Talks on de-escalating the aerial war between Israel and Iran could begin in days, observers said on Sunday, citing channels through Oman and widespread desire for containment, especially by Tehran, which faces a threat to its oil production.
No one, however, is ruling out miscalculations that could widen the war, especially after Israeli attacks wiped out a significant part of Iran’s top military echelon, and given the presences of hardline figures on both sides who might push for a maximalist posture. Israel appears to have widened its publicly declared goals from degrading the nuclear programme to destroying Iran’s missile capabilities. Iran, meanwhile, has not used its proxy capabilities, which relies on ideological militias to wage war on its behalf.
”I would not be surprised if the Omanis receive a call soon from Tehran that they are willing to return to the negotiating table,” Saud Al Sharafat, a prominent Jordanian security specialist, told The National.
Shiite Iran is among the world’s top 10 oil producers. The hostilities have already affected the global energy markets, raising concern that other producers in the region might become involved in the war if Iran attacks US or other targets in the Middle East, directly or through a network of proxies.
“The Israelis have gone after the head of the octopus. And this time talks will not be just about Iran’s nuclear programme," said Mr Al Sharafat, a former brigadier general in Jordanian intelligence. He expected any peace negotiations to be broadened to include Iran’s role in the region and its use of proxies, rather than just its nuclear programme and other armaments. Israel, the US and most of its Arab allies have long accused Tehran of using militia allies, such as Hezbollah and the Houthis, to destabilise the mostly Sunni Middle East.
Mr Al Sharafat, however, cited Ayatollah Ali Khamenei as a “supreme pragmatist”. He has been Iran's supreme leader since he succeeded his hardline mentor Ayatollah Ruhallah Khomeini in 1989. Mr Khamenei was president when Khomeini accepted a deal 37 years ago to end the Iraq-Iran war, despite likening the move to swallowing poison.
“More than the loss of lives, what Khamenei is concerned about is internal destabilisation if Israel destroys the Iranian oil industry. This is what will drive Khamenei to the table," said Mr Al Sharafat, who heads the Shorufat ِCentre for the Study of Globalisation and Terrorism think tank.
As for Israel, Mr Al Sharafat said that it “does not care if Iran’s theocracy remains intact” as long as Mr Khamenei stops acting against Israel.
US President Donald Trump said early on Saturday that Washington “can easily get a deal done between Iran and Israel” in an apparent suggestion of expanding the talks with Iran that he initiated in April, with Omani mediation.
In later post on the TruthSocial platform, he declared, “We will have PEACE, soon, between Israel and Iran! Many calls and meetings now taking place."
Israel's attacks on nuclear facilities, fuel depots and other targets have caused the most damage to Iran since its 1980-1988 war with Iraq. The attacks started on Friday as Mr Trump's push to reach a deal over on Iran’s nuclear programme stalled. Iran has been retaliating with barrages of drones and missiles that have caused death and destruction in Israel but on much a smaller scale.
An Arab diplomat said that despite Tehran’s inability to repel Israel's attacks, its ability to sustain an extended war should not be underestimated.
“The Iranians have been preparing for such a moment for decades. But they know that if they lose oil production, it will be the beginning of the end of the regime.”
Israel's most recent attacks, on Iranian fuel depots, were a warning that upstream production could be next, he said. “We are looking at two more weeks [of war] before Iran is forced back to the table”.
The diplomat cautioned that the “pride factor” could make Tehran turn down offers of mediation. “The damage they are doing to Israel, however small in relative terms, is important to save face. They see humiliation not just an affront to their [Shiite] ideology but also to themselves as Persian," he said.
A Western source who met Iranian officials shortly before the conflict began said that although the regime’s instinct would be to negotiate, its behaviour has become less predictable after Israel's strikes killed its most senior military leaders. “We don’t know how the new ones think, and how much they influence Khamenei."
He said the “rational choice” for Iran is to make a deal, even if it severely curtails its nuclear programme and its regional posture, and “violate it one or two years later, when they are stronger”. However this could achieve Israel‘s immediate goal of preventing Iran's nuclear enrichment and submitting it to a deal with the US that is heavily influenced by Israeli security demands.
Iranian Foreign Minister Abbas Araghchi said on Sunday that if Israel stops its attacks, Iran will stop, and that Tehran will not give up nuclear accomplishments.
Sources in Cairo said Egypt was in contact with officials from Oman, Iran and the United States in attempt to prevent a broader conflict, and was also working with Britain, France, Germany and Turkey.
They said import-dependent Egypt feared that a broader conflict would have disastrous consequences for its already woeful economy, specifically a steep rise in the price of fuel if Iran makes good on its threat to close off the strategic Strait of Hormuz at the mouth of the Arabian Gulf, through which one-fifth of the world's oil shipments pass.
The sources said Egyptian authorities, for the first time in decades, have encouraged prominent media figures and intellectuals loyal to the government of President Abdel Fattah El Sisi to support Iran in their writings as they critcise Israel. "Egypt is keen on ensuring that the conflict does not continue or expand," said one of the sources.
In an indication of other possible negotiations channels, Cyprus announced on Sunday that Iran had asked President Nikos Christodoulides to “convey some message to Israel” and that he would be talking soon with Prime Minister Benjamin Netanyahu. However, Iran's Foreign Ministry later denied this.
Ihsan Al Shammari, head of the Iraqi Political Thinking Centre in Baghdad, said the expected attempts at de-escalation in the coming one or two weeks will “depend on the levels of the attacks from both sides that could lead one of the warring sides to go for a settlement”.
An Iraqi official said Iran had erred by forgoing a sixth round of talks with the US that was scheduled in Oman on Sunday, undermining chances for any quick resolution of the war with Israel.
“The US is backing Israel in this and wants to further weaken Iran ahead of any new round of talks,” the official said.
Both sides have “crossed red lines and unwritten rules of engagement,” they said. However, Iran’s refusal to attend the planned round of talks in Oman “was a grave mistake” committed against the advice of Iraq.
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Who was Alfred Nobel?
The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
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Starring: Hani Razmzi, Maya Nasir and Hassan Hosny
Four stars
The years Ramadan fell in May
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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Price, base: Dh105,900 (Premium); Dh115,900 (Sport)
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Timeline
2012-2015
The company offers payments/bribes to win key contracts in the Middle East
May 2017
The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts
September 2021
Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act
October 2021
Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence
December 2024
Petrofac enters into comprehensive restructuring to strengthen the financial position of the group
May 2025
The High Court of England and Wales approves the company’s restructuring plan
July 2025
The Court of Appeal issues a judgment challenging parts of the restructuring plan
August 2025
Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision
October 2025
Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange
November 2025
180 Petrofac employees laid off in the UAE
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Company profile
Company: Verity
Date started: May 2021
Founders: Kamal Al-Samarrai, Dina Shoman and Omar Al Sharif
Based: Dubai
Sector: FinTech
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Will the pound fall to parity with the dollar?
The idea of pound parity now seems less far-fetched as the risk grows that Britain may split away from the European Union without a deal.
Rupert Harrison, a fund manager at BlackRock, sees the risk of it falling to trade level with the dollar on a no-deal Brexit. The view echoes Morgan Stanley’s recent forecast that the currency can plunge toward $1 (Dh3.67) on such an outcome. That isn’t the majority view yet – a Bloomberg survey this month estimated the pound will slide to $1.10 should the UK exit the bloc without an agreement.
New Prime Minister Boris Johnson has repeatedly said that Britain will leave the EU on the October 31 deadline with or without an agreement, fuelling concern the nation is headed for a disorderly departure and fanning pessimism toward the pound. Sterling has fallen more than 7 per cent in the past three months, the worst performance among major developed-market currencies.
“The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome,” said Mr Harrison, who manages more than $10 billion in assets at BlackRock. “We will see this game of chicken continue through August and that’s likely negative for sterling,” he said about the deadlocked Brexit talks.
The pound fell 0.8 per cent to $1.2033 on Friday, its weakest closing level since the 1980s, after a report on the second quarter showed the UK economy shrank for the first time in six years. The data means it is likely the Bank of England will cut interest rates, according to Mizuho Bank.
The BOE said in November that the currency could fall even below $1 in an analysis on possible worst-case Brexit scenarios. Options-based calculations showed around a 6.4 per cent chance of pound-dollar parity in the next one year, markedly higher than 0.2 per cent in early March when prospects of a no-deal outcome were seemingly off the table.
Bloomberg
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