Pakistan Refinery expresses inability to process Russian crude

Pakistan Refinery (PRL) has reportedly raised concerns about its capacity to process more quantities of Russian crude oil, a setback for the Shehbaz Sharif government’s attempts to increase reliance on cheaper Russian crude to cut domestic fuel prices.

Analysts say the processing of Russian crude oil — available at a discount after it was banned from European markets due to Russia’s war on Ukraine — has been hampered by a shortage of foreign currency and limitations at Pakistan’s refineries and ports.

Another obstacle is that local refineries cannot extract as much petrol and diesel out of Urals crude — a type of crude oil from Russia — as they produce from Middle Eastern crudes.

Pakistan’s first crude cargo from Russia arrived in June and the payment was made in yuans. The target was to import 100,000 barrels per day (bpd) from Russia, nearly two-thirds of Pakistan’s total 154,000 bpd of crude imports in 2022.

The first shipment did not immediately lead to any significant savings for consumers. Instead, just over a week before the National Assembly’s dissolution, the outgoing coalition government raised petrol and diesel prices by up to Rs20 per litre.

According to sector experts, PRL failed in gaining any notable financial gains from processing the Russian crude, adding that the move to increase imports was allegedly a political stunt by the PDM government to appease consumers.

Musadik Malik, the minister of state for petroleum in the previous cabinet, told Dawn that PRL had not refused to further process Russian crude imports as long as he was in charge. The National Assembly was dissolved at midnight on Wednesday.

Some sources estimate the financial benefit to the PRL from this import was too paltry.

According to informed sources, PRL had taken the stance that other refineries should also bear the responsibility and challenges of processing Russian crude oil, which had not resulted in any significant financial benefit for the PRL.

Given the minimal benefits in terms of reducing local fuel prices, experts believe the interim government may shy away from importing more Russian crude until after the general elections.

Annually, local refineries process about 3 million tons of locally extracted crude oil. Besides, the country imports up to 8 million tons crude from Saudi Arabia and the United Arab Emirates.

Zahid Mir, Chief Executive Officer PRL last month told Reuters that the refinery would need around two months to fully process its first batch of 100,000 tons equivalent to 730,000 barrels of Urals crude.

This oil needs to be mixed with Middle Eastern crude to balance the high fuel oil output from the Russian variant. “Our optimum processing solution is to blend Urals with Middle Eastern imported crude while not exceeding 50% Ural in the blend,” Mir told the news agency.

 

Upcoming Saudi Maritime Congress

The maritime and logistics sectors in the Kingdom of Saudi Arabia are experiencing unprecedented growth, driven by economic diversification efforts, policy reforms, and foreign direct investment commitments.

As the Kingdom fast-tracks its way to becoming a world-leading maritime hub, all eyes are on Saudi Arabia's ambitious plans. The upcoming 4th edition of the Saudi Maritime Congress is poised to be a central event in these developments.

Taking place in Dammam from September 20-21, 2023, the Saudi Maritime Congress will illuminate the tremendous scope of opportunity within the fast-growing maritime logistics sector. Chris Morley, Group Director Seatrade Maritime, emphasizes the integral role of maritime transport infrastructure as part of the strategy to bolster the domestic ports and logistics sector, in line with the government's ambitious goal of making Saudi Arabia the leading regional logistics hub.

The Congress's comprehensive and free-to-attend conference program will provide an in-depth analysis of Vision2030 and its objectives for the maritime and logistics sectors.

Among the planned improvements are initiatives to boost port revenue, enhance rail connectivity, and quadruple the country's annual container throughput to 40 million TEU by 2030.

Mega projects like the US$500 billion Neom scheme and plans for the Oxagon port, the world's largest floating structure, signify the scale of Saudi Arabia's aspirations.

Building on the success of the 2022 event, which attracted 3,757 international visitors, this year's exhibition and conference at Dhahran Expo, Dammam, KSA, promises to be a vital gathering of maritime executives, leading suppliers of marine equipment and services, and key influencers in the KSA maritime landscape.

The two-day program features industry and keynote addresses by prominent figures such as Nancy W. Karigithu, Principal Secretary State Department for Shipping and Maritime, Kenya; Erik Jensby, Head of Business Development and Membership, BIMCO; John McDonald, EVP and COO, ABS. With over 30 speakers lined up, topics ranging from ship management to mega strategies for the maritime industry's future in the Kingdom will be explored.

The bustling exhibition will include companies like MAWANI; IMI; Transport Global Authority; Saudi Global Ports Co; Grandweld; Naghi Marine Company; DP World Middle East; ASRY, and more, showcasing the latest in maritime technology and services.

The Saudi Maritime Congress 2023 promises to be a vital forum for understanding and engaging with the Kingdom's ambitious maritime and logistics goals. By offering a platform for dialogue, innovation, and collaboration, it plays a pivotal role in shaping the future of the region's maritime landscape.

Registration is free for both the exhibition and conference program, highlighting the Congress's accessibility and dedication to fostering industry growth.

 

US losing power to control crude oil prices

Historically, OPEC, led by Saudi Arabia had remained under the US pressure to move crude oil prices, the way the super power wanted. The recent history includes, Iran-Iraq war, imposition of sanctions on Iran and Venezuela, political turmoil in Nigeria and Libya and the latest being imposition of sanctions on Russia. Lately, there are growing evidences that the US power to maneuver crude oil prices is on the decline.

Oil prices tumbled about one percent on Monday as concerns about China's faltering economic recovery and a stronger dollar, after seven weeks of gains driven by tightening supply from OPEC Plus cuts.

Brent crude futures slipped 93 cents, or about 1.1% to US$86.46 a barrel by 1237 GMT, while US West Texas Intermediate (WTI) fell US$1.03, or roughly 1.2%, to US$82.81 a barrel.

"Crude has been in overbought territory for some time now, defying expectations of a correction. It has been singularly focused on US economic optimism, to the exclusion of the increasingly stronger headwinds blowing in the eurozone and China," said Vandana Hari, founder of oil market analysis provider Vanda Insights.

"A rebalancing is overdue but it may need a reality check in the markets stateside," she said.

China's sluggish economic recovery and a stronger US dollar could depress prices, but OPEC Plus has indicated it would do whatever it takes to tighten supply and stabilize markets, CMC Markets analyst Tina Teng said.

The US dollar index extended gains after a slightly bigger increase in US producer prices in July lifted Treasury yields despite expectations the Federal Reserve is at the end of hiking interest rates

A stronger dollar pressures oil demand by making the commodity more expensive for buyers holding other currencies.

Meanwhile, supply cuts by Saudi Arabia and Russia, part of the alliance between the Organization of the Petroleum Exporting Countries and their allies, or OPEC Plus, are expected to erode oil inventories over the rest of this year, potentially driving prices even higher, the International Energy Agency said in its monthly report on Friday.

Last week’s encouraging demand estimates, falling OPEC supply, declining inventories and mitigated inflationary pressure, said Tamas Varga of oil broker PVM, "is a warning signal that unless China joins the party the path upwards will be paved with pitfalls".

Separately on Monday, a Shell spokesperson said exports of Nigeria's Forcados crude oil resumed on Sunday, roughly a month after loadings of the medium sweet grade were suspended because of a potential leak at the export terminal.

The suspension of Forcados loadings contributed to Nigeria becoming the second-biggest contributor to the drop in OPEC crude oil output in July.

 

Israel rules out Jerusalem base for Saudi envoy

According to Reuters, Israel has ruled out on Sunday a diplomatic base in Jerusalem for the new Saudi envoy to the Palestinians, whose appointment comes as Washington tries to forge formal Israeli relations with Riyadh.

Saudi Ambassador to Jordan, Nayef Al-Sudairi on Saturday expanded his credentials to include non-resident envoy to the Palestinians. A social media post by his embassy in Amman said "Consul General in Jerusalem" was now among Al-Sudairi's duties.

That appeared to correspond with the Palestinians' long-standing and so-far fruitless goal of founding a state in territories occupied by Israel in a 1967 war, with East Jerusalem as capital.

Israel deems Jerusalem its own capital, a status recognized by the United States under then-President Donald Trump in 2017 but not by other world powers. Israeli authorities bar Palestinian diplomatic activity in the city.

Saudi Arabia has championed the Palestinian cause and shunned official ties with Israel but the US is seeking to promote what could be a historic Middle East deal that would include normalizing Israeli-Saudi relations.

"This (Al-Sudairi) could be a delegate who will meet with representatives in the Palestinian Authority," Israeli Foreign Minister Eli Cohen told Tel Aviv radio station 103 FM.

"We will not allow the opening of any kind of diplomatic mission" in Jerusalem, Cohen added. "Will there be an official physically sitting in Jerusalem? This we will not allow."

Israel's hard-right government has played down any prospect of it giving significant ground to the Palestinians as part of a normalization deal with Saudi Arabia.

Riyadh has previously conditioned recognition of Israel on Palestinians' statehood goal being addressed. Among challenges to that goal is the schism between the internationally backed Palestinian administration and its armed Islamist rival Hamas.

Bassam Al-Agha, the Palestinian ambassador to Riyadh, cast Al-Sudairi's appointment as Saudi affirmation of Palestinian statehood and rejection of what had been announced by former US President Trump.

"This means a continuation of Saudi Arabia's positions," Al-Agha told Voice of Palestine radio.

While Cohen said Al-Sudairi's appointment had not been coordinated with Israel, he saw a possible link to the normalization prospects.

"What is behind this development is that, against the backdrop of progress in the US talks with Saudi Arabia and Israel, the Saudis want to relay a message to the Palestinians that they have not forgotten them," Cohen said.

 

Iran to invest US$2 billion in maritime projects

Head of Iran’s Ports and Maritime Organization (PMO) Ali-Akbar Safaei has said that investment in maritime projects across the country is going to be increased to one quadrillion rials (about US$2.01 billion) in order to realize maritime economy goals.

So far 189 trillion rials (about US$381.2 million) have been invested in various maritime projects across the country, Safaei said on Thursday in a televised interview with IRIB.

Mentioning the remarks of Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei regarding the significance of the maritime economy, the official said the PMO has been named as the body in charge of realizing the country’s maritime economy goals.

In this regard, the parliament has also prepared the necessary legal basis in the maritime sector to increase the share of the sea economy in the country's economic growth, he said.

He pointed to the oil industry, marine food sector, and tourism as some major axes of the maritime economy, noting that in the offshore sector, the main issue is to form economic poles on the coastal regions.

Back in May, Safaei said that over US$800 million of maritime and port projects were underway in the country.

In November 2022, PMO announced that the organization has modified its investment charter in order to facilitate foreign investment in the country’s ports.

“Since economic diplomacy is a major policy of the 13th government, the charter of investment in ports has been facilitated with the aim of attracting foreign investors,” IRNA quoted PMO Deputy Head Jalil Eslami as saying.

Speaking in a gathering of PMO managers with oil and petrochemical industry representatives, Eslami said: “We live in a period when ports infrastructure development is very important and over the past few decades positive efforts have been made to increase the capacity of ports in the south and north of the country.”

According to the official, the capacity of the country’s ports is going to be increased to 280 million tons per annum in the near future.

Later in March this year, Iranian Transport and Urban Development Minister Mehrdad Bazrpash inaugurated 10 major maritime projects worth 42.951 trillion rials (about US$81.1 million) in southern Hormozgan province.

 

Iran unblocks funds stuck in South Korea

Iranian central bank chief said on Saturday that all of Iran's frozen funds in South Korea had been unblocked and would be available for use for non-sanctioned goods.

Mohammad Reza Farzin's post on social media appeared to confirm comments a day earlier by Washington, which said there would be restrictions on what Iran could do with any funds unfrozen under an emerging deal that has led to the release of five Americans from prison to house arrest in Tehran.

White House spokesperson John Kirby said Iran could only access the funds to buy food, medicine, medical equipment that would not have a dual military use. An estimated US$6 billion in Iranian assets have been held in South Korea.

The five Americans will be allowed to leave Iran once the funds are unfrozen, a source familiar with the matter told Reuters.

Farzin wrote in a post on messaging platform X, formerly known as Twitter, that the funds would be transferred to six Iranian banks in Qatar.

"Congratulations to the foreign exchange diplomacy team for successfully releasing seized foreign currency resources," he said in the post.

He added that the costs of converting the funds from South Korea's won currency to euros would be accepted by the "third country" where the money would be deposited to buy non-sanctioned goods.

 

Pakistan: Kakar appointed Caretaker Prime Minister

According to Pakistan’s leading English newspaper, Dawn, Baluchistan Awami Party (BAP) Senator Anwaarul Haq Kakar has been chosen as the interim prime minister of Pakistan. His job is to keep the country running until a new government is elected.

The much awaited announcement came after Prime Minister Shehbaz Sharif and outgoing Opposition Leader in the National Assembly (NA) Raja Riaz reached a consensus over Kakar’s name for the coveted post during a meeting in Islamabad today.

Subsequently, the two leaders sent an advice regarding Kakar’s appointment as the caretaker prime minister to President Arif Alvi, who shortly afterwards accorded his assent.

“President Dr Arif Alvi has approved the appointment of Anwaarul Haq Kakar as caretaker prime minister. The president approved the appointment under Article 224-A of the Constitution,” a statement by the Aiwan-e-Sadr said.

Earlier, in a media talk outside the Prime Minister’s House after meeting PM Shehbaz, Riaz also confirmed that Kakar had been picked to head the interim set-up.

“We had earlier decided that the caretaker PM should be someone from a smaller province and a non-controversial personality. Our aim was to remove the sense of deprivation in small provinces.

“We have finally reached a consensus that Anwaarul Haq Kakar will be the caretaker PM,” Riaz said.

“I had given this name and the PM has consented to this name … I and the PM have signed on the summary,” he told reporters, adding Kakar would be sworn in on Sunday.

Anwaarul Haq Kakar was elected as an independent senator from Baluchistan in 2018, clinching a six-year term that will conclude in March 2024.

Simultaneously, he worked as chairperson of the Senate Standing Committee on Overseas Pakistanis and Human Resource Development, and as a member of the Business Advisory Committee, Finance and Revenue, Foreign Affairs and Science and Technology.

Kakar also undertook the role of parliamentary leader for the Baluchistan Awami Party — formed in 2018 — within the Senate.

Kakar navigated this leadership position for considerable five-year duration. Nonetheless, a mere five months ago, the party resolved to opt for new leadership, leading to his replacement.

He also served as the spokesperson for the Baluchistan government from December 2015 to January 2018.

According to the Centre for Strategic and Contemporary Research (CSCR), an Islamabad-based research institute, Kakar holds a bachelor’s degree in political science and sociology from the University of Baluchistan.

The institute also mentioned Kakar’s proficiency in English, Urdu, Persian, Pushto, Balochi, and Brahvi languages.

Reacting to the development, former information minister and ex-PTI leader Fawad Chaudhry said Kakar was an “honest, educated and modest” Pakistani.

“After a long time, some good news has come for Pakistan. May God be your supporter and bless this decision for Pakistan,” he said on X, formerly known as Twitter.

PPP leader Faisal Karim Kundi welcomed the development and congratulated Kakar. “PPP left it to PM Shehbaz to nominate the caretaker prime minister with the consultation of opposition leader.

“Hope under his leadership Election Commission will conduct free and fair elections,” he added.

Contrary to his colleague Kundi, PPP’s Khursheed Shah opposed Kakar’s selection and said, “We were not aware that Anwaarul Haq’s name will be finalized, and it would have been better if another person was selected for the post.”

However, he added, “Anwaarul Haq Kakar would be remembered if he succeeds in ensuring transparent elections.

Shah told Dawn.com over the phone that the PPP had proposed five names for the interim PM, which did not include Kakar. He shared four names he said were recommended by the PPP — Salim Abbas Jilani, Jalil Abbas Jilani, Muhammad Malik and Afzal Khan.

“Whoever proposed his (Kakar) name, we should hope for good,” the PPP leader said.

PTI Senator Ali Zafar said Kakar is an “intelligent, articulate [and] reasonable man”.

“[He] believes in politics of cooperation not confrontation: has always well represented the interests of Baluchistan [sic]. Wish him the best,” he tweeted.

Separately, Bloomberg quoted political commentator Hasan Askari Rizvi as saying that Kakar’s true test would be whether he follows the IMF’s approach and conducts inclusive elections involving all political parties.

He separately told AFP that Kakar has a limited political career and not much weight in Pakistani politics, but that could work in his favour.

“This can be an advantage because he has no strong affiliation with the major political parties,” he said.

“But the disadvantage is that being a lightweight politician he may find it difficult to cope with the problems he’s going to face without the active support of the military establishment.”

Sources said PML-N supremo Nawaz Sharif was insisting, through PM Shehbaz Sharif, on former finance minister Ishaq Dar to be picked as caretaker premier, and if not Dar, then former prime minister Shahid Khaqan Abbasi.

However, Riaz, a PTI dissident with no backing of a political party, was getting dictation from another power corridor and insisting on the name of Senate Chairman Sadiq Sanjrani, sources claimed. Sanjrani called on Riaz on Friday, as well as Dar and Ahsan Iqbal.