OPEC Plus thought of production cut annoys US

OPEC Plus looks set for deep oil output cuts in its meeting today (Wednesday), curbing supply in an already tight market despite pressure from the United States and other consuming countries to pump more.

The likely cut could spur a recovery in oil prices that have dropped to about US$90 from US$120 three months ago due to fears of a global economic recession, rising US interest rates and a stronger dollar.

The cartel that includes Saudi Arabia and Russia, is working on cuts in excess of one million barrels per day (bpd). Reuters reports the cuts could be as high as two million bpd if reductions could include additional voluntary cuts by members such as Saudi Arabia or if cuts could include existing under-production by the group.

OPEC has been under-producing over 3 million bpd and the inclusion of those barrels would dilute the impact of new cuts.

"Higher oil prices, if driven by sizeable production cuts, would likely irritate the Biden Administration ahead of US midterm elections," Citi analysts said in a note.

"There could be further political reactions from the US, including additional releases of strategic stocks along with some wildcards including further fostering of a NOPEC bill," Citi said referring to a US anti-trust bill against OPEC.

Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries and allied producers (OPEC Plus) have said they seek to prevent volatility rather than to target a particular oil price.

The West has accused Russia of weaponizing energy as Europe suffers from a severe energy crisis and may face gas and power rationing this winter in a blow to its industry.

Moscow accuses the West of weaponising the dollar and financial systems such as SWIFT in retaliation for Russia sending troops into Ukraine in February. The West accuses Moscow of invading Ukraine while Russia calls it a special military operation.

A significant cut is likely to anger the United States, which has pressured Saudi Arabia to pump more to pressure oil prices and reduce revenue for Russia.

Saudi Arabia has not condemned Moscow's actions and relations are strained between the kingdom and the administration of US President Joe Biden, who travelled to Riyadh this year but failed to secure any firm cooperation commitments on energy.

Saudi Aramco CEO and President Amin Nasser said that the spare production capacity is not the responsibility of Saudi Arabia alone.

Nasser made the remarks on Tuesday during his speech at the Energy Intelligence Forum 2022 in London. He added that the spare capacity amounts to 1.5% of global demand.

The oil market does not focus on the fact that global spare capacity to increase oil production is very low, Nasser said.

He clarified that the market focuses on what will happen to demand if there is recession in different parts of the world. He also added that they do not focus on the supply fundamentals.

Nasser stressed that Aramco maintained its market in Asia despite European demand, while he pointed out that the problem of Europe lies in gas and liquefied gas due to the lack of spare capacity.

During his speech, Nasser expected that the demand for oil would increase until 2030 and beyond. He also added that Aramco is on track to raise its capacity to 13 million barrels per day by 2027, which would cost billions of dollars.

The Aramco's CEO remarks came about 24 hours before the meeting of the OPEC Plus meeting that will be held on Wednesday in Vienna, which is its first attendance meeting since March 2020.

The alliance is expected to reduce production by at least 500,000 barrels per day, while other expectations indicate the possibility of reducing by more than one million barrels per day.

 

 

Is US behind Nord Stream gas pipeline blasts?

Since the outbreak of the Ukraine war and many years before the conflict even erupted, the signs were clear. The United States was and continues to wage economic war against Russia and all other countries, such as China and Iran that pursue independent foreign and economic policies. 

On Russia, Congress loathed the idea of Moscow sending 40% of Europe's gas supplies mostly through the Nord Stream 1 pipeline. Over the years, the US imposed so much diplomatic pressure on Europe to abandon the implementation of another pipeline: Nord Stream 2. 

It was supposed to be a major energy project in Europe, perhaps the biggest but also of major concern in Washington, where officials tried their best at scaremongering their counterparts in Europe.

Nord Stream 2 is designed by Russian energy giant Gazprom and the aim of the new pipeline was to double the amount of gas flowing from Russia straight to Germany.

The concern in Washington was the US sitting on an excess amount of gas supply from the shale gas boom but unlike Russia, there were little buyers.

The US has been eager to export the surplus to Europe on tankers in the form of liquefied natural gas (LNG) and essentially replace Russian supplies. 

What stood in the way of the LNG companies was Nord Stream 2, which all but ended the European Union's interest in building the more expensive LNG gas terminals that are needed to import American gas. The logistics of the whole operation did not make sense when there was a much cheaper option from Russia. 

As the momentum for Nord Stream 2 was gaining speed, former US President Donald Trump, in his last year in office, signed into law sanctions from the US Congress against companies involved in the construction of the new gas pipeline between Russia and Germany. 

However, many said at that time the sanctions came too late and would do little to end the project’s completion. Too much money had already been spent on Nord Stream 2, something to the tune of US$11 billion.

The layout of the new pipeline followed the route of the existing Nord Stream 1 pipeline under the Baltic Sea. While the Russian gas would serve most of Europe's energy needs the main countries involved, Russia and Germany, accused the US of using energy security concerns as a smokescreen for its own economic interests. 

Former German Chancellor Angela Merkel even condemned the American sanctions, with then Foreign Minister Heiko Maas saying they amounted to "interference in autonomous decisions taken in Europe. European energy policy is being decided in Europe, not in the US” he said. An EU spokesperson said the 27-nation bloc “opposes the imposition of sanctions against EU companies conducting legitimate business”.

To the huge frustration of the American Congress, Moscow and Brussels brushed aside the sanctions and it was obvious that the pipeline was almost complete. Denmark gave the final approval needed for the project. The company constructing Nord Stream 2 said it was putting the final touches with over 2,000 kilometers already laid at the bottom of the Baltic Sea. The pipeline was expected to start pumping gas earlier this year.

NATO's eastward military buildup toward Russian borders was met with the following threat by US President Joe Biden: "If Russia invades (Ukraine), then there will be longer Nord Stream 2. We will bring an end to it.” Before adding "I promise you we will be able to do it."

Moscow says the NATO military buildup on Russian borders, the abandonment of the Minsk agreement and Washington’s refusal to answer Russian security guarantees forced it to conduct what the Kremlin describes as a “special military operation” in Ukraine.

Three unexplained gas leaks, preceded by two explosions, occurred on the Baltic Sea’s Nord Stream 1 and 2 pipelines last Monday. Did the US force Russia into military action to exchange Russian gas to the EU with US gas in the aftermath of the Covid-19 pandemic that battered the American economy?

In the aftermath of the Ukraine conflict, the US offered a quick commitment to deliver its own LNG to the EU telling Brussels this is a big step towards making Europe less dependent on Russian gas.

EU Commission Head Ursula von der Leyen said, "We aim to reduce this dependency on Russian fossil fuels and get rid of it. This can only be achieved through... additional gas supplies, including LNG deliveries."

"The US commitment to provide the European Union with additional at least 15 billion cubic meters of LNG this year is a big step in this direction because this will replace the LNG supply we currently receive from Russia."

The United States has committed to providing the EU with an additional 15 billion cubic meters (bcm) of LNG this year, with both sides aiming to ramp up deliveries to 50 bcm per year over time.

"Looking ahead, the United States and Europe will ensure stable demand and supply for additional at least 50 billion cubic meters of US-LNG until 2030," Von der Leyen said, adding this would replace one-third of Russian gas supplies to the EU today.

"We need to secure our supplies not just for next winter but also for the years ahead", she added. "Our partnership aims to sustain us through this war."

The timing of the leaks and explosions has raised many eyebrows. It occurs just as Europe is getting restless with skyrocketing energy bills that are making voters topple one government after the other. While Nord Stream 1 was filled with gas when the explosions occurred, it was not pumping to Europe as a result of Western sanctions that had led to technical issues.

However, such is the severity of the European energy crisis. The sanctions could have been lifted on the pipeline, the maintenance issues resolved and the energy flows resumed. Not just Nord Stream 1 but gas could have been delivered through Nord Stream 2 as well to get to Europe by the winter.

Russia has said that the ruptures appear to be the result of state-sponsored "terrorism".

Russian President Vladimir Putin has accused the West of organizing the blasts that led to numerous gas leaks.

“Sanctions are not enough for the West. They have switched to sabotage. Unbelievable, but it is a fact!” Putin said during a televised speech.

“By organizing explosions on the Nord Stream international gas pipelines that run along the bottom of the Baltic Sea, they actually started destroying European energy infrastructure,” Putin said. “It is clear to everyone who benefits from this,” he added.

The Kremlin says the incidents on two major undersea gas pipelines from Russia to Germany look like acts of state-sponsored "terrorism".

"This looks like an act of terrorism, possibly on a state level," Kremlin spokesman Dmitry Peskov told reporters.

"It is very difficult to imagine that such an act of a terrorism could have happened without the involvement of a state of some kind, this is a very dangerous situation which requires an urgent investigation," Peskov said.

There have been many protests against energy price hikes across Europe which has put pressure on governments to return Russian energy. The German chancellor visited Persian Arab Gulf countries to try to secure energy supplies.

The Russian Foreign Ministry says US President Joe Biden is “obliged” to answer if Washington is behind the gas leaks. “On February 7, 2022, Joe Biden said that Nord Stream would be finished if Russia invaded Ukraine,” foreign ministry spokeswoman Maria Zakharova said on social media, posting a video of Biden saying “we will bring an end” to Nord Stream 2 if Russian tanks cross Ukraine’s border.

“Biden is obliged to answer the question of whether the US carried out its threat,” Zakharova added.

“A statement of intent was backed by a promise. We must be responsible for our words... Europe must know the truth,” Zakharova added.

The ministry says the ruptures to the pipelines occurred in territory that is "fully under the control" of US intelligence agencies.

 

OPEC Plus mulling largest cut since 2020

The OPEC Plus group of oil producers is discussing output cuts of more than one million barrels per day (bpd). Voluntary cuts by individual members could come on top of that, making it their largest cut since 2020.

The group is set to meet on October 05, 2022 in Vienna in person for the first time since March 2020, against a backdrop of falling oil prices and months of severe market volatility which prompted top OPEC Plus producer, Saudi Arabia, to say the group could cut production.

The cartel, which combines OPEC countries and allies such as Russia, has been gradually raising its output target to unwind the record cuts it made in 2020.

Now faces a sharp fall in prices, which have dipped below US$90/barrel from as high as $120 in recent months due to fears about the global economy and a rally in the US dollar after the Federal Reserve raised interest rates.

"It may be as significant as the April 2020 meeting," the source said, referring to when the cartel agreed record supply cuts of around 10 million bpd, or 10% of global supply, as the COVID-19 pandemic slashed demand.

A significant cut is likely to anger the United States, which has been putting pressure on Saudi Arabia to continue pumping more to help oil prices soften further and reduce revenue for Russia as the West seeks to punish Moscow for sending troops into Ukraine.

Saudi Arabia has not condemned Moscow's actions amid difficult relations with the US administration under President Joe Biden.

Last week, a source familiar with Russian thinking said Moscow would like to see OPEC Plus cut its output target by one million bpd or 1% of global supply.

On Sunday, sources said the cut might exceed one million bpd.

On Monday, one OPEC source said voluntary cuts by individual members would come on top of that figure.

It was not yet clear what levels of voluntary cuts Saudi Arabia or any other top Gulf OPEC producers could contribute.

In the past few years, only Saudi Arabia has offered voluntary cuts to give additional boost to the markets.

"My instinct is that if they (OPEC Plus) have suggested a cut and prices are still going down, they will have to do it and a bigger one than they wanted," said Raad Alkadiri, Managing Director at Eurasia Group.

Stephen Brennock at PVM said fears of a demand-sapping recession have rattled OPEC Plus and hence they are set to take preemptive action.

"It must be noted that OPEC Plus is already pumping more than 3 million bpd below its target, hence any further cuts will only exacerbate the existing supply tightness," he said.

 

Saudi Arabia to host World Petroleum Congress

The organizing committee of the World Petroleum Congress has accepted Saudi Arabia’s bid to host the 25th edition of the congress and its accompanying exhibition in 2026. This was announced on the sidelines of the Youth Forum that World Petroleum Council (WPC) organized in Almaty, Kazakhstan.

Saudi Arabia has received big international support after the Ministry of Energy has recently extended the bid to host the congress and the exhibition.

WPC Director General Dr. Pierce Riemer has congratulated Saudi Arabia on being selected to host the 25th edition of the congress in Riyadh, for its being the biggest oil-exporting country in the world and owning one of the world’s biggest oil reserves. This highlights Saudi Arabia’s importance globally and worthiness to host one of the most important energy meetings of energy in the world.

Riemer expressed aspiration to work with the Kingdom to organize a successful congress in 2026 that matches the status of Saudi Arabia in its capacity as a global pioneer in the energy field, in addition to its being among the most active economies in the world.

The World Petroleum Congress, along with its accompanying exhibition, is considered a prominent global event that brings together countries and international organizations every three years to enhance cooperation in energy fields and provide solutions to the main challenges facing the development of this vital sector.

The congress and exhibition received much attention from specialists and visitors. The 24th edition of the event was held in Calgary, Canada, between September 17 and 21, 2023. 

Need to explore causes of floods in Pakistan

Large areas of Pakistan were inundated in 2010 by heavy floods, resulting in the displacement million of people. Experts had termed it one of the worst humanitarian catastrophes the country has suffered.

Twelve years later, massive flooding has forced analysts and political leaders alike to search for new adjectives that can describe the devastation caused by monsoon rains, appropriately.

It may be recalled that the Metrological department had warned about the intensity of rain and resulting devastation, but it was too late to avert the situation. Now the government has declared a national emergency and has desperately sought urgent aid from the international community.

While the UN promised US$160 million and other countries pledged aid, government officials say the floods have inflicted an estimated loss of at least US$30 billion.

Pakistan having more than 220 million populations faces the greatest humanitarian crisis. More than 1,200 people have died, one-third of the country is still submerged and at least 33 million people are affected. The National Disaster Management Authority (NDMA) puts the number of affected districts at 72 out of a total 160.

The NDMA estimates damage to more than 5,000km of roads, 10 million houses partially or fully destroyed, and the death of 700,000 livestock, often people’s only livelihood.

The southern province of Sindh remains the worst affected. As of August 30, more than 14 million people in the province are badly affected, of which only 377,000 are living in camps right now.

The Global Climate Risk Index puts Pakistan as the eighth most vulnerable country because of disasters caused by climate change, yet the country is responsible for less than 1 percent of the world’s planet-warming gases.

Extreme weather conditions have left the country precariously placed, where weather patterns are no longer predictable.

Earlier this year, the country faced unprecedented heat waves and months-long drought in Sindh and Balochistan. Only a few months later, Pakistan broke its decades-long rainfall record with the two provinces receiving 500 percent more rain than the annual average.

Sara Hayat, a Lahore-based climate change lawyer and policy specialist said, to ascertain what has caused the devastating floods, it needs to be seen as a pyramid of factors with the foundational one being global climate change.

Hayat said the flooding was caused by excessive torrential rain, as well as glacial melt in the north of the country.

“Pakistan generally gets three to four cycles of monsoon rains,” she said. “This year we have received eight already and there are predictions that rain will go on till October. This is extremely unusual.”

Ali Tauqeer Sheikh, an Islamabad-based climate change analyst aid, unlike the 2010 floods that were riverine in nature, this year saw multiple types overlapping each other that resulted in heavy destruction across the country.

The urban flooding, flash flooding, glacial lake bursts as well as cloud bursts as some of the different types of flooding to hit the country, all linked to climate change activity.

These are not routine floods. In fact, Pakistan has not had riverine floods at all this year. This is perhaps the first time the country saw climate change affecting patterns of monsoon. Only time will tell if it was a freak event of nature, or it will become a routine.

It is easy to pin blame on the government, preparing for this scale of flooding was always going to be a difficult job.

At a time when the country is already reeling from back-breaking inflation and barely averted a default after the International Monetary Fund (IMF) released US$1.17 billion funds, an once-in-a-lifetime flood was the last thing Pakistan needed. Added to this volatile mix is perpetual political instability, exacerbated since the removal of the Pakistan Tehreek-e-Insaf (PTI) government in April.

It is imperative that political warmongering stop and priorities be adjusted to face the daunting challenge of rebuilding.

One of the biggest challenges Pakistan will face is when the country goes into election cycle. It is necessary to say that flood relief efforts and rehabilitation of the affected population must accompany all political conversation in the country.

Pakistan faces catastrophic economic repercussions because of the floods. There is an immediate impact on destroyed food crops, homes, roads, and livestock. This affects both people who are directly impacted by the flood by wiping out their household wealth, but also people in major cities through increasing the cost of food.

Pakistan faces a very difficult winter ahead as it needs money for a nationwide rebuilding effort post-floods, meeting the demands set up by the IMF program, competing with Europe to secure gas imports, and cushioning the impact of increasing food inflation.

Worst case scenario would be if Pakistan gets multiple kinds of floods it had this year plus the riverine flood together, the devastation would be unimaginable. Flood management strategies must be reoriented to become more robust and climate-smart.

There is a conflict between the urgent and long term plans. Those affected by the floods don’t have a roof over their heads and their standing crops have been destroyed. They need urgent help, and it is in the interest of the government to provide them that.

More often than not, building back better gets forgotten; meanwhile, some other crisis hits which diverts the policymakers’ attention.

In Pakistan, if someone becomes homeless due to floods, the government says, ‘take 15,000 rupees and rebuild’. But the house will be destroyed next year again due to floods as it’s in the same fragile areas. The government should enforce rules and make cash reimbursement conditional with living in safe zones.

There is a need to create a balance between relief and rehabilitation. Pakistan needs guidelines that will help mud houses become stronger, and help their roofs withstand climate change instead of collapsing. Whether plazas, or houses in rural areas and shanty towns, there is a need to have a standard for building them. For infrastructure the country needs guidelines that respond to the growing need to deal with floods and disasters.

So far, we have not increased our adaptation, and as a result have not reduced our vulnerability to floods and other disasters. At the heart of it, we are a climate-vulnerable country, and we desperately need adaptation strategies to avoid this level of loss and damage.

PSX benchmark index closes flat for 3Q2022

Pakistan Stock Exchange benchmark index for 3Q2022 declined 1% after falling 8% in 2Q2022. The index has now recovered 3% from its 2022 low of 39,831 touched on July 21, 2022.

This was on the back of revival of IMF program and expectations of increased foreign flows. To recall, the IMF Executive Board approved release of US$1.1 billion tranche under the Extended Fund Facility (EFF).

In US dollar terms, the index was down 11% in 3Q2022 due to currency depreciation. Lately, intense monsoon season and flash flooding severely impacted Agricultural crops and has caused damage to infrastructure which has raised concerns over Agricultural outlook and increase in imports.    

According to Bloomberg, Pakistan was neither amongst the top nor the worst performers during the quarter. Sri-Lankan market was up 33%, Argentina up 33%, Laos up 30% were the best performing markets during the quarter under review. As against this, Poland was down 27%, Ghana down 25%, and Hong Kong down 23% were the worst performing markets.

During 3Q2022, average daily traded volumes in the Cash and Ready market declined by 47%YoY, while it dropped by 12%QoQ to 218 million shares. The average daily traded value plunged 50%YoY and 4%QoQ to Rs7.0 billion.

The average daily traded volume in the Futures market also declined by 39%YoY and 14% QoQ to 91 million shares. The average traded value declined by 47%YoY, while up 6%QoQ to Rs3.6 billion.

Insurance sector was top seller during the quarter with net selling of US$40 million followed by Mutual Funds (US$25 million and Foreign Corporates (US$14 million). On other hand, Individuals (US$25 million), Companies (US$13 million), and Brokers (US$8 million).

Key sectors that underperformed market during the quarter included Cable & Electrical, Automobile Assemblers, and Tobacco. However, sectors that outperformed were Technology, Transport, and Cements.

Foreign inflows and debt relief

Pakistan foreign exchange reserves have remained under severe pressure recently and remain under 1.5 months of import cover. With Pakistan external financing requirements (debt repayment & current account deficit) of over US$32 billion, there are concerns whether Pakistan will be able to meet its financing needs or not.

However, with the recent floods and the damage it has caused to human lives and infrastructure, there are expectations for debt relief and flood assistance. UN Secretary-General Antonio Guterres recently suggested global financial institution to give Pakistan debt swaps where the relief on debt repayment is diverted towards addressing climate changes.

Asian Development Bank (ADB) also has recently stated that it is envisioning providing Pakistan financing of US$2 billion to help country fight from devastation of floods.

Along with this, demand for debt relief from Bi-lateral/Multi-lateral sources including debt relief from Paris Club is been made which could provide some respite to the depleting reserves of the country.

Pakistan has total outstanding debt of US$9.2 billion from Paris Club and a scheduled debt servicing of US$1.2 billion in FY23. Any debt relief or rescheduling of Paris Club debt and expected foreign flows from ADB, friendly countries and other multi-lateral agencies will remain the key in determining outlook of the market.

IMF stance on floods and relaxation

Given the severity of floods, Pakistan faces a big challenge in achieving stringent external account and fiscal account targets set with IMF for FY23. It will be interesting to see if IMF provides any relaxations in its next review scheduled in November. A few newspaper quoted that IMF has agreed to give relaxation on increase in taxes on petroleum products and Fuel Charges Adjustment on power tariffs till 3-months.         

Commodity Prices

 Outlook on Pakistan economy will also be dependent upon commodity price trend going forward. International Arab Light oil prices have been down by 15% during the quarter, the fears of global recession has led to expectations of further drop. Oil imports continue to constitute over 30% of Pakistan’s oil import bill as sustained reduction in crude oil and product prices could lower pressures on import bill and could also curb rising inflation.   

New Finance Minister 

Ishaq Dar has recently been appointed as Finance Minister replacing Miftah Ismail. Ishaq Dar recently stated that his focus would be on addressing issue of speculation in currency market as he termed Pak Rupee as undervalued. He also vowed to tame down inflation and interest rates.

Since Sep 23, 2022, Rupee has gained against US$ in anticipation of the steps he will take to bring down the exchange parity. Petrol/Diesel prices were also cut, though marginally for the next 15-days, beginning October 01, 2022.

 

Pakistan economy after the floods

When Pakistan received tranche of US$1.2 billion from International Monetary Fund (IMF), it was anticipated that PKR would find solid ground against the US$. However, against expectations, the currency continued depreciation.  While the country’s borrowing needs for the year are fully met, the outlook beyond FY23 remains uncertain.

As per the latest IMF document, Pakistan’s gross borrowing needs over the next 5 years are expected to top US$180 billion, meeting them or even rolling them over will be an uphill task. In the short term, the country’s borrowing needs may increase further as floods have washed away standing crops in Sindh and lower Punjab.

The country will need to import various food items to fulfill local demand and the import bill will be driven by food items. With exports likely to remain lackluster, the onus falls upon inward remittances and FDI to balance the gap between inflows and outflows.

However, the remittance inflow, which has picked up of late, has remained largely disappointing. The same can be said for RDA inflows which have also started to dry up over the past few months.

The need of the hour is to increase monthly remittances and RDA inflows while stamping out currency smuggling from the country.

Pakistan’s monthly current account deficit (CAD) for August 2022 nearly halved to US$0.7 billion, lowest since April 2022, despite hefty oil and food imports amid recent flood damages. Import curtailment gained support from administrative measures, reducing trade deficit to US$2.9 billion (a decline 4%MoM). Remittances also increased during the month to US$2.7 billion, cushioning trade deficit adequately. The month also saw a Balance of Payment surplus owing to US$1.2 billion received from IMF. Going forward, bilateral and multilateral loans and international aid for floods rehabilitation will likely provide external support.

Trade deficit has declined by a mere 4%MoM to US$2.9 billion, largely owing to administrative measures on restricting non-essential items and policy rate impact. However, food imports have increased to all-time high of US$1.0 billion up 34%MoM.

Petroleum imports have been recovered at US$1.9 billion, up 30%MoM) in August 2022. The month also saw trend reversal in PBS-SBP import difference, which has mostly remained short-lived historically.

Resumption of energy supplies amid normalized working days and lack of Eid holidays, led to the rebound in textile exports, up 18%MoM. This has led to overall exports growth of 23%MoM; helping trade deficit to remain under US$3.0 billion level. 

Remittances recovered during August 2022, increasing to US$2.7 billion, up 8% MoM and cushioning the trade gap. Higher inflows from United States and Saudi Arabia have elevated overall base. Looking ahead, analysts expect decent growth numbers in FY23 backed by increase in Pakistani worker registration in GCC countries.

As per Board of Emigration and Overseas Employment (BEOE), around 531,000 Pakistanis have expatriated during 8MFY22 as against 288,000 and 225,000 during FY21 and FY20, respectively. Most of the expatriations have occurred towards Middle East countries which continue to enjoy better macros in a high oil price environment.

The overall Balance of Payment (BoP) turned to positive and stood at US$440 million. This is largely owing to US$1.2 billion tranche received from IMF under EFF facility. But to support overall BoP and foreign exchange reserves, Pakistan needs further support from international organizations and friendly countries, the deliberations with these lenders have already started. Analysts believe, the stronger US$ has continued to impact PKR, besides the low foreign exchange liquidity in the country; pushed PKR to near to its all-time low of PKR240/USD.

 Pakistan has been severely impacted by the recent floods as it has led to massive damage to country’s physical infrastructure including damage to homes, roads, bridges etc.

As per National Disaster Management Authority (NDMA) a cumulative loss of 1.76 million houses (partially and fully damaged), 390 bridges and roads (distance of 12,718km) has already taken place till September 14, 2022.

Therefore, there is a need to explore cement sector outlook, especially after floods. A brokerage house made an attempt to estimate the impact. The manufacturers cumulatively represent 76% of the total industry size in terms of plant capacity.

The survey results show that 75% of the participants expect domestic cement dispatches to fall in the range from 0% to 10%YoY in FY23 as against 2MFY22 fall of 35%. Around 17% of the participants anticipate growth of 10% or above and 8% expect it to increase from 0% to 10%. 

This likely fall in local sales is better than initial expectation of a larger fall due to floods and economic slowdown.

Cement manufacturers anticipate cement demand to pickup next year as 83% of the participants expect demand to remain in the range of 0% to more than 10% in FY24 whereas 17% of the manufacturers believe it will increase from 10% to 20% as construction activity will pick up once relief measures complete and the water starts receding.

The survey results also show that rebuilding or reconstruction activity could at least take 3 to 6 months. 42% of the participants expect it to start after 1 to 3 months whereas 42% of the participants believe it will start after 3 to 6 months. On other hand, 17% of the participants anticipate that it will start after 6-9 months.

United States sacrificing Iranian nuclear deal for Israel election

Talks in Vienna over reviving a 2015 Iran nuclear deal appear to have entered a stage of inertia amid Israeli and American preparations for upcoming elections. 

Nearly a month has passed since Iran submitted its response to a US response to the final text submitted by the European Union coordinator for the Vienna talks to resuscitate the tattered 2015 nuclear deal, commonly known as the Joint Comprehensive Plan of Action (JCPOA).

Spokesman for the Iranian Ministry of Foreign Affairs Nasser Kanaani announced that Iran had submitted its views on America’s response to the draft of a possible agreement on the removal of sanctions.

“After receiving the US response, the Islamic Republic of Iran’s team of experts precisely reviewed it, and Iran’s responses were drafted and submitted to the coordinator on September 08 following evaluations at different levels,” the official said.

“The submitted text has a constructive approach with the goal of finalizing the negotiations,” the spokesman added.

The United States was quick to respond. It described the Iranian response as unconstructive. Since then, US officials have repeated this, accusing Iran of derailing the conclusion of the talks, a charge Iran denies. 

After a bout of Iran-bashing remarks, the US plunged into silence as to when it would respond to the Iranian response. In the meantime, press reports alleged that the conclusion of the talks could be delayed until after the November congressional elections in the US and Israel. 

It seems that the Vienna talks have gotten stuck in electoral politics in Tel Aviv and Washington. Legislative elections are due on November 01, 2022, in Israel. A week later, US mid-term elections will kick off. Israel has entered what can be called election fever. The Vienna talks seem to have fallen victim to that fever.

On Thursday, Mossad Director David Barnea concluded a security-diplomatic visit to Washington; the main objective was to dissuade the Biden administration from signing the JCPOA. 

“Mossad Director David Barnea, met various senior US officials, including Heads of CIA and FBI, National Security Advisor, Secretary Defense, Chairman Joint Chiefs of Staff, and additional senior administration officials at the State Department,” a statement by the Israeli Prime Minister’s office said. 

The statement added, “During the meetings, the Director of the Mossad presented sensitive intelligence materials, and emphasized that Israel will not be able to stand idly by while Iran continues to deceive the world.”

It was issued after a meeting between Barnea and Israeli Prime Minister Yair Lapid, who is facing fierce criticism from his political rivals, namely his predecessor Benjamin Netanyahu, over Israel’s policy toward the Vienna talks. 

Pundits believe that Lapid’s crusade against the JCPOA is primarily motivated by his desire to politically disarm his rivals in the approaching Knesset elections.

In a sense, pundits say, Lapid wants to derail the talks to convince Israeli voters that his campaign against Iran is no less fierce than Netanyahu's.

 

Putin proclaims Ukrainian annexation

Vladimir Putin proclaimed Russia's annexation of a swathe of Ukraine in a pomp-filled Kremlin ceremony, promising Moscow would triumph in its special military operation against Kyiv even as some of his troops faced potential defeat.

According to Refuters, The Russian President's proclamation of Russian rule over 15% of Ukraine - the biggest annexation in Europe since World War Two - has been firmly rejected by Western countries and even many of Russia's close allies.

It comes as Russian forces in one of the four regions being annexed face being encircled by Ukrainian troops after Putin ordered a massive mobilization drive to get hundreds of thousands of Russian men to the front.

In one of the toughest anti-American speeches he has delivered in more than two decades in power, Putin signalled he was ready to continue a battle for a greater historical Russia using whatever tools he had at his disposal and slammed the West as neo-colonial and Satanist.

"Truth is on our side. Russia is with us!" Putin told his country's political elite, who had gathered in one of the Kremlin's grandest halls to watch him signing documents annexing four Ukrainian regions.

He said the United States had set a precedent when it had dropped two atomic bombs on Japan in 1945, but stopped short of issuing new nuclear warnings against Ukraine himself, something he has done more than once in recent weeks.

The ceremony culminated in the 69-year-old leader chanting "Russia Russia!" as he clasped the hands of the four Russian-backed officials he wants to run the annexed regions, which Ukraine is fighting to win back.

Putin said Russia and the four regions would defeat Ukraine together.

"People living in Luhansk, Donetsk, Kherson region and Zaporizhzhia region are becoming our compatriots forever," said Putin, referring to the four Ukrainian regions which he said Russia was annexing.

"We will defend our land with all our strength and all our means," he said, calling on "the Kyiv regime to immediately cease hostilities and return to the negotiation table".

Ukrainian President Volodymr Zelenskiy, speaking in Kyiv after Putin, said he was ready for peace talks if and when Russia got a new president and announced that Ukraine was formally applying for fast-track membership of the NATO military alliance, something Moscow fiercely opposes.

US President Joe Biden condemned what he called Russia's fraudulent attempt to annex sovereign Ukrainian territory, which he said was a flagrant violation of international law and said new US sanctions would hurt those who provided political or economic support to the annexation drive.

US planning new sanctions on Iranian oil sales

The United States is planning to impose new sanctions on Iranian oil sales, according to a tweet by Bloomberg TV’s Annmarie Hordern.

“The sanctions will focus on entities facilitating the oil trade, and will be part of a broader plan to set up sanctions on the regime in the coming weeks,” Hordern said on Thursday afternoon.

For months now, a new nuclear deal with Iran has kept the market on edge and has been routinely touted as “imminent.” However, a deal has yet to be struck. In just the last couple of weeks, the hope of reaching a deal seemed less certain.

It was often expressed by market pundits that reaching a new nuclear deal with Iran could send oil prices plummeting, with Iran finding it easier to export more oil barrels without the current sanctions.

A new round of sanctions from the United States on Iranian oil exports— termed secondary sanctions on those helping to facilitate Iranian oil trade—would likely have the opposite effect on oil prices.

While the United States prepares to announce additional sanctions on Iranian oil sales—the announcement alone which would certainly send prices upwards to some degree—it is sending the clear message to the US oil and gas industry that gasoline prices are still too high.

On Wednesday evening, US Energy Secretary Jennifer Granholm said that motor gasoline prices should be 30 cents lower than the currently prevailing.

“Prices at the pump should be falling, not rising. Companies need to fix this,” Granholm said in a Tweet.

Russia to annex four more areas of Ukraine

Russian Vladimir Putin will hold a signing ceremony on Friday formally annexing four more areas of Ukraine after a referendum. Russian-backed officials had earlier claimed the five-day exercise secured almost total popular support.

Voting was held in Luhansk and Donetsk in the east and in Zaporizhzhia and Kherson in the south. The Russian president will make a major speech at the Kremlin.

A stage has already been set up in Moscow's Red Square, with billboards proclaiming the four regions as part of Russia. There were echoes of Russia's annexation of Crimea in 2014, which also followed a discredited referendum and was heralded by a presidential victory speech from a stage.

The Western media says no independent monitoring of the process took place and there were accounts of election officials going from door to door escorted by armed soldiers.

The United States said it will impose sanctions on Russia because of the referendums and EU member states are considering an eighth round of measures.

German Foreign Minister Annalena Baerbock said on Thursday that people in occupied regions of Ukraine had been taken from their homes and workplaces by threat and sometimes at gunpoint. "This is the opposite of free and fair elections. And this is the opposite of peace, it is a dictated peace," she said.

The exercise began across 15% of Ukraine last Friday with only a few days' notice. Russian state media argued that the use of armed guards was for security purposes but it was clear that it had the added effect of intimidating residents.

"You have to answer verbally and the soldier marks the answer on the sheet and keeps it," one woman in Enerhodar told the BBC.

Russia does not fully control any of the four regions it has decided to annex. Although most of Luhansk remains in Russian hands, Moscow only controls 60% of Donetsk.

Seven months after Russian forces invaded Ukraine from the north, east and south, war is still raging on the front lines in all four areas. The capital of the southern region of Zaporizhzhia is firmly under the control of Ukraine's government, and a counter-offensive is underway in Kherson.

What US Military Base schools teach?

United States troops serving overseas find that government schools are indoctrinating their children and teaching them to keep secrets from their parents.

According to a report from the Claremont Institute, classes from the Department of Defense Education Activity (DoDEA) teach children radical activism, gender ideology, and hiding gender questions from families.

The lesson plans aren’t about teachers helping children learn the basics; instead, they’re about teachers helping children hide facts from their parents.

“Maybe that student is not ‘out’ to other students in their gender identity,” seventh-grade humanities teacher Genevieve Chavez said in a video provided to Claremont by a whistleblower. “They may be out at school; but they may not be out at home.”

The video was part of a 2021 summit talk titled “Ally 101—Creating an Inclusive Classroom for LGBTQ+ Students.”

In the same talk, Chavez urged teachers to speak about new gender identities with young children.

 “You can talk about LGBTQ+ things in elementary school,” she says. “It’s actually the ideal time. Kids as young as 4 years old are already starting to develop a stable understanding of their gender identity. Elementary school is the perfect time because you can really show students the diversity of gender expression and gender activity.

Claremont notes in its report that many parents disagree with exposing children to gender confusion at an early age.

“Parents have long taken for granted that cultivating a stable sexual identity is a key to individual development. Our military schools think upsetting a stable identity is the key to education,” the report states.

The 2021 summit urged teachers to filter every aspect of school life through radical gender ideology, the report states.

Prom kings and prom queens should be homecoming court or royalty or partners of distinction, teachers should say their own pronouns to normalize it, and teachers can keep the preferred pronouns of students secret from parents, according to Lindsey Bagnaschi, who was teaching high school drama at Stuttgart High School in Germany, which serves local army bases.

It’s also a mistake to call a roomful of students ‘guys’ instead of ‘seventh-graders’,Chavez says.

This year, students rejected the idea of scrapping the old titles, the Claremont report states. But there’s always next year.

The DoDEA’s program also encourages students to activism, according to the Claremont report. The DoDEA’s Strategic Initiatives seek to provide equitable learning experiences for all students.”

To do so, the government suggests implementing “programs and supports to address achievement gaps between racial, ethnic, ability, and other identified groups” and provide “learning environments where students feel safe, secure, and supported by the entire learning community.”

The DoDEA also promises to “stand up and grow Diversity, Equity, and Inclusion (DEI) structures to lead and implement DEI across the organization so that all students, employees, and families feel welcomed, respected, engaged, and empowered.”

The Claremont Institute notes that none of the DoDEA’s focus areas emphasize math, engineering, or any other form of academic excellence, and never define terms like “Key Performance Indicators.”

According to the report, encouraging students to restructure schools to hide the gender binary will teach them to restructure society as adults.

 “If students are used to restructuring their school environment, they will become activists for restructuring the general culture once they leave school,” the report states. “Future citizens, sons and daughters of military personnel, will become much more like their teachers than like their parents.”

A DoDEA presentation on equity and access tells teachers to instruct students in having conversations about critical race theory, the Claremont report states.

Such a conversation is one that “explores the relationship between identity and power, that traces the structures that privilege some at the expense of others, that helps students think through the actions they can take to create a more just, more equitable, world,” according to the presentation.

Tracy Shelton, a literacy coach at Feltwell Elementary, which teaches the children of Americans serving at Air Force bases in Great Britain, recommended that children study books to learn how to be antiracist, the report states.

Racism and antiracism allow no neutral party, Shelton says.

“Racists, Shelton said, following the work of Ibram Kendi, are those who do not fight for racial equity, while antiracists put the fight for racial justice at the center of their lives,” the report states.

Even white people being silent are damaging, according to presentations quoted by the report.

“I was reading ‘Me and White Supremacy’,” says one teacher, and what it teaches “about white silence, and I realized the damage I was doing by my white silence,” the report states.

If teachers can’t get radical books onto reading lists, they can get them to children through independent reading time, book clubs, and literature circles, says Merilee Debus.

Debus is a professional practice improvement specialist at the DoDEA, according to her LinkedIn page.

“We still have a lot of room for getting the right book in their hands when they need it.”

Another teacher, Betty Roberts of Robinson Barracks Elementary School, which serves five military bases in Germany, recommends reading books without critical race theory using critical race theory interpretations, the report states.

She urged students to “take a look at their textbooks and [to] identify … the biases and how underrepresented groups are represented in these textbooks.”

The Claremont Institute ended its report with a call for action from public officials and Congress. But if they don’t act, military parents have one last nuclear option, the report concludes.

“It seems that members of the military who object to such education are no longer welcomed in the military. Perhaps they should just walk out of the military schools with their children or walk away from the military altogether,” the report states.

US claims downing Iranian drone in Iraq

The US forces on Wednesday claimed downing of an Iranian drone that officials said appeared poised to attack American troops in Iraq.

It was claimed that the downing came as the Iranian military started a drone bombing campaign targeting the bases of an Iranian-Kurdish opposition group in northern Iraq, attacks that have killed at least nine people and wounded 32 others, according to the Kurdish Regional Government’s Health Ministry. 

The bombings follow Iraqi and Iranian Kurds protesting in Iraq’s northern city of Erbil over the death of Mahsa Amini, the 22-year-old Kurdish woman who died in the custody of Iran’s morality police. 

“US Central Command condemns the Islamic Revolutionary Guard Corps’ unprovoked attack in Iraq’s Erbil Governorate this morning. Such indiscriminate attacks threaten innocent civilians and risk the hard-fought stability of the region,” command spokesman Joe Buccino said in a statement. 

In the midst of the bombing campaign, US forces brought down an Iranian Mojer-6 unmanned aerial vehicle “headed in the direction of Erbil as it appeared as a threat to CENTCOM forces in the area,” according to Buccino. 

He noted that no US forces were wounded or killed, no US equipment was damaged as a result of the strikes and that Central Command forces are assessing the situation. 

US and coalition troops are based in Iraq to advise and assist its military to counter ISIS militants and keep the terrorist group from resurging in the region. 

The US government has condemned the strikes, with national security adviser Jake Sullivan stating Wednesday that Washington stands with Iraq’s leaders in the Kurdistan region and Baghdad in condemning these attacks as an assault on the sovereignty of Iraq and its people.

“Iranian leaders continue to demonstrate flagrant disregard not only for the lives of their own people, but also for their neighbors and the core principles of sovereignty and territorial integrity enshrined in the UN Charter,” Sullivan said. “Iran cannot deflect blame from its internal problems and the legitimate grievances of its population with attacks across its borders.”

Iraq’s Foreign Ministry and the Kurdistan Regional Government have also condemned the attacks.

 

 

Saudi Arabia: Top 5 ship owners

Saudi Arabia is often classified as one of the largest oil producing country and it needs ships to deliver crude oil and/or POL products around the world. Many of our readers ask who Saudi Arabia’s biggest ship owners are.

When it comes to the answer by total fleet value it is little surprise to see Bahri coming out top, but looking at the largest number of vessels the ranking is somewhat different.

Ahead of the Saudi Maritime Congress which kicks off Kingdom’s top five owners are both by total value of their fleet and size in terms of numbers of vessels.

By value it is little surprise to see Bahri topping the list with its tanker fleet estimated to be worth US$2.28 billion.

Second in terms of value is MODU owner ADES International with a fleet worth US$947.62 million, with Bihar International with its fleet of LPG carriers, tankers and OSVs valued at $567.32 million.

In fourth and fifth spots are Arabian Drilling Co and Rawabi Holdings with fleets valued at US$503.08 million and US$445.13 million, respectively.

Ahead of the Saudi Maritime Congress which kicks off in Dammam we asked VesselsValue who the Kingdom’s top five owners are both by total value of their fleet and size in terms of numbers of vessels.

By value it is little surprise to see Bahri topping the list with its tanker fleet estimated to be worth US$2.28 billion. Second in terms of value is MODU owner ADES International with a fleet worth US$947.62 millio, with Bihar International with its fleet of LPG carriers, tankers and OSVs valued at US$567.32 million?

In fourth and fifth spots are Arabian Drilling Co and Rawabi Holdings with fleets valued at US$503.08 million and US$445.13 million, respectively.

However, if we look at the top 5 Saudi owners in terms of numbers of vessels in their fleet a rather different picture emerges.

Rawabi Holdings has the largest number of owned vessels with a fleet of 62 OSVs and offshore construction vessels (OCS). In second place is Zamil Offshore with an owned fleet of 50 OSVs and OCS. In third position is Bahri with an owned fleet of 44 tankers.

In fourth and fifth places are Hadi Hamad Al Hamman ADES International with an owned fleet of 38 and 30 vessels respectively.

Courtesy: Saudi Gazette