Page 7 - MEOG Week 49 2022

MEOG POLICY & SECURITY MEOG

OPEC+ sticks to its guns

despite Russian oil cap

OPEC LAST week, the focus was on falls in OPEC oil 2% of world demand, from November until the
output following the steps taken by the cartel to end of 2023. There were accusations from Wash-
meet pledged cuts throughout the market. A ington that the group and, specifically, one of its
week later, the situation is not materially differ- leaders, Saudi Arabia, was siding with Russia in
ent but there have been subtle variations. spite of Moscow’s war in Ukraine.
This week’s developments include the G7 OPEC+ argued it had cut output because
nations setting a price cap on Russian oil. The of a weaker economic outlook. Oil prices have
G7 nations and Australia agreed a $60 per bar- declined since October due to slower Chinese
rel price cap on Russian seaborne crude oil in and global growth and higher interest rates,
a move to deprive President Vladimir Putin of prompting speculation the group could cut
revenue while still keeping Russian oil flowing output again. Kuwait’s oil minister: OPEC+
to global markets. Moscow said it would not sell decisions based on oil market data and ensure
its oil under the cap and was analysing how to market stability
respond. Many analysts and OPEC ministers OPEC+’s decisions are based on oil market
have said the price cap is confusing and proba- data and ensure the market’s stability, Kuwait’s
bly inefficient, as Moscow has been selling most oil ministry said in a statement on state news
of its oil to countries like China and India, which agency KUNA, following a meeting where the
have refused to condemn the war in Ukraine. group decided to continue its existing policy.
Then, at their latest meeting – on December The impact of slow global economic growth,
4 – OPEC+ agreed to stick to its oil output targets soaring inflation and high interest rates on oil
as the oil markets struggle to assess the impact of demand are a cause for “continuous caution”, Oil
a slowing Chinese economy on demand and the Minister Bader al Mulla said. Following Sunday’s
G7 price cap on Russian oil on supply. decision the policy has remained unchanged;
OPEC+ had angered the United States and OPEC’s ministers will next meet on February 1
other Western nations in October when it agreed for a monitoring committee while a full meeting
to cut output by 2mn barrels per day (bpd), about is scheduled for June 3-4.™

Turkish businessman sanctioned

over links to Iran’s Quds

TURKEY THE US late on December 8 imposed sanctions contracts for Iranian oil with foreign purchasers,
on Turkish businessman Sitki Ayan and his net- arranged shipments of oil, and helped launder
work of companies, accusing him of facilitating the proceeds, obscuring the oil’s Iranian origin
oil sales and money laundering on behalf of the and the [Quds Force’s] interest in the sales,” the
expeditionary Quds Force of Iran’s Islamic Rev- US Treasury, which oversees the implementa-
olutionary Guard Corps (IRGC). tion of American sanctions, said in a statement.
Politico noted that the announcement of the The businessman has arranged business con-
move against Ayan followed its publication of an tracts to sell Iranian oil worth hundreds of mil-
article on his suspect dealings and could be seen lions of dollars to buyers in China, the United
as “reversing months of inaction in the face of Arab Emirates and Europe, the statement added,
reams of evidence detailing the Turk’s dealings saying he funnelled the proceeds back to the
with the Iranians, including signed contracts and Quds Force.
bank transfers”. Ayan’s son Bahaddin Ayan, his associate
It added: “The US’s reluctance to sanction Kasim Oztas and two other Turkish citizens
Ayan, diplomats say, was driven by his close asso- involved in his business network were also des-
ciation with [Turkish President Recep Tayyip] ignated by the US Treasury, along with 26 com-
Erdogan, a key American ally in the Middle East panies including his ASB Group of Companies,
and beyond.” a Gibraltar-based holding company and a vessel.
Ayan, a friend of Erdogan, attended the The Treasury designations freeze any US
same high school as the Turkish leader. “Ayan’s assets of those designated and generally bar
companies have established international sales Americans from dealing with them.™

Week 49 07•December•2022 www. NEWSBASE .com P7