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RIYADH — The head of oil giant Saudi Aramco on Tuesday said a lack of recent investments in the oil sector could lead to a shortage of supplies. 

“Not much investments have been going into the energy sector... $1 trillion has been either deferred or cancelled” amid the price slump of recent years, Aramco CEO Amin Nasser said at an investment conference in Riyadh.

Of that, $300 billion was due for investment in oil exploration and $700 billion for project development, he said.

“This will have an impact on the future of energy if nothing happens,” Nasser said, pointing to additional needs due to “natural depreciation of fields and normal rise in demand”.

Nasser also said renewable energy will not threaten the position of oil and natural gas as the main global energy sources.

“We are witnessing a transformation... But it will be decades before renewable energy takes a major share in the energy mix,” he said at the Saudi Future Investment Initiative conference.

Global oil prices more than halved in 2014 because of oversupply and weak global economic growth.

The prices have made a partial recovery after producers from OPEC and non-OPEC countries agreed last year to cut production by 1.8 million barrels per day (bpd). 

The initial six-month deal was further extended by nine months until the end of March.

Saudi Arabia, the world’s top oil exporter, made the largest cut of around 500,000bpd. It has said it will increase the reduction to 560,000bpd in November.

The kingdom has lost hundreds of billions of dollars in oil revenues since mid-2014 and as a result posted huge budget deficits.

It has launched a package of economic reforms that include a plan to sell up to 5 per cent of state-owned Aramco.

Speaking at the conference, the managing director of Saudi Arabia’s state-owned Public Investment Fund, Yasir Al Rumayyan, reiterated that an Aramco initial public offering is on track for next year.

Nasser said on Monday that the IPO, expected to raise $100 billion if Aramco is valued at $2 trillion, will take place in the second half of 2018.

RIYADH — Saudi Aramco’s initial public offering will take place in the second half of 2018, CEO Amin Nasser said on Monday, dismissing reports that the oil giant’s plans could be shelved.

“We have always said that we will be listing in 2018, and to be more specific, in the second half of 2018,” Nasser said in an interview with CNBC television.

“The IPO is on track. The listing venue will be discussed and shared in due course,” Nasser told the channel in Riyadh.

The Aramco chief also said Saudi authorities were not in talks with Chinese or other investors to sell a stake in the firm, estimated to be worth around $2 trillion.

Aramco, which controls Saudi Arabia’s massive energy assets, plans to list nearly 5 per cent of its shares in the stock market.

The IPO is expected to be the largest in history, raising around $100 billion in much-needed revenue for the kingdom, which has posted $200 billion in deficits in the past three fiscal years.

Saudi billionaire Prince Alwaleed Bin Talal, whose Kingdom Holding Co. rivals the state-owned Public Investment Fund, has also hinted that Aramco might be headed for even more stock sales in the years to come.

“If you go five per cent, there’s nothing that prohibits you from going another five per cent next year, and five per cent the third year and fourth year, and so forth, depending on the situation,” he told CNBC on Monday.

The potential Aramco listing is a cornerstone of an ambitious economic reform programme launched by Saudi Arabia’s Crown Prince Mohammed Bin Salman last year.

The programme, known as Vision 2030, aims to balance the Saudi budget after the OPEC kingpin lost hundreds of billions of dollars because of the slump in oil prices.

Doubts have been swirling around the viability and ambitious timeline of the Aramco IPO.

Saudi Arabia had laid out plans for a dual listing on the Saudi stock market and an international exchange for 2018, with markets in New York and London vying for the offering.

But the company has struggled to select an international venue for its listing.

CARACAS — Inside a locked room in an office building in Caracas, 20 humming computers use their data-crunching power to mine bitcoins, an increasingly popular tool in the fight against Venezuela’s hyperinflation.

In warehouses, offices and homes, miners are using modified computers to perform complex computations, essentially book-keeping for digital transactions worldwide, for which they earn a commission in bitcoins.

While practised worldwide, Bitcoin mining is part of a growing, underground effort in Venezuela to escape the worst effects of a crippling economic and political crisis and runaway inflation that the International Monetary Fund (IMF) says could reach 720 per cent this year.

Having no confidence in the bolivar and struggling to find dollars, many Venezuelans, who are neither computer geeks nor financial wizards, are relying on the bitcoin — currently valued around $6,050, or other virtual currencies.

Caracas office worker Veronica says her boss installed the 20 machines in early 2015.

“These are machines that bring in $800 a month [more than 26 million bolivars],” says Veronica, who refused to give her full name because of fears of arrest.

Bitcoin mining consultant Randy Brito estimates that about 100,000 Venezuelans are “mining,” although it is impossible to have an exact figure because many are protecting themselves by using servers in foreign countries.

Brito said the boom in these virtual transactions began in 2014, when Venezuela’s economic crisis intensified as a result of the collapse in the price of oil, which accounts for 96 per cent of the country’s revenue.

“Whoever buys bitcoins with bolivars earns money by increasing the price of the bitcoin against the dollar, and escapes inflation,” Brito told AFP.

Not without risk 

Venezuela is something of a mining hotspot because the electricity needed to run the power-hungry computers is so heavily subsidised as to be almost free.

Thus, “It is very profitable to ‘produce’ bitcoins,” said economist Asdrubal Oliveros.

Tempted by the money made by her boss, Veronica has taken the plunge at home, buying a machine for $2,280 online from China. 

“A friend took another and a boy I know bought 20,” said Veronica. “People are buying machines like crazy.”

They set the machines up in another woman’s house, as many miners do to spread the power consumption and avoid attracting the attention of the state intelligence service Sebin, whose agents regularly raid buildings when they notice a suspicious surge. 

“If they find machines, they arrest the owners or they try to extort money,” said Veronica. “In electricity, we spend barely 15,000 bolivars a month [less than 50 cents at the black market rate].”

Lawyer Jesus Ollarves said that while bitcoin mining is legal in Venezuela, which does not have cryptocurrency laws, “those who practice it are often liable to arrest by the police for energy theft”.

According to the LocalBitcoins portal, transactions in bitcoins amounted to $1.1 million in Venezuela in the last week of September.

Commissions, paid in bitcoin, help buy food and medicine that are currently in acutely short supply because of the crisis, said Eugenia Alcala, founder of Dash Caracas, which provides courses in cryptocurrency mining.

Veronica said her machine is producing 20 to 25 Litecoins — another virtual currency — per month.

“Each Litecoin is worth $46, that’s $920 a month,” said Veronica — a fortune in a country where the minimum monthly salary is 135,543 bolivars ($40), supplemented by a voucher of 189,000 bolivars ($56).

BAGHDAD — Saudi Arabia’s Oil Minister Khalid Al Falih made a high profile visit to Iraq on Saturday, calling for increased economic cooperation and praising existing coordination to boost crude oil prices.

In a speech at the opening of the Baghdad International Exhibition, Falih said cooperation between Iraq and Saudi Arabia contributed to “the improvement and stability we are seeing in the oil market”.

Falih is the first Saudi official to make a public speech in Baghdad for decades. The two countries began taking steps towards detente in 2015 after 25 years of troubled relations starting with the Iraqi invasion of Kuwait in 1990.

Tension remained high after the 2003 US-led invasion of Iraq, which toppled Saddam Hussein. The American occupation of Iraq empowered political parties representing Iraq’s Shiite majority, close to Saudi Arabia’s regional rival Iran.

Iraq is seeking economic benefits from the thaw with Riyadh while Saudi Arabia hopes closer ties would help rollback Iran’s influence in the region. 

“The best example of the importance of cooperation between our two countries is the improvement and stability trend seen in the oil market,” said Falih, to applause from the audience of Iraqi ministers, senior officials and businessmen.

Falih and Saudi Foreign Minister Adel Al-Jubeir held talks earlier this year in Baghdad, paving the way for visits to Saudi Arabia by Iraqi Prime Minister Haider Al Abadi and popular Shiite cleric Moqtada Al Sadr. 

Saudi Arabia and Iraq are respectively the biggest and second biggest producers of the Organisation of the Petroleum Exporting Countries (OPEC).

The Iraqi oil ministry said Falih and his Iraqi counterpart, Jabar Al Luaibi, agreed to cooperate in implementing decisions by oil exporting countries to curb global supply in order to lift crude prices.

OPEC, Russia and several other producers have reduced production by about 1.8 million barrels per day  since the start of 2017, helping to boost oil prices. The cutbacks should continue until March 2018.

“The market has improved a lot but has still some way to go,” Falih told reporters, adding that the compliance of the 24 nations taking part in the cutbacks deal “exceeds 100 per cent”.

Falih called for increased economic cooperation between the two countries at all levels, saying Saudi Arabia is implementing measures to facilitate the flow of goods and services between the two countries.

A Saudi commercial airplane, operated by Flynas, arrived in Baghdad on Wednesday for the first time in 27 years.

In August, the two countries said they planned to open the Arar land border crossing for trade for the first time since 1990.

NEW YORK — The Dow Jones index hit 23,000 for the first time on Tuesday, boosted by a spate of solid earnings reports from blue-chip companies and extending a Wall Street rally.

Near (15:40 GMT), the Dow Jones Industrial Average was at 22,977.91, up 0.1 per cent from Monday’s closing price, after earlier hitting 23,002.20.

The broad-based S&P 500 lost less than 0.1 per cent at 2,556.64, while the tech-rich Nasdaq Composite Index was flat at 6,624.08.

The two biggest gainers in the Dow were Johnson & Johnson, up 2.2 per cent after earnings topped analyst expectations, and United Healthcare, which surged 4.9 per cent after lifting its full-year profit forecast.

US stocks have broken numerous records since President Donald Trump last month released an outline of his tax cut plan. Other key factors behind the boom include relatively low interest rates and solid earnings. 

Still, analysts are cautious about the market’s ability to rise further in the coming weeks.

A note last week from Wells Fargo Investment Institute predicted the S&P 500 would experience a “modest pullback” by the end of the year, while Goldman Sachs said the trajectory would depend on the fate of the tax cut plan.

Goldman projected the S&P 500 would fall to 2,400 without tax reform, but could rise to 2,650 if the plan is enacted. 

Netflix dropped 2.1 per cent after reporting that quarterly profits jumped to $129 million, more than double that of the year-ago period. The streaming company announced plans to boost spending on original content to $7 to $8 billion in 2018, up from $6 billion in 2017.

Boeing shed 0.4 per cent following news that archrival Airbus took a stake in an airliner programme of Canadian plane manufacturer Bombardier that had been mired in a US-Canada trade dispute. Some analysts said the tie-up would sharpen competition for Boeing in the narrow-body market.

Procter & Gamble slid 0.6 per cent after disclosing that preliminary vote results showed shareholders rejected activist Nelson Peltz’S board election by a scant 0.2 per cent. Peltz’S firm Trian said it would await the final results and that the outcome still cannot be determined.

GAZA CITY, Palestinian Territories — Israeli officials have announced they will temporarily expand the fishing area for Palestinians off a sector of the blockaded Gaza Strip.

From Wednesday, fishermen in southern Gaza will be able to travel up to 9 nautical miles out to sea in search of hauls, up from six previously, an Israeli statement said on Sunday.

The six-week expansion will “improve the economy in the Gaza Strip”, said the statement from the Israeli defence ministry unit known as COGAT.

Fishing limits off the northern part of Gaza will remain unchanged at 9.6 kilometres.

Nizar Ayesh, head of the Palestinian fishing union, told AFP they had not yet been informed of the decision.

Under the Oslo Agreements of the 1990s, fishermen are supposed to be allowed to fish up to 20 nautical miles off the coast.

Ayesh said he hoped the recent reconciliation between Palestinian factions would pressure Israel to further loosen its restrictions.

Israel has imposed a blockade of the Hamas-run Gaza Strip for a decade, while Egypt has also largely closed its border with the isolated enclave.

Israel and Hamas have fought three wars since 2008.

In May, a fisherman was shot dead by Israeli forces who alleged he breached the blockade and ignored warnings to stop.

Around 4,000 fishermen work in Gaza, more than half of whom live below the poverty line.

ANKARA — US President Donald Trump’s hardened stance towards Iran evoked a mixture of indifference and national pride among Iranians on Saturday but many were concerned about economic hardship should a multinational nuclear deal unravel.

In a major shift in US foreign policy, Trump said on Friday he might ultimately terminate the 2015 agreement that lifted sanctions in return for Tehran rolling back technologies with nuclear bomb-making potential.

“… Of course we don’t want economic hardship, but it does not mean we will be their puppet and do whatever they say,” said housewife Minou Khosravani, 37, a mother of two in the central city of Yazd.

Within minutes of Trump’s speech, Iranian President Hassan Rouhani went live on state television, ruling out any renegotiation of the deal Iran signed with major powers. He also signalled Iran would withdraw from the agreement if it failed to preserve Tehran’s interests. 

Tired of economic adversity during years of tough sanctions over Iran’s nuclear programme, many Iranians still fervently back the decision by Iran’s clerical rulers to resist US pressure. 

“I am not a regime supporter. But I side with Iran’s rulers against Trump and his illogical pressure on Iran,” said hairdresser Ziba Ghanbari, 42, when contacted by Reuters in the northern city of Rasht.

Iranians around the globe took to social media in anger.

Former official Mostafa Tjzadeh, who spent seven years as a prisoner of conscience in Iran, tweeted: “One nation, One message: No to #Trump. We are in this together.” 

“Long on rhetoric, short on substance,” tweeted Niloofar Ghadiri, a journalist in Tehran. 

Economic hardship 

Iranian authorities say 15 per cent of the country’s workforce is unemployed. Many formal jobs pay a pittance, meaning the true figure of people without adequate work to support themselves is probably far higher. 

Lack of foreign investment, if more sanctions are imposed, will deepen the unemployment crisis. Currency exchange shops are refusing to sell US dollars because of the uncertainty as the rial has lost value in the past days. Iranians fear new sanctions will also see the price of food, including rice, bread and dairy products, rise. 

“My worry is that the economy will go back to the sanctions era when we had difficulties to find essential food and even medicine. I want my son to have a good life,” said elementary school teacher Gholamali Part, 43, in Tehran.

To improve Iran’s economy, Rouhani has rolled out the red carpet for global investors since sanctions were suspended. But so far only a few major European investors have returned to Iran’s market, including planemaker Airbus, French energy group Total and Germany’s Siemens. 

Others are deterred mainly by a separate raft of sanctions Washington continues to impose in retaliation for what it calls Tehran’s support for terrorism and human rights abuses. Iran denies involvement in terrorism.

The nuclear deal was also signed by China, France, Russia, Britain, Germany and the European Union. Despite assurances by other signatories over their continued commitment, European companies could think twice about involvement in Iran if the deal cannot survive.

Hossein, like millions of Iranians who bore the brunt of the sanctions, has no high hopes. “We are going to be sanctioned again,” said Hossein, who declined to give his full name.

‘Rare unanimity’

Inflation has dropped to single digits since Rouhani was first elected in 2013, but he has failed to tackle high unemployment and the gap between rich and poor is widening.

The hardline daily Kayhan, which campaigned against the deal during 18-months of the nuclear talks, wrote: “Trump keeps the nuclear pact: advantages for America, restrictions for us!”

In a report headlined “Mr Blunder’s isolation”, the moderate Arman daily wrote: “’A rare unanimity supports Iran in the World’ is the closest definition of the mood after Trump’s speech last night.”

Some Iranians are indifferent. “I don’t care. Will there be holidays if the deal fails? That is important because I can go on a holiday with my friends,” said Arjang Bakhtiari, 19, whose family owns factories in several cities. 

Trump’s decision in effect leaves the fate of the deal up to the US Congress, which might try to modify it or bring back US sanctions previously imposed on Iran.

The failure of the deal could be politically tricky for Rouhani, its chief architect, who has been criticised by the country’s utmost power, Supreme Leader Ayatollah Ali Khamenei, for the country’s slow pace of economic recovery. 

Khamenei cautiously backed the deal, but has repeatedly expressed pessimism about the United States remaining committed to it. The economic problems caused by the US  pressure could weaken Rouhani’s stance in Iran’s faction-ridden and complex establishment.

DUBAI — A massive slide in the economic growth of Middle East top oil exporters is weighing heavily on the outlook for the entire region, the International Monetary Fund (IMF) said on Tuesday.

“Fuel exporters are particularly hard hit by the protracted adjustment to lower commodity revenues,” the IMF said in its World Economic Outlook for October.

Iran’s growth is forecast to slide to 3.5 per cent this year down from a strong 12.5 per cent in 2016. 

Iraq’s economy, which experienced healthy 11 per cent growth in 2016, is expected to fall into negative territory and shrink by 0.4 per cent this year.

The Saudi economy, the largest in the region, is forecast to end 2017 flat — down from 1.7 per cent growth last year.

Saudi Arabia, Iraq and Iran are the top oil producers and exporters in the Middle East. Riyadh is the world’s top oil exporter.

Kuwait’s economy is projected to shrink the most among oil exporters, by 2.1 per cent, while the economies of the United Arab Emirates and Algeria will grow at a modest rate, the IMF said.

In all, the growth of MENA oil exporters Iran, Iraq, Algeria and the six Gulf Cooperation Council states is forecast to end this year at 1.7 per cent from 5.6 per cent in 2016.

MENA growth as a whole is projected to more than halve in 2017, from 5.1 per cent to 2.2 per cent, “on the back of a slowdown in the Islamic Republic of Iran’s economy after very fast growth in 2016 and cuts in oil production in oil exporters”, the IMF said.

It projected the price of oil to average $50.3 a barrel in 2017, higher than the previous year, but will remain in the 50s until 2022.

Regional oil exporters have lost hundreds of billions of dollars in revenue since crude prices began to slump in mid-2014.

As a result, they have posted budget shortfalls and some have resorted to painful reforms.

The IMF welcomed Saudi Arabia’s reform package, although it has already sent the kingdom’s economy into the red in the first two quarters of the year.

In contrast to these exporters, economic growth in oil-importing nations — which include Egypt, Morocco, Sudan and others — is forecast to improve to 4.3 per cent this year from 3.6 per cent in 2016, the IMF said.

The IMF had a better outlook for 2018, forecasting a rebound in growth to 3.2 percent compared with just 3 per cent in its July outlook.

The adjustment is due to stronger domestic demand in oil-importing countries and an expected rise in oil output.

The diplomatic rift between Organisation of Petroleum Exporting Countries member Qatar — also the world’s top exporter of liquefied natural gas — and a Saudi-led Arab bloc has not affected oil and gas markets, as Qatar’s exports have continued, the IMF said.

However, the report warned of the impact of ongoing conflicts, both domestic and regional.

“Internal and cross-border conflict in parts of the Middle East still weighed on economic activity,” it said.

KHARTOUM — Sudan’s economy is headed towards gradual recovery, Finance Minister Mohamed Othman Rukabi said at a forum on Saturday, just one day after the US lifted its 20-year-old economic sanctions opening the way for critical economic reforms and badly needed investment. 

The move will suspend a trade embargo, unfreeze assets and remove financial restrictions that have hobbled the Sudanese economy.

“Lifting the sanctions leads to increasing growth and production rates, but in order to benefit from this chance we must bring down inflation, increase exports, decrease imports and government spending, lift subsidies on basic goods and attract foreign investment,” Rukabi said. 

Sudan’s economy has struggled since the south seceded in 2011, taking with it three-quarters of the country’s oil output, its main source of foreign currency and government income.

Price rises have been compounded by the government’s decision late last year to cut fuel and electricity subsidies in a bid to tighten its finances. Petrol prices rose by about 30 per cent, leading to broader inflation.

“The finance minister’s comments on reducing inflation and government spending and increasing exports would not have been possible before the sanctions were lifted and now there is hope that Sudan can operate under normal conditions,” said Bakri Youssef, general secretary of the Federation of Sudanese Businessmen.

The United States lifted long-standing sanctions against Sudan on Friday, saying Sudan had made progress fighting terrorism and easing humanitarian distress, and also secured Khartoum’s commitment not to pursue arms deals with North Korea.

Khartoum is hopeful that the move would help it regain access to global financial markets which could help draw in badly needed investment and raise prospects for a recovery.

LONDON — The British pound sank on Thursday as investors fretted over Prime Minister Theresa May’s political future one day after a “shambolic” speech to the Conservative Party’s annual conference, analysts said.

By about (15:15 GMT), sterling had dived to a one-month low at $1.3122.

Earlier, the European single currency had hit a three-week pinnacle at 89.33 pence per euro.

“After Theresa May’s speech at the Tory party conference on Wednesday, there are rumours that she will be asked to step down by her own party,” said City Index analyst Kathleen Brooks.

“The prospect of a leaderless UK in the middle of the Brexit process, or even worse, a Prime Minister Boris [Johnson], are right to unnerve sterling traders.”

She added that the market “seems to be ignoring some fairly solid economic data, progress in the Brexit talks, and a weaker dollar and euro, in favour of politics”.

May’s conference speech dominated Thursday’s newspapers, which had sympathy for her bad luck but bleak warnings about what the string of misfortunes signalled for her leadership.

The premier was hoping to use the keynote speech to reassert her authority following a dismal election showing.

However, she was interrupted by a comedian handing her a fake notice of unemployment, before succumbing to a persistent cough in front of a collapsing set.

“Sterling is coming under pressure again... following speculation that Theresa May’s position is increasingly under threat following yesterday’s shambolic speech,” added Oanda analyst Craig Erlam.

“A change of leadership so soon after the election and just as Brexit talks appear to be making some progress may seem like a ludicrous idea — but a leadership challenge has been brewing since the disastrous election campaign.”