Pakistan exports 50,000 tons furnace oil to Singapore

Refineries in Pakistan were facing glut of furnace oil, which was also hampering their operations. Pak Arab Refinery Limited (PARCO) takes the lead by exporting the first cargo of 55,000 metric tons on Sunday night. This opens the door for other refineries to follow the footsteps of PARCO.

According to a report, the tender for this cargo was floated by PARCO at the beginning of December 2022, and Dubai-based E3 Energy DMCC won the tender for the export.

According to the sources in the refining sector, PARCO had to export furnace oil to keep the refinery running. PARCO Managing Director Shahid Mahmood Khan took the decision to export the fuel oil.

If the decision was not taken, the refinery would have shut down due to the accumulation of huge furnace oil stocks. Before the export of fuel oil, PARCO had almost fifty percent of total stockpile with the local refineries following slump in demand.

The demand dropped because thermal power plants stopped stockpiling furnace oil which was on the bottom of the electricity generation merit list. Also, electricity demand had declined due to winter.

As PARCO started accumulating excess furnace oil, which was not being taken by the power plants, it started storing the fuel at Port Qasim for exports.

Reportedly, PARCO sold the stock to a foreign group at free on board (FOB) plus five dollars. Although the export price was low, it would help the refinery keep the operations.

Before the export of 55,000 tons, the country’s total furnace oil stock stood at 592,000 tons. Refineries have 233,000 tons or 39% of the total stock.

Oil marketing companies hold 186,000 tons or 31% of the total stock, whereas power plants carry 172,000 tons or 29% of the total stocks available in the country.

Out of the total stocks with refineries, PARCO held 108,000 tons furnace oil or 46%. That has now reduced to 53,000 tons, following Sunday’s export to Singapore.

Cnergyico has 45,000 tons furnace oil or 19% of total stock carried by refineries.

Attock Refinery Limited (ARL) holds 37,000 tons or 16%.

Pakistan Refinery Limited (PRL) stockpile stands at 25,000 tons or 11%.

National Refinery Limited (NRL) is carrying 17,000 tons or 7%.

It may be recalled that Furnace oil stockpiles started increasing after power plants refused to lift it despite government instructions. Their reason of refusal was the low demand of electricity, which made power generation from expensive furnace oil economically unfeasible.

 

Oil slides after IMF warns of tougher 2023

Oil prices slid on Tuesday from their highest levels in a month on a stronger US$ and after the head of the International Monetary Fund warned of a tougher 2023 as major economies experience weakening activity.

Brent crude futures dropped to US$84.93/barrel by 0148 GMT while US West Texas Intermediate crude (WTI) traded at US$79.49/barrel, after the US$ strengthened. A stronger greenback makes dollar-denominated commodities more expensive for holders of other currencies.

IMF Managing Director Kristalina Georgieva said on Sunday that the United States, Europe and China - the main engines of global growth - are all slowing down simultaneously, making 2023 tougher than 2022 for the global economy.

Still, oil prices settled more than 2% higher on Friday with Brent and WTI closing 2022 up 10.5% and 6.7%, respectively.

Commodities saw a substantial US$12.3 billion bullish flow in the week that ended on December 27, 2022 the single largest weekly bullish flow in 2022, Societe Generale analysts said in a January 03. 2023 note.

“The commodity with the largest flow was Brent, which saw a US$3.4 billion bullish flow as Russia outlined its response to the EU and G7 imposed price cap on the country's crude exports to third parties," the analysts said.

President Vladimir Putin banned the supply of crude and oil products from February 01, 2023 for five months to nations that abide by the cap in a decree, which also included a clause that allows for Putin to overrule the ban in special cases.

Russian crude has been diverted to India and China from Europe while Moscow planned to increase diesel exports from the Baltic Sea port of Primorsk to 1.81 million tons in January 2023. However, January oil products exports from Tuapse are expected to fall to 1.333 million tons, traders said.

A Reuters oil price poll showed that Brent prices are expected to average at US$89.37/barrel in 2023 while the average for WTI is at US$84.84 a barrel as global economic growth slows.

In China, the world's largest crude importer and second-largest oil consumer, some people in key cities braved the cold and a rise in COVID-19 infections to return to regular activity on Monday, raising the prospect of a boost to the economy and oil demand as more recover from infection.

 

Pakistan in the midst of a perfect storm

At present Pakistan is plagued by policy paralysis and the situation is likely to get worse before getting better. The continuation of the IMF program remains critical.

Unfortunately, analysts do not see much of an improvement. Pakistan seems to be caught in the midst of a perfect storm of adversities with spiraling inflation, falling reserves and external vulnerabilities.

Politics appears to be a nightmare because the current set up seems incapable of making the right decisions. The logjam in politics continues to persist, which is prolonging policy inaction, delaying the 9th IMF review and taking the situation from bad to worse.

Given the urgent need for action to revive the IMF program and procure fresh bilateral funding, the possibility of a technocrat-led government has made its way into the discourse. Such a setup would need very strong backing and slack by political parties, which appears to be missing.

Balance of Payments crisis is getting worse. Pakistan barely managed to meet the US$ one billion Sukuk maturity in early December 2022, but confidence on meeting external debt obligations in 2023 is being shattered with foreign exchange reserves slipping below US$ 6 billion.

There is little conviction also that the donors conference scheduled for January 09, 2023 in Geneva will generate meaningful funds for post-flood reconstruction.

Pakistan urgently needs the promised US$3 billion from Saudi Arabia, together with the continuation of the IMF program.

The situation has already become unsustainable and analysts expect the PKR to slip further down.

They also expect the policy rate to rise by another 100bps to 17% in the next Monetary Policy Committee meeting scheduled for January 23, 2023.     

Prime Minister Shehbaz Sharif has indicated there is no option but to comply with IMF conditions (market-based exchange rate, energy reforms, higher revenue generation), but the government needs to take immediate action.

Exploring affiliation of Israeli cabinet members

Benjamin Netanyahu's newly formed cabinet has been officially sworn in despite receiving no favorable headlines from around the world, reports Tehran Times

Even some Israeli media outlets have referred to the new cabinet as the most rightwing during the entity’s decades-long history.

Israel, as a colonialist regime, has always been viewed as an extremist right-wing occupation committing atrocities and Palestinian do not see much difference between any Israeli cabinets over the past seven decades.

All the regime's cabinets have committed crimes against humanity that included war crimes, genocide, the mass slaughter of children, the ongoing ethnic cleansing campaign along with so many other violations of international law.

However, the newly formed Netanyahu cabinet is perhaps the most extreme and right-wing and that's according to Israel’s leftist parties who are afraid that it will result in an increased number of retaliatory operations by the Palestinians.

A member of Israel’s own Knesset admitted that the occupation, under the rule of Netanyahu and his extremist cabinet, is moving toward a full-fledged fascist state.

The remarks were made during an Israeli settler protest outside the Knesset in strong opposition to the return of Netanyahu who has been Israel's longest-ever serving Prime Minister.

The truth is Israel has always held a fascist ideology but it is now under the rule of a more extreme and fascist ideology. The regime has given the powers of governance to war criminals and extremists because Israel has never been so weak and vulnerable as it is at the moment.

It has been exposed because of the unprecedented armed resistance that has been emerging from the occupied West Bank this year. 

Such is the extent of the resistance; Israel has turned to Netanyahu, the war criminal and a person that is facing multiple corruption charges along with a coalition that is so extreme that it has called for the expulsion of all Palestinians from their native land and the execution of Palestinian prisoners.

Netanyahu was forced to bring in these fascist figures because he wanted to secure a majority that can bring him back to power and save him from corruption charges.

In other words, the war criminal does not care for the safety of Israeli settlers which is something that is very concerning for Israelis who are planning on leaving the occupied Palestinian territories in their droves, according to surveys.

There are now Israelis protesting against the new cabinet, for the first time in history, because of new ministers in an office such as Itamar Ben-Gvir who has made so many disturbing and racist statements that even Israel’s allies are concerned.

The most extreme and right-wing fascist cabinet in history will put Israel at odds with large parts of the Israeli public, and concern Israel's closest allies while escalating tensions with the Palestinians.

Reports indicate that some elements of the new Israeli cabinet are so extreme that the administration of US President Joe Biden will not deal with them as they feel uncomfortable with such elements. 

Netanyahu's incoming hardline government will place illegal West Bank settlement expansion at the top of its agenda and had already pledged to legalize dozens of illegally built outposts and annex the occupied territory as part of its coalition deal with ultranationalist allies.

Some members of the new cabinet squat on illegal settlements themselves, in a sign that there will be a major push in the future toward expanding settler units, despite the fact they are considered illegal under international law. 

But experts say the newly formed West Bank resistance groups will expand their armed operations in the face of further settlement expansion, which comes alongside Israeli demolitions of Palestinian homes.

The new cabinet members also support the Israeli settlers storming of the al-Aqsa Mosque compound, something Palestinians have said is a red line. 

There is no doubt this will represent a new escalation in occupied al-Quds (Jerusalem) next year and the wider occupied West Bank as well as inside the occupied Palestinian territories.

Some Palestinian analysts say they are glad the new Israeli government is in power because it represents the real face of the regime in front of the international community. 

Meanwhile, Palestinians have welcomed a vote by the United Nations General Assembly to ask the International Court of Justice (ICJ) to deliver a widespread opinion on the legal consequences of Israel's occupation of the Palestinian territories.

"The time has come for Israel to be a state subject to law, and to be held accountable for its ongoing crimes against our people," said Nabil Abu Rudeineh, a senior Palestinian official based in the occupied West Bank.

In a social media post, another senior official Hussein al-Sheikh said that the vote "reflects the victory of Palestinian diplomacy."

The United Nations General Assembly has passed a resolution calling on the ICJ to give an opinion on Israel’s illegal occupation of Palestine.

The General Assembly voted 87 to 26 with 53 abstentions on the resolution, with Western nations split but with virtually unanimous support in the Islamic world – including among Arab states that have normalized relations with Israel.

Russia and China also voted in favor of the resolution.

Global economy faces tougher year 2023

For much of the global economy, 2023 is going to be a tough year as the main engines of global growth - the United States, Europe and China - all experience weakening activity, the Head of International Monetary Fund (IMF) said on Sunday.

The New Year is going to be "tougher than the year we leave behind," IMF Managing Director Kristalina Georgieva said on the CBS Sunday morning news program "Face the Nation."

"Why? Because the three big economies - the United States, European Union and China - are all slowing down simultaneously," she said.

In October 2022, the IMF had cut its outlook for global economic growth for 2023, reflecting the continuing drag from the war in Ukraine as well as inflation pressures and the high interest rates engineered by central banks like the US Federal Reserve aimed at bringing those price pressures to heel.

Since then, China has scrapped its zero-COVID policy and embarked on a chaotic reopening of its economy, though consumers there remain wary as coronavirus cases surge. In his first public comments since the change in policy, President Xi Jinping on Saturday called in a New Year's address for more effort and unity as China enters a "new phase."

"For the first time in 40 years, China's growth in 2022 is likely to be at or below global growth," Georgieva said.

Moreover, a "bushfire" of expected COVID infections there in the months ahead are likely to further hit its economy this year and drag on both regional and global growth, said Georgieva, who traveled to China on IMF business late last month.

"I was in China last week, in a bubble in a city where there is zero COVID," she said. "But that is not going to last once people start traveling."

"For the next couple of months, it would be tough for China, and the impact on Chinese growth would be negative, the impact on the region will be negative, the impact on global growth will be negative," she said.

In October's forecast, the IMF pegged Chinese gross domestic product growth last year at 3.2% - on par with the fund's global outlook for 2022. At that time, it also saw annual growth in China accelerating in 2023 to 4.4% while global activity slowed further.

Her comments, suggest another cut to both the China and global growth outlooks may be in the offing later this month when the IMF typically unveils updated forecasts during the World Economic Forum in Davos, Switzerland.

 

China launches direct shipping line to Chabahar Port

The first container ship departing from China docked at Iran’s key port of Chabahar on Saturday, marking the establishment of the first direct shipping line between China and Iran's southeastern seaport.

The announcement was made by Amir Moghadam, Managing Director of the Chabahar Free Zone Organization, Tasnim news agency reported.

According to Moghadam, Chinese ships previously unloaded in Bandar Abbas, the capital city of the southern province of Hormozgan, with their cargos then being transferred to Chabahar in Sistan-Baluchestan Province via smaller ships.

With the establishment of the direct shipping line between China and Chabahar, cargos are delivered ten days earlier, while the cost of loading and unloading is reduced by US$400 per container, the official explained.

In addition, the establishment of the mentioned shipping line plays a great role in the development of transit via Chabahar Port, he added.

As Iran's only oceanic port on the Gulf of Oman, Chabahar port holds great significance for the country both politically and economically. The country has taken serious measures for developing this port in order to improve the country’s maritime trade.

In this regard, Iran has been welcoming investors from all over the world to take part in the development of this port and benefit from its distinguished position as a trade hub in the region.

Chabahar port consists of Shahid Kalantari and Shahid Beheshti terminals, each of which has five berth facilities.

The port is located in Iran’s Sistan-Baluchestan Province and is about 120 kilometers southwest of Pakistan’s Baluchistan province, where the China-funded Gwadar port is situated.

In May 2016, India, Iran, and Afghanistan signed a trilateral agreement for the strategically-located Chabahar to give New Delhi access to Kabul and Central Asia.

Based on an agreement with Iran, India is going to install and operate modern loading and unloading equipment including mobile harbor cranes in Shahid Beheshti Port in Chabahar.

While Iran is combating the US unilateral sanctions on its economy, the country’s ports as the major gates of exports and imports play a significant role in this battle. This role makes all-out support to ports and more development of them serious and vital.

Such necessity has led the government to define projects for more development of the ports and also take some measures to encourage investment making in ports, in addition to facilitating the loading and unloading of goods, especially basic commodities, there.

 

Arab League welcomes UN adoption of resolution on Israeli practices

The Palestinian Presidency has welcomed the UN general assembly adoption by a majority of 87 in favor of a Palestinian draft resolution regarding the Israeli practices marring the human rights of the Palestinian people in the Palestinian territories, considering the latest UN-sponsored development a victory for the world justice and the Arab-Islamic-Internationally-supported Palestinian diplomacy alike.

In a statement, Nabil Abu Rudeineh, the spokesman of the Palestinian Authority President Mahmoud Abbas, cited the vote as yet another evidence of the support of the world for the Palestinian people and their historic inalienable rights.

It is time to hold the Israeli occupation accountable according to international law for its crimes, said Abu Rudeineh, noting that the Palestinian people firmly believe that imposing international justice is the only way to achieve peace.

For its part, the Palestinian Foreign Ministry drew the attention that resorting to the International Court of Justice comes in line with the Palestinian story based on the international law and the Palestinian people basic rights in confrontation to the Israeli fake story.

It also confirms that all Israeli policies and practices on the occupied Palestinian territories, including the city of Al-Quds are denounced by the world community and according to the international law.

In Cairo, the secretariat general of the Arab League (AL) welcomed the resolutions issued by the UN General Assembly as regards the Palestinian cause, citing, in particular, the one asking the world court to weigh in on Israeli occupation and annexation since 1967, including the city of Al-Quds.

In a statement, Assistant Secretary General for Palestinian and Arab Territories Affairs at the AL Dr. Saeed Abu-Ali said that the UN-sponsored resolution has constituted an important station and platform to confront the Israeli plots, practices and aggression through legal tracks and holding the occupation accountable of its crimes.

He said that the resolution has reflected the will of the world community through scoring victory for the principles of the international law and legitimacy resolutions, including empowering the legal mechanisms to confront the Israeli practices and plots.

Abu-Ali called on the countries that did not support the resolution to review their positions according to the principles of international law, charters and justice in support for fair peace based on the two-state solution.

In Jeddah, the secretariat general of the Organization of Islamic Cooperation (OIC) welcomed the resolutions issued by the UN general assembly as regards the Palestinian cause, citing, in particular, the one asking the world court to weigh in on Israeli occupation and annexation since 1967, including the city of Al-Quds. OIC paid tribute to the countries that supported the resolution.