China virus forces OPEC to weigh up extension to oil output cuts

Venezuela’s Oil Minister Manuel Quevedo, Saudi Arabia’s Minister of Energy Prince Abdul Aziz bin Salman and Russia’s Energy Minister Alexander Novak. (Reuters)
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Updated 29 January 2020

China virus forces OPEC to weigh up extension to oil output cuts

  • Slide in crude prices to three-month low alarms officials amid concerns over coronavirus’ impact on economic growth

LONDON: OPEC wants to extend current oil output cuts until at least June, with the possibility of deeper reductions on the table if oil demand in China is significantly affected by the spread of a new coronavirus, OPEC sources said.

The quick slide in oil prices over the past few days has alarmed OPEC officials, the sources say, as the new virus found in China and several other countries raised concerns about a hit to economic growth and oil demand.

Oil futures were on course for a sixth day of losses with Brent crude staying below $60 per barrel. On Monday it hit a three-month low of $58.50, as the virus outbreak triggered a global selloff of riskier assets.

Saudi Arabia, OPEC’s de-facto leader, joined by key oil producers such as the United Arab Emirates, Algeria and Oman, sought to calm market jitters on Monday — urging caution against gloomy expectations on the impact of the virus on the global economy and oil demand.

But OPEC officials have also started weighing their options and intensified internal discussion on how best to respond to the price slump, the sources said.

“A further extension is a strong possibility and a deeper cut is a possibility,” said one OPEC source, adding that the impact of the China virus outbreak on oil demand would be clearer over the coming week.

“Extension is highly possible until June,” another source said, adding that an additional preferable option is to extend the oil producers’ pact until end of 2020 and that a deeper cut was “possible” if there was a need for it.

A source familiar with Russian thinking, said that although Moscow had been keen earlier to exit from price cuts, it would stay on board if oil prices continued to trade below $60 a barrel

OPEC+, which includes Russia, has been reducing oil supply to support prices, agreeing in December to hold back 1.7 million barrels per day (bpd) of output until the end of March.

Russia had insisted it wanted the current deal to last only until March, while Saudi Arabia has been keener for the deal to last longer, according to OPEC+ sources.

This year, OPEC expects its world market share to fall further as output booms in non-OPEC rivals including the US, Brazil, Canada, Australia, Norway and Guyana while global demand is rising.

Jordan textile worker ‘had one day off in two years’

Updated 19 September 2020

Jordan textile worker ‘had one day off in two years’

  • Rights abuses revealed in government-subsidized factories

AMMAN: Workers’ rights are repeatedly ignored in factories set up and subsidized by the Jordanian government, a nine-month investigation has revealed.

Fatemeh, 40, a textile worker in the Anjara factory near the city of Ajloun in the north of the country, said she had taken only a single day off in a two-and-a-half-year period.

She told reporters investigating the rights abuses that she is supporting a family of seven and wanted to avoid deductions to her salary.

Other women interviewed said that factory managers refused to give them sick leave, according to Shafa Qoda and Insam Ismael, two reporters supported by the Canadian-based Journalists for Human Rights.

Mohammad Shamma, head of content at the group’s Amman office, told Arab News that the report is part of a series of investigations focusing on workers’ rights.

“We have trained local reporters, and once their investigations are completed and approved by our lawyers, we publish them on the independent Jordanian news site,” she said.

Shamma said that the subject of workers’ rights has been kept “under wraps for too long.”

The reporters, both from Ajloun, investigated working conditions facing 17 female workers at three factories in the area.

“We documented cases of annual and sick leave being stopped, forced overtime, as well as health and occupational difficulties in the work environment,” they said.

The factories were created with support and funding from Jordan government to the tune of $100 million in construction costs and tax breaks.

Jordan’s labor ministry spokesman Mohammad Ziod told Arab News that the authorities have not received any complaints from workers in the factories.

“Our doors are open and we look into any and all complaints. We have created an online app that also protects those who complain,” he said.

“Nevertheless, we contacted these companies and they said that no one is forced to work overtime, and that they are abiding by the laws pertaining to the workers’ rights and occupational health.”

Ziod said that even if workers want to work and get paid on their days off, “this is not allowed according to Jordan’s labor laws.”

Muath Momani, director of Lawyers without Borders, said that while the government has an obligation to help find work for people, “this doesn’t absolve labor inspectors from ensuring that workers’ rights are protected regardless of whether complaints have been filed or not.”

Ahmad Awad, director of the Phenix Center for Economic and Informatics Studies, said: “These factories depend on low-paid jobs. Workers come from poor communities and are forced to work in unacceptable conditions in order to earn a meagre living.”

He described the situation as forced labor due to weak government supervision and the absence of labor unions.

Linda Al-Kalash, director of the Tamkeen Center for Legal Aid and Human Rights, said lack of supervision is a major problem.

“These factories have poor occupational health and safety conditions and suffer from the low minimum wage these workers get,” she said.