Saudi remarks on oil surge, test prospects for output freeze
DOHA: Saudi Arabia’s top oil official, Deputy Crown Prince Mohammed bin Salman, said Riyadh could boost output immediately and almost double it long term, in comments that could threaten the signing of a global production freeze deal planned.
The second in line to the throne of the world’s largest crude exporter added in remarks to Bloomberg that the kingdom would only restrain its output if all other major producers, including Iran, agree to freeze their production.
His remarks appeared to cast doubt on a freeze plan to be discussed by producers of the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC member countries such as Russia in the Qatari capital Doha.
Iran, a fellow OPEC member but also Saudi Arabia’s regional rival, said it would not participate in the meeting as it could not accept proposals to freeze production.
“We have told some OPEC and non-OPEC members like Russia that they should accept the reality of Iran’s return to the oil market,” Oil Minister Bijan Namdar Zanganeh was quoted as saying by the oil ministry’s news agency SHANA.
“If Iran freezes its oil production at the February level, it means it cannot benefit from the lifting of sanctions.”
Yet OPEC delegates told Reuters there was still a chance for a deal if participants can find a compromise - and avoid a repeat of the last OPEC meeting in December where Iran and Saudi Arabia clashed over output policy.
The fact that Tehran’s stance has not torpedoed the convening of the meeting suggests fellow producers may be prepared to tolerate a rise in Iran’s output, provided there is no new price rout.
The freeze proposal has helped oil prices to rise over 60 per cent from a 12-year low near US$27 a barrel hit in January, despite little change to the market’s supply glut.
“I am optimistic,” acting Kuwaiti oil minister Anas Khalid alSaleh said on Saturday regarding prospects for a deal.
Several sources told Reuters there was support among the producers, including another OPEC delegate who said: “I still think there will be a deal.”
Delegates said a number of approaches were being discussed and there was talk of setting up a committee to monitor compliance.
“We have a deal,” one senior oil source told Reuters, referring to a proposal backed by several producers for an output freeze at January levels that would last until October.
Producers have struggled for nearly two years with low oil prices and an oversupplied market but have been loath to cut output as that would cede market share to rivals.
Sanctions imposed by the US and other world powers were lifted in January in return for Tehran agreeing to long-term curbs on its nuclear programme.
Prince Mohammed said Saudi Arabia would cap its market share at about 10.3 million to 10.4 million barrels a day (bpd), if producers agree to the freeze. — Reuters JOHANNESBURG: South Africa plans a new “fat tax” on sugary drinks to combat an obesity epidemic – but sweet-toothed consumers say its chances are slim of making them cut down.
Ranked as one of the most obese nations on the continent, South Africa is joining a growing list of countries around the world, such as Britain and Mexico, trying to put a cap on fizzy drinks.
But even health experts, who welcome the proposed levy, don’t believe the tax will single-handedly discourage South Africans from popping open bottles of sugar-packed soda and sweetened juices.
The levy, announced by Finance Minister Pravin Gordhan in his budget in February, will come into effect in April next year.
It is aimed not only at saving people from their own unhealthy appetites but at offsetting the economic costs of diseases related to obesity.
In Zandspruit, a township west of Johannesburg, 30-year-old insurance broker Thulani Masango scoffs at the levy.
“We know sugar causes diabetes and obesity, but...we cannot survive without sugar,” said Masango, as he strolled down a dusty street.
“As we speak, the price of meat has gone up, but we continue braaing (barbecuing). Alcohol goes up almost every year, we still drink.
“It’s the same with sugar. It’s something that is uncontrollable,” said Masango.
A Zandspruit supermarket supervisor and mother of two, Anastacia Tshabalala, 53, agrees. She believes that sugar is addictive.
“Sugar is sugar! We are going to take it no matter what. Even if the price goes up, we have to take sugar everyday – you can’t live without it,” she said.
South African endocrinologist Professor Tess van der Merwe, who says half of adult women and a third of adult men in South Africa are “overweight”, is also sceptical.
“These are epidemic proportions,” she said, adding that about 15 per cent of South Africans are in the “morbidly obese category” – more than 100 pounds or 45 kilogrammes overweight. — AFP
We have told some OPEC and non-OPEC members like Russia that they should accept the reality of Iran’s return to the oil market. Bijan Namdar Zanganeh, Oil Minister