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Oman Denies Claims about Negotiations with Iran Over Stakes in Hengam Gas Field

Oman has achieved a balanced increase of 2.1 percent in the production of crude oil and oil condensate during 2021. (Oman News Agency)
Oman has achieved a balanced increase of 2.1 percent in the production of crude oil and oil condensate during 2021. (Oman News Agency)
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Oman Denies Claims about Negotiations with Iran Over Stakes in Hengam Gas Field

Oman has achieved a balanced increase of 2.1 percent in the production of crude oil and oil condensate during 2021. (Oman News Agency)
Oman has achieved a balanced increase of 2.1 percent in the production of crude oil and oil condensate during 2021. (Oman News Agency)

The Omani Ministry of Energy and Minerals stressed that it had not recently participated in any technical discussions or commercial negotiations related to the joint offshore oil field with Iran.

Oman denied recent reports by Iranian media about a bilateral agreement over the Hengam gas field, and Tehran’s acquisition of an 80 percent share. The ministry stated that previous discussions on the development of the field have failed to reach an agreement.

In a statement on Tuesday, the ministry of Energy noted that it had not recently participated in any technical discussions or commercial negotiations related to this joint field and denied any agreement to distribute shares between the parties.

It confirmed, however, that maximizing the benefit of the gas field would only be achieved through joint development.

“The joint offshore oil field (West Bukha - Hengam) is located between the maritime borders of the Sultanate of Oman and the Islamic Republic of Iran, off the Musandam Governorate from the Omani side. The part of the Iranian side is called Hengam and on the Omani side it is called West Bukha in concession area block 8. Production in the West Bukha field of the Sultanate of Oman has started since 1985,” the ministry clarified.

The joint field contains huge reserves of oil and gas, estimated at 700 million barrels of oil, in addition to two trillion cubic feet of gas.

Iranian media recently said that the Omani and Iranian sides reached an agreement on the division of shares, according to which Iran would get an estimated 80 percent of the field’s production, while the Sultanate of Oman would receive 20 percent.

Meanwhile, a senior official in the Omani Ministry of Energy and Minerals stated that the country has achieved a balanced increase of 2.1 percent in the production of crude oil and oil condensate during 2021, maintaining the same levels of oil production. This comes in line with an agreement to reduce production with OPEC and other countries outside the organization.

Dr. Saleh bin Ali Al-Anbouri, Director General of the ministry’s General Directorate of Exploration and Production, said: “The reserves of crude oil and oil condensates have increased by four percent compared to 2020.”

In a report published by the Oman News Agency, Al-Anbouri noted that the ministry has supervised the implementation of several projects with oil and gas operating companies, which aim to develop fields and ensure continuous improvement through latest technologies.

The average production of crude oil and oil condensates during the year 2021 was about 971,000 barrels per day, compared to 951,000 barrels per day in 2020, with an increase of 2.1 percent over the previous year.

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US Fed Set to Hold Rates Steady in the Face of Trump Pressure

An eagle tops the US Federal Reserve building's facade in Washington, July 31, 2013. (Reuters)
An eagle tops the US Federal Reserve building's facade in Washington, July 31, 2013. (Reuters)
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US Fed Set to Hold Rates Steady in the Face of Trump Pressure

An eagle tops the US Federal Reserve building's facade in Washington, July 31, 2013. (Reuters)
An eagle tops the US Federal Reserve building's facade in Washington, July 31, 2013. (Reuters)

The US central bank is expected to keep interest rates unchanged for a fourth straight policy meeting this week, despite President Donald Trump's push for rate cuts, as officials contend with uncertainty sparked by the Republican's tariffs.

While the independent Federal Reserve has started lowering rates from recent highs, officials have held the level steady this year as Trump's tariffs began rippling through the world's biggest economy.

The Fed has kept interest rates between 4.25 percent and 4.50 percent since December, while it monitors the health of the jobs market and inflation.

"The hope is to stay below the radar screen at this meeting," KPMG chief economist Diane Swonk told AFP. "Uncertainty is still very high."

"Until they know sufficiently, and convincingly that inflation is not going to pick up" either in response to tariffs or related threats, "they just can't move," she said.

Since returning to the presidency, Trump has slapped a 10 percent tariff on most US trading partners. Higher rates on dozens of economies are due to take effect in July, unless an existing pause is extended.

Trump has also engaged in a tit-for-tat tariff war with China and imposed levies on imports of steel, aluminum and automobiles, rattling financial markets and tanking consumer sentiment.

But economists expect it will take three to four months for tariff effects to show up in consumer prices.

Although hiring has cooled slightly and there was some shrinking of the labor force according to government data, the unemployment rate has stayed unchanged.

Inflation has been muted too, even as analysts noted signs of smaller business margins -- meaning companies are bearing the brunt of tariffs for now.

At the end of the Fed's two-day meeting Wednesday, analysts will be parsing through its economic projections for changes to growth and unemployment expectations and for signs of the number of rate cuts to come.

The Fed faces growing pressure from Trump, citing benign inflation data, to lower rates more quickly, a move the president argues will help the country "pay much less interest on debt coming due."

On Wednesday, Trump urged Fed Chair Jerome Powell to slash interest rates by a full percentage point, and on Thursday, he called Powell a "numbskull" for not doing so.

He said Powell could raise rates again if inflation picked up then.

But Powell has defended US central bank independence over interest rates when engaging with Trump.

- 'Cautious patience' -

For their part, Fed policymakers have signaled "little urgency" to adjust rates, said EY chief economist Gregory Daco.

He believes they are unwilling to get ahead of the net effects from Trump's trade, tax, immigration and regulation policy changes.

Powell "will likely strike a tone of cautious patience, reiterating that policy remains data dependent," Daco said.

While economists have warned that Trump's tariffs would fuel inflation and weigh on economic growth, supporters of Trump's policies argue the president's plans for tax cuts next year will boost the economy.

On the Fed's path ahead, HSBC Global Research said: "Weak labor market data could lead to larger cuts, while elevated inflation would tend to imply the opposite."

For now, analysts expect the central bank to slash rates two more times this year, beginning in September.

The Fed is likely to be eyeing data over the summer for inflationary pressures from tariffs, said Ryan Sweet, chief US economist at Oxford Economics.

"They want to make sure that they're reading the tea leaves correctly," he said.

Swonk warned the US economy is in a different place than during the Covid-19 pandemic, which could change how consumers react to price increases.

During the pandemic, government stimulus payments helped households cushion the blow from higher costs, allowing them to keep spending.

It is unclear if consumers, a key driver of the economy, will keep their dollars flowing this time, meaning demand could collapse and complicate the Fed's calculus.

"If this had been a world without tariffs, the Fed would be cutting right now. There's no question," Swonk said.