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Oman’s Producer Price Index Posts Increase of 37%

A gas field in Oman. (Reuters)
A gas field in Oman. (Reuters)
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Oman’s Producer Price Index Posts Increase of 37%

A gas field in Oman. (Reuters)
A gas field in Oman. (Reuters)

Oman's producer price index for the third quarter of 2022 posted an increase of 36.6 percent, compared to the corresponding period in 2021, according to the quarterly survey by the National Center for Statistics and Information (NCSI).

The Oman News Agency (ONA) reported on Sunday that oil and gas prices took the lead by scoring a 44.1 percent hike, while non-oil products increased by 2.9 percent.

The rise in prices of oil and gas products was due to a 48 percent growth in crude oil and natural gas, coupled with a 21.8 percent surge in prices of refined oil products.

The rise in the prices of non-oil products was due to a 3.1 percent growth in prices of the converting industries’ group.

Prices of mining, electricity, and water increased by 2.3 percent.

Overall GDP growth in Oman rebounded from -3.2 percent in 2020 to 3 percent in 2021 and is projected at 4.3 percent in 2022, the IMF noted in a report.

The economic recovery is gaining traction. Rebounding economic activity and elevated global inflationary pressures are expected to push up average inflation to 3 percent in 2022 and down to 2.5 percent in 2023.

The report noted that there are risks of short-term economic relapse that stem particularly from global geopolitical conditions and their impact on the economy and oil prices, in addition to the renewed flare-up of COVID-19 infections, and the increased inflationary pressures from higher global food and energy prices.

"Fiscal and external surpluses are expected in 2022 and over the medium term."

Central government debt declined to 62.9 percent of GDP in 2021 and it is expected to decline to about 43.7 percent of GDP in 2022.

Meanwhile, OQ, Oman’s government-owned integrated energy group, announced the start of operations at the third crude oil processing plant at Bisat oilfield.

The plant's production would rise to 60,000 barrels per day (bpd) early next year.

OQ has successfully increased the production of the oilfield from 5,000 barrels per day in 2019 to 55,000 barrels per day by the third quarter of 2022, the fastest annual growth of oil field production in the region.

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Ukraine Threatens to Halt Transit of Russian Oil to Europe

A view of storage tanks and pipelines at the Mero central oil tank farm, which moves crude through the Druzhba oil pipeline, near Nelahozeves, Czech Republic, August 10, 2022. REUTERS/David W Cerny/File Photo
A view of storage tanks and pipelines at the Mero central oil tank farm, which moves crude through the Druzhba oil pipeline, near Nelahozeves, Czech Republic, August 10, 2022. REUTERS/David W Cerny/File Photo
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Ukraine Threatens to Halt Transit of Russian Oil to Europe

A view of storage tanks and pipelines at the Mero central oil tank farm, which moves crude through the Druzhba oil pipeline, near Nelahozeves, Czech Republic, August 10, 2022. REUTERS/David W Cerny/File Photo
A view of storage tanks and pipelines at the Mero central oil tank farm, which moves crude through the Druzhba oil pipeline, near Nelahozeves, Czech Republic, August 10, 2022. REUTERS/David W Cerny/File Photo

A top aide to Ukrainian President Volodymyr Zelensky on Friday said Kyiv would halt the transit of Russian oil across its territory at the end of the year, when the current contract expires and is not renewed.

Mykhailo Podolyak said in an interview with the Novini.Live broadcaster that current transit contracts for Russian supplies that run through the end of the year will not be renewed.

“There is no doubt that it will all end on January 1, 2025,” he said.

Kiev says it is prepared to transport gas from the Central Asian countries or Azerbaijan to Europe, but not from Russia, as it is crucial for Ukraine to deprive Russia of its sources of income from the sale of raw materials after it attacked its neighbor well over two years ago.

The contract for the transit of Russian gas through Ukraine to Europe between the state-owned companies Gazprom and Naftogaz ends on December 31.

Despite the launch of Russia's full-scale invasion of Ukraine in February 2022, the Ukrainians have fulfilled the contract terms - in part at the insistence of its European neighbors, especially Hungary.

But the leadership in Kiev has repeatedly made it clear that it wants the shipments to end.

Meanwhile, the Czech Republic energy security envoy Vaclav Bartuska said on Friday that any potential halt in oil supplies via the Druzhba pipeline through Ukraine from Russia from next year would not be a problem for the country.

Responding to a Reuters question – on comments by Ukrainian presidential aide Mykhailo Podolyak that flows of Russian oil may stop from January – Bartuska said Ukraine had also in the past warned of a potential halt.

“This is not the first time, this time maybe they mean it seriously – we shall see,” Bartuska said in a text message. “For the Czech Republic, it is not a problem.”

To end partial dependency on the Druzhba pipeline, Czech state-owned pipeline operator MERO has been investing in raising the capacity of the TAL pipeline from Italy to Germany, which connects to the IKL pipeline supplying the Czech Republic.

From next year, the increased capacity would be sufficient for the total needs of the country’s two refineries, owned by Poland’s Orlen, of up to 8 million tons of crude per year.

MERO has said it planned to achieve the country’s independence from Russian oil from the start of 2025, although the TAL upgrade would be finished by June 2025.

On Friday, oil prices stabilized, heading for a weekly increase, as disruptions in Libyan production and Iraq’s plans to curb output raised concerns about supply.

Meanwhile, data showing that the US economy grew faster than initially estimated eased recession fears.

However, signs of weakening demand, particularly in China, capped gains.

Brent crude futures for October delivery, which expire on Friday, fell by 7 cents, or 0.09%, to $79.87 per barrel. The more actively traded November contract rose 5 cents, or 0.06%, to $78.87.

US West Texas Intermediate (WTI) crude futures added 6 cents, or 0.08%, to $75.97 per barrel.

The day before, both benchmarks had risen by more than $1, and so far this week, they have gained 1.1% and 1.6%, respectively.

Additionally, a drop in Libyan exports and the prospect of lower Iraqi crude production in September are expected to help keep the oil market undersupplied.

Over half of Libya’s oil production, around 700,000 barrels per day (bpd), was halted on Thursday, and exports were suspended at several ports due to a standoff between rival political factions.

Elsewhere, Iraq plans to reduce oil output in September as part of a plan to compensate for producing over the quota agreed with the Organization of the Petroleum Exporting Countries and its allies, a source with direct knowledge of the matter told Reuters on Thursday.

Iraq, which produced 4.25 million bpd in July, will cut output to between 3.85 million and 3.9 million bpd next month, the source said.