Pro-Hamas militiamen in Iraq halt oil supplies to Jordan

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Border unrest has forced oil supplies from Iraq to Jordan to stop, authorities in the two countries said on Thursday, in a new regional development caused by the Israel-Gaza war.

Iraqi militiamen supported by Iran and other Tehran loyalists, numbering several hundred, have been protesting near the border crossing of Trebel, with government support, since October 20, demanding access to travel through Jordan to fight against Israel.

The oil volumes, sourced from the northern Kirkuk fields and transported by tanker through the western Iraqi governorate of Anbar, are minimal, compared with Jordan's overall energy imports.

But they are a barometer of ties between the two countries.

An Iraqi oil ministry official said the authorities in Baghdad are talking with people linked to the protest – who he did not name – “to allow these trucks to cross the border".

“We expect the issue will be resolved soon,” he told The National.

The relationship between Jordan and Iraq deteriorated with the Iran-supported Shiite political ascendancy that followed the removal of Saddam Hussein in 2003. Since then, the movement of Iraqi oil has often been blocked, depending on the status of political ties between Amman and Baghdad.

Baghdad is widely seen in Amman and other Middle East capitals as having become a satellite of Iran in the past decade, with militias in Iraq and Syria attacking US and other targets.

These attacks have increased since the Gaza war started.

Tehran has been calling for Israel to be attacked from all sides in support of Hamas, the Tehran-backed militant group that began the war with a surprise raid on Israel on October 7.

But its militia allies have avoided waging sustained warfare, so far. Some Iranian officials in the Islamic Revolutionary Guard Corps have also said they may directly attack Israel if the war continues.

Jordanian authorities have angrily called for halt in the Israeli operation on Gaza, which is supported by Washington. But they have avoided any criticism of the United States.

Another Iraqi official said that the militiamen amassed at Trebil “only want to draw attention to themselves”, and constitute no threat to Jordan.

The kingdom is a major recipient of US aid and has a military agreement with Washington. Its 310km border with Israel is governed by a 1994 peace treaty. The Jordanian-Iraqi border is 180km long.

A western official said that the militia border deployment is “an Iranian message to Jordan”.

“This is how the Iranians apply pressure,” said the official, who is on a visit to Amman and did not want to be named. "It is a warning that Jordan is not immune to infiltration."

“All you have to do is look at the map and see that Jordan is in the way between Israel and Iran’s proxies in Iraq and Syria.”

The Iraqi oil, which amounts to 10,000 barrels per day, constitutes 7 per cent to 10 per cent of Jordan’s consumption, a Jordanian Energy Ministry official said.

The rest of Jordan’s oil needs are imported overland from Saudi Arabia, which will cover any drop in oil imports, he said.

The official said that the oil tankers have been forced to go back to Ramadi, the capital of Anbar province this week to protect “the safety of the drivers and the trucks”.

He said the kingdom’s strategic reserve of crude oil amounts to 44 days of consumption, while the oil products reserves would last for two months.

Four reasons global stock markets are falling right now

There are many factors worrying investors right now and triggering a rush out of stock markets. Here are four of the biggest:

1. Rising US interest rates

The US Federal Reserve has increased interest rates three times this year in a bid to prevent its buoyant economy from overheating. They now stand at between 2 and 2.25 per cent and markets are pencilling in three more rises next year.

Kim Catechis, manager of the Legg Mason Martin Currie Global Emerging Markets Fund, says US inflation is rising and the Fed will continue to raise rates in 2019. “With inflationary pressures growing, an increasing number of corporates are guiding profitability expectations downwards for 2018 and 2019, citing the negative impact of rising costs.”

At the same time as rates are rising, central bankers in the US and Europe have been ending quantitative easing, bringing the era of cheap money to an end.

2. Stronger dollar

High US rates have driven up the value of the dollar and bond yields, and this is putting pressure on emerging market countries that took advantage of low interest rates to run up trillions in dollar-denominated debt. They have also suffered capital outflows as international investors have switched to the US, driving markets lower. Omar Negyal, portfolio manager of the JP Morgan Global Emerging Markets Income Trust, says this looks like a buying opportunity. “Despite short-term volatility we remain positive about long-term prospects and profitability for emerging markets.”

3. Global trade war

Ritu Vohora, investment director at fund manager M&G, says markets fear that US President Donald Trump’s spat with China will escalate into a full-blown global trade war, with both sides suffering. “The US economy is robust enough to absorb higher input costs now, but this may not be the case as tariffs escalate. However, with a host of factors hitting investor sentiment, this is becoming a stock picker’s market.”

4. Eurozone uncertainty

Europe faces two challenges right now in the shape of Brexit and the new populist government in eurozone member Italy.

Chris Beauchamp, chief market analyst at IG, which has offices in Dubai, says the stand-off between between Rome and Brussels threatens to become much more serious. "As with Brexit, neither side appears willing to step back from the edge, threatening more trouble down the line.”

The European economy may also be slowing, Mr Beauchamp warns. “A four-year low in eurozone manufacturing confidence highlights the fact that producers see a bumpy road ahead, with US-EU trade talks remaining a major question-mark for exporters.”