Air Algerie Incurs USD130 Million Loss Due to COVID-19

An Air Algerie Boeing 737-8b6 plane is seen on the tarmac at the Lyon-Saint-Exupery airport in Colombier-Saugnieu near Lyon, France, March 14, 2019. REUTERS/Emmanuel Foudrot/Files
An Air Algerie Boeing 737-8b6 plane is seen on the tarmac at the Lyon-Saint-Exupery airport in Colombier-Saugnieu near Lyon, France, March 14, 2019. REUTERS/Emmanuel Foudrot/Files
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Air Algerie Incurs USD130 Million Loss Due to COVID-19

An Air Algerie Boeing 737-8b6 plane is seen on the tarmac at the Lyon-Saint-Exupery airport in Colombier-Saugnieu near Lyon, France, March 14, 2019. REUTERS/Emmanuel Foudrot/Files
An Air Algerie Boeing 737-8b6 plane is seen on the tarmac at the Lyon-Saint-Exupery airport in Colombier-Saugnieu near Lyon, France, March 14, 2019. REUTERS/Emmanuel Foudrot/Files

Algerian Finance Minister Ayman bin Abdul Rahman said that Air Algerie has incurred losses estimated at USD130 million due to the suspension of flights during the coronavirus pandemic.

During a meeting on evaluating the consequences of the pandemic and its impact on the economy, chaired by Algerian Prime Minister Abdulaziz Jarad, Bin Abdul Rahman said that maritime transport losses have exceeded USD700,000.

He further announced allocating more than USD500 million to fight the pandemic.

Jarad noted that the country was undergoing a tragic and unprecedented economic condition ensuing from the structural crisis by former governments, the collapse of oil price, and the impact of the novel coronavirus.

He affirmed that Algerian President Abdelmadjid Tebboune was committed to backing the affected institutions, whether public or private. In addition, he noted that the precautionary measures have struck various economic sectors mainly commerce, hospitality, and construction.

Jarad called for an objective assessment of COVID-10 repercussions, noting that the economic and social revival would occur through establishing balanced institutions and achieving a purchasing power for households to support the economic dynamic.



Oil Slips as Iran-Israel Conflict Enters Sixth Day

FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo
FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo
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Oil Slips as Iran-Israel Conflict Enters Sixth Day

FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo
FILE PHOTO: A view shows an oil pump jack outside Almetyevsk in the Republic of Tatarstan, Russia, June 4, 2023. REUTERS/Alexander Manzyuk/File Photo

Oil prices fell on Wednesday, after a gain of 4% in the previous session, as markets weighed up the chance of supply disruptions from the Iran-Israel conflict and as they ponder a direct US involvement.

Brent crude futures fell 93 cents, or 1.2%, to $75.52 a barrel by 0918 GMT. US West Texas Intermediate crude futures fell 88 cents, also 1.2%, to $73.96 per barrel.

US President Trump warned on social media on Tuesday that US patience was wearing thin, and called for an "unconditional surrender" from Iran.

While he said there was no intention to kill Iran's leader Ali Khamenei "for now," his comments suggested a tougher stance toward Iran as he weighs whether to deepen US involvement.

A source familiar with internal discussions said one of the options Trump and his team are considering included joining Israel on strikes against Iranian nuclear sites.

A direct US involvement threatens to widen the confrontation further, putting energy infrastructure in the region at higher risk of attack, analysts say.

"The biggest fear for the oil market is the shutdown of the Strait of Hormuz," ING analysts said in a note.

"Almost a third of global seaborne oil trade moves through this chokepoint. A significant disruption to these flows would be enough to push prices to $120 [a barrel]," the bank added.

Iran is OPEC's third-largest producer, extracting about 3.3 million barrels per day (bpd) of crude oil.

Meanwhile, Iranian ambassador to the United Nations in Geneva Ali Bahreini said on Wednesday that Tehran has conveyed to Washington that it will respond firmly to the United States if it becomes directly involved in Israel's military campaign.

Markets are also looking ahead to a second day of US Federal Reserve discussions on Wednesday, in which the central bank is expected to leave its benchmark overnight interest rate in the range of 4.25% to 4.50%.

However, the conflict in the Middle East and the risk of slowing global growth could potentially push the Fed to cut rates by 25 basis points in July, sooner than the market's current expectation of September, said Tony Sycamore, market analyst with IG.

Lower interest rates generally boost economic growth and demand for oil.

Confounding the decision for the Fed, however, is the Middle East conflict's potential creation of a new source of inflation via surging oil prices.

US crude stocks fell by 10.1 million barrels in the week ended June 13, market sources told Reuters, citing American Petroleum Institute figures on Tuesday. Official Energy Information Administration data is due later on Wednesday.