WEEKLY ENERGY RECAP: Oil sees big weekly loss as Iran struggles to store crude

Oil prices ended last week with the biggest weekly losses of the year. Brent fell below the $70 psychological barrier to $68.69 a barrel. (Reuters/File Photo)
Updated 25 May 2019

WEEKLY ENERGY RECAP: Oil sees big weekly loss as Iran struggles to store crude

  • The market remained under pressure from US stock-build for the third week in a row

RIYADH: Oil prices ended last week with the biggest weekly losses of the year. Brent fell below the $70 psychological barrier to $68.69 a barrel, while WTI dropped under $60 to $58.63.
The market remained under pressure from US stock-build for the third week in a row. But what mostly pushed prices lower was the low speculator activity, amid hesitation to add bets on almost flat price fluctuations.
The direction of oil prices has apparently ignored the tight physical market, amid signs that OPEC+ may extend its output cuts extensions, US sanctions against Iran and Venezuela, and slower Russian exports due to a contamination of some of its crude.
While Iran said it has already resumed oil sales to China, its biggest buyer, tanker tracker data suggests its total exports have plummeted. Iranian exports fell to 500,000 barrels per day or lower in May, more than half the level seen in April, the data suggest. However, Iran needs to keep oil flowing as any suspension would damage its future operations at its aging oil fields.
To keep its operations going as exports slump and sanctions block purchases, Iran has been forced to store more oil on land and at sea.
But that brings myriad problems. Iran’s land storage is very limited due to poor oil infrastructure and logistics that haven’t been developed since the mid-1970s. At sea, it has an aging fleet of ships, and it will face difficulties with insurance and in striking agreements with shipping companies.


Saudi finance minister reassures public on taxes

Updated 10 December 2019

Saudi finance minister reassures public on taxes

  • Mohammed Al-Jadaan: There will be no more fees and taxes until after the financial, economic and social impacts have been considered carefully
  • The government expects to generate about SR203 billion in taxes this year – more than 20.5 percent higher than the previous year

RIYADH: Saudi finance minister Mohammed Al-Jadaan pledged that there would be no more taxes or fees introduced in the Kingdom until the social and economic impact of such a move had been fully reviewed.

He was speaking at the 2020 Budget Meeting Sessions, organized by the Ministry of Finance and held in Riyadh on Tuesday, where a number of ministers and senior officials gathered following the publication of the budget on Monday evening.

“There will be no more fees and taxes until after the financial, economic and social impacts have been considered carefully, especially in terms of economic competitiveness,” said Al-Jadaan.

The government expects to generate about SR203 billion in taxes this year – more than 20.5 percent higher than the previous year and more than 10 percent higher than the expected budget for this year. 

Most of that increase has come from taxes on goods and services which rose substantially as a result of the improvement in economic activity over the year.

The reassurances from the minister come as the Saudi budget deficit is estimated to widen to about SR187 billion, next year, or about 6.4 percent of GDP.