The price of oil will continue to rise, thanks to global demand growth that is expected to rise from 48% of current global demand to as much as 60% by 2035, according to Kenneth McKellar, partner and Middle East Energy & Resources leader at Deloitte in the Middle East.
In the latest Deloitte periodical publication, Middle East Point of View, which hosts independent analysis and views from experts, an article titled ‘Back to the future: where next for 100-dollar oil’ states that global average demand for crude oil reached 86.6 million barrels a day in 2010, the highest level since 2007 and is set to increase by almost two million barrels a day each year over the next two years.
The article reiterates that, as a result, the price of oil had crossed the $100 threshold for the second time in two years. After factoring the impact of the situation in Libya and the ability of Saudi Arabia to cover most the production shortfall, oil has traded close to $100 after briefly peaking at $114.
In addition to this article, the Deloitte Point of View magazine’s independent author’s views ranged from corporate governance in the public sector, affordable housing in Saudi Arabia, strategy building and rethinking innovation in emerging markets.
Through their editorial ‘Facing up to FATCA’, Joe El Fadl, Financial Service Industry leader and John Belsey, International Tax Services and the Mergers and Acquisitions (M&A) Tax practice leader at Deloitte Middle East reiterate that, under its provisions which impose a 30% withholding tax on all income and capital payments received by Foreign Financial Institutions (FFI) from US sources, the ‘Foreign Account Tax Compliance Act’ (FACTA) will apply to any non-US financial institution that receives source payments from January 1st 2014, onwards.
“FATCA will impact the majority of institutions operating in financial markets across the globe, including the Middle East; it presents significant financial and operations risks and requires urgent consideration,” Joe El Fadl, said.
Midhat Salha, Partner at Deloitte in Qatar explains through his article ‘Family businesses time to act’ that the ‘rules of the game’ have significantly changed for family businesses.
“The economic challenges facing the world has made it difficult for a family owned business to obtain funding on the basis of name or reputation alone as financial institutions and other creditors are looking more into business fundamentals and cash flows,” he said.
In his editorial ‘The growing pains of Islamic Finance’, Dawood Ahmedji, Islamic Finance Advisory Services leader at Deloitte Middle East, reiterates that the Middle East and Africa account for almost 80% of the sharia compliant investment assets, with just over half of these in the Gulf Cooperation Council (GCC). However, he added, the regulatory frameworks of many GCC countries continue to pose considerable impediments to the developments of the Islamic Finance industry.
“The under–development of regional debt capital markets relative to other sources of finance has had a profound ripple effect on the Islamic Finance industry.”