AM — Temporary reprieve from Black Sea wheat blackout as cargoes head to Egypt

Good morning, wonderful people. We have very good news to start the workday: Egypt has received two shipments of wheat — and more is on the way, including grain from Ukraine and Russia. The news, coupled with the government signaling that it will provide subsidized flour to private-sector bakeries for a period of time, should go a long way toward easing jitters about food security in the wake of Russia’s invasion of Ukraine.

We have chapter and verse on the wheat story at the top of this morning’s news well, below, and get into the flour-for-bakers issue in Last Night’s Talk Shows.

Also this morning: It’s refreshing to see a ton of interest in green manufacturing, with news from major international investors looking to significantly up their investments here.

PSA #1- Windy weather warnings: It’s going to be cold during the day — and you’ll want to break out a heavy blanket tonight, the Egyptian Meteorological Authority (EMA) warned yesterday. We will see highs of 16-22°C and lows of 9-11°C through Saturday, the EMA said, adding that light to moderate rainfall is expected across the north coast today and tomorrow.

PSA #2- Clocks changed in much of Canada and the United States yesterday as they “sprang forward” one hour to mark the start of daylight saving time. The United Kingdom will follow suit on Sunday, 27 March. Egypt dumped daylight saving time back in 2016, with the peak of DST madness having come in 2014, when clocks changed four times in one year (forward in spring, back for Ramadan, forward again after Ramdan, and then back in fall at the end of DST).

SOUND SMART #1- We probably did the right thing by ditching DST — and most EU citizens want to do the same. The time change is supposed to conserve energy, prevent traffic accidents and cut crime. The National Geographic thinks those benefits are probably overblown, if they exist at all — and that deadly traffic accidents may actually go up after clocks change.

MEANWHILE- Covid is still a thing and it’s causing trouble in China: Beijing placed the entire city of Shenzhen — home to 17.5 mn people and one of the country’s most important economic centers — into lockdown yesterday following a spike in covid cases, Bloomberg reports. Transport has been suspended, all non-essential businesses are closed, and residents are being prevented from leaving the city.

SOUND SMART #2- Why this matters: Shenzhen has one of the country’s busiest ports and is a key manufacturing hub, producing components for tech companies across the world. It hosts the headquarters of two of the country’s biggest tech companies, Huawei and Tencent, as well as the main manufacturer of the iPhone. Not good news at a time when shipping costs are surging and tech supply chains continue to face bottlenecks due to the pandemic.

WHAT’S HAPPENING TODAY-

Foreign Minister Sameh Shoukry has kicked off a tour of Asia, during which he will visit Malaysia, Singapore, Indonesia and Pakistan, the ministry said in a statement yesterday. The ministry didn’t provide details of his schedule but mentioned that he will be in Islamabad to attend the Organization of Islamic Cooperation summit on 22-23 March.

A World Health Organization (WHO) delegation is in town visiting Egyptian Drug Authority (EDA) headquarters, to check in on the EDA’s work mechanisms, offer training on standard lab procedures in accordance with WHO rules, and make sure our pharma industry is operating within WHO guidelines.

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THIS WEEK-

A lobby group for the construction industry is sounding the alarm on the impact of rising building materials costs. The Egyptian Federation of Construction and Building Contractors will hold an “urgent” meeting tomorrow, Al Mal says, to discuss “unjustified rises” in the local price of steel, cement, and other materials. One union member was quoted as saying that contractors have been struggling with shortages and high prices in the steel market in recent days, potentially jeopardizing project schedules.

The Russian-Ukrainian crisis has pressured global prices — and the hikes now hitting the Egyptian market. Iron ore prices have been climbing over concerns that the conflict could curb global supply of the key steelmaking ingredient. Ezz Steel is now selling a ton of steel for EGP 17k after raising its prices by EGP 2k over the past month, while the Suez Steel Company hiked its prices by around EGP 1.5k.

It’s Fed week: The Federal Reserve will meet to review interest rates on Tuesday and Wednesday and is expected to kick off its long-signposted tightening cycle with a 25-bps hike. The market previously anticipated the central bank to go bigger and raise interest rates by 50 bps, but now expects the uncertainties triggered by the conflict in Ukraine to have changed its calculations.

CIRCLE YOUR CALENDAR-

RESCHEDULED- US Deputy Secretary of State Wendy Sherman scrapped her trip to Egypt scheduled for Thursday and Friday of last week “due to unforeseen logistical issues.” She had been set to meet with Shoukry and “other senior officials,” including National Council for Human Rights chief Moushira Khattab. Sherman “looks forward to rescheduling her visit,” the State Department said in a brief statement.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

*** It’s Blackboard day: We have our weekly look at the business of education in Egypt, from pre-K through the highest reaches of higher ed. Blackboard appears every Monday in Enterprise in the place of our traditional industry news roundups.

In today’s issue: In many parts of the world proximity to reputable institutions and the high costs associated with enrollment have typically presented significant barriers to access high quality post-secondary education. Now, many of the top universities around the world offer a portion of their undergraduate and graduate course offerings online — a good chunk of which you can complete at zero cost. In this issue we map out where to find these platforms and some of the most popular (and useful) courses you can use to help you jumpstart a career shift or advance your current skill set from the comfort of your home.

Shipments of Black Sea wheat are on their way to Egypt: Several cargoes totaling 189k tonnes of Ukrainian, Russian and Romanian wheat are on their way to Egypt even as the war in Ukraine continues to disrupt commercial shipping in the Black Sea. Egypt will receive 63k tonnes of wheat from each country in the coming days, the Supply Ministry said in a statement yesterday, helping to shore up the country’s reserves amid a supply shock caused by the conflict.

That’s not all: Egypt received 126k tonnes of French and Romanian wheat last week, the ministry said.

The latest shipments have made it out of port despite Russia’s invasion of Ukraine: The conflict is causing serious disruption to exports from the two countries, which supply around a third of the world’s supply of wheat and around 80% of Egypt’s grain imports. The ministry didn’t disclose which ports the shipments have departed from.

Signs of normalization? Russia seems to be easing restrictions on commercial traffic in the Black Sea and has in recent days allowed 30 ships carrying grains to depart Russian ports, Bloomberg reported last week, citing Interfax. Moscow had closed the sea of Azov to commercial ships after it launched its invasion of Ukraine, preventing the export of grains and other commodities from its Azov port.

Conflicting signals? Ukraine was reported last Wednesday to have banned the export of wheat, oats and other staples. The same day, Canada’s Globe and Mail quoted the head of the country’s grain association as confirming reports the country would move wheat by rail to neighboring countries including Romania, Hungary, Slovakia and Poland. The country reportedly has 20 mn tons of wheat and corn in storage. It closed its Black Sea ports to commercial ships after the conflict broke out and has said they will remain closed as long as the fighting continues.

The shipments are good news for Egypt: State grains buyer GASC had canceled two tenders in the early days of the war amid spiraling prices and was reported by Reuters to have agreed to an extended shipment deadline for at least one of several cargoes reportedly stuck in Ukraine at the start of March. It is also said to be offering more flexibility over documentation. Two cargoes carrying 120k tonnes of wheat had been stuck in port in the Black Sea as of 4 March.

The gov’t is working several angles to shore up food security as war continues in Easter Europe: It is looking to up its production of local wheat, has banned the export of staple foods for three months, and is trying to diversify supply away from the embattled Black Sea region. The country currently has enough wheat in reserve to sustain it for 4.5 months and the local harvest should provide another four months of supply.

The fiscal impact is going to be significant: The Finance Ministry expects soaring wheat prices to add up to EGP 15 bn to its import bill this fiscal year and is already rethinking its fiscal targets as a result. Global wheat prices have surged 48% over the past two weeks, adding more than USD 100 to the price per ton and sending local bread prices soaring.

But upping local wheat will also come with a price: Faced with surging fertilizer prices and rising labor costs, local farmers are calling on the government to raise local wheat prices by 22% in order for them to meet production targets, Farmers’ Syndicate head Hussein Abu Saddam told Bloomberg Asharq. The syndicate wants the government to purchase wheat for EGP 1k per ardib, up from EGP 820, to help the domestic industry cope with inflation.

The gov’t already hiked prices by 13% from last year: The supply, agriculture and finance ministries raised prices to EGP 800-820 per ardib ahead of this year’s planting season in response to decade-high wheat prices in the global market — and that was before Russia’s war effectively suspended 30% of the world’s wheat supply. “The price offered by the government is not appropriate. Everything has increased in price, from fertilizers to equipment to the cost of labor, so why only the price of wheat remains the same,” one farmer told the newspaper.

Farmers warn that if the price isn’t right, they won’t produce enough to meet the government’s ambitious target: The Supply Ministry hiked local purchase targets to 5.5 mn tonnes at the war’s outset from an earlier 4 mn tons. The move is meant to shore up reserves, but the syndicate is warning that it will not be able to meet this unless the state offers better pricing. “If the government doesn’t raise prices, it won’t be able to collect even 3 mn tonnes of wheat” this season, Abu Saddam told Asharq.

Incentives are in the works: Adding details to incentives signposted last week, the government will try to help out farmers by upping its supply of fertilizer and speeding up transactions, Deputy Agriculture Minister Mohamed El Kersh said in a phone-in with Kelma Akhira’s Lamees El Hadidi (watch, runtime 4:23). The ministry also wants to allocate another 800k acres of agricultural land to cultivating wheat, he said.

But it is unclear whether it is willing to negotiate on prices: “So far, there are no signs that the government will increase the price of wheat,” another farmer said.

Ukraine, Russia negotiators signal progress in peace talks: Peace negotiations between Russia and Ukraine could be showing signs of progress, with officials from both sides yesterday signaling that the talks could produce an agreement within days.

What the Ukrainians are saying: “I think that we will achieve some results literally in a matter of days,” Ukrainian negotiator and presidential adviser Mykhailo Podolyak said in a video posted online seen by Reuters, adding that Russia is “beginning to talk constructively.”

What the Russians are saying: There has been “significant progress” in the negotiations, according to Russian negotiator Leonid Slutsky, who told RT that he believes the two sides could be in a position to sign onto an agreement in the coming days.

What are they actually talking about? The details of the negotiations are being kept under wraps so it remains unclear where compromises are being made. The Russians have so far been steadfast in their public demands of Ukraine, with senior officials repeatedly telling Kyiv that the war will not stop until it promises to add a neutrality clause to its constitution, recognize Russian sovereignty over Crimea, and allow the breakaway republics in the Donbas to become independent territories. Ukraine, meanwhile, is refusing to cede any of its territory to the Russians but has signaled that it is willing to discuss its future relationship with Nato.

The next round of talks is due to start today via video, Reuters says.

Progress at the negotiating table was dimmed somewhat by more Russia-Nato saber-rattling and claims that Moscow wants Chinese assistance in the conflict: A Russian missile strike on a Ukrainian military base close to the Polish border led to more calls for a no-fly zone and warnings from Washington that attacks on the territories of Nato members will be met with a military response. Ukrainian officials said that 35 people died and more than 130 were injured after Russian forces struck a base used by western governments to train Ukrainian soldiers.

Russia has asked China for military assistance to help it in the conflict, US officials told the Financial Times, without providing evidence or further details. US National Security Adviser Jake Sullivan warned that Beijing will “absolutely” face repercussions if it helps Moscow skirt sanctions, according to Reuters. Sullivan is due to meet senior Chinese diplomat Yang Jiechi for talks in Rome today.

China denies: "I've never heard of that,” the spokesperson for China's embassy in Washington told Reuters when asked for comment.

THE HUMAN TOLL-

Almost 2.7 mn people have now fled Ukraine into neighboring countries, according to the latest tally by UN agencies.

At least 596 people have lost their lives, including 43 children, since the conflict began on 24 February, the UN said (pdf) yesterday, adding that it believes the figure to be “considerably higher.” In addition, 1,067 civilians, including 57 children, have been injured.

More than 140k civilians have been evacuated from conflict areas in the country, Ukraine’s deputy prime minister said yesterday, according to Reuters.

Award-winning American journalist Brent Renaud was shot dead by Russian forces in the town of Irpin outside of Kyiv, as he was traveling to film refugees, the New York Times reported.

PLANET WAR FINANCE-

A Russian sovereign default is unlikely to trigger a global financial crisis, IMF head Kristalina Georgieva said yesterday, amid expectations that Moscow will be unable to pay its foreign-currency debts due to the unprecedented sanctions on its central bank and financial system. Russia is “definitely not systemically relevant,” Georgieva said when asked about possible contagion during an interview on CBS’s Face the Nation, Bloomberg reports. Sanctions on the Russian central bank has left it without access to most of its reserves, leaving it unable to meet foreign-currency bond repayments. Fitch said last week that it expects an “imminent” default.

But that doesn’t mean we’re being spared a global downturn: Georgieva said last week that she expects the IMF to further downgrade its 2022 global growth outlook due to the commodity price shock and its effects on consumer and business confidence.

Misr Ins. Holding (MIH) has tapped Zaki Hashem & Partners as legal advisors for the process of offering its subsidiary, Misr Life Ins., on the EGX, Chairman Basel El Hiny said in a press conference yesterday.

MIH is looking to list 25% Misr Life on the EGX during 2H2022 as part of the state privatization program, El Hiny told us back in October. The state-owned company has completed all the internal procedures needed for its planned IPO and is currently waiting on approvals from other authorities, El Hiny said. The company previously announced that it appointed NI Capital as its financial advisor for the offering.

But when to pull the trigger? That depends on market conditions, he said.

Market conditions haven’t been great this year, with the EGX30 falling into correction territory last week and foreign investors leaving the market on concerns about the impact of the ongoing commodity price shock on the economy. The benchmark index is now down 12.3% from its recent peak in January.

The potential sale of a stake in Misr Life comes as MIH reports improving earnings: The company reported a 5% increase in net income in 2020-2021.

ALSO FROM MIH-

The company will announce a new leasing and factoring arm in the coming weeks and has already received approval from the Financial Regulatory Authority, El Hini said. MIH has previously tried to enter the non-bank sector by making acquisitions but was unsuccessful, he said.

MIH is working on a second investment in education: After contributing to the launch of the Lighthouse Education investment platform, MIH plans to deepen its footprint in the "promising" education sector, El Hini said, without providing further details. The company invested EGP 125 mn in Lighthouse, which reached a first close of EGP 560 mn in November.

No L/Cs required for operational imports: Some goods imported by companies and organizations for their own use — as opposed to for resale or as raw materials for manufacturing, for example — will be exempted from filing certain customs forms with banks, including letters of credit (L/Cs), the Central Bank of Egypt announced in a circular (pdf) last week. As of the beginning of March, banks have stopped documentary collection as part of the import cycle after the CBE instructed them to only accept L/Cs

The imports that don’t require L/Cs: The paperwork isn’t necessary for own-use imports worth up to USD 25k made once every six months. Machinery and equipment for projects implemented by Egyptian companies abroad is also newly exempt — such as construction equipment bought by a local firm to complete a project in a foreign country, which the firm then ships back home once the project is completed. Imports by embassies, consulates, commercial service bureaus, and international and regional organizations also get a pass on the forms.

The list of imports exempted from L/Cs is growing. It now includes: transactions between freezones and overseas companies; some types of cross-border trade; temporary imports and imports for re-export; imports by foreign companies; those made via express shipment; imports of goods worth up to USD 5k; and a raft of commodity and pharma imports.

ALSO IN TRADE- CBE extends cash cover for foodstuffs: The central bank is extending (pdf) the exclusion period for rice, lentils, and fava beans from their 100% cash cover for another year, ending 15 March, 2023. The CBE has extended the exemption period annually (here and here) since it was first introduced to facilitate imports of essential commodities in 2019.

Investment into green energy and infrastructure is starting to heat up ahead of COP27:-

Norwegian renewable energy giant Scatec plans to build a green ammonia plant in Egypt with an annual production capacity of 1 mn tons per year, potentially expandable to 3 mn tons, it said in a statement. The plant, powered by renewable energy, will be based in the SCZone in Ain Sokhna with unspecified investment from the Sovereign Fund of Egypt.

Details still to come? Cabinet said in a statement that the facility would cost USD 5 bn to build, but did not make clear whether that was for the first phase of the plant or the total anticipated cost including the expansion. It said it expects production to begin in 2025. The SCZone’s Yehia Zaki said the facility will form the centerpiece of a “green fuel industrial hub” in the SCZone.

MEANWHILE- Lekela could branch out into green hydrogen + desalination: Renewables player Lekela Power is “actively exploring” potential green hydrogen and renewables-powered water desalination investment prospects with the government and the private sector, general manager for Egypt Faisal Issa told Enterprise. Spanish and British investors have expressed interest in working with Lekela on the desalination projects, he added.

New projects = fresh investment: Lekela could double or triple its investment in Egypt over the next four years, Issa said, without disclosing specific figures. The company inaugurated its 250 MW wind farm in West Bakr last November, and said in 2020 that it would funnel most of its investments to Egypt in “the coming period.”

Green hydrogen + desalination are all the rage right now: We’ve been hearing a lot lately about the government’s plans to bring the private sector in to boost these two priority sectors — and efforts are ramping up ahead of the COP27 climate summit in Sharm El Sheikh this November. Eleven companies are reportedly planning to bid on government desalination projects worth a combined USD 2.8 bn, and are waiting on the government to issue related regulations. Meanwhile, the Electricity ministry is set to develop a 12-month green hydrogen strategy amid plans to implement projects in the sector worth some USD 3-4 bn.

REMINDER- Lekela could soon be under new ownership. South African mining firm Exxaro and Chinese state fund CNIC are reportedly among the final bidders in the running for Actis’ 60% stake in the renewables firm. African Infrastructure Investment Managers — a unit of pan-African financial services outfit Old Mutual — is also said to have advanced to the final round and is currently seen as the frontrunner. Lekela has a presence in Egypt, Ghana, South Africa, and Senegal and has been valued at more than USD 2 bn.

YouTubers and other content creators: Here’s how you file your taxes. The Finance Ministry and the Tax Authority have published a manual (pdf) outlining the ins and outs of the so-called “blogger tax” announced last year. All YouTubers and content creators must pay income tax, while those who earn over EGP 500k a year via local platforms must also charge VAT. The manual breaks down who pays what and how.

If you are a Youtuber, TikToker, influencer, blogger, podcaster, or any kind of online creator who gets paid for their content, you now need to open up a tax file with the Tax Authority like any other business.

What kind of revenues will be taxed? Taxes will be collected on money made through content, including: advertising revenue on video and audio content posted to social media platforms (such as Youtube, Tiktok, Facebook and Instagram), as well as revenue made through endorsements, sponsored content, promoting products, selling merchandise, and funds collected through online “donations” on Youtube, Patreon and other platforms.

How will the taxes be calculated? Egypt-based content creators will pay income tax at the same rates as any other self-employed person, ranging between 2.5% and 25% depending on how much you make. Tax returns need to be filed between January and March of each year.

Keep your receipts: What you pay to create content will be tax deductible. The money spent on products and services that help creators run their business will be written off. Examples of tax-deductible items include photography equipment, video editing services, domain hosting, and transport expenses.

If you make more than EGP 500k per year, you need to charge and remit VAT. Content creators with income above this threshold will need to charge and remit VAT and submit monthly returns via the Finance Ministry’s electronic system, on top of their annual income tax declaration.

Let’s say you have a “paid partnership” to promote Brand X on a series of Youtube videos. By definition, you don’t invoice Youtube — Youtube gives you a cut of any advertising generated by your videos. That’s an automated process and it is VAT exempt (see below). But you do have to charge Brand X the 14% VAT on the value of the invoice you give them to promote their (restaurant / widget / app) in that series of videos on your channel. In other words: Congratulations, you’ve just become an advertising agency of one.

ALSO- While there’s no VAT on content created for international platforms (goods and services exported outside Egypt are zero-rated under the VAT Act), content for Egypt-based platforms will be subject to the standard 14% VAT. So if you make content for a local website and get a cut? Break out your invoice software of choice.

Raya Holding’s net income rose to EGP 541.4 mn in 2021, after having posted losses of EGP 45.7 mn the year before, according to the company’s financials (pdf). Revenues rose to EGP 16.9 bn, compared with EGP 10.8 bn in 2020.

Oil Minister Tarek El Molla has appointed former EGPC head Abed Ezz El Regal as the chairman and managing director of Abu Qir Fertilizers, according to Al Masry Al Youm.

Rising food price inflation continued to dominate the airwaves last night, with most of the talking heads dedicating sizable portions of their shows to discussing bread prices and what the government is doing to tackle the problem.

Bringing old prices back: In an effort to hold down bread prices, the government will subsidize private bakeries by selling flour at a discounted rate, according to Ragab Shehata, head of the Rice Division of the Federation of Industries, who appeared on El Hekaya last night (watch, runtime 3:27). From today, bakeries will be able to purchase a ton of flour for EGP 8.5k, rather than the current market price of around EGP 11k, he said. The government also held talks with industry players, where the suggestion was made that bakeries could be required to sell unsubsidized bread by weight rather than pricing per loaf, to ensure that they aren’t skimping on loaf size.

The price of unsubsidized bread in the Greater Cairo area has risen by as much as 50% as global wheat prices soared following Russia’s invasion of Ukraine. As of last week, a pack of five balady loaves can cost EGP 7.50 in Cairo, up from EGP 5.00 the week before.

Calls for extending the export ban to include metals: Engineers and metallurgical industry experts are calling on the Trade Ministry to extend its export restrictions to include a one-year ban on all types of metals, said Mohamed El Mohandes, chairman of the Engineering Industries Chamber of the Federation Industries, in a phone-in on Kelma Akhira (watch, runtime 5:55) amid a global surge in the prices of steel, copper and aluminum due to the Russia-Ukraine war. The Trade Ministry last week banned the export of staple food commodities, including wheat, flour, oils and corn, for three months.

(EDITOR’S NOTE: This story was corrected on 14 March, 2022 to reflect that the cabinet is not considering supplying reduced amounts of flour to bakeries to combat stockpiling and inflating prices. The government in fact held talks with industry players, where it was suggested that bakeries could be required to sell unsubsidized bread by weight rather than pricing per loaf.)

The commodity price shock and its effect on Egypt’s food supply is still dominating coverage in the foreign press: The Wall Street Journal, the Financial Times and Bloomberg all mention Egypt in their latest updates on how the Russia-Ukraine conflict is upending the global food supply.

Egypt wants to produce green fuels for Maersk: Maersk will soon sign an MoU with the Suez Canal Economic Zone (SCZone) which could pave the way for Egypt to supply the shipping giant with fuel for its new generation of low-carbon vessels, the SCZone said in a statement Friday following talks last week. Twelve new vessels recently ordered by Maersk will run on green methanol when they set sail in 2024 and the company is looking to secure at least 450 mn tonnes a year to keep them running.

Don’t be surprised if this doesn’t happen, though: Following the talks, Maersk announced it had signed agreements with six companies from Europe, the US and China that will provide them with at least 730k tonnes a year by 2025.

Other things we’re keeping an eye on this morning:

• US-based water solutions company Xylem is planning to establish a factory in Egypt, and has opened a regional office (pdf) in New Cairo. It will complete a feasibility study for the factory by the end of the year.
• Phosphate Misr is set to begin construction on a USD 1.2 bn phosphoric acid and fertilizer complex in Abu Tartur plateau next May. The plant will produce 600k tonnes of acid a year once fully operational.
• Emirati businessman Khalaf Al Habtoor has held talks with a number of Egyptian banks to discuss potential investment in the country.
• An attempt by US lawmakers to block a USD 2.2 bn arms sale to Egypt on human rights grounds has failed, with senators voting down the effort by a margin of 81 to 18.

Egypt pushes green finance for Africa alongside continued oil + gas exploration: Oil minister Tarek El Molla repeated the call for more climate finance to African countries ahead of COP27 in Sharm El Sheikh, while also stressing “the right of African countries to exploit their natural gas and petroleum resources as part of a just transition,” according to a ministry statement. El Molla made the comments during a forum on African economies and energy attended by the energy ministers of 11 African countries, at S&P Global’s CERAWeek energy conference in Houston, Texas.

An unexpected positive from the Russia-Ukraine conflict? Long standing foes Turkey and Greece have agreed to improve relations during talks yesterday in response to the deteriorating security situation in Europe, Reuters reports. “Pointing out that Turkey and Greece have a special responsibility in the changing European security architecture with Russia's attack on Ukraine, the meeting focused on the mutual and regional benefits of increasing cooperation between the two countries,” the Turkish presidency said in a statement. “It was agreed at the meeting to keep communication channels open and to improve bilateral relations.”

Eighteen months is a long time in international relations: It was only in 2020 that the two countries were on the verge of going to war over competing gas interests and territorial claims in the eastern Mediterranean.

And a big negative: The conflict is threatening to tank prospects of a nuclear agreement with Iran. The US is not willing to enter negotiations with Moscow to save the Iran nuclear agreement and could start exploring alternatives if Russia doesn’t withdraw its demand for written guarantees that its trade with Iran will not be impacted, the Wall Street Journal quoted a senior US official as saying. Negotiators trying to restore the 2015 Iran nuclear pact were forced to suspend their efforts last week after they had been close to reaching an agreement due to Russia’s last minute demands for Ukraine-related sanctions exemptions.

Iran has reacted swiftly following the suspension of talks, yesterday ending direct talks with regional rival Saudi Arabia and launching a missile strike in the Iraqi city of Erbil, targeting what it says was an Israeli “strategic center.”