Ben Lobel, Copywriter at DailyFX
- New tool charts global commodity trading over the last decade
- The UK has reduced its oil imports by over 75 million barrels in five years
- African countries lead the way in reducing their oil imports
The world is slowly reducing its reliance on oil and a new online tool from Daily FX has revealed the nations that are leading the movement.
Many of these are from Africa, including five of the ten countries that are decreasing their oil imports at the quickest rate. Morocco takes top spot after reporting a staggering 99.99% fall in the number of barrels it imported between 2013 and 2018.
It’s followed in the list by three other countries from the continent, with Kenya, Burundi and Gambia all reducing their imports by over 99%.
In the UK, oil imports dropped by more than fifth (21%) over the five years.
While the country remains the 12th biggest global importer of oil, including petroleum oils, it has taken great strides towards reducing its dependency on such environmentally-harmful fuels.
During the studied time period, the UK had the eighth-best rate in Europe for reducing such imports, with its intake dropping by 76.9 million barrels (from 359 million to just over 280 million).
In financial terms, this meant the UK spent $13.74 billion (£10.63 billion) less on oil. In 2013, the country spent over $40 billion on the commodity (£30.9 billion), but this fell to $26 billion (£20 billion) five years later.
Malta (93%) and the Republic of Moldova (92%) experienced the most significant decreases across the continent.
Internationally, the 10 countries that have reduced their reliance on oil the most are:
- Morocco (>99%)
- Kenya (>99%)
- Burundi (>99%)
- Gambia (>99%)
- Seychelles (>99%)
- Malta (93%)
- Republic of Moldova (92%)
- Estonia (86%)
- Botswana (84%)
- Israel (83%)
Globally, the money spent on oil imports fell by 28% but still remained above the $1 trillion (£773 billion) mark. From over $1.6 trillion in 2013, it dropped to under $1.2 trillion in 2018. The world’s 17 biggest importers account for over $1 trillion of this (86% of the total value), with the remaining 81 countries in the research making up the remaining $0.2 trillion.
The tool shows that China has recently overtaken the USA as the world’s biggest importer of oil. The Asian giant imported nearly 3.4 billion barrels in 2018, which was over 240 million more than the USA. China tops the list having increased its oil imports by 64% since 2013 – nearly six times the rate of its rival (11%).
Israel is the only country to drop out of the top 10. The country was the seventh biggest importer in 2013, but has fallen down the rankings thanks to its impressive 83% reduction.
Taking its place in the top 10 is Singapore, which increased its imports of oil by 18% over the time period. In 2013, the city-state imported 320 million barrels, and this rose to 376 million in 2018.
The top 10 global importers of oil (2018) are:
- China – 3.38 billion barrels
- USA – 3.14 billion barrels
- India – 1.65 billion barrels
- Japan – 1.09 billion barrels
- The Republic of Korea – 1.09 billion barrels
- Germany – 622 million barrels
- Netherlands – 506 million barrels
- Italy – 460 million barrels
- France – 397 million barrels
- Singapore – 376 million barrels
Daily FX’s unique tool allows traders to spot developments in the flow of commodities and the growth of both supply and demand while comparing the changes to critical economic indicators.
John Kicklighter, Chief Currency Strategist at Daily FX, said: “The world is changing and so is the way that it uses energy. Renewable and environmentally-friendly fuel options are the future, and while the end of crude oil is still far off, there will be considerable changes in the world’s top importers and exporters. Our new tool helps track those changes.
“While some of the larger countries have increased their appetite, it is interesting from an investor’s perspective to see the UK exploring alternative energy sources and reducing its dependence on oil.”
‘Global Commodities’ takes the form of a re-imagined 3D globe where the heights of countries rise and fall to show the import and export levels of a range of commodities over the last decade. The data visualisation allows users to switch views from a single commodity or market and show information relevant to that commodity or market’s performance.
To learn more about Global Commodities and view the tool, visit: https://www.dailyfx.com/research/global-commodities
THE TRIALS AND TRIBULATIONS OF TRADERS TRADING FROM HOME
Steve Haworth, CEO of TeleWare Group
Banks had hoped to keep their London trading floors open amid the worsening coronavirus pandemic, insisting traders were “key workers”. But trading floors were quickly cleared and employees sent to work from home in isolation.
Firms needed to quickly adapt to remote working. This meant recreating the carefully monitored environment of the trading floor at thousands of sites.
With major disruption across the entire sector, it seems the Financial Conduct Authority felt no other choice but to relax regulations on recording calls. But does this measure introduce more problems than it solves?
Why call recordings are regulated
Whilst regulations differ globally, authorities in the UK, US and Hong Kong have long required trading floor phone calls to be recorded for certain activities.
In the UK, the FCA demands financial institutions keep records of all trades and transactions related to certain types of business for at least six months. Recording calls and reporting trades are essential to the regulators’ ability to monitor the markets for abuse, such as insider trading. Requirements to record calls apply to companies that receive and execute client orders to buy or sell in the financial markets.
Each trading floor in a financial firm also has its own set of policies which staff must abide by. For instance, the trading floor manager must ensure that all trade-based calls are recorded and monitored. An often-used policy that still exists is to ban all mobile phones on the trading floor. To enforce this, mobile phones are often stored in lockers and traders are required to use turrets to host calls.
Beyond call recording, most traders and salespeople need to sit together on a monitored trading floor in order to meet regulatory rules. A range of compliance complexities under GDPR, MiFID II and Dodd Frank have meant working from home has simply not been an option for many traders.
The rush to relax regulations
Traders are now required to work from home – if they can. The FCA has said it accepts that some scenarios may emerge where recording calls may not be possible. Adding that it expects companies to “consider what steps they could take to mitigate outstanding risks if they are unable to comply with their obligations to record voice recordings.” If financial services companies are unable to record calls they are then expected to “come up with a plan to fix the problem”.
Yet, trading firms have enough problems to solve without having to decipher call recording requirements. Why should traders spend extra time updating the FCA and coming up with an alternative solution when one already exists?
A smart alternative
Smart solutions – such as mobile call recording which meet global regulations – have perhaps been overlooked as a way to maintain business continuity.
Mobile voice recording technology (MVR) is not new. It has existed since 2011 and includes secure and reliable voice and SMS recording, easy to use conferencing and robust, accessible voicemail. It has matured over the years and proven itself to be flexible and highly reliable.
Technology can keep traders trading from wherever they are. Ensuring they can operate effectively at home while remaining compliant.
STOP THE CONFUSION: HOW TO KNOW IF YOUR BUSINESS MAY BE INSURED AGAINST COVID-19
By Alex Balcombe, Partner at Harris Balcombe
The last few weeks has seen businesses in hospitality, tourism, retail, leisure and more forced to close their doors following the Government’s orders that they should close to prevent the spread of coronavirus.
While this is expected to flatten the curve and reduce the number of coronavirus cases, it will of course have an impact on businesses and employees alike. For small businesses especially, there are many concerns about how they can claim on their insurance to weigh the fall of this impact.
In response to calls to help struggling businesses, the Government has informed the public that companies who are facing turmoil will be able to claim on their business interruption insurance during this difficult time. For most, this is wrong.
The insurance industry has also been extremely vocal that there is no cover for any coronavirus-hit businesses during this tough financial period. This isn’t strictly true either.
How can businesses see through the mixed messaging and best secure their future and their livelihoods and reduce money worries? It’s an extremely stressful time for many companies, and confusion over whether or not they can be covered can only cause more unnecessary stress.
Since it’s a new disease, most businesses will not be covered for business interruption due to COVID-19. In fact, the vast majority of policies do not cover anything related to COVID-19.
That said – don’t rule out the idea that you may be covered. There is a chance that you will be covered against COVID-19, but not know it. This is a very small chance, but your current cover may already protect your business against the consequences of coronavirus, and the nationwide response to it – though those with this cover are unlikely to realise it.
How Could I Be Covered?
Not everyone has business interruption insurance, as it’s not a legal requirement. It is entirely up to the policy holder to weigh up the benefits of having it, and their ability to trade should a disaster happen.
To be considered for cover for COVID-19, there are two types of policy extensions to your business interruption cover that can potentially cover you for this situation:
Infectious Disease Extension
Many policies expressly state which diseases fall within the realm of being an infectious or notifiable disease. If this is the case, your policy will not provide cover. As it is a new disease, these policies will not have included COVID-19.
Other infectious disease extension policies will define the disease with reference to the actions of the government. Since the UK Government has named COVID-19 as a notifiable disease throughout the UK, it is possible that your business may fall into this definition, thus meaning you may be able to make a claim.
However, again, it’s not always that simple. Many policies require the disease to have been on your premises, while others specify a radius from your premises in order to qualify.
Denial of Access Extension (non-damage)
Denial of Access Extension (non-damage) policies may cover you if you’re prevented from accessing your property. This could be due to an event, or by the actions of a competent authority, which could cause your business interruption cover to engage.
If covered by this clause, there are often very subtle differences in wording in your policy. This could depend on the insurer or policy. You may well be covered, but it will depend on your particular circumstances, and the specific policy wording.
It’s clear that the Government needs to do more in ensuring there is clear messaging for businesses, and to help the insurance market look after policy holders. This is an unprecedented situation, and with many people looking to claim on their insurance, we’re already seeing major delays which could have a domino impact.
People throughout the world are understandably facing all kinds of worries because of the current pandemic. Our ways of living have changed, and many business owners will not have experienced a situation like this in their life times. If you own a business and are unsure about whether you can claim for business interruption, or are confused about ambiguous wording, get in touch with a loss assessor.
These claims are not simple, but loss assessors will be experts in business interruption insurance, and will specialise in large and complex claims. They will be able to help and guide you along the way, check your wording and work on your behalf to make sure you get everything you are entitled to.
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