Iran's oil production fell below Iraq's last year. Vahid Salemi / AP
Iran's oil production fell below Iraq's last year. Vahid Salemi / AP

High oil prices can cushion impact of Iran sanctions



'You can see the current economic situation of the people, I hope someone would take the responsibility for that," said the Iranian football star Ali Daei. For any major oil exporter, being cut off from some of the world's largest markets, subject to steadily constricting curbs on its remaining customers, prevented from shipping or insuring cargoes, denied payments, forbidden imports of technology and fuels, would seem to mean certain relegation from the top division.

A report by the Energy Information Administration on Iran, just released in the United States, details some of the impacts of sanctions. Multi-layered sanctions have been imposed by the US, European Union and United Nations over Iran's nuclear programme.

The toughest measures came from late 2011 onwards. Iranian oil exports dropped in 2012 by 39 per cent, to their lowest level since 1986, when the Iran-Iraq War was still raging. Still Opec's third-largest exporter at the start of 2012, by the year's end it was only seventh.

In the middle of 2012, its production fell below long-time rival Iraq's for the first time in a quarter of a century. Barring state collapse in Iraq, the Iranians will probably never overtake the Iraqis again.

Iran's inflation rate, officially 30 per cent, may have surpassed 80 per cent in reality. The rial has collapsed from 10,700 to the dollar to around 35,000 on the black market. Only four basic food items are still subsidised; cooking oil is now off the list, and lower-income Iranians can barely afford meat.

This gloomy litany seems to validate the observations of sanctions supporters that, as the White House claimed, sanctions are working or, as the Israeli finance minister declared in September, that Iran's economy "is on the verge of collapse".

But such assessments underestimate Iran's ability to adapt, and its leadership's willingness for its people to suffer.

Even at reduced export levels, Iran is benefiting from near-record oil prices. As recently as the 1999 oil price slump, it was receiving just $250 per person in oil export revenues; in 2012,that grew to $875. And 2011's inflation-adjusted oil revenues of around $95 billion were the second-highest the country has ever received, after 1974.

The sanctions have laid bare the Iranian administration's remarkable incompetence and waste. This historic oil boom was squandered on handouts, corruption and a surge of imports encouraged by a wildly overvalued exchange rate.

If anything, the collapse of the rial has returned it to a realistic rate, given Iran's continuing high inflation, making domestic industry more competitive. Ironically, sanctions pressure has spurred Tehran's fractious polity to take long-needed steps, upgrading domestic oil refining and removing costly energy subsidies. The economy shrank 1.9 per cent last year - serious, but hardly comparable to Greece's 6.8 per cent fall.

Iran's rather diversified and self-sufficient economy is much better-placed to weather sanctions than Iraq's after its invasion of Kuwait in 1990.

The global oil market balance is easing - otherwise such stringent sanctions could never have been imposed - but China and others will always be keen to buy Iranian oil. Iran will offer discounts; its trading partners will devise diversions to sidestep western dominance of finance, insurance and shipping.

The technical efficacy of sanctions is a question apart from their morality, or their effects on Iranian society and a potentially pro-democracy middle class and civil society. Pseudo-privatisation and lobbying government for favours is creating a class that not only copes with sanctions, but even benefits.

Sanctions may be western diplomats' best available choice, from a rather undesirable menu. They may encourage Tehran to keep negotiating. But advocates should not have rosy ideas that sanctions will bring the speedy collapse of the regime in Tehran, or lead to a unilateral surrender of its nuclear programme.

Robin Mills is the head of Consulting at Manaar Energy, and the author of The Myth of the Oil Crisis and Capturing Carbon

Jeff Buckley: From Hallelujah To The Last Goodbye
By Dave Lory with Jim Irvin

COMPANY PROFILE
Name: HyperSpace
 
Started: 2020
 
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
 
Based: Dubai, UAE
 
Sector: Entertainment 
 
Number of staff: 210 
 
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Dubai Bling season three

Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed 

Rating: 1/5

Game Changer

Director: Shankar 

Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram

Rating: 2/5

'Spies in Disguise'

Director: Nick Bruno and Troy Quane

Stars: Will Smith, Tom Holland, Karen Gillan and Roshida Jones 

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Investing success often hinges on discipline and perspective. As markets fluctuate, remember these guiding principles:
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The specs

AT4 Ultimate, as tested

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Nayanthara: Beyond The Fairy Tale

Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni

Director: Amith Krishnan

Rating: 3.5/5

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COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
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Tree of Hell

Starring: Raed Zeno, Hadi Awada, Dr Mohammad Abdalla

Director: Raed Zeno

Rating: 4/5

The biog

Age: 59

From: Giza Governorate, Egypt

Family: A daughter, two sons and wife

Favourite tree: Ghaf

Runner up favourite tree: Frankincense 

Favourite place on Sir Bani Yas Island: “I love all of Sir Bani Yas. Every spot of Sir Bani Yas, I love it.”

Company Profile

Company name: Big Farm Brothers

Started: September 2020

Founders: Vishal Mahajan and Navneet Kaur

Based: Dubai Investment Park 1

Industry: food and agriculture

Initial investment: $205,000

Current staff: eight to 10

Future plan: to expand to other GCC markets

Results
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Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.

When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.

How to get there: Emirates currently flies from Dubai to Orlando five times a week.
What is the definition of an SME?

SMEs in the UAE are defined by the number of employees, annual turnover and sector. For example, a “small company” in the services industry has six to 50 employees with a turnover of more than Dh2 million up to Dh20m, while in the manufacturing industry the requirements are 10 to 100 employees with a turnover of more than Dh3m up to Dh50m, according to Dubai SME, an agency of the Department of Economic Development.

A “medium-sized company” can either have staff of 51 to 200 employees or 101 to 250 employees, and a turnover less than or equal to Dh200m or Dh250m, again depending on whether the business is in the trading, manufacturing or services sectors. 

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How to avoid crypto fraud
  • Use unique usernames and passwords while enabling multi-factor authentication.
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  • Avoid suspicious social media ads promoting fraudulent schemes.
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COMPANY PROFILE
Name: ARDH Collective
Based: Dubai
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Sector: Sustainability
Total funding: Self funded
Number of employees: 4
Squid Game season two

Director: Hwang Dong-hyuk 

Stars:  Lee Jung-jae, Wi Ha-joon and Lee Byung-hun

Rating: 4.5/5

Results

6.30pm: Madjani Stakes Group 2 (PA) Dh97,500 (Dirt) 1,900m, Winner: RB Frynchh Dude, Pat Cosgrave (jockey), Helal Al Alawi (trainer)

7.05pm: Maiden (TB) Dh82,500 (D) 1,400m, Winner: Mnasek, Dane O’Neill, Doug Watson.

7.40pm: Maiden (TB) Dh82,500 (D) 1,600m, Winner: Grand Dubai, Sandro Paiva, Ali Rashid Al Raihe.

8.15pm: Handicap (TB) Dh87,500 (D) 2,200m, Winner: Meqdam, Sam Hitchcock, Doug Watson.

8.50pm: Dubai Creek Mile Listed (TB) Dh132,500 (D) 1,600m, Winner: Thegreatcollection, Pat Cosgrave, Doug Watson.

9.25pm: Conditions (TB) Dh120,000 (D) 1,900m, Winner: Sanad Libya, Richard Mullen, Satish Seemar.

10pm: Handicap (TB) Dh92,500 (D) 1,400m, Winner: Madkhal, Adrie de Vries, Fawzi Nass.

Paatal Lok season two

Directors: Avinash Arun, Prosit Roy 

Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong

Rating: 4.5/5

Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
 
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
Round 3: February 7-9, Dubai Autodrome – Dubai
 
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Our legal advisor

Ahmad El Sayed is Senior Associate at Charles Russell Speechlys, a law firm headquartered in London with offices in the UK, Europe, the Middle East and Hong Kong.

Experience: Commercial litigator who has assisted clients with overseas judgments before UAE courts. His specialties are cases related to banking, real estate, shareholder disputes, company liquidations and criminal matters as well as employment related litigation. 

Education: Sagesse University, Beirut, Lebanon, in 2005.

The bio

Favourite book: The Alchemist by Paulo Coelho

Favourite travel destination: Maldives and south of France

Favourite pastime: Family and friends, meditation, discovering new cuisines

Favourite Movie: Joker (2019). I didn’t like it while I was watching it but then afterwards I loved it. I loved the psychology behind it.

Favourite Author: My father for sure

Favourite Artist: Damien Hurst

The biog

Born November 11, 1948
Education: BA, English Language and Literature, Cairo University
Family: Four brothers, seven sisters, two daughters, 42 and 39, two sons, 43 and 35, and 15 grandchildren
Hobbies: Reading and traveling

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Electric scooters: some rules to remember
  • Riders must be 14-years-old or over
  • Wear a protective helmet
  • Park the electric scooter in designated parking lots (if any)
  • Do not leave electric scooter in locations that obstruct traffic or pedestrians
  • Solo riders only, no passengers allowed
  • Do not drive outside designated lanes
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Sonchiriya

Director: Abhishek Chaubey

Producer: RSVP Movies, Azure Entertainment

Cast: Sushant Singh Rajput, Manoj Bajpayee, Ashutosh Rana, Bhumi Pednekar, Ranvir Shorey

Rating: 3/5

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New schools in Dubai