ABU DHABI: Abu Dhabi’s investment fund Mubadala has posted a 52-percent drop in profits for the first half of 2015, hit hard by the slide in global oil prices.
The group tasked with diversifying the Gulf state’s energy-dependent economy has a global investment portfolio that includes US-based technology giant GE, EMI Music Publishing, and Italy’s Piaggio Aerospace.
Mubadala said profits in the first six months of the year stood at AED625.5 million ($170.4 million) compared with 1.3 billion dirhams in the same period in 2014.
Revenues came in at 15.9 billion dirhams, less than one percent lower from the year before.
“Higher semiconductor, information and communications technology, health care, real estate and industry-related revenues were offset by lower aerospace and energy-related revenues,” it said in a statement.
Mubadala said an increase in income from financial investments was offset in part by lower operating revenues.
“Despite challenging market conditions such as volatile commodity prices impacting certain businesses in our portfolio, the diversity of our asset base and prudent management enabled us to record positive results,” said chief financial officer Carlos Obeid.
“As the economic situation remains unclear, we continue to carefully manage our operations and balance sheet,” he said.
Mubadala’s vast portfolio also includes stakes in private equity firm Carlyle, telecoms company Etisalat Nigeria and gas firm Emirates LNG.
Abu Dhabi sits on the bulk of the oil wealth of the United Arab Emirates.
World oil prices have roughly halved in value since a year ago, plagued by a global supply glut caused largely by cheaper production of US oil following extraction from shale rock.
Mubadala posts sharp loss
Mubadala posts sharp loss
Oil prices rise sharply after attacks in Middle East disrupt global energy supply
- Traders were betting the supply of oil from Iran and elsewhere in the Middle East would slow or grind to a halt.
- Attacks throughout the region have restricted countries’ ability to export oil to the rest of the world
NEW YORK: Oil prices rose sharply Monday as US and Israeli attacks on Iran and retaliatory strikes against Israel and US military installations around the Gulf sent disruptions through the global energy supply chain.
Traders were betting the supply of oil from Iran and elsewhere in the Middle East would slow or grind to a halt. Attacks throughout the region, including on two vessels traveling through the Strait of Hormuz, the narrow mouth of the Arabian Gulf, have restricted countries’ ability to export oil to the rest of the world. Prolonged attacks would likely result in higher prices for crude oil and gasoline, according to energy experts.
West Texas Intermediate, the light, sweet crude oil produced in the United States, was selling for about $72 a barrel early Monday, up around 7.3 percent from its trading price of about $67 on Friday, according to data from CME group.
A barrel of Brent crude, the international standard, was trading at $78.55 per barrel early Monday, according to FactSet, up 7.8 percent from its trading price of $72.87 on Friday, which had been a seven-month high at the time.
Higher global energy prices could lead to consumers paying more for gasoline at the pump and shelling out more for groceries and other goods, at a time when many are already feeling the impacts of elevated inflation.
Roughly 15 million barrels of crude oil per day — about 20 percent of the world’s oil — are shipped through the Strait of Hormuz, making it the world’s most critical oil chokepoint, according to Rystad Energy. Tankers traveling through the strait, which is bordered in the north by Iran, carry oil and gas from Saudi Arabia, Kuwait, Iraq, Qatar, Bahrain, the UAE and Iran.
Iran had temporarily shut down parts of the strait in mid-February for what it said was a military drill, which led oil prices to jump about 6 percent higher in the days that followed.
Against that backdrop, eight countries that are part of the OPEC+ oil cartel announced they would boost production of crude Sunday. The Organization of Petroleum Exporting Countries, in a meeting planned before the war began, said it would increase production by 206,000 barrels per day in April, which was more than analysts had been expecting. The countries boosting output include Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman.
“Roughly one-fifth of global oil supply passes through the Strait of Hormuz, a vital artery for world trade, meaning markets are more concerned with whether barrels can move than with spare capacity on paper,” said Jorge León, Rystad’s senior vice president and head of geopolitical analysis, in an email. “If flows through the Gulf are constrained, additional production will provide limited immediate relief, making access to export routes far more important than headline output targets.”
Iran exports roughly 1.6 million barrels of oil a day, mostly to China, which may need to look elsewhere for supply if Iran’s exports are disrupted, another factor that could increase energy prices.
