Gold jewellery exports from India routed through West Asia are being adversely affected because of two reasons: First, because of the 10 per cent import duty levied on imported gold used in making jewellery, and, second, by the 5 per cent import duty on jewellery levied by the United Arab Emirates (UAE) effective January 1.
Gold jewellery exports dropped more than 24 per cent in January and 47.52 per cent in February. India has been losing exports rapidly to competitors including China.
Experts say there has been an increase in the number of manufacturing units set up in the UAE because of this phenomenon. These manufacturing bases are dominated largely by Indians who own similar units in India. As a result, people who work on gold are migrating to the UAE, which accounts for nearly 20 per cent of India’s jewellery exports.
“Dubai is no longer a free trade centre. The immediate need of the hour is to reduce the import duty on gold. An import duty on gold beyond 5 per cent is counterproductive. Hence, the government should cut the import duty on gold to below 5 per cent to arrest the fall in gold jewellery exports,” said Praveen Shankar Pandya, chairman, Gems and Jewellery Export Promotion Council (GJEPC), the premier jewellery export promotion body under the ministry of commerce.
Asian companies are increasing their presence in oil concessions in the United Arab Emirates.
Abu Dhabi National Oil Co. has solicited new bids for the onshore concessions held by the Abu Dhabi Co. for Onshore Petroleum Operations (ADCO), which expired in 2014. Four Western oil majors — BP, Total, Royal Dutch Shell and Exxon Mobil — each held a 9.5% of interest in the ADCO concessions, which produce 1.6 million barrels per day of oil.
Total became the first company to renew its interest in January 2015, followed by Japanese company Inpex’s 5% acquisition in April the same year. South Korea’s GS Energy then acquired a 3% interest in May 2015 and BP acquired 10% in December 2016.
Earlier this year, ADNOC awarded concessions to two Chinese companies. On Feb. 19, it signed an agreement with state-owned China National Petroleum Corp. for an 8% interest. The next day, it struck a deal with private energy company CEFC China Energy for a 4% interest. The agreements cover a 40-year term backdated to January 2015.
“Our agreement with CNPC strengthens and deepens the strategic and economic relationship between the United Arab Emirates and China,” ADNOC chief executive Sultan al-Jaber said. To enter into the concession, CNPC contributed a sign-up bonus of 6.5 billion dirhams ($1.76 billion), according to ADNOC. CEFC paid 3.3 billion dirhams.
Airline passengers traveling from eight Middle Eastern nations, including Jordan and Egypt, will be barred from carrying large electronic devices into the main cabin under new regulations from the Trump administration.
The new rules, which come into effect on Tuesday, also apply to Saudi Arabia and the United Arab Emirates, according to a US official. Passengers from the eight countries will have to check laptop computers and other large devices, such as tablets, into the hold on all flights bound for airports in the US. But the restrictions will not apply to flights leaving the US for the same countries, according to the official, who requested anonymity.
The move marks the latest attempt by the Trump administration to tighten security after Mr Trump vowed during the presidential race to do more to tackle terrorism. It comes one week after his administration issued a revised travel ban that temporarily bars citizens of seven largely Muslim countries from entering the US. The revised order, like the first one, has been blocked by the courts, preventing implementation for the time being.
Royal Jordanian Airlines earlier on Monday warned its passengers about the new Department of Homeland Security regulations regarding large electronic devises. But the airline later removed a notice from its social media accounts, following suggestions that it had prematurely released information. While some outlets have reported that the ban applied to 13 countries, the US official said only eight nations were on the actual list.
Ten days ago, we reported that as a result of Obama’s vow to extend the Iran Sanctions Act for another 10 years, Iran threatened to retaliate, saying it violated last year’s deal with six major powers that curbed its nuclear program.
While US officials said the ISA’s renewal would not infringe on Obama’s landmark nuclear agreement (which may or may not be voided by Trump), and under which Iran agreed to limit its sensitive atomic activity in return for the lifting of international financial sanctions that harmed its oil-based economy, senior Iranian officials took odds with that view. Iran’s nuclear energy chief, Ali Akbar Salehi, who played a central role in reaching the nuclear deal, described the extension as a “clear violation” if implemented.
“We are closely monitoring developments,” state TV quoted Salehi as saying. “If they implement the ISA, Iran will take action accordingly.” Iran’s most powerful authority, the Supreme Leader Ayatollah Ali Khamenei, warned in November that an extension of U.S. sanction would be viewed in Tehran as a violation of the nuclear accord.
To be sure, that was merely jawboning by Iran, which has far less leverage and far more to lose if it antagonizes Washington and provokes the US into reimposing sanctions upon the Gulf nation, amounting to the tune of over 1 million barrels per day in foregone oil exports that would be taken offline, should the US impose similar sanctions as those which took the country’s crude export production largely offline in the 2013-2015 timeframe.
It is also the lesser of Iran’s worries: a far bigger concern is whether Trump will tear up Obama’s landmark nuclear agreement.
A large GMC 4×4 sits with deflated tyres. Like the Range Rovers and Camaro GT parked nearby, it is covered in a thick layer of sandy dust — one of more than 30 apparently abandoned cars lining the bays of a floor of a multi storey car park at Dubai airport.
The vehicles are testament to the rising number of “skips” afflicting Dubai — indebted expatriates who have left the city state rather than face debtors’ prison as an economic downturn squeezes the business and finance hub.
Throughout the oil-rich Gulf, the slump in crude prices is forcing governments to slash spending and delay projects, while private companies shed staff and, in some cases, shut down.
“There is a material slowdown under way, and it still has some way to run,” said Simon Williams, chief Middle East economist at HSBC. “Low oil prices are part of the problem. Dubai may not be an oil producer, but it exports its services to the rest of the Gulf where demand is weakening.”
Abandoned vehicles were a totemic image of Dubai’s last crisis in 2009, when the emirate was forced to turn to its oil-rich brother emirate Abu Dhabi, capital of the United Arab Emirates, for a $20bn bailout.
This year’s slowdown has not reached the crisis-levels of that recession, and Dubai is less affected than other oil-dependent peers, such as Qatar or Abu Dhabi. But the emirate is still burdened with debts of around 140 per cent of gross domestic product and faces loan and bond repayments of $22bn through 2018.
A recurring oil market theme in the past few months has been the speculation that despite its jawboning that it is ready and willing to boost crude production, Iran has had a hard time getting both the funding and the required infrastructure to substantially boost its production to recapture its supply levels last seen before the recent US sanctions. That however appears to be changing fast.
Recall all those tankers we have profiled before on anchor next to the Iran shore?
They have finally started to move.
According to Bloomberg, tankers carrying about 28.8 million barrels of crude, or more than 2 million a day, left the Persian Gulf country’s ports in the first 14 days of April, according to tanker-tracking data. That compares with a rate of about 1.45 million barrels a day in March. As a result, Iran’s crude shipments have soared by more than 600,000 barrels a day this month, adding to the pressure facing producer nations as they prepare to meet in Doha to discuss freezing output to prop up oil prices.
Shocking Photo: Nearly 30 Oil Tankers in Traffic Jam Off Iraqi Coast
Oil tankers are caught in a traffic jam near the Iraqi port of Basra, causing delays in loading. According to Reuters, around 30 very large crude carriers (VLCCs) are sitting in the Persian Gulf, and the backlog could cost ship owners more than $75,000 per day. Some could be waiting for weeks to reach the port.
Check out this shocking satellite photo of the tanker traffic jam just off the coast of Iraq.
Bahrain and Oman have increased fuel prices significantly as the Gulf states struggle to rein in budget deficits and ease pressure on government coffers ravaged by the decline in oil prices.
The two poorer members of the six-strong Gulf Co-operation Council followed the example of the United Arab Emirates and Saudi Arabia in cutting subsidies and spending while looking at ways to boost non-oil revenues.
Bahrain, which last year ended state subsidies on meat, announced that regular petrol would rise on Tuesday by 56.3 per cent to 0.125 Bahraini dinars (33 US cents) per litre and premium petrol would increase by 60 per cent to BD 0.160.
Oman said it would raise regular petrol by 23 per cent to 0.140 Omani riyals (36 US cents,) premium petrol by a third to OR 0.160 and diesel by 10 per cent to OR 0.160. The Omani price increase comes into effect on January 15 and will be reviewed monthly. The reform, which includes spending cuts, was endorsed by cabinet in Muscat last month.
Bahrain needs around $125 a barrel to balance its budget, while Oman’s fiscal break-even price is around $110 a barrel.