Oil Down on OPEC+ Output Increase, Tariffs Start and US Pause on Ukraine Aidhttps://english.aawsat.com/business/5118338-oil-down-opec-output-increase-tariffs-start-and-us-pause-ukraine-aid
Oil Down on OPEC+ Output Increase, Tariffs Start and US Pause on Ukraine Aid
A worker walks past oil pipes at a refinery in Wuhan, Hubei province March 23, 2012. REUTERS/Stringer//File Photo
Oil prices extended losses on Tuesday following reports that OPEC+ will proceed with a planned output increase in April and as US tariffs on Canada, Mexico and China came into effect, as well as Beijing's retaliatory tariffs.
Brent futures were down $1.05, or 1.5%, at $70.57 a barrel by 1133 GMT while US West Texas Intermediate (WTI) crude was off 83 cents, or 1.2%, at $67.54.
"The current downward trend in oil prices is primarily driven by OPEC+'s decision to increase output and the introduction of US tariffs," said Darren Lim, commodities strategist at Phillip Nova.
He said another factor was President Donald Trump's decision to pause all US military aid to Ukraine following his Oval Office clash with President Volodymyr Zelenskiy last week.
The Organization of the Petroleum Exporting Countries (OPEC) and allies like Russia, known as OPEC+, also decided on Monday to proceed with a planned April oil output increase of 138,000 barrels per day, the group's first since 2022.
OPEC+'s move took the market by surprise, said Bjarne Schieldrop, chief commodities analyst at SEB.
"The change in the OPEC strategy looks like they are prioritising politics over price. Those politics are likely connected with the wheeling and dealing of Donald Trump", who has called for lower oil prices, Schieldrop said.
US tariffs of 25% on imports from Canada and Mexico took effect at 12:01 a.m. EST (0501 GMT) on Tuesday, with 10% tariffs on Canadian energy, while tariffs on imports of Chinese goods were increased to 20% from 10%.
Analysts expect the tariffs to weigh on economic activity and demand for energy, putting downward pressure on oil prices.
As the US tariffs kicked in on Tuesday, China swiftly retaliated, announcing 10% to 15% hikes to import levies covering a range of American agricultural and food products, and placing 25 US firms under export and investment restrictions.
Further weighing on oil was Trump's halt of military aid to Ukraine, with some in the market saying the growing distance between the White House and Ukraine could see potential US sanctions relief for Russia, with more oil supply returning to the market.
The pause followed a Reuters report that the White House has asked the State and Treasury departments to draft a list of sanctions that could be eased for US officials to discuss during talks with Moscow, sources have said.
"The perfect storm for crude oil has intensified. Reports that the US has paused military aid to Ukraine are viewed as a precursor to lifting sanctions on Russian oil," said IG market analyst Tony Sycamore.
"It also comes at the same time as US tariffs on Canada, Mexico and China come into effect, sparking fears of a trade war. Crude oil just cannot take a break at the moment."
However, Goldman Sachs analysts said in a note on Monday that Russia's oil flows are constrained more by its OPEC+ production target than sanctions, warning that an easing might not boost them significantly.
The bank also said higher-than-expected crude supply and a demand hit due to softer US activity and tariff escalation posed downside risks to oil price forecasts.
Chinese demand is also lower with a period of refinery maintenance coming up, according to Josh Callaghan, head of crude derivatives at Arrow Energy Markets.
Army Commander Abdel Fattah al-Burhan stated that the high cost of living is 'part of the battle' and pledged to emerge victorious (AFP).
Sudan has entered a new phase of economic turmoil after its currency, the pound, fell sharply against foreign currencies, with the dollar trading above 9,000 pounds in some parallel-market transactions in recent days.
The pound later temporarily recovered some of its losses, but severe volatility disrupted markets, prompting some traders to suspend sales and close their shops.
Exchange-rate movements illustrate the scale of the deterioration. The dollar, which traded at about 4,400 pounds on the parallel market in June, surged to more than 9,000 pounds at the height of this month’s September turmoil.
The number of pounds needed to buy one dollar has nearly doubled in about three months.
Rates quoted by several banks remained far below those on the parallel market, reflecting a widening gap between the official banking rate and the price at which traders obtain foreign currency outside the banking system.
After a limited improvement on Friday, the dollar again rose above 8,000 pounds on Saturday amid a shortage of US currency in banks.
Sovereign Council Chairman and army chief General Abdel Fattah al-Burhan directly linked the economic crisis to the war.
“The battle has taken many forms,” Burhan said after Friday prayers in Khartoum’s Burri district. He described the economic crisis, rising prices and scarcity of resources as “part of this battle” and pledged that Sudan would emerge “victorious, just as we drove the rebellion out of Khartoum and other cities.”
Exchange-rate, market and gold-production figures suggest that the “economic battle” is more complicated than controlling currency speculators. It involves the wartime economy, shortages of foreign currency, declining production, foreign-trade imbalances and gold smuggling.
Prices surge
The pound’s depreciation is having a direct effect on people’s lives.
During a tour of markets in Khartoum and Wad Madani on Sept. 18, local broadcaster Radio Tamazuj reported that the price of a 50-kg sack of sugar had risen to 470,000 pounds from 380,000 pounds, an increase of about 24%.
A sack of flour climbed to 120,000 pounds from 80,000 pounds, an increase of about 50%.
The broadcaster said most of the shops visited during the tour were closed. Traders had stopped selling because prices were changing so rapidly that they could not determine how much it would cost to replace the goods they sold.
Closures spread to other cities. Local reports from Atbara in River Nile state said that a growing number of shops had closed and traders were refusing to sell. Reports from Duwaim said about three-quarters of shops had closed, citing local traders.
In Tamboul in Gezira state, activists circulated a local account describing the city’s market as almost at a standstill, with shops closed and goods scarce.
The account put the price of a 50-kg sack of sugar at 600,000 pounds, a sack of sorghum at 500,000 pounds, a 36-pound container of cooking oil at 400,000 pounds and a sack of flour at 150,000 pounds.
The prices could not be independently verified, nor could it be confirmed whether the closures affected the entire market.
The crisis is reflected in the experience of grocery store owner Ibrahim Idris, who said his capital was no longer sufficient to stock the range and quantities of goods he had previously sold.
Idris said the price of a 36-pound container of cooking oil had risen to nearly 350,000 pounds from about 170,000 pounds over the past month, more than doubling.
Customers were buying smaller quantities, he said, while increasing numbers were asking to purchase goods on credit.
Nahla Khalifa, a homemaker from Omdurman, previously told Asharq Al-Awsat that her family had often gone without meat, milk and vegetables, while obtaining medication for her husband, who has diabetes, had become increasingly difficult.
Osman al-Jundi, a supervisor of community kitchens, or takayas, in Khartoum, told Asharq Al-Awsat days before the sharp currency decline that falling donations, rising prices and the pound’s depreciation had forced several free kitchens to close.
Only two kitchens in his area were still operating daily, he said, even as the number of people in need continued to grow. They included displaced people from Kordofan, as well as children, women, older people and people with disabilities.
The Sudanese pound continues its slide to a record low against the dollar (Reuters)
Gold production declines
The sharpest contradiction emerges in Sudan’s gold sector.
According to data from the Sudanese Mineral Resources Company, recorded gold production exceeded 70.15 metric tons in 2025. That included about 58.38 tons from traditional mining, roughly 5.68 tons from mining-waste processing companies and about 5.96 tons from concession companies.
However, the amount of gold entering official export channels was far below recorded production.
Data attributed to the Central Bank of Sudan showed that about 14.7 tons of gold, worth nearly $1.54 billion, were exported in 2025. In a separate estimate, the finance minister said about 20 tons had entered official channels.
The difference cannot be treated entirely as smuggled gold because of existing stockpiles, domestic consumption and trade, as well as differences in how the data are calculated. It nevertheless reveals a substantial gap between recorded production and the amount appearing in official exports.
An official at the Sudanese Mineral Resources Company previously estimated that about 48% of the country’s 2024 gold production had been smuggled, depriving the banking system of a significant source of foreign currency.
Gold is also intertwined with the war. A study by the Chatham House think tank said both sides in the conflict had benefited from the gold economy and its production and trading networks, although through different methods and in different areas of influence.
The study linked gold-sector revenues to the warring parties’ ability to finance operations and obtain resources, weapons and supplies.
That does not mean all proceeds from official gold exports are used for military spending. The state also uses foreign currency to finance imports of fuel, wheat and other goods and necessities.
A further contradiction has emerged within the gold sector itself.
Twenty-three mining companies have threatened to begin gradually suspending production on Sept. 30 and halt it entirely on Oct. 1 in protest against the Central Bank of Sudan’s mechanism for purchasing gold.
The companies say they produce about 17% of the country’s gold and that the central bank’s purchase price does not cover rising fuel, transportation, wage and operating costs caused by the pound’s depreciation.
The distortions extend beyond the gold market.
While the dollar rose above 9,000 pounds in some transactions in government-controlled areas, it traded at about 4,600 pounds in cash in Nyala. Its price through transfers using the Bankak banking application reached about 6,500 pounds.
The cash price of the dollar in Nyala was, therefore, at roughly the same time, about half the rate recorded in some markets in government-controlled territory.
That does not mean the economy in areas controlled by the paramilitary Rapid Support Forces is stronger.
Experts and traders attribute much of the difference to the shortage of banknotes, or cash liquidity, in Darfur, as well as different trade routes and foreign-currency flows. Markets in western Sudan are also linked to Chad, Libya and South Sudan.
The difference within Nyala itself — 4,600 pounds in cash versus 6,500 pounds via bank transfer — illustrates the distortions created by the liquidity crisis.
Seeking solutions
As the pound’s decline accelerated, the National Committee for Economic Management, headed by Prime Minister Kamil Idris, formed a committee led by Finance Minister Gibril Ibrahim to address the exchange-rate crisis.
The announced measures include increasing agricultural, livestock and mining production; encouraging manufacturing and exports; reducing imports; regulating the gold trade and combating smuggling; requiring exporters to repatriate export proceeds; and confronting currency speculation and foreign-exchange trading outside official channels.
But the figures present those measures with a clear test.
The dollar has risen above 9,000 pounds despite previous interventions. Gold production has exceeded 70 tons, yet far smaller quantities have appeared in official exports. Companies producing 17% of the country’s gold are threatening to halt operations, while shops have closed because traders can no longer set stable prices for their goods.
The contradiction between Burhan’s pledge to prevail in the “economic battle” and the economic data is stark: Sudan produces more than 70 tons of gold annually but suffers from a shortage of foreign currency.
The dollar trades above 9,000 pounds in one market and at about 4,600 in another, while flour prices in some markets rose by 50% during the latest bout of volatility.
For Sudanese people, the question is therefore no longer merely when the dollar will fall. It is how much real value the pound retains — and how much food and medicine it will be able to buy the following day.
IMF: AI Could Boost EU Growth But Increase Economic Strainshttps://english.aawsat.com/business/5320339-imf-ai-could-boost-eu-growth-increase-economic-strains
AI Artificial intelligence words, miniature of robot and EU flag are seen in this illustration taken December 21, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
IMF: AI Could Boost EU Growth But Increase Economic Strains
AI Artificial intelligence words, miniature of robot and EU flag are seen in this illustration taken December 21, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
Artificial intelligence could lift European productivity by about 1% over five years, but risks widening inequality, straining power networks and increasing dependence on foreign technology unless governments deepen economic integration, an International Monetary Fund paper said.
The background note, prepared for an informal meeting of European Union finance ministers in Dublin on September 18-19, said the benefits and costs of AI were likely to be distributed unevenly across countries, regions and workers, according to Reuters.
It said completing the EU single market would help spread AI adoption and its gains more evenly across the 27-nation bloc.
The paper echoes concerns raised by former European Central Bank President Mario Draghi and the European Commission that Europe's fragmented capital, labor and energy markets are holding back investment and innovation.
The IMF estimated that around 60% of workers in advanced European economies are employed in occupations highly exposed to AI. While some could become more productive through AI tools, others faced displacement as routine tasks become automated, it said, particularly in jobs where AI is more likely to replace labor than complement it.
The paper said Europe's data centers already consume roughly 3% of the continent's electricity and that demand would rise sharply as AI use expands.
Major technology hubs such as Frankfurt, London, Amsterdam, Paris and Dublin are among the areas most exposed, with data-center clusters already putting pressure on local power networks.
To address that, the EU should invest in cross-border grid infrastructure and deepen integration of the European energy market, the IMF said.
The paper also warned that Europe risks developing another strategic dependency because the US and China dominate the development of AI models.
It said Europe would need significant investment in its own AI industry to avoid becoming reliant on foreign technology.
AI's gains are also likely to be unevenly distributed across and within the EU, the paper said. More advanced economies are expected to benefit disproportionately because they are better prepared for and more exposed to the technology.
Bolivia Approves $1.9 Billion IMF Deal, Eliminates Diesel Subsidieshttps://english.aawsat.com/business/5320092-bolivia-approves-19-billion-imf-deal-eliminates-diesel-subsidies
Bolivia Approves $1.9 Billion IMF Deal, Eliminates Diesel Subsidies
A person is counting dollars in La Paz, Bolivia, 10 July 2026. (EPA)
Bolivian lawmakers approved a $1.9 billion loan agreement with the International Monetary Fund on Friday, delivering the conservative government a key victory in its efforts to ease the country's deep economic crisis as unions threatened renewed protests.
Just hours after Congress approved the loan, President Rodrigo Paz announced an immediate end to subsidies for the diesel powering Bolivia’s trucks, buses and tractors — a step toward meeting IMF demands. Gasoline, used mainly in private cars, would remain subsidized for now, though Paz had already scaled back that support in recent months, The Associated Press said.
The Senate ratified the IMF agreement a day after the lower house approved it, clearing the final legislative hurdle for the three-year financing program aimed at replenishing dwindling foreign reserves and stabilizing the ailing economy marked by high inflation and weak growth. The IMF first announced the staff-level agreement in July after months of negotiations with Paz’s market-friendly government, which took power last year after nearly two decades of socialist rule as part of a wave of new Latin American leaders allied with the Trump administration.
The program still requires approval from the IMF’s executive board before funds can be disbursed. Economy Minister Christian Morales told senators that the deal would give other lenders, including the World Bank and the Inter-American Development Bank, greater confidence in the government and help it secure about $5 billion in additional financing.
But the assistance is conditioned on tough economic measures, including the elimination of fuel subsidies, that threaten to reignite unrest in Bolivia, where weeks of road blockades in June and July paralyzed much of the South American nation as demonstrators demanded Paz’s resignation. Congress on Thursday extended for another 90 days a state of emergency that Paz had declared to clear roads during the protests. It allows for military intervention and the suspension of some civil liberties.
The Bolivian Workers’ Central, the country’s main labor federation, and other unions have voiced fierce opposition to the IMF loan, warning that the government spending cuts required under the deal would drive up living costs and deepen hardship for struggling families.
Although Paz’s Christian Democratic Party lacks a majority in Congress, the centrist and right-wing lawmakers that dominate both chambers rallied behind the deal. The Movement Toward Socialism, the party that dominated Bolivian politics after the former coca growers’ union leader Evo Morales won the presidency in 2005, now holds just two of the 130 seats in the lower house and none in the 36-member Senate.
Declining natural gas exports have deprived Bolivia of dollars needed to import gasoline and diesel, contributing to chronic fuel shortages that began in 2023 and have persisted under Paz. The Iran war has pushed up global fuel costs, making fuel subsidies an even greater burden on public finances.
“No one can buy something expensive and sell it cheap,” Paz said in his late-night declaration that diesel in Bolivia would now be sold at international prices.
To cushion the blow, he announced about $79 million in cash assistance for 2.9 million Bolivians, along with loans on preferential terms for truckers, small businesses and producers facing higher diesel costs. He pledged to redirect subsidy spending toward schools, hospitals and roads.
لم تشترك بعد
انشئ حساباً خاصاً بك لتحصل على أخبار مخصصة لك ولتتمتع بخاصية حفظ المقالات وتتلقى نشراتنا البريدية المتنوعة
