Agency, in a report on Thursday, put the combined month-on-month increase at 230,000 bpd.
If Iran were able to develop its liquefied natural gas (LNG) industry to its full potential, Tehran could help reduce reliance on Russia, Kazempour said — something that the United States would favor.
“Trump is concerned about EU and German dependence on Russian gas. Why do Trump and American companies together with EU companies not invest in Iranian LNG for Europe? Iran holds the largest gas reserves.”
The US president had launched a sharp public attack on Germany on Wednesday for supporting a Baltic Sea gas pipeline deal with Russia, saying Berlin had become “a captive to Russia.”


Struggling WeWork mulls bailout deals with SoftBank, JP Morgan

Updated 48 min 28 sec ago

Struggling WeWork mulls bailout deals with SoftBank, JP Morgan

TOKYO: Under-pressure start-up WeWork is considering two huge bailout plans including a cash injection that could see Japanese investment titan SoftBank take control of the firm, according to reports.
The office-sharing giant had been on course for a massive initial public offering until last month when questions began to be asked over its governance and profit outlook.
The firm’s valuation plunged from $47 billion in January to less than $20 billion in September and the listing plans have been dropped, while co-founder Adam Neumann stepped down as chief executive.
With New York-based parent company We Co. not expected to push for the IPO this year, the cash-strapped firm is looking for a financial lifeline.
The Wall Street Journal, New York Times and Bloomberg News cited unnamed sources close to the talks as saying SoftBank — the US firm’s biggest shareholder — had drawn up a proposal that gives it full control of WeWork.
The move would dilute the voting power of Neumann, who remains as chairman of the company he started in 2010 and also currently maintains control a majority of voting shares.
They also reported that WeWork is looking at a deal with Wall Street giant JP Morgan to raise $5 billion in debt, with the Times saying directors of We would be meeting as soon as Monday afternoon to discuss that.
“WeWork has retained a major Wall Street financial institution to arrange financing,” the Journal reported a company spokesman as saying.
“Approximately 60 financing sources have signed confidentiality agreements and are meeting with the company’s management and its bankers over the course of this past week and this coming week.”
The New York-based startup that launched in 2010 has touted itself as revolutionizing commercial real estate by offering shared, flexible workspace arrangements, and has operations in 111 cities in 29 countries.
However, the company, which lost $1.9 billion last year, has faced skepticism over its ability to make money, especially if the global economy slows significantly.