Oil producers will find it challenging to reach an agreement at a virtual meeting of Opec+ producers as deeper cuts for oil-revenue dependent economies could come at a high economic cost, analysts say.
The Opec+ alliance headed by Saudi Arabia and Russia is set to meet on Thursday after US President Donald Trump lobbied them to consider cutting back 10 to 15 million barrels per day of output.
Mr Trump's suggestion of record volume output curbs sent crude futures surging as high as 30 per cent last week.
His comments came amid a decline in oil prices, which fell 70 per cent from their peak in January.
The crunch in oil demand caused by the two-month lockdown in China, the centre of the coronavirus pandemic that has spread to nearly every country in the world, has hit air and land transport.
Countries have closed borders and grounded airlines in an effort to contain the spread of the infectious disease through quarantine measures.
Oil prices were also affected by Russia's reluctance to agree to deeper cuts – a move that led to the collapse of the Opec+ pact in March and prompted Saudi Arabia and the UAE to pledge to bring more supply to markets.
The producers sought to claim back the market share lost to about three years of production cuts.
"I think it makes sense for now to reach an agreement to eliminate at least the supply element and the decline in oil prices will in any way filter out some of the higher-cost producers," Ziad Daoud, chief economist for the Middle East at Bloomberg, told delegates at a virtual conference organised by the Arab Gulf States Institute in Washington on Tuesday.
The Opec+ meeting on Thursday will be followed by a virtual summit of G20 energy ministers on Friday.
The involvement of the US in any kind of production cuts – the world's largest oil and gas producer – could be challenging, noted Edward Bell, commodity analyst at Emirates NBD.
"Other producing countries that are dominated by a single state-linked producer have indicated they would be willing to support production cuts," Mr Bell said.
"But the US has no single national producer that could agree to cut output in a meaningful enough way to contribute to a 10 to 15m bpd agreement".
Norway and Brazil, which have state-backed companies, will participate in the G20 meeting.
However, the US energy landscape is dominated by thousands of independent shale producers who lack a single voice of representation.
In spite of advocating steeper cuts by Opec+, Mr Trump has been unwilling to single out his own industry for any significant contribution. He has said that the free market will decide supply and demand for crude.
US shale independents are already being squeezed, with one producer, Whiting Petroleum, filing for bankruptcy earlier this month. A refinery in Canada's Newfoundland province also closed while all refineries in Nigeria, an Opec member, were set to shut down on Wednesday.
Vandana Hari, founder and chief executive at Singapore-based Vanda Insights, said Opec+ would probably announce some sort of informal agreement "forged in advance" and rubber-stamped at the virtual meeting.
Should the meeting be delayed again, it would send a "major negative signal to the market", she said.
There is a chance that Mr Trump's ambitious request for cuts of up to 15 million bpd will not be met.
"The current 23-member Opec+ configuration could come up with six to seven million bpd of collective cuts, contingent on the US, Canada, Norway, Brazil and perhaps a couple of other producers pitching in with four million bpd or more, " Ms Hari said.
Nasser Saidi, of economic advisory company, Nasser Saidi & Associates, is even more sceptical of producers reaching a 10 million bpd reduction.
"That is impossible to achieve. They couldn't agree on 200,000-300,000 bpd reduction [in March], then no way anybody is going to agree on 10 million bpd. That's outlandish," he told the Arab Gulf States Institute in Washington conference.
He expects some sort of reduction that is unlikely to cause significant ripples in a market that has collapsed from low economic activity and a significant slowdown in transportation.
Fighter profiles
Gabrieli Pessanha (Brazil)
Reigning Abu Dhabi World Pro champion in the 95kg division, virtually unbeatable in her weight class. Known for her pressure game but also dangerous with her back on the mat.
Nathiely de Jesus, 23, (Brazil)
Two-time World Pro champion renowned for her aggressive game. She is tall and most feared by her opponents for both her triangles and arm-bar attacks.
Thamara Ferreira, 24, (Brazil)
Since her brown belt days, Ferreira has been dominating the 70kg, in both the World Pro and the Grand Slams. With a very aggressive game.
Samantha Cook, 32, (Britain)
One of the biggest talents coming out of Europe in recent times. She is known for a highly technical game and bringing her A game to the table as always.
Kendall Reusing, 22, (USA)
Another young gun ready to explode in the big leagues. The Californian resident is a powerhouse in the -95kg division. Her duels with Pessanha have been highlights in the Grand Slams.
Martina Gramenius, 32, (Sweden)
Already a two-time Grand Slam champion in the current season. Gramenius won golds in the 70kg, in both in Moscow and Tokyo, to earn a spot in the inaugural Queen of Mats.
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
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What is tokenisation?
Tokenisation refers to the issuance of a blockchain token, which represents a virtually tradable real, tangible asset. A tokenised asset is easily transferable, offers good liquidity, returns and is easily traded on the secondary markets.
Yahya Al Ghassani's bio
Date of birth: April 18, 1998
Playing position: Winger
Clubs: 2015-2017 – Al Ahli Dubai; March-June 2018 – Paris FC; August – Al Wahda
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Skoda Superb Specs
Engine: 2-litre TSI petrol
Power: 190hp
Torque: 320Nm
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Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
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