JEDDAH: The Arab League member countries are holding talks to formulate a rules of origin agreement (RO) governing commodities produced in Arab countries by the end of this year.
The agreement is aimed at determining the country of origin of each commodity. This is expected to help pave the way for the establishment of an Arab Free Trade Zone (FTZ.)
Muhammad Al-Tuwaijri, Arab League’s assistant secretary-general for Economic Affairs, said the member countries were formulating a detailed RO, calling on member countries to be determined to formulate rules that take into consideration Arab countries’ industrial factors and are compatible with the necessity to develop and integrate trade exchanges between them. Previously officials held talks and discussed a 40 percent value-added tax on Arab commodities, which were later amended.
Current discussions were on points of negotiations that had previously been determined. Resulting agreements would be on specific principles that serve Arab trade, Al-Tuwaijri told Al-Eqtisadiah newspaper.
In 2007 the member countries formulated preferential RO agreements, and so far detailed ROs were agreed upon for group Arab commodities, he said.
“Before approving the rules, their effects on bilateral trade exchanges and Arab countries’ industrial abilities to adhere to them must be recognized, especially as the new rules come to amend previous ones approved by the Arab Economic and Social Council. The council previously raised the minimum value-added tax on some commodities from 40 to 50 and 60 percent,” he added.
Products’ Country of Origin (COO) is the foundation on which the process of commercial commodity exchange between countries takes place. Without it, it is not possible to determine a commodity’s place of origin and consequently it will be difficult to categorize it, Al-Tuwaijri said, adding that COO data is necessary for determining customs duties and other customs procedures, including restrictions and obligations that countries have to apply according to countries’ trade agreements and protocols.
Rules formulated to pave way for Arab FTZ
Rules formulated to pave way for Arab FTZ
Oil surges as Iran conflict disrupts Middle Eastern supply flow
SINGAPORE: Oil prices surged by as much as 13 percent on Monday after shipping in the crucial Strait of Hormuz was disrupted by retaliatory Iranian attacks following initial bombing by Israel and the US that killed Iranian Supreme Leader Ali Khamenei.
Brent crude futures rose to as much as $82.37 a barrel, the highest since January 2025, before retreating to be up $5.41, or 7.4 percent, to $78.28 by 09:05 am Saudi time.
US West Texas Intermediate crude climbed to an intraday high of $75.33, up over 12 percent and the highest since June, though it later pared gains and was up $4.74, or 7.1 percent, at $71.76.
Both benchmarks jumped as a sustained exchange of counterattacks damaged tankers and sharply disrupted shipmentsin the Strait of Hormuz, a waterway between Iran and Oman that connects the Gulf to the Arabian Sea.
On a typical day, ships carrying oil equal to about one-fifth of global demand from Saudi Arabia, the UAE, Iraq, Iran, and Kuwait sail through the Strait along with tankers hauling diesel and jet fuel and gasoline and other products from their refineries to major Asian markets including China and India.
“Markets are acknowledging the seriousness of the conflict, but are also signalling that, for now, this is a geopolitical shock, not a systemic crisis,” said Priyanka Sachdeva, senior analyst at Phillip Nova.
Prolonged effective closure of the Strait would push oil prices higher and cause shortages in supply to top importers China and India.
More than 200 vessels including oil and liquefied gas tankers have dropped anchor outside the Strait, shipping data showed on Sunday. Three tankers were damaged and one seafarer was killed in attacks on Sunday in Gulf waters.
Asian economies are assessing oil stockpile availability and ways to secure alternative supply. South Korea will offer petroleum from its stockpiles to local industries if supply disruptions are prolonged, while India is exploring alternative shipping routes.
PRICES PARE GAINS
Still, prices pared gains after the steep surge in early Asian trade, which analysts attributed to buyers already factoring a risk premium into prices in anticipation of the conflict.
Brent had risen over 19 percent this year until Friday’s close, while WTI was trading about 17 percent higher.
Amid the conflict, OPEC+ agreedon Sunday to a modest oil output boost of 206,000 barrels per day for April. Every OPEC+ producer is essentially producing at capacity except for Saudi Arabia, RBC Capital analyst Helima Croft said.
The International Energy Agency is in touch with major producers in the Middle East, director Fatih Birol said on Sunday. The energy watchdog coordinates the release of strategic petroleum reserves from developed countries during emergencies.
Globally, visible oil inventories stood at 7.827 million barrels, enough for 74 days of demand, which is near a historical median, Goldman Sachs wrote in a note.
Citi analysts expect Brent to trade between $80 and $90 a barrel this week amid the ongoing conflict.
“Our baseline view is that the Iranian leadership changes, or that the regime changes sufficiently as to stop the war within 1-2 weeks, or the US decides to de-escalate having seen a change in leadership and set back Iran's missiles and nuclear program over the same time frame,” Citi analysts led by Max Layton wrote.
Analysts are also warning retail gasoline prices in the US, the world’s biggest fuel consumer, may break above $3 a gallon because of the conflict, a potentially risky result for President Donald Trump and his Republican Party ahead of midterm elections this November.
US gasoline futures surged by as much as 9.1 percent to $2.496 a gallon, their highest since July 2024, and were last at $2.381 a gallon, up 4.2 percent.
