The Organization of the Petroleum Exporting Countries (OPEC) increased pressure on Iran and Iraq on Wednesday to limit their oil production following a tentative deal between Saudi Arabia, Russia, and other oil producers to freeze output.
Qatari Energy Minister and current OPEC President Mohammed al-Sada met with ministers from Iran, Iraq, and Venezuela in Tehran on Wednesday to discuss the agreement. Sada said he is hopeful that Iran will agree to freeze oil production at the January levels. However, Iran said it would resist any plans to restrain its oil output. “Asking Iran to freeze its oil production level is illogical . . . when Iran was under sanctions, some countries raised their output and they caused the drop in oil prices.” Iranian OPEC envoy Mehdi Asali said. “How can they expect Iran to cooperate now and pay the price?” he said. Meanwhile, Kuwait said it will commit to the agreement if it is backed by other major oil producers, and the United Arab Emirates said that it was open to cooperating with other oil producers. [WSJ, 2/17/2016]
The Kurdistan Regional Government (KRG) said Wednesday it would halt independent oil sales if Baghdad pays its employees, but cast doubt on the federal government’s ability to implement the proposal. Iraqi Prime Minister Haider al-Abadi said earlier this week that he would pay KRG employees’ salaries if the region halts oil sales. The KRG said it accepts Abadi’s proposal, which includes paying all the salaries of the employees of the Kurdistan region, who number 400,000 people. The salaries amount to about $800 million a month. In exchange, the region would hand over all of its oil production to the federal government of Iraq. The Kurdish authorities appeared skeptical about the chances of a deal materializing and questioned the state of Iraq’s federal finances. [AFP, 2/17/2016]
Quarantine officials at Egypt’s Ministry of Agriculture have rejected a shipment of Canadian wheat, saying it contained traces of the fungus ergot. The move is the latest in a series of rejections that have caused concerns over Egypt’s strict new quality regulations. The vessel carrying Canadian wheat has been rejected twice by quarantine officials on ergot concerns. The Canadian cargo was first rejected in early February after visual inspection at the port in Abu Qir. It was barred again by officials even after three independent tests carried out by the seller found ergot levels at 0.005 percent, far below the 0.05 percent limit. Egypt, the world’s largest wheat importer, has been facing difficulties purchasing wheat in its import tenders since it rejected a shipment from Bunge. Wheat suppliers have refrained from making offers or added risk premiums to prices. Egypt’s quarantine officials have also reportedly started applying stricter measures to other commodities. [Reuters, Bloomberg, 2/16/2016]
Money exchange houses in the United Arab Emirates (UAE) are holding talks with the central bank about planned new capital requirements amid concerns that they might restrict industry growth. The central bank has been tightening rules for the industry in an effort to combat money laundering and push out weaker companies. New guidelines for minimum capital came into effect on January 1. Under the rules, companies are required to hold at least 5 million dirhams ($1.4 million) if they offer remittance services, up from the previous level of 2 million dirhams. Firms handling wage payments must have at least 10 million dirhams. Implementation of another new rule related to the opening of additional branches has been delayed amid confusion about the requirement. [Reuters, 2/16/2016]
Also of interest
What Saudi Arabia’s freeze means for oil prices | WSJ
Reactions to Saudi, Russia deal to freeze oil output | Reuters
Bahrain raises bond re-tap to $750 million | Reuters
Dollar exceeds EGP 9 in Egyptian informal market for first time | DNE
Bankers say further devaluation of Egyptian expected | DNE
Bunge seeks to resell French wheat cargo rejected by Egypt | Reuters
Libya’s NOC, Mellitah discuss offshore development | Libya Monitor (subscription)
Algeria Sonelgaz looks to foreign loans after oil price drop | Reuters
UN launching $1.8 billion campaign for urgent aid in Yemen | VOA