The noise and commotion from one Gulf is drowning out activities in the other Gulf - the latter being the Persian Gulf.
A new chief executive has been appointed at BP, which is becoming more American by association with Bob Dudley now at the helm.
While clean up in the Gulf of Mexico and long-term solutions to cap the well dominate the agenda, there has been a tanker incident in the Straits of Hormuz, which raised some concerned eyebrows temporarily.
Maybe the "green light," which has been giving tankers unfettered passage of late, should be raised to amber as a sign of cautionary times ahead.
The tanker, "M. Star," owned and operated by Mitsui O.S.K. Lines of Japan had set sail off Das Island, Abu Dhabi and was headed to Japan with 270,000 tons of oil.
There was an explosion on board, the cause of which there are at least two explanations for. A crew member described seeing a flash before the explosion, leading a spokesperson for the company to say it could have been an attack.
A captain at the Port of Fujairah in the UAE said the tanker was exposed to a high wave attack as a result of an earthquake in Southern Iran over the previous weekend. After further inspection, port officials edged away from that cause.
The U.S. 5th Fleet is investigating the incident, and I am sure U.S. Central Command in Qatar will also be on higher alert, even if this was a false alarm.
I spent some time during the first Gulf War covering this main artery of energy transport. From up in the air, there are times when the Straits appear like a crowded highway for tankers.
Fifteen tankers a day, on average, pass through the Straits, handling about 17 million barrels - or 20 percent of the world’s daily crude demand. Japan is particularly dependent on the artery, with 75 percent of its supplies coming from the Gulf.
Since more than 40 percent of the proven reserves sit in countries that border the Persian Gulf: Saudi Arabia, Iran, Iraq, the UAE and Oman, the International Energy Agency believes the oil passing through the Straits will double by 2020.
This plays right into the hands of the current leader in Iran, Mahmoud Ahmadinejad, who has threatened to wreak havoc if economic sanctions hold back his ability to develop the energy sector.
The country’s Revolutionary Guard conducted naval exercises at the end of April to underscore the point. Iran sits atop the third largest proven oil and gas reserves and the majority of a huge natural gas field, which is shared with Qatar. It is fair to note that Qatar cannot produce energy at its state of the art LNG facility fast enough, while Iran suffers from a lack of investment and technical expertise on its side of the field.
All this discussion triggers memories of the so-called “tanker attacks” in the mid-1980s when Iran and Iraq planted sea mines to not only attack each other during their eight-year war, but to keep the energy passage on tenterhooks. Similar security challenges persisted during the Gulf War, creating wild gyrations in energy markets.
Not to be alarmist, but those I have recently spoken with in the business are not taking anything for granted. They remain concerned about the rhetoric coming out of Iran and the fact it was raised to a new level after the vote for European Union sanctions, which includes actions to target Iran’s energy sector.
At this stage, the incident of the M. Star may be an act of Mother Nature and the tanker can move on its merry way after minor repairs. That would be a simple ending to this story. But the Straits of Hormuz and the Persian Gulf are too complex for that.
Bring in Turkey’s Prime Minister Recep Tayyip Erdogan to add an interesting plot twist. While hosting his British counterpart David Cameron in Ankara, Erdogan kept to the line that he prefers a diplomatic solution to Iran’s nuclear plans.
Turkey cast a vote against U.N. sanctions and is not of course a supporter of stricter measures from Brussels. Let’s not forget two crucial elements that may influence his decision: the exhaustive debate over Turkey’s application to the E.U. and the country’s larger than life role in oil and natural gas distribution for Europe.
I invite you to call up a few of the maps that include oil and gas pipelines. Those arteries of energy seem to outnumber the major truck routes in the country.
Turkey’s emboldened stance comes after a few years of active diplomacy by the leader whose country straddles East and West. He has decided to take his chips to the East, where the role of one of the region’s most populated countries is more appreciated.
Against this backdrop there remain tensions in Gaza, re-emerging frictions in Lebanon and yes, Iran’s nuclear ambitions.
LONDON, England – I hardly go into my London bank branches. I don't even do much internet banking. Everything I do is through automatic debits and standing orders and automatic deposits. Then there is the occasional phone call. Britain's big banks have been shedding branches for this very reason. No surprise there.
So, why are there people wanting to start new banks and open new branches just after the worst banking crisis in decades?
On Thursday Metro Bank opened its first "store" (they like to call them that instead of branches) in central London.
Metro is based on the Commerce Bancorp model started in the United States in the early 1970s by founder Vernon Hill. He's also the man behind Metro and thinks Londoners want more branches (sorry, stores), longer hours and to be able to walk into the bank 7 days a week, 361 days a year (few 'bank' - aka public - holidays for his employees).
There are certainly some nice touches at the Holborn store; friendly staff, quick sign-ups for a new account, a coin-counting machine for the kids to put money into a new account and even hundreds of American-style safe deposit boxes. Hill told me one big advantage is that it doesn't have to deal with legacy technology.
More stores will open soon and they hope to have 200 in 10 years. Chairman Anthony Thomson says they want to grab 5 10 percent of London's banking market and says that would be enough to be lucrative.
People were lined up in front of the store before it opened and every teller was busy during the first few hours. People do seem to want a simple branch bank concept. But Metro does not appear to be trying to undercut the big boys – consumers groups have looked at the rates being charged for things like mortgages and credit cards and child accounts and while they are competitive, they are not priced to lure people in it seems. Its all about customer service.
Metro also promises to make loans to small and medium-sized companies near the stores.
Metro might have competition soon. Bank branches are being closed or sold off by state-owned Northern Rock, Lloyds and Santander and there is talk that other "community" banks will sprout up. Just when I got used to not finding a branch when I occasionally do need one.
I recently spent a lot of time interviewing William Kentridge, one of South Africa's most well-known artists. I interviewed him and wrote the documentary for CNN's show, African Voices, while also reporting the World Cup and presenting Marketplace Africa. At the same time I was also juggling being a mother to two small children. The pace of life was "hectic," as they say here in South Africa.
As most working parents know, it's amazing how much you can fit into a day when you are busy. You work fast and smart when you have a lot to do.
Having lots to do means you get less bogged down in the small things. Just think about how little one accomplishes at work when you have no deadlines, an empty inbox and hours of unlimited time to waste?
Being busy is not just about surviving the business day and finishing tasks – William Kentridge actually finds that working at a fast pace and physically walking around his studio stimulates his creativity. Work begets art, in his case.
He told me: "I find I have to get up to a certain speed, a speed of working, of drawing, of making, to generate the ideas. In other words the physical activity of drawing, tearing, erasing filming, is what actually gets my mind active and new ideas emerging. So that means there's a lot of material that gets made, maybe too much material but if I slow down, everything slows down and I go into a kind of hibernation, physically and mentally."
Do you agree?
P.S.: Yes I did write this blog between rushing to pick up my daughter from school and shooting a story for Marketplace Africa.
Hardcovers and paperbacks need to make much more room for their digital cousins. The annual Hong Kong Book Fair is in town this week and for the first time, there's a section on digital publishing.
Considering the book fair attracts about 900,000 book lovers, the digital section is getting heavy foot traffic and lots of eyeballs. About two dozen companies showcased their digital offerings. Two especially caught our eye.
The first, Kiwa Media of New Zealand, sells Q Books, interactive children's books that can be downloaded onto the iPad (which was launched this week in Hong Kong), iPhone and iPod Touch.
Derek Judge, creative director for Kiwa, demonstrated how a child can "read" a book on an iPad. He opened up a digital children's book titled "Milly, Molly and the Bike Ride." There's a drop down language menu which gives you the options of English, Chinese, Spanish or Italian. He selected Chinese for text and narration. All of the text turned into Chinese characters.
When he put a finger on one character, a computerized voice pronounced that word in Chinese. There's also a color palette from which a child can choose colors to fingerpaint the story's images on the touchscreen.
"I had a girl yesterday that grabbed my iPAD off me, sat down on the chair and was playing with it for an hour," he said. "She was coloring in. She did some fantastic coloring ins. This was a four-year old. She was tapping words in Italian and spelling them out. So that's exactly what it is: it's entertainment and a children's book but it's engaging."
Kiwa Media offers 15 children's books for the iPad and 18 for the iPod and iPhone. Kiwa Media is the conduit for different publishers to offer their childrens book as a digital application. According to Judge, the publishers set the price but the average download costs about US$4.
The second company, Hanvon, is a Chinese firm that has come out with the Chinese equivalent of Amazon's Kindle. Company representative Bo Bo Wong powered up Hanvon's newest model, the N618, adding: "This is the first time we have a wifi model in Hong Kong."
The N619 has 5,000 books pre-installed in the e-book reader. The books can be read in traditional and simplified Chinese characters as well as English. Wong says you can also download most other books and newspapers that are available online. The N618 has been on the market in China for a few months and sells for US$430.
Last week, Amazon announced it sold more e-books than hardcover books in the past three months. Jeff Bezos, CEO of Amazon.com calls this "astonishing" especially since the online retailer has been selling hardcover books for 15 years while Kindle books have been available for just under 3 years.
As we saw at the Hong Kong book fair, this trend towards digital publishing is also turning the page on the traditional book fair.
The announcements of order books at air shows are a tricky thing and Boeing and Airbus have a dog fight over who will outgun the other.
In Berlin, Airbus secured an $11.5 billion order for 32 A380s. At Farnborough, Boeing announced a $9 billion order for 30 777s. The two shared one common theme, the dominant Middle East carrier Emirates was behind both of them.
Six months after shocking the global financial community with a standstill on debt payments, the Emirate of Dubai is out to make its mark in the sectors it built its reputation on: trade, transport, tourism and financial services.
While it was placing record plane orders, it opened Dubai World Central airport to cargo services – the gigantic hub will open for passenger traffic in March 2010.
If behind the scenes Dubai is expressing caution – restructuring debt and the chief lieutenants that report to Sheikh Mohammed bin Rashid Al Maktoum - outward activities are conveying something else.
But this is not only a Dubai story.
To mark our coverage of the biennial event at Farnborough, we spent time with the two smaller, fast-growing challengers in the Middle East's airspace – the chief executives of Qatar Airways and Etihad Airways, Akbar Al Baker and James Hogan.
They are very different personalities, but both carriers are expanding alongside their respective home markets. Doha will open a brand new airport in 2012 and Etihad a brand new terminal projected for the same year.
We have all raised eyebrows at Farnborough orders in 2008 and this year, but as the Americans often say “you ain’t seen nothing yet”. According to a recent study by Boeing, passenger traffic in the region will grow by 11 percent a year for the next two decades.
The U.S. aerospace giant says there is a regional backlog of some 789 jetliners today, but the carriers will need more than 1,700 planes by 2030. No wonder exhibitors welcome the Middle East players with open arms each year.
By the time the new airports are fully operational in Dubai, Doha and Abu Dhabi, passenger traffic capacity will be well over 200 million a year. While airports like Heathrow have blocked expansion and new runways due to environmental concerns, these hubs are making a 21st Century “air and land grab” and scooping up routes as fast as possible.
As a result, Europe's legacy carriers have been crying foul and accusing their Middle Eastern competitors of route dumping. Al Baker of Qatar Airways strongly dismisses such talk: “If the legacy carriers don’t have the guts or the courage to take opportunities or to expand their services or regions it is their problem.” While sharing a buggy across the Farnborough airfield, Al Baker says competitors from Europe and Asia bypassed the Middle East, which created an opportunity for the deep-pocketed Gulf players.
Etihad’s Hogan said he has a huge advantage coming into the market with a clean sheet of paper, which helps him draw up a growth plan from scratch. If you look at the plans of Emirates, Etihad and Qatar, they tilt to the East and South and are opportunistic, shall we say, when going West.
By 2011 in its 14th year of operations, QA will have crossed the century mark in both planes and routes and Al Baker says we should expect more expansion in China, Africa and Latin America. When asked about his concerns related to an expanding bubble in the regional airline market he said: “We are going to make sure that all this capacity that is being added around us won’t deviate us from the plans that we have.”
While touring his integrated operations center in Abu Dhabi, Hogan also avoided commenting directly about the Dubai card now being played to expand in a “larger than life” way. He talks about being “best in class” across any market they choose to go into. Like Al Baker’s role in Doha, Hogan wants his carrier to support the bigger brand which for him means the UAE capital.
Something is definitely in the air and, likely, in the future, most tail wings will be carrying a brand from Dubai, Doha or Abu Dhabi.
QMB viewers are familiar with the Q25 – the exercise we conduct each earnings season, to see if we can spot the prevailing trend in the health of major companies. In the Q25, good results earn a green balloon, while a red is what we give for a disappointing report.
When we last did the Q25 there were far more greens than reds – which gave great hope that the world's big corporations were back on track.
In the first days of this earnings season there is a great deal of dismay at the results. Even though economists had warned that there was a slowdown, now we are seeing the evidence.
Earnings expectations may have been set too high, but companies are warning that things are still very tough and not getting much better. In the past week a wide range of companies warned of more difficult times ahead.
We have many more companies to add before we can come to any conclusions from our Q25. There is still a long way to go in this reporting season, but the early signs are not good.
The World Diamond Council recently announced that Zimbabwe will be allowed to sell its diamonds by September after an agreement was made with the Kimberly Process, which monitors trade in the precious stones to stop the use of blood diamonds’ to fuel conflicts.
This decision comes after much wrangling because the Zimbabweans say they need to earn foreign currency from the sale of the diamonds, while the Kimberly Process was concerned about reports of human rights abuses at Zimbabwe's Marange diamond fields.
The Zimbabwe army is accused of killing and torturing hundreds of illegal diggers in the Marange diamond fields in 2006, which prompted the international community to stop buying Zimbabwean diamonds.
Now the Finance Minister Tendai Biti, who is one of the opposition leaders for the Movement for Democratic Change, has won a small victory by getting the green light for the sale of two batches of diamonds, which will take place under strict monitoring and regulation.
All in all, Zimbabwe says it holds a stockpile of 4 million carats of Marange diamonds, worth about $1.7 billion.
For Biti, selling just some of these will help boost the economy and offset the lack of donor aid, which has not come flooding into the country after a political agreement was made between Robert Mugabe’s Zanu PF and the opposition MDC. Zimbabwe’s international debt is estimated at about 5.5 billion dollars.
So my question is, do you think this is a good thing? Should Zimbabwe be given a chance to sell diamonds to help earn much-needed revenue for its bankrupted state coffers? Or is this decision premature and are the abuses at the Marange diamond fields still occurring?
About Business 360
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