UAE sees no immediate risk to oil flow through Strait of Hormuz

UAE sees no immediate risk to oil flow through Strait of Hormuz
The region was shaken last year by attacks on oil tankers near the Strait of Hormuz and an assault on Saudi energy plants. (AFP/File)
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Updated 09 January 2020

UAE sees no immediate risk to oil flow through Strait of Hormuz

UAE sees no immediate risk to oil flow through Strait of Hormuz
  • The situation is not a war, and what is happening now should not be exaggerated, says minister

ABU DHABI: The UAE’s energy minister said on Wednesday he saw no immediate risk to oil passing through the vital gateway of the Strait of Hormuz after Iran attacked bases housing US forces in Iraq.

Iranian officials have said the missile strikes were a response to Friday’s killing of top Iranian commander Qassem Soleimani in Baghdad.

The situation is not a war, and what is happening now should not be exaggerated, Suhail Al-Mazrouei said on the sidelines of a conference in Abu Dhabi, capital of the UAE, an OPEC producer.

“We will not see a war,” he added. “This is definitely an escalation between the US, which is an ally, and Iran, which is a neighbor, and the last thing we want is more tension in the Middle East.”

Oil prices were about 1 percent higher on Wednesday, but well below highs hit in a frenetic start to the trading day after the missile attacks raised the specter of a spiraling conflict and disruption to crude flows.

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Iranian Oil Minister Bijan Zanganeh was quoted by the semi-official ISNA news agency as saying on Wednesday that Tehran was benefiting from rising oil prices, and also called on the US to quit the region.

“The trend of oil prices is up and this benefits Iran ... Americans should stop disturbing the region and let the people of the region live,” Zanganeh said.

The secretary-general of the Organization of the Petroleum Exporting Countries (OPEC), Mohammed Barkindo, told the conference in Abu Dhabi that oil facilities in Iraq, the second biggest producer in OPEC, were secured and output was continuing.

He said global spare oil capacity stood at around 3-3.5 million barrels per day (bpd), with the majority held by Saudi Arabia, the top producer in OPEC.

The UAE’s Mazrouei said OPEC would respond to any possible oil shortages if needed, within its “limitations.” But he saw no sign of a supply shortage, with healthy demand and global oil inventories hovering around the 5-year average.

“We are not forecasting any shortage of supply unless there is a catastrophic escalation, which we don’t see,” he said.

Barkindo said he was confident that leaders in the Middle East were doing everything possible to restore normal conditions.

The region was shaken last year by attacks on oil tankers near the Strait of Hormuz and an assault on Saudi energy plants that initially halved the Kingdom’s crude output.

Washington and Riyadh blamed their common foe Iran, also an OPEC member, for those strikes, a charge Tehran denied.

Barkindo said the forecast for global demand growth was around 1 million bpd, adding this was “not robust and not alarming.”

Asked what message he would send to US President Donald Trump, Barkindo told the gathering that the United States’ emergence as a leading oil and gas producer should carry shared responsibility for energy market stability.

“The continued task of the OPEC+ to maintain stable oil markets on a sustainable basis is a shared responsibility of all producers including the US,” Barkindo said.

“OPEC alone can’t shoulder that responsibility. We invite the United States to join us in this noble objective,” he added.

OPEC and its allies, a grouping known as OPEC+, has been capping production since 2017 to avert oversupply and support prices. The US is not part of this oil supply management agreement.


Egyptian minister hails reforms as public investment jumps 70%

Updated 03 December 2020

Egyptian minister hails reforms as public investment jumps 70%

Egyptian minister hails reforms as public investment jumps 70%
  • The rate of economic growth reached about 1.8 percent — less than the population growth rate
  • A plan to control population increase will begin in January 2021

CAIRO: The volume of public investment in Egypt grew by 70 percent in the 2020/2021 fiscal year, reaching 595 billion Egyptian pounds ($37.9 billion), Minister of Planning and Economic Development Hala Al-Saeed has said.

In a speech at the Egypt Economic Summit 2020, she said that Egypt could become one of only three economies across the Middle East to achieve economic growth this year.

The growth followed reforms that helped make the Egyptian economy “more flexible” and “able to absorb external shocks,” she said.

Al-Saeed said Egypt faced great challenges that led to imbalances in the monetary, financial and external axes, which caused a decline in Egyptian economic indicators. The rate of economic growth reached about 1.8 percent — less than the population growth rate.

The minister added that a plan to control population increase will begin in January 2021, as Egypt’s population is expected to grow by 2.5 million annually and reach 130 million in 2030.

Al-Saeed said that achieving development requires sustained economic progress to overcome weak population growth and the challenges facing the Egyptian economy in light of political and economic changes and the coronavirus pandemic.

The challenge helped Egypt commit to reforms based on comprehensive planning and an ambitious vision for the future, in the form of Egypt’s Vision 2030 sustainable development strategy, the minister said.

Egypt’s implementation of reforms since November 2016 led to “overall stability” and “comprehensive growth.” This was reflected in positive indicators that the Egyptian economy saw before the coronavirus outbreak, she added.

The rate of economic growth was about 5.6 percent in the first half of the 2019/2020 fiscal year, and about 5 percent during the third quarter. There was an average growth of 5.4 percent in the first nine months of the year, before the coronavirus outbreak.

Al-Saeed said that international institutions had “positive expectations” regarding the Egyptian economy.

She referred to the results of the World Economic Outlook report issued by the International Monetary Fund in October 2020, in which the Fund raised its expectations for Egypt’s gross domestic product growth to 3.5 percent for the year, compared with a previous forecast of 2 percent in the June report.

If the prediction is realized, it will make Egypt among only three economies in the Middle East and Central Asia to achieve economic growth this year.