Outlook for BRICS Common Currency

The prime objective of formation of BRICS, in my opinion, is to “end the US hegemony by getting rid of involvement of US currency in trade and above all US dominated settlement system”. It is not an easy task because creation of an alternative currency and dependable settlement system is a mammoth job, especially because United States would not like to see end to its hegemony.

De-dollarization of the global financial system is the long-term goal of the bloc amid Western economic sanctions on several members. For example, Saudi Arabia and the UAE might face rising pressures to sell oil to China and India in a currency acceptable and dependable. Trade in general is set to be increasingly carried out in the bloc’s currencies. Nonetheless, a common BRICS currency is not an easy task given the Gulf countries’ heavy links with the West and the Petrodollar, large economic disparities among members, and the strength of the Western financial system. 

BRICS economies will remain heterogeneous, with marked differences in their stage and pace of development, and in economic size and structure. For example India, Egypt and Ethiopia will grow at the fastest rates, boosted by great catch-up potential. China will benefit from its high-tech manufacturing sector. Non-oil diversification strategies will buttress activity in Saudi Arabia and the UAE. In contrast, Brazil, Iran, Russia and South Africa are set to grow at underwhelming clips due to lackluster progress on structural reforms. 

The western analysts believe, “Expansion will bolster the BRICS geopolitical significance—provided the group can reconcile its internal tensions—and its combined economic muscle, but the direct economic impact will be small. The BRICS group is unlikely to become a solid geopolitical and economic construction, regardless of how many bricks are added to the wall.” 

 The biggest agreement is, “Despite some pressure, the Petrodollar will remain the preferential currency for trade. A greater role of BRICS and other emerging markets in global trade may create more natural demand for alternatives to Petrodollars, but this has not happened so far. The higher share of CNY in trade invoicing doesn’t seem to be dethroning Petrodollar, but rather pushing out second tier developed market FX, such as GBP. One direction in which Petrodollar could be challenged given the geopolitical confrontation is the higher focus of BRICS trade on other emerging market economies.” 

Iran: Presidential election and there after

In the Iranian presidential election being held today, six handpicked candidates are participating. Though, the scanty details have started pouring in, these are mostly tweaked. The details coming from western media are aimed at proving that elections are eyewash. The western media is also busy in creating discontent among the Iranians and using a few dissent voices.

Ironically, the presidential debate in the United States is engrossed in self-created issues of United States, i.e. trade war with China, Russia-Ukraine conflict and above all on going genocide in Gaza by Israel. All these issues have been created and garnered by military complexes that are the key donors of election campaigns in United States for ages.

One may recall that once there was a ban on export of oil from United States, now the country has attained the status of major oil and gas producing and exporting country. The lust for getting complete control over energy trade is touching new highs.

Therefore, the United States wants to keep Iran out of energy trade. However, the bigger objective is, not to allow Iran to become a regional power. Saudi Arab – Iran animosity has been used for more than five decades to keep Iran out of energy trade and luring Saudi Arabia to buy more and more lethal weapons.

Since Islamic revolution in Iran, United States has tried to sponsor anti-cleric groups but failed miserably. The US has killed many of the Iranian scientists and commanders, with close coordination with Israel. The elimination of President Ebrahim Raisi was an attempt to disrupt the process of choosing the successor of Rahbar Ali Khamenei.

The United States is also annoyed by the growing cordial diplomatic relations with Saudi Arabia. The biggest disturbing point is that in case these two countries become friend, not only US hegemony in the region will be reduced but the two countries will get control over oil and gas moving through Strait of Hormuz and Red Sea.

Whatever may be the outcome of Iranian elections, United States remains adamant at imposing new sanctions of Iran, keeping it out of energy trade and disrupting normalization of Saudi-Iranian relations. The bigger objective is to support Israel in killing Gazans and get control over the tiny piece of land extra rich in oil and gas.

 

  

 

 

United States: Disrupter of Global Trade

Washington has taken further steps to increase pressure on Tehran. This time, the White House, despite the negative impact of its decisions on the global stage, has leveraged its political influence on Panama to counter Tehran’s expansion of foreign policy.

The US has opted to exert pressure on Panama to prohibit Iranian vessels, sanctioned by Washington, from flying its flag. During a visit to Panama on Wednesday, Abram Paley, Deputy Special Envoy in the US Office of the Special Envoy for Iran, stated that the measure aims to prevent ships from being utilized for what he termed as illegal actions.

Paley emphasized in a statement that the US is endeavoring to enhance the enforcement of sanctions as part of a broader diplomatic outreach campaign. "Iran and affiliated entities are attempting to circumvent sanctions here in Panama," he remarked. "They seek to exploit Panama's flag registry."

"We anticipate that the Panamanian government will continue to collaborate with us in accordance with their domestic legislation and international commitments," Paley added.

Washington's recent action follows shortly after Iranian Oil Minister Javad Owji declared that Tehran's oil sales would remain unaffected by sanctions, even if Donald Trump were to win the US presidential elections in November.

Panama leads globally in providing flags of convenience, enabling shipping companies to register their vessels in countries with which they have no connection — for a fee and exemption from oversight.

It appears that the White House intends to reinforce the implementation of existing sanctions as the regional crisis escalates. This move by Washington stands in stark contrast to what Washington's Iran hawks call Biden's appeasement policy in West Asia.

The United States has consistently wielded its power as leverage to advance its interests, regardless of the potential repercussions on the regional and international scale. This approach is evident in the consistent US formula for intervening in the policy-making systems of other countries.

For instance, Washington's policy towards Caracas and the imposition of sanctions on Venezuela have served as tools for intervening in Venezuela's political system. Similarly, the US employs similar tactics in West Asia, as evidenced by the array of American military bases in the region and unwavering support for Tel Aviv. These actions reflect a policy that prioritizes Washington's interests above all else, irrespective of their broader effects.

The Biden Administration's pressure on Panama exemplifies this approach, indicating that Washington is not inclined to pursue diplomatic channels in its dealings with Iran. Instead, the primary objective appears to be preventing the Islamic Republic of Iran from expanding its political influence.

Despite the Biden administration's initial endorsement of a more conciliatory policy in West Asia and its expressed willingness to revive the 2015 Iran nuclear deal, formally called the JCPOA, the White House has demonstrated a lack of political resolve to take concrete actions. Moreover, the Biden administration has yet to lift any sanctions on Iran, failing to demonstrate a tangible commitment to resolving issues through diplomatic means. 

The recent US stance in Panama and its maneuver in the Red Sea have triggered alarm bells regarding their potential ramifications on the seamless flow of global trade. What emerges from these developments is a pattern of US behavior wherein the pursuit of its own interests takes precedence, even at the expense of disrupting international commerce. 

Take, for instance, the situation in Panama. The US exertion of pressure seems to transcend the immediate issue at hand, instead serving as a means to constrain Iran's influence. This strategic maneuver underscores Washington's inclination to prioritize geopolitical objectives over the broader interests of global trade. Similarly, the US confrontational stance towards certain factions in the Red Sea region has stirred unnecessary friction along a crucial trade artery.

Such actions raise legitimate concerns about the US approach to international affairs. By prioritizing its own objectives over collaborative efforts aimed at fostering global economic stability, the US risks sowing seeds of discord that could have far-reaching consequences. Indeed, this prioritization of unilateral interests over multilateral cooperation threatens to set off a chain reaction of instability, imperiling the very foundation upon which the global economy rests.

As the world navigates through increasingly complex geopolitical terrain, it becomes imperative for nations to uphold principles of cooperation and mutual benefit. The recent US actions serve as a sobering reminder of the dangers inherent in a myopic pursuit of national interests at the expense of broader global imperatives. Only through concerted efforts to promote dialogue, understanding, and collaboration can we hope to safeguard the integrity of the global trade system and steer clear of the choppy waters of economic uncertainty.

 

 

Bank of China opens branch in Saudi Arabia

China’s most internationalized state bank on Tuesday opened its first branch in Saudi Arabia in a move to expand the use of yuan amid a growing number of economic deals between the two countries.

Bank of China (BOC), one of China’s four biggest state-owned banks, opened its branch in Riyadh, the capital city of the oil-rich Middle Eastern country, more than two years after being given approval by the Saudi Arabian government.

The branch has more than 20 staff, with a majority hired locally – a condition requested by local authorities.

It is the second Chinese bank to open a branch in Saudi Arabia after the Industrial and Commercial Bank of China (ICBC) opened its first branch in Riyadh in 2015. ICBC also opened a branch in Jeddah in May.

China’s ambassador to Saudi Arabia, Chen Weiqing, said the opening of the branch was a result of positive developments in the bilateral relations between the two countries, and new stage of financial cooperation.

“It also shows that China highly recognizes the financial regulations, investment environment, and geographical advantages of Saudi Arabia,” Chen said, as he attended the opening ceremony with Bank of China president Liu Jin.

Saudi Central Bank governor Ayman al-Sayari and Saudi Arabia’s deputy investment minister, Saleh Ali Khabti, also attended the opening ceremony along with 250 guests.

The Saudi-listed ACWA Power, Saudi Arabia’s Ministry of Investment, Ajlan & Bros Holding Group and Zhejiang Rongsheng Holding Group signed memorandums of understanding involving internationalizing the yuan and green financing with BOC during the opening ceremony, the statement added.

The move came as part of a growing series of economic activities between China and Saudi Arabia, with their bilateral relations described as being at the best stage ever following President Xi Jinping’s state visit in December 2022, with both countries facing souring relations with the West.

During the trip at the end of last year, Xi pledged to work towards widening the use of yuan in oil and gas trade in the region, amid a push to establish the currency internationally and weaken the US dollar’s grip on world trade.

Saudi Arabia is China’s largest source of crude oil imports, with 87.5 million metric tons (641 million barrels) shipped in 2022.

Amid efforts by state banks to tap potential in the Middle East, BOC’s new branch has been licensed to provide basic commercial banking services to individual consumers and small- to medium-sized businesses, ranging from deposit accounts and loans to mortgages and yuan transactions.

At the weekend, BOC president Liu also met Khaled Mohamed Salem Balama Al Tameemi, the governor of the central bank of the United Arab Emirates, to court more support for its yuan clearing in the region and potential cooperation with the nation’s sovereign wealth funds.

In an interview with local media in June, BOC said the new branch aimed to offer the yuan to the wider Middle East region to assist commercial and financial trade between China, Saudi Arabia and beyond.

As there are many Chinese companies entering the market in the region, being able to trade and make financial transactions using the yuan would encourage Chinese companies to invest in the area.

The Saudi Arabian government first agreed to allow BOC to open its branch in January 2020. At the time, Saudi Arabia had only 14 foreign banks, including ICBC.

BOC also has existing branches in Abu Dhabi and Dubai in the UAE, as well as Bahrain, Turkey and Qatar.

Li Tong, president of the bank’s investment banking unit, Bank of China International, said in June during the Arab-China Business Conference in Riyadh that the new branch in Riyadh would push for financial cooperation, and further boost economic cooperation between the two countries.

The bank has also been in discussion with local counterparts to offer panda bonds – yuan-denominated bonds sold by overseas entities in China’s onshore bond market to raise investments in China.

A number of other banking sector collaborations have also been announced this year.

In March, the Export-Import Bank of China announced a first loan cooperation with Saudi National Bank, Saudi Arabia’s largest bank, in yuan.

Hong Kong has also been named as a major hub for financial cooperation between China and Saudi Arabia.

In July, the Hong Kong Monetary Authority, the city’s de facto central bank, signed a memorandum of understanding with the Saudi Central Bank, pledging initiatives in financial infrastructure development, open market operations, market connectivity and sustainable development.

 

 

Resumption of Saudi Iran ties pivotal for regional security

Foreign Minister Prince Faisal bin Farhan has affirmed Saudi Arabia's desire to strengthen bilateral relations with the Islamic Republic of Iran and his country's keenness to discuss ways to activate agreements between the two countries.

Addressing a joint press conference with his Iranian counterpart Hossein Amir-Abdollahian in Riyadh on Thursday, Prince Faisal said the resumption of diplomatic relations between Saudi Arabia and Iran marked a pivotal moment for regional security.

Amir-Abdollahian’s visit to Riyadh follows the reestablishment of diplomatic relations between Riyadh and Tehran, brokered by China in March, after seven years of no formal ties.

"Within the framework of the implementation of the agreement, the missions of both countries have resumed their work, and so have the ambassadors-designate," Prince Faisal said.

Prince Faisal said that the Kingdom is keen to activate security and economic agreements that were inked with Iran. He also conveyed Saudi Arabia’s gratitude to Iran for its support of the Kingdom’s bid to host World Expo 2030.

For his part, Amir-Abdollahian described the discussions in Riyadh fruitful. He said that the Islamic Republic values the role Saudi Arabia plays in the region, adding that the two countries can work together to resolve lingering regional issues.

Amir-Abdollahian said that relations with Saudi Arabia were moving in the right direction and stressed that his country was determined to strengthen relations with the Kingdom.

He added that Iranian President Ebrahim Raisi will visit Saudi Arabia soon.

Prince Faisal had made a landmark visit to Tehran in June, where he met with Amir-Abdollahian and President Ebrahim Raisi.

Under the deal signed in March, Riyadh and Tehran agreed to reopen embassies and consulates in each other’s territories and implement security and economic cooperation agreements that were signed over 20 years ago.

Saudi Arabia severed ties with Iran in 2016 following an attack on its embassy in Tehran and consulate in Mashhad. 

Iranian president meets Venezuela president

Iranian President Ebrahim Raisi and his accompanying delegation held several meetings with Venezuelan officials in a bid to deepen partnership between Tehran and Caracas. 

On Monday morning Iran’s local time, President Raisi left Tehran for a tour of three Latin American nations -Venezuela, Nicaragua, and Cuba- as the head of large politico-economic delegation. 

Upon his arrival in the Venezuelan capital, the Iranian president was accorded an official reception in which the national anthems of Iran and Venezuela were played. During the playing of the national anthem of the Islamic Republic of Iran, a group of Venezuelan children and teenagers sang the national anthem of Iran in Persian.

After the reception ceremony, President Raisi and his Venezuelan counterpart Nicolas Maduro held a meeting in which they discussed ways to boost bilateral cooperation. 

In the meeting, Raisi described the relations between the two countries as strategic. 

“Despite the expansion of relations between Iran and Venezuela in recent years, diverse mutual capacities require the agreements of the two countries to be implemented as quickly as possible and the relations between them to be upgraded to higher levels,” he said, according to the official website of the Iranian presidency. 

Raisi underlined the achievements that Iran made while being under US. sanctions. He said Iran can share these achievements with Venezuela.

“The Iranian nation has gained valuable experiences and achievements in the field of science and technology by standing up to the domination system and overcoming the sanctions, which can be shared with Venezuela,” Raisi noted.

The Iranian president also touched on the emerging new world order, saying that such a development can benefit Iran and Venezuela. Stating that a new system is being formed in the world, Raisi said that the future of these developments will benefit the freedom-seeking and independent countries of the world.

President Maduro, praised the history of strategic relations between Tehran and Caracas and announced his determination and the members of the cabinet of this country to start a new round of efforts and measures to expand relations with the Islamic Republic of Iran.

Maduro also hailed the emerging new world order. “In the new world that is being formed, imperialism is falling and the countries that have resisted the arrogance of the arrogant are on the verge of victory,” he said. 

Stressing the need for establishing a direct air link between the two countries and strengthening shipping lines to increase trade between Iran and Venezuela Maduro said, “The two countries have good capacities for cooperation in the fields of tourism, agriculture and animal husbandry.”

In the meeting of the high-ranking delegations of Iran and Venezuela, the presidents of the two countries called Martyr Haj Qassem Soleimani and the late Venezuelan politician Simón Bolivar as heroes of the fight against domination and imperialism.

Maduro praised General Soleimani. “I always remember General Soleimani and I pay tribute to him. In 2018, a brutal cyber attack from United States was launched on our energy infrastructure. He directed a team to investigate the cyberattack and helped us a lot. Many do not know about that,” Maduro said, according to Fars News. 

He added, “I also pay my respects and we will install his bust in the tomb of Simon Bolivar.”

In Caracas, President Maduro also awarded Raisi the national honor of Venezuela.

Raisi and Maduro also participated in Iran-Venezuela high-level joint commission meeting. After the meeting, the presidents of the two countries held a joint press conference.  

“Iran and Venezuela have common interests and views in the fields of independence, freedom and justice, which has brought the people of these two countries closer together,” Raisi said at the presser. 

He also stated that the people of Iran and Venezuela have common enemies who do not want them to live independently. 

“The Iranian nation has proven its friendship with the Venezuelan people over the past years and has always shown that it is their friend during their difficult times,” Raisi added.

Pointing out that the relations between Iran and Venezuela are not ordinary, but strategic, President Raisi said, “Having common interests, views and enemies have made cooperation deep and strategic.”

He added, “Today, the two countries are determined to develop relations in different fields.”

Raisi stated, “The Islamic Republic of Iran, thanks to the blessings of the Islamic Revolution, the pure blood of the martyrs, and the resistance of the Iranian people, has been able to turn the pressures and sanctions into opportunities, and in this way has provided various capacities that are ready to be shared with the resilient nation of Venezuela.”

At the end, Raisi once again paid tribute to the national heroes of Venezuela and honored the memory and name of the resistance martyr Haj Qassem Soleimani and saluted his noble soul.

 

Can BRICS dare to challenge US hegemony?

BRICS includes Brazil, Russia, India, China, and South Africa. It will hold its first ministerial meeting on Friday and Saturday in preparation for heads of state summit in August. This year's gathering will be held in Cape Town, South Africa.

Around 20 non-BRICS foreign ministers will be in attendance at the end of the week, with many countries actively expressing an interest in becoming members.

During last year's BRICS summit in China, a strong message was delivered of putting development on top of everything else on the international agenda. As Chinese President Xi Jinping pointed out at the UN General Assembly, the goal of the initiative is that no country or individual should be left behind in pursuing development.

As the rotating chair switches to South Africa, among the themes of this year's summit is multilateralism in promoting international development.

It's no surprise that the success of the BRICS mechanism has attracted many like-minded nations who are expressing a desire to join, from the UAE in Asia to Algeria in Africa and Argentina in Latin America.

Among other issues on the agenda at the BRICS summit in August is increased economic autonomy. Another is plans to decide on admitting new members and what criteria they would have to meet.

Talks on the enlargement of the bloc are mainly based on the interest of other countries over the self-made economic prosperity of its members, as other nations who seek BRICS membership are growing tired of dealing with the International Monetary Fund or the World Bank.

According to Anil Sooklal, South Africa’s ambassador to BRICS, the Kingdom of Saudi Arabia and the Islamic Republic of Iran are in talks to join the economic bloc.

“What will be discussed is the expansion of BRICS and the modalities of how this will happen,” Bloomberg has cited his as saying.

“Thirteen countries have formally asked to join and another six have asked informally. We are getting applications to join every day.” 

Since its formation as the four-member BRIC in 2006, the bloc has only added one new member, South Africa, in 2010, which made it BRICS.

In March, South African Foreign Minister Naledi Pandor said international interest in the BRICS group was huge, Saudi Arabia is one, she said. Others are United Arab Emirates, Egypt, Algeria, and Argentina, as well as Mexico and Nigeria."

Iran is said to have already applied to join BRICS and its foreign minister Hossein Amir Abdollahian has confirmed he will be participating in the Cape Town meeting at the official invitation of South Africa.  

The latest submissions for membership give substance to the argument of the rapidly changing global developments following the Ukraine, Yemen and Afghanistan wars.

Among the attractive aspects of BRICS is that nations view the alliance of emerging markets as an alternative, and not necessarily a challenge, to a US-led world order which is weakening, as experts point out, because of America's unilateral foreign policy blunders.

Experts also argue that Europe lacks any sovereign world vision, as witnessed by the Ukraine war, where it has taken its marching orders from Washington and failed to bring peace to Ukraine, as European households suffer from record inflation as a direct result of the conflict on its doorstep.

The Ukraine war has had a direct impact at international scale when it comes to food and energy.

In the absence of any willpower to stamp its authority on regional affairs, let alone global affairs, Europe has, in essence, failed the international community as a reliable economic partner, forcing many to seek alternatives to the West.

Iran for instance has the second largest gas reserves in the world, something that Europe is desperately searching for, but has not approached Tehran about, because of its bizarre compliance to illegal US unilateral sanctions. It now looks that the much-needed Iranian commodity will most likely be heading elsewhere.

While BRICS has its own bank (New Development Bank), it is not as large as the World Bank or the International Monetary Fund (IMF), but this could be down to just a matter of time as more countries seek to join the economic bloc.

The World Bank and the IMF were founded back in the 1940's and have failed in their declared goals of creating a more stable and prosperous global economy.

The austerity that comes with loans has brought increasingly high levels of poverty and inequality to countries who borrowed money from them. Just ask the people of Greece or Argentina. Critics accuse the US of having unfair influence on the World Back and the IMF.

On the other hand, the New Development Bank or the BRICS Bank, which was just established in 2015 and with its stated aim to help build a more inclusive, resilient and sustainable future for the planet is appealing.

It may sound like a good advertising slogan, but the facts on the ground show BRICS is attracting a record number of clients seeking to expand the bloc.

According to reports, BRICS is in talks with Saudi Arabia to become a member of its New Development Bank. While Saudi Arabia has yet to confirm this, such reports were unheard of just a year ago.

The idea itself makes sense as most oil purchasing clients are now based in the East and Latin America. But it will be a major setback for the United States, which will see an agonizing decline of petrodollars.

In the early 1970s, Washington and Riyadh reached an agreement that Saudi oil sales to all international clients be sold in dollars in exchange for American military protection, something that the US failed to adhere to in the Saudi conflict with Yemen.

Today, Saudi Arabia is in talks with Beijing to sell its oil to China in the Yuan and has restored diplomatic ties with Iran in another blow to the US and its extremely mischievous proxy in the region Israel.

Should the Kingdom become a New Development Bank member, it would be a boost to the bank as well as for Saudi Arabia itself, as BRICS members, among other things, provide a safety net in times of difficulty.

For instance, BRICS members have not bowed to NATO pressure to join the sanctions regime against Russia.

Brazilian President Luiz Inácio Lula da Silva has argued that BRICS nations should establish their own common currency, highlighting the advantages of such a unified economic measure that would be independent of the US dollar.

Under a US dollar dominated world order, prosperity has been taken over by poverty while peace has been replaced by violence.

In April, BRICS' deputy ministers and special envoys held a meeting in Cape Town to discuss, among other issues, the Israeli-Palestinian conflict, as well as developments in the Persian Gulf states, Syria, Iraq, Lebanon, Libya, Western Sahara and Yemen.

Such platforms provide an opportunity to bring emerging markets together to discuss both the financial and political aspects of the world.

 

Russia and Iran conspiring to weaken US dollar, alleges Israel

Russian Presidential Aide Igor Levitin, who is currently on a two-day trip in Tehran, met with the Secretary of Iran's Supreme National Council Ali Shamkani, and the two discussed ways to thwart Western sanctions.

During the meeting, Shamkhani expressed his satisfaction with the volume of economic cooperation between Russia and Iran, praising the path that started to reduce the influence of the dollar in regional and international economic exchanges.

These plans, he said, "will limit the dominance of the West over the world economy to the minimum."

The representatives also discussed the ongoing joint project, the North-South Transport Corridor (NSTC), which Shamkhani described as having a decisive role in changing the geometry of goods transit in the region.

The NSTC is a transport network for moving freights between Iran, Russia, Azerbaijan and other countries in Asia and Europe.

The transport corridor aims at creating new networks to avoid the US and the West as sanctions grow on Iran.

Levitin, for his part, expressed Moscow's readiness to invest in Iran's steel, oil and petrochemical industries.

Despite Russian efforts to weaken the US dollar, the currency has continued to gain this week, while the Russian rouble is having the worst week of the year so far.

The Russian rouble suffered its worst week against the dollar this year, tumbling on a lack of foreign currency in Moscow and on the sale of Western businesses in Russia, despite gaining slightly on Friday afternoon as traders locked in profits.

The rouble RUBUTSTN=MCX skidded more than 2% against the US dollar on Friday to an intraday low of 83.50, its weakest since April last year, and fell more than 2% against the euro to an intraday low of 91.32 against EURRUBTN=MCX.

The rouble had nosedived to 113 per US dollar after President Vladimir Putin ordered the invasion of Ukraine in February 2022, but the central bank and finance ministry helped stabilize the currency, and it strengthened to 50 per dollar in July 2022.

The West then imposed a price cap on Russian oil - the lifeblood of the Russian economy - late last year, since which the rouble has weakened from about 60 per US dollar to more than 80 US dollar this week.

Traders said the Russian currency has come under pressure recently from a cocktail of problems including the sale of Western assets to domestic investors, which stoked demand for dollars, while lower oil prices in March cut the country's export revenue.

The rouble is the third-worst performer among global currencies so far this year, behind only the Egyptian pound and the Argentine peso, Reuters calculations show.

"The Russian currency remains in fundamentally weak conditions," said Vladimir Evstifeev, head of analysis at Bank Zenik. He said exporters were reluctant to swap their export revenues for roubles in the expectation that the dollar would strengthen while importers were buying foreign currency in the expectation of a bounce back in consumer confidence.

"The rate of weakening of the Russian currency is increasing, so it is likely that the authorities will get involved in the situation on the foreign exchange market and conduct a series of verbal interventions in support of the rouble."

Sanctions could cause energy shortages, warns Saudi energy minister

Saudi Energy Minister, Prince Abdulaziz bin Salman warned on Saturday Western sanctions against Russia could result in a shortage of energy supplies in future.

In answer to a question over how trade measures would affect the energy market, Prince Abdulaziz told an industry conference in Riyadh, "All of those so-called sanctions, embargoes, lack of investments, they will convolute into one thing and one thing only, a lack of energy supplies of all kinds when they are most needed".

The prince also said Saudi Arabia was working to send Liquefied Petroleum Gas (LPG) to Ukraine. LPG is most commonly used as a cooking fuel and in heating.

The European Union has imposed a series of sanctions against Russia, reducing Russian energy exports, and other Western powers have also imposed measures as they seek to further limit Moscow's ability to fund its war in Ukraine.

Asked what lessons had been learnt from energy market dynamics in 2022, Prince Abdulaziz said the most important one was for the rest of the world to trust OPEC Plus.

"We are a responsible group of countries, we do take policy issues relevant to energy and oil markets in a total silo and we don't engage ourselves in political issues," the prince said.

OPEC Plus, an alliance that includes members of the Organization of the Petroleum Exporting Countries (OPEC) and others including Russia, agreed last year to cut its production target by 2 million barrels per day, about 2% of world demand, from November 2022 until the end of 2023 to support the market.

An OPEC Plus panel that met last Wednesday endorsed the decision and the main message throughout the meeting was that the group would stay the course until the end of the agreement.

Need to end Saudi-Iran animosity

One completely fails to understand why even a thought of ending Saudi-Iranian animosity make the supporters of monarch jittery. If one could recollect lately Iraq made an attempt to ease tension between the two arc enemies, but turmoil was created in Iraq. Soon after two top military strategist, one each from Iran and Iraq were killed, the probability of war in the region increased manifold.

Recently, Iranian Foreign Minister Mohammad Javad Zarif, who traveled to Germany to attend the 2020 Munich Security Conference, said that after the martyrdom of commander Soleimani, we received a message from Saudi Arabia calling on talks with Iran. Zarif also reiterated that although he replied to the Saudis' response, he received no further messages.

Following the remarks by the Iranian foreign minister, Saudi Foreign Minister, Prince Faisal bin Farhan Al Saud claimed that Riyadh had not sent any private messages to Tehran. On the issue of talks between Iran and Saudi Arabia, there seem divergent thoughts, which must be explored to end the enomsity.

First, it is being said that Saudi Arabia is trying to compare the dialogue between Riyadh and Tehran with the US-Iran negotiation and is constantly changing its stance on Iran. The nature of the negotiations between Iran and the US differs from that between Iran and Saudi Arabia. Iran has repeatedly stated that it is willing to hold talks with the Saudis without any preconditions, as the proximity of the two countries is in favor of stabilizing the region and reducing tensions.

Second, the Saudis have always set mostly general and vague preconditions for starting talks with Iran, such as the need for Iran to change its behavior in the region. The foreign policies of the countries are defined by their foreign interests, so Saudi Arabia expects to change all of Iran's behavior and policies in the region, which is totally inappropriate.

Third, Saudi officials have been at odds over developments in the region; on the one hand, they know that the US and the West cannot provide the country’s security forever, which led Riyadh to the dialogue with Tehran, and on the other hand, they are still looking forward U. support. The recent regional developments have led Saudi Arabia to face new developments in the region.

Fourth, remarks by Zarif indicate that the Saudis are deeply afraid of escalating tensions in the region. Whenever military tensions are heightened in the region the Saudis reduce their provocative actions against Iran, but once the situation is settled down they resume their actions. The most notable sample of this behavior is Saudi Arabia’s reaction to the assassination of General Qassem Soleimani, as it was trying to not take a provocative stance against Iran.

Fifth, Saudi Arabia needs to restore its ties with Iran to deal with the regional cases. The first issue is the attrition warfare in Yemen that began in March 2015 with the invasion of the Saudi-led coalition and has continued until now. There are clear thoughts a war that had nothing but destruction for the Yemeni people and defeats and lots of military costs for the Saudis.

In its recent actions toward Damascus, Saudi Arabia has shown that it is seeking to improve its relations with Syria, a country that has strong ties with Iran and is a part of the axis of resistance. In this regard, Syria’s permanent representative to the United Nations, Bashar Al-Jaafari, recently attended a special ceremony held in honor of the Saudi Minister of State in New York, Fahad Bin Abdullah Al Mubarak, which drew lots of controversy.

Diplomatic sources in New York said the Saudi delegate to the UN, Abdullah bin Yahya al-Muallami had intentionally met with Bashar al-Jaafari during the visit, which was unexpected for the attendees. During their celebration Saudi officials expressed their love for Syria and said that it remained in their hearts, adding that what had occurred between the two countries was nothing but a summer cloud that will inevitably pass.

Ankara has become a relentless rival to Riyadh in all aspects these days. This issue has been worsened following the Persian Gulf crisis, Saudi Arabia's cut of relations with Qatar and the assassination of Jamal Khashoggi inside the Saudi consulate in Istanbul. Saudi Arabia needs to improve its relations with Iran to be able to prevent Turkish influence, especially in African countries and Libya.

Improving relations between Iran and Saudi Arabia can undoubtedly be helpful in settling the crisis between Saudi Arabia and Qatar, as Doha has gotten closer to Tehran and Ankara since the crisis.

 The point is that some parties will certainly be dissatisfied with the close relations between Iran and Saudi Arabia and will make every effort to obstruct it.

Who has attacked Iranian oil tanker?

Reportedly, an Iranian oil tanker Sabiti was hit by missiles in Red Sea waters off Saudi Arabia on Friday. The incident is likely to further heighten friction in the region already rattled by attacks on tankers and oil installations since May. Oil prices rose on the news of the incident and industry sources said it could drive up already high shipping costs.

The Red Sea is a major global shipping route for oil and other trade, linking the Indian Ocean with the Mediterranean via the Suez Canal.

It is the latest incident involving oil tankers in the Red Sea and Gulf region, and may ratchet up tensions between Iran and Saudi Arabia, long-time regional adversaries fighting a proxy war in Yemen, at the southern end of the Red Sea.

There was no claim of responsibility for the reported incident and it has yet to be independently confirmed.

The proximity of the tanker at the time of the attack to Saudi Arabia’s Jeddah port gives western media to allege that the missiles could have been launched from the kingdom.

Another plausible theory could be that the ship was hit in an Israeli sabotage operation. The purpose would be to disrupt Iranian tanker activity in the Red Sea corridor as it heads toward the Suez Canal. A third possibility would be that the attack was conducted by a terrorist group.

An Iranian government spokesman has described targeting of an Iranian-owned oil tanker by missiles as a “cowardly attack” and said Iran would respond after the facts had been studied.

“Iran is avoiding haste, carefully examining what has happened and probing facts,” government spokesman Ali Rabei, siad.

Separately, a senior security official said video evidence had provided leads about the incident, adding that the Sabiti was hit by two missiles.

“A special committee has been set up to investigate the attack on Sabiti... with two missiles and its report will soon be submitted to the authorities for decision,” said Ali Shamkhani, secretary of Iran’s top security body.

“Piracy and mischief on international waterways aimed at making commercial shipping insecure will not go unanswered,” he said.

According to Iranian sources, leakage of cargo from the tanker has been stopped as it heads for the Gulf. The tanker is heading for Persian Gulf waters and it was expected to enter Iranian waters safely. Nasrollah Sardashti, head of National Iranian Tanker Company (NITC) that owns the damaged tanker, said the crew was safe and the vessel would reach Iranian waters within 10 days.

Saudi Arabia said it received a distress message from the damaged tanker but the vessel kept moving and switched off its transponder before it could be provide assistance.

The United States has been balaming Iran for attacks on tankers in the Gulf in May and June as well as for strikes on Saudi oil sites in September. Tehran has denied having a role in any of them.

The U.S. Navy’s Fifth Fleet, which operates in the region, said it was aware of the reports but had no further information.

According to western media, at times, Iranian narratives offer diverging accounts. State-run television, citing the national oil company, said the tanker was hit by missiles while denying a report they came from Saudi Arabia.

It also said, Iran’s Foreign Ministry said the ship was hit twice, without saying what struck it. State television broadcast images from the Sabiti’s deck saying they were taken after the attack but showing no visible damage. The ship’s hull was not in view.

Political risk consultancy Eurasia Group said it did not have firm evidence about who may have been behind the incident.