KARACHI: The International Air Transport Association (IATA) on Wednesday asked Pakistan and Bangladesh to release airline revenues amounting to $720 million, saying the two countries were holding it in contravention of international agreements.

IATA, an international organization representing the global airline industry, asked Pakistan to simplify the “onerous” repatriation process involving audit and tax exemption certificates in a statement, pointing out such procedures caused “unnecessary delays.”

Bangladesh, it said, had a more standardized system, though aviation needed to be a higher central bank priority to facilitate access to foreign exchange.

“The situation has become severe with airlines unable to repatriate over $720 million ($399 million in Pakistan and $323 million in Bangladesh) of revenues earned in these markets,” the statement informed.

IATA’s regional vice president for Asia-Pacific Philip Goh emphasized that the timely repatriation of revenues to different countries was critical for payment of dollar denominated expenses such as lease agreements, spare parts, overflight fees and fuel.

“Delaying repatriation contravenes international obligations written into bilateral agreements and increases exchange rate risks for airlines,” he said. “Pakistan and Bangladesh must release the more than $720 million that they are blocking with immediate effect so that airlines can continue to efficiently provide the air connectivity on which both these economies rely.”

Goh maintained that his organization recognized the two governments were facing difficult challenges, making it necessary for them to determine how to utilize foreign currencies strategically.

“Airlines operate on razor-thin margins,” he continued. “They need to prioritize the markets they serve based on the confidence they have in being able to pay their expenses with revenues that are remitted in a timely and efficient fashion.”

He pointed out reduced air connectivity limited the potential for economic growth, foreign investment and exports, adding such large sums of money involved in the Pakistani and Bangladeshi markets necessitated urgent solutions.

TOKYO: Oil prices extended gains on Wednesday after industry data showed a surprise drop in US crude stocks last week, a positive sign for demand, though markets were also keeping a close eye on hostilities in the Middle East, according to Reuters

Brent crude futures rose 26 cents, or 0.29 percent, to $88.68 a barrel and US West Texas Intermediate crude futures climbed 26 cents, or 0.31 percent, to $83.62 a barrel at 9:34 a.m. Saudi time.

US crude inventories fell 3.237 million barrels in the week ended April 19, according to market sources citing American Petroleum Institute figures. In contrast, six analysts polled by Reuters had expected a rise of 800,000 barrels.

Traders will be watching for the official US data on oil and product stockpiles due at 5:30 p.m. Saudi time for confirmation of the big drawdown.

US business activity cooled in April to a four-month low, with S&P Global saying on Tuesday that its flash Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to 50.9 this month from 52.1 in March.

“This could help convince policy makers that rate cuts are required to support the economy,” ANZ analysts said in a note.

US interest rate cuts could bolster economic growth and, in turn, demand for oil from the world’s top consumer of the fuel.

Analysts were still bullish that any latest developments in conflicts in the Middle East will still support markets, though the impact on oil supplies remains limited for now.

“Overall, crude oil prices are well supported around current levels by on-going Middle East risk premium. On the topside, risk of possible renewed OPEC production increase from Jun will help limit any significant upside,” said head of markets strategy for United Overseas Bank in Singapore Heng Koon How.

“We maintain our forecast for Brent to consolidate at USD 90/bbl by end of this year,” Heng added.

Israeli strikes intensified across Gaza on Tuesday, in some of the heaviest shelling in weeks.

“Recent reports suggest that both Iran and Israel consider the current operations concluded against one another, with no follow-up action required for now,” ING analysts said in a note.

“The US and Europe are preparing for new sanctions against Iran – although these may not have a material impact on oil supply in the immediate term,” they added.