RuSSIan SanCTIOnS ShIfT OIL PRICe MakIng POweR TO aSIa fROM euROPe

profIt reuters wESTERNsanctions on Russian and Iranian oil have channelled cheap fuel to Asia and in the process eroded a decades-long trend whereby the continent has paid more for energy than Europe, according to traders, analysts and Refinitiv Eikon data.

Analysts and government officials from consumer countries use the term Asian premium to refer to the higher prices Asian importers have paid for oil sold by big exporters, such as members of the Organization of the Petroleum Exporting Countries.

For Asia, a weakened premium amounts to an economic stimulus, highlighting another unintended consequence of the Western sanctions on oil and gas exporter Moscow, which also led to a surge in the amount Europeans have paid for natural gas.

“It’s safe to say that some major consumers in Asia, most notably India and China, are the major winners of the sanctions,” Ole Hansen, head of the commodity strategy at Saxo Bank, said.

Western Sanctions have led Russia to sell more than twice as much crude to Asia in the year to January, according to Kepler data. Iran, under US sanctions, has boosted exports to the highest in three years on some estimates, with China as the biggest buyer.

Russia’s flagship export blend Urals, which before the Ukraine invasion was sold in Europe at a few dollars a barrel below the value of benchmark dated Brent, is being sold in Asia at a discount of minus $24, according to Refinitiv Eikon data. Some industry sources, asking not to be named, say the discount is narrower at $10-$15 per barrel. price-takers and makers

Even at a discount of around $15 per barrel, a refinery in India processing 200,000 barrels per day would save $3 million a day on its crude purchases compared to a European rival. On an annual basis, the saving would exceed $1 billion.

Hardeep Singh Puri, India’s oil minister, said in early February the country will keep buying from Russia if prices “continue to be good”.

The Asian premium dates back to when producer countries began issuing market prices for their crude in the 1980s, and they could be higher for buyers in Asia, who were more dependent on imports, making them price-takers.

Asian buyers have made previous attempts to erode the premium, investing in refining capacity to boost their demand and improve their negotiating power.

Saudi Arabia and other leading exporters have reflected the current shifts in significantly lower official selling prices (OSPs) expressed as differentials to regional benchmarks.

In the three months to February, Saudi Arabia reduced prices for its flagship Arab Light for Asian buyers – although it has increased the prices for April- and March-loading crude.

Even so, since November, Saudi Arabia has lowered the differential for Arab Light sold in Asia by $3.35 a barrel.

China to allow foreign tourist visas for first time since 2020

BEIJING reuters

China said that it will reopen its borders to foreign tourists for the first time in three years since the outbreak of the Covid-19 pandemic by restoring the issuance of all types of visas from Wednesday. The removal of this last cross-border control measure imposed to guard against Covid-19 comes after authorities last month declared victory over a recent surge in the virus.

The boost to the tourism sector should help rekindle a $17 trillion economy that last year suffered one of its slowest rates of growth in nearly half a century.

Areas in China that required no visas prior to the pandemic will revert to visa-free entry, the foreign ministry said on Tuesday. This will include the southern tourist island of Hainan and cruise ships passing through Shanghai port. Visa-free entry to the southern manufacturing hub of Guangdong for foreigners from Hong Kong and Macau will also be resumed.

The ministry also said foreigners holding visas issued before March 28, 2020 that are still within their validity dates will also be able to enter China.

“Resuming applications for all types of visas removes another significant barrier in the resumption of normal travel between the UK and China,” Tom Simpson, managing director, China-Britain Business Council, told Reuters. “The (council) has already seen business travel applications and arrivals begin to increase since January, however, this news should lead to a significant increase in visits in particular for tourism.” outbound travel: China, which withdrew its advisory to citizens against foreign travel in January, also added another 40 countries to its list for which group tours are allowed, bringing the total number of countries to 60. Inbound and outbound international flights in the week of March 6 rose more than 350% compared with a year earlier to nearly 2,500 flights, according to Chinese flight tracking APP Flight Master, though the number was still just 17.4% of 2019 levels. In 2022, just 115.7 million cross-border trips were made in and out of China, with foreigners accounting for around 4.5 million. By contrast, China logged 670 million overall trips in 2019 before the arrival of Covid19, with foreigners accounting for 97.7 million.

Beijing abandoned its draconian zero-Covid policies in December and in January cancelled quarantine requirements for incoming travellers.

New Premier Li Qiang said on Monday that China took less than two months to achieve a “smooth transition” in its response to Covid-19 and that the country’s strategies and measures had been completely correct.

SCO members to consider jointly developing emerging fuel projects

The differential for sales to Europe basis Ras Tanura has been increased over the same period by 10 cents a barrel.

Other big OPEC exporters Iraq and Kuwait have also reduced their OSPs to Asia since November. Iraq, the only one of the two which also issues prices for Europe, has cut the differentials for Basrah Medium and Heavy to Asia and increased them to Europe.

“Iran and now Russia increasingly compete on price and the other Middle East producers must adjust their prices accordingly – the result being relatively higher selling prices to Europe,” Saxo Bank’s Hansen said.

europe loses supply source

India was among those to have complained about the Asian premium they paid to the big exporters.

“The Asians used to have less options than the rest of the world as their pricing needed to attract long-haul exports,” said Jorge Montepeque, who during decades working at S&P Global Platts, developed the dated Brent pricing benchmark. “So by definition the Asians had to pay up, while Europe and America had indigenous supplies.”

Now, with Europe losing Russian crude as a source of supply, the continent needs to draw oil from further afield and “in theory, the Middle East pricing becomes worse for the Europeans,” he said.

The outright price of Arab Light crude, according to an approximation based on Refinitiv data, in Europe moved closer to parity and sometimes exceeded that for Asia in 2023.

In 2021 and early 2022, the price in

Asia was mostly at a premium, as shown by the chart below.

‘no free market’ Neil Atkinson, an independent analyst and former senior International Energy Agency official, said the drop in Russia’s Western shipments and its discounted Indian sales were making the Asian premium redundant.

“These normal sorts of patterns of Asian premium or discount don’t really apply,” he said. “The circumstances are so extraordinary. We don’t have essentially the free market that we would have in normal times.”

In another example of firmer European crude markets, Norwegian Johan Sverdrup crude on February 16 was offered at a premium to dated Brent, up from a $5.15 discount in late November. It is unclear whether it found a buyer.

Sverdrup, from Europe’s largestproducing oilfield, made its market debut in 2020. Initially, most shipments went to Asia. After the imposition of sanctions on Russia following its invasion of Ukraine began in February last year, most of the shipments of Sverdrup remain in Europe and have replaced the Russian Urals for many refiners.

Not all see Europe paying elevated prices for the longer term as other suppliers, from which Asia is buying less fill the gap – and an end to the Ukraine war could restore the flow of Russian crude.

“Once the war is over, I believe some normality will return and eventually sanctions will be lifted allowing Russia to compete on equal terms for customers,” Saxo Bank’s Hansen said.

Chinese Premier’s down-to-earth approach charms the world

ISLAMABAD

Mian abrar

Chinese Premier Li Qiang held his first press conference as China’s premier on Monday morning, during which he addressed various key issues concerning the Chinese economy, vowing to further stabilize growth, prices and employment, while making new progress on high-quality development, supporting private businesses and continuing to open up China’s market to the world.

Li’s remarks, coming just two days after he was endorsed as Chinese Premier on Saturday, reflected his down-to-earth approach after working at various levels of local governments in economic powerhouses in eastern China, which inspires confidence among private businesses and the broader Chinese society about the country’s economic and social development prospect, economists said. challenges vs bright future: During the press conference which lasted about 82 minutes, Li, with a steadfast tone and great eloquence, addressed risks and challenges facing the Chinese economy head-on and projected confidence in its future prospects.

On the government’s GDP growth target of around 5 percent for 2023, Li said the target was set after taking into account all factors, but China’s economic output has exceeded 120 trillion yuan, the base is very high and there is no shortage of new challenges this year.

“To achieve the 2023 gross domestic product (GDP) growth target of around 5 percent on the current high base of China’s economic output is no easy task and requires redoubled efforts ,” Li said.

The Premier said that the emphasis will be placed on ensuring stable growth, employment and prices, and the key to seeking progress lies in making new advancement in high-quality development. Specifically, China will make good use of a number of policy mixes in leveraging macro policies, expanding demand, advancing reform and innovation, and preventing and defusing risks, Li said, adding that the country will enrich, adjust and improve these policies in the course of implementation.

Despite the challenges, China also enjoys a series of advantages in its economic and social development, including a vast market, a complete industrial system, abundant human resources, solid foundation for development, and most importantly, notable institutional strength, Li said, noting he is fully confident of China’s economic prospect. “[China’s economy] will break winds and waves and sail toward a bright future.”

The Premier’s remarks, particularly his down-to-earth approach and his eloquence, boosted confidence in China’s development.

Notably, following the press conference, Chinese stocks closed higher on Monday, with the benchmark Shanghai Composite Index gaining 1.2 percent, even as stock markets in most of Asia Pacific were down due largely to the fallout of the collapse of two banks in the US.

“In general, [the press conference] was down-to-earth with vernaculars that ordinary people can understand,” Tian Yun, a Beijing-based economist, told the Global Times on Monday, noting that the most impressive thing was the focus on promoting the practice of research and studies among officials at all levels.

As part of efforts to improve the conduct of the government, Li said that government officials at all levels will be encouraged to engage more with local communities to learn about what the people need and seek their opinions on the work of the government.

“I have worked at the local level for a long time and I have a deep feeling: When sitting in the office, there are all problems; but when going into the grassroots, there are solutions. The bests are among the people,” Li said.

Throughout the press conference, the Premier also repeatedly referred to his experience working in local governments. When asked about China’s opening-up policies and China-US relations, Li said he worked in Shanghai for the most part of last year, senior managers of multinational corporations he had talked to were all optimistic about the future of Shanghai and China, and they all believed that cooperation is the sure path to win-win outcomes.

The Shanghai Cooperation Organisation (SCO) said on Tuesday that its members, including Russia, China and India, would consider jointly developing emerging fuel projects to connect countries emerging as major fuel producers and consumers. Energy ministers from the regional bloc, which also includes Pakistan and four Central Asian nations, met virtually on Tuesday when member states agreed on the need for greater collaboration in the emerging fuels sector, according to a joint statement.

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TPL Life onboards

15,000 potential life insurance agents on ‘Muavin’

TPL Life Insurance Limited, Pakistan’s 1st InsurTech enterprise in the innovative insurance business, has launched the country’s most revolutionary Virtual Life Insurance Agent Learning & Earning Platform –“Muavin.” A means for every Pakistani to create an alternate or regular income stream by selling TPL Life’s insurance products. The user can sign-up for free on Muavin, complete the learning phase while referring to available video lectures & course material, become a certified Muavin, start selling from anywhere in Pakistan, and earn a commission for successful sales. A means for every Pakistani to create an alternate or regular income stream by selling TPL Life’s insurance products. The user can sign-up for free on Muavin, complete the learning phase while referring to available video lectures & course material, become a certified Muavin, start selling from anywhere in Pakistan, and earn a commission for successful sales. pr

Building Infrastructure Vital for country’s Sustainability

Karachi: InfraZamin collaborated with Nutshell Group to jointly host Pakistan’s first ever Infrastructure Summit at a local hotel in Karachi. Infrastructure development helps reduce unemployment and stimulates economic growth. In his welcome address, Muhammad Azfar Ahsan, Founder & CEO, Nutshell Group, and former Minister of State & Chairman, Board of Investment, said, “For infrastructure, we need political stability for an empowered public sector funding and though there is a huge potential for economic growth through foreign direct investment, we need to focus on the local investors first and mobilize that money on priority.” pr