NEW YORK (Reuters) – Oil fell nearly 3% a barrel on Thursday, weighed down by weakness in U.S. equities markets and an expectation that crude output would rise in the Gulf of Mexico following last week’s hurricane in the region. Crude rose earlier in the session after Iran said it had seized a foreign tanker in the Gulf. Prices pulled back after it emerged that the vessel had only a small cargo and was detained on Sunday for fuel smuggling. Brent crude LCOc1 futures were down $1.76, or 2.8% at $61.91 a barrel by 12:26 p.m. EDT (1726 GMT), after earlier touching a session high of $64.46. West Texas Intermediate crude CLc1 futures were down $1.64 a barrel, or 2.9% at $55.14, after earlier rising to as much as $57.32 a barrel. U.S. offshore oil and gas production has continued to return to service since Hurricane Barry passed through the Gulf of Mexico last week, triggering platform evacuations and output cuts. Royal Dutch Shell (RDSa.L), a top Gulf producer, said Wednesday it had resumed about 80% of its average daily production in the region. “You have people that were trying to ride the whole storm and a 9 million(-barrel) draw (in U.S. crude inventories) that went with it last week,” said Bob Yawger, director of energy at Mizuho in New York. “This week the situation has totally changed and everyone is trying to get out of the market.” In addition to the U.S. storm, tensions in the Middle East have dictated market moves in recent weeks. “The oil price reaction on Thursday shows once again that the conflict in the Middle East is far from solved and tensions could flare up at any time,” UBS analyst Giovanni Staunovo said. Britain pledged to defend its shipping interests in the region, and U.S. Central Command chief General Kenneth McKenzie said the United States would work “aggressively” to enable free passage after recent attacks on oil tankers in the Gulf. Iran said the vessel impounded was the one it towed on Sunday after the ship had sent a distress call. U.S. officials said on Wednesday they were unsure whether an oil tanker towed into Iranian waters had been seized or rescued. Reuters reported on Wednesday that shipping companies were hiring unarmed security guards for voyages through the Gulf.
Jens Stoltenberg put the responsibility for saving the dying treaty on Moscow, despite the fact it was Washington who unilaterally withdrew from the agreement earlier this year and Russia’s assertion that Washington also violated the nuclear agreement. NATO Secretary General Jens Stoltenberg said the alliance should prepare for a world without the INF Treaty and “more Russian missiles” because Moscow has given “no signs whatsoever” it will change its position on the INF, the BBC reported Wednesday. “Therefore we have to be prepared for a world without the INF Treaty and with more Russian missiles”, he said. Earlier this year, US President Donald Trump withdrew from the Soviet-era treaty that banned ground-based nuclear missiles with a range of 500 to 5,000 kilometers, claiming the secretive Russian missile 9M729 violated the terms of the INF. Moscow maintains that the 9M729 has a maximum range of 480 kilometers and denies it violates the terms of the agreement. Russia accuses Washington of being in violation of the treaty, saying its Aegis Ashore missile defence systems deployed in Europe can fire cruise missiles without additional refurbishing. Moscow says US strike drones that have an operational range of 1,100 kilometers are very similar in nature to cruise missiles. In response to the US withdrawal, Russia suspended its participation in the agreement. NATO has nonetheless put all responsibility on Moscow for the failure of the treaty and has called on Russia to save the deal. Stoltenberg reiterated that if Russia takes no action by 2 August, when the US decision to withdraw officially comes into effect, the alliance will respond in a “measured, defensive” way, saying that “conventional air and missile defence, new exercises and readiness of forces, and new arms control initiatives” could form part of that response, according to the BBC.
(Reuters) – Packers Plus Energy Services, a company built on the North American shale oil boom, is turning to the Middle East to weather a new round of spending cuts by producers amid warnings of a looming oil glut. Oil production has outpaced demand by 900,000 barrels per day (Nick Note: This is nothing in a 100,000,000 (bpd) market) this year, according to the International Energy Agency, which expects increases to add a net 136 million barrels to the global surplus by March. Spending cuts by producers also have sharply cut service providers’ margins, a June survey of 60 providers by the Dallas Federal Reserve Bank revealed. The last time supplies overwhelmed demand, oilfield service suppliers cut 100s of thousands of jobs and top firms gushed red ink. Memories of that sharp downturn in late 2014 have executives such as Ian Bryant, chief executive officer of privately-held, Calgary-based Packers Plus, again cutting jobs, seeking safe harbors, mergers, or putting business units on the market. These defensive strategies comes as oil and gas drillers are producing vastly more oil with less investment. U.S. shale output is estimated to have hit 8.5 million bpd, (Nick Note: this is piss aunt prodution OPEC+ is capable of producing 60 milliom bpd.) even as the number of rigs in operation fell by almost 100 in the last year. On average, analysts expect the top 50 U.S. independent oil producers will cut spending by 20% this year, with some by as much as 60%, according to review by researcher DrillingInfo. Weatherford International, once a top four oilfield service provider, filed for protection from creditors this month and has been cutting staff, citing “market headwinds” and lack of access to financing.. Across the U.S. the number of yet-to-be-fracked wells hit 8,289 in May, up 22% in a year, according to the U.S. Energy Information Administration. Oil and gas employment in the United States has grown since the last downturn, but last month remained 20% below the same month in 2014, according to U.S. government data. Profits for service companies that added people and equipment following the 2015-2016 oil price collapse also have suffered. Oilfield equipment utilization fell nearly 13 points and profitability tumbled 26 points versus the previous quarter, according a June survey by the Dallas Federal Reserve bank. Its survey polled 60 oilfield service companies in Texas, New Mexico and Louisiana.Investors have so soured on the sector that there were no public equity offerings by oilfield service firms last quarter, said Drillinginfo, for the first time in more than three years. “There are not very many buyers,” said Sajjad Alam, an analyst for debt rating firm Moody’s Investors Service. “The market is still very weak and looks more uncertain today than it did earlier in the year.”
U.S. crude oil refinery inputs averaged 17.3 million barrels per day during the week ending July 12, 2019, which was 172,000 barrels per day less than the previous week’s average. Refineries operated at 94.4% of their operable capacity last week. Gasoline production decreased last week, averaging 9.9 million barrels per day. Distillate fuel production increased last week, averaging 5.4 million barrels per day.
U.S. crude oil imports averaged 6.8 million barrels per day last week, down by 470,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 7.1 million barrels per day, 16.3% less than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 852,000 barrels per day, and distillate fuel imports averaged 132,000 barrels per day.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.1 million barrels from the previous week. At 455.9 million barrels, U.S. crude oil inventories are about 4% above the five year average for this time of year. Total motor gasoline inventories increased by 3.6 million barrels last week and are about 2% above the five year average for this time of year. Finished gasoline and blending components inventories both increased last week. Distillate fuel inventories increased by 5.7 million barrels last week and are about 2% below the five year average for this time of year. Propane/propylene inventories increased by 0.5 million barrels last week and are about 5% above the five year average for this time of year. Total commercial petroleum inventories increased last week by 11.7 million barrels last week.
Total products supplied over the last four-week period averaged 20.8 million barrels per day, up by 0.6% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 9.5 million barrels per day, down by 1.7% from the same period last year. Distillate fuel product supplied averaged 3.7 million barrels per day over the past four weeks, down by 4.9% from the same period last year. Jet fuel product supplied was up 2.1% compared with the same four-week period last year. Nick Bit: Oil dropped on the smaller inventory draw down then expected. Hopefully we can buy more at even lower prices…. Hos cool is that?
TOKYO (Reuters) – Oil prices rose slightley on Wednesday after steep falls in the previous session, although U.S. crude trailed gains for international benchmark Brent after U.S. crude inventories fell less than expected. West Texas Intermediate crude futures were up 6 cents at $57.68 by 0327 GMT, having fallen 3.3% on Tuesday. Brent crude futures were up 25 cents at $64.60, or 0.4%. They ended down 3.2% in the previous session. Crude inventories fell by 1.4 million barrels in the week to July 12 to 460 million, industry group the American Petroleum Institute (API) said on Tuesday. That compared with analysts’ expectations for a decrease of 2.7 million barrels. Official data is due out later today from the U.S. government’s Energy Information Administration (EIA). If it confirms the fall it will be the fifth consecutive weekly decline, the longest stretch since the beginning of 2018. “Market participants are looking ahead to the weekly IEA oil inventory data for the U.S., which is expected to show yet another drawdown,” Abhishek Kumar, head of analytics at Interfax Energy in London.“Nevertheless, oil production in the Gulf of Mexico returning to normal following Hurricane Barry will limit price gains,” Kumar said. More than half the daily crude production in the U.S. Gulf of Mexico remained offline on Tuesday in the wake of Hurricane Barry, the U.S. drilling regulator said, as most oil companies were re-staffing facilities to resume production. The Bureau of Safety and Environmental Enforcement said 1.1 million barrels per day of oil, or 58% of the region’s total, and 1.4 billion cubic feet per day of natural gas output remained shut. The smaller than expected decline in crude stocks suggested production shut-ins caused by Hurricane Barry late last week had little impact on inventories. Gasoline stocks also fell, declining by 476,000 barrels, compared with analysts’ expectations in a Reuters poll for a 925,000-barrel decline. Distillate fuels stockpiles, which include diesel and heating oil, rose by 6.2 million barrels, compared with expectations for a 613,000-barrel gain, the API data showed. Oil prices fell on Tuesday after U.S. President Donald Trump said progress has been made with Iran, signaling tensions could ease in the Mideast. However, Iran later denied it was willing to negotiate over its ballistic missile program, contradicting a claim by U.S. Secretary of State Mike Pompeo, and appearing to undercut Trump’s statement. Tensions between the United States and Iran over Tehran’s nuclear program have lent support to oil futures, given the potential for a price spike should the situation deteriorate.
NEW YORK and LONDON (Bloomberg) — Oil extended losses below $60/bbl on the prospect of easing tensions between the U.S. and OPEC member Iran, and as Gulf of Mexico producers began resuming operations after a storm. Futures fell as much as 3.2% in New York on Tuesday, after Secretary of State Mike Pompeo said Iran, which has been hit by American sanctions over its weapons program, had signaled an openness to talks. That followed similar comments from the Islamic Republic’s foreign minister, Mohammad Javad Zarif, the first signs of a possible diplomatic solution since the U.S. sought to curb the Middle East producer’s revenues by squeezing its oil exports. Oil explorers and refiners along the Gulf coast, meanwhile, are returning employees after the former Hurricane Barry shuttered almost three-quarters of output over the weekend. That’s expected to be a factor in the latest tally of American stockpiles, which probably declined by 3 MMbbl last week, according to a Bloomberg survey. Oil has rallied about 10% since mid-June on shrinking U.S. inventories, rising tensions over Iran and extended cuts by the Organization of Petroleum Exporting Countries and its partners. Geopolitical risk heightened Tuesday as the U.S. said it was probing the fate of a small Emirati tanker that entered the Persian Gulf state’s waters. Still, expanding supply, including from American shale fields, and weaker demand are concerns. “Bullish catalysts are in short supply,” analysts at London-based broker PVM Oil Associates Ltd. said in a note to clients. “The Gulf Coast of Mexico hurricane premium is fading as offshore operations in the region resume. At the same time, the U.S. shale engine continues to give oil bulls a sleepless night.” Oil climbed earlier in the day along with U.S. equities after American retail sales, factory output and housing reports all beat forecasts. However, the rally fizzled amid speculation the data could deter the Federal Reserve from cutting interest rates. August West Texas Intermediate oil was down $1.91 at $57.67/bbl on the New York Mercantile Exchange as of 1:25 p.m., after losing 1.1% on Monday. Brent futures for September settlement slipped $1.69 to $64.79 on the ICE Futures Europe Exchange in London. The global benchmark crude was at a premium of $6.80 to WTI for the same month. Royal Dutch Shell Plc and ConocoPhillips are among companies seeking to restore output at offshore platforms in the Gulf of Mexico now that weather conditions have improved. The region accounts for 16% of total U.S. crude oil production, according to the Energy Department.“In the short-term, given that we’re in peak driving season, we’re going to continue to see inventories draw,” Sanford C. Bernstein analyst Oswald Clint said in a Bloomberg TV interview. “OPEC needs to keep a lid on production and potentially cut more if it’s going to continue to manage prices around the $70/bbl mark.”
HOUSTON (Reuters) – U.S. oil companies on Monday began restoring some of the nearly 74% of production that was shut at U.S. Gulf of Mexico platforms ahead of Hurricane Barry, the U.S. offshore drilling regulator said. There were 1.3 million barrels per day (bpd) of oil production offline in the U.S.-regulated areas of the Gulf of Mexico on Monday, about 80,000 barrels fewer than on Sunday, according to the U.S. Bureau of Safety and Environmental Enforcement (BSEE). Workers also were returning to the more than 280 production platforms that had been evacuated. It can take several days for full production to be resumed after a storm leaves the Gulf of Mexico. Anadarko Petroleum Corp, BHP Group Ltd, Chevron Corp, Exxon Mobil Corp and Royal Dutch Shell Plc said on Monday they had begun returning staff to evacuated platforms and were in the process of restoring production operations. “Redeployment and crew-change flights to some of our assets have begun now that weather conditions in the Gulf and onshore have improved,” said Shell spokeswoman Cynthia Babski. Three Shell platforms remained shut and a fourth had limited production on Monday, she added. BP also has begun returning teams to evacuated facilities, said spokesman Jason Ryan. Production will resume after safety is assured, pipelines and receiving systems are working and regulatory approvals are in place, he said. Barry came ashore in central Louisiana as a Category 1 hurricane with at least 74-mile-per-hour (119-kph) top sustained winds on Saturday. Late Monday, it was a post-tropical cyclone, and moving north at about 13 mph (20 kmh) into Missouri after dropping up to 4 inches (10 cm) of rain on Arkansas. Most refineries in southeastern Louisiana kept running through the storm except for Phillips 66’s 253,600-bpd Alliance, Louisiana, refinery, which the company began restarting on Monday. The Alliance refinery was shut on Friday because of the threat of flooding and a mandatory evacuation order in Plaquemines Parish, where the refinery is located along the Mississippi River.
The trade war between China and US has seen increased pressure on US allies to follow its policies of restriction against Chinese telecoms company, Huawei from 5G core infrastructure and the company place on a US ‘blacklist’. The UK has so far allowed Huawei access only to “non-core” infrastructure. The Trump administration sent a stark threat to the UK on Saturday, warning that a post-Brexit trade deal with the US may depend on the UK’s willingness to follow US trade policy towards Huawei. The Sunday Telegraph reported that allowing Huawei access to newly-developed 5G networks and infrastructure could be a deal breaker when negotiating a new trade deal with the US. The declaration is based on an alleged national security threat from the US which lays on the basis that Huawei technology is ultimately answerable to the Chinese government and could be used to spy on users of 5G infrastructure. CEO of Huawei Ren Zhengfei has assured the UK that it would “never do anything to harm any other nation”. Huawei itself has also offered to sign a “no spy” accord with the UK. This stands in contrast to US tech companies such as Apple and Google which have offered to signed no such agreement. Reports from trade talks between the US and China reveal Telecoms companies believe that is likely the US’s actual concerns are more due to fear of international competition on the global market than any legitimate anti-security threat. This echoes statements from American academic and tech expert Nicholas Negroponte who said that “clearly [the Huawei ban is] not about national security. We don’t trade national security.” Speaking to The Telegraph, a civil servant claimed that Britain may have to capitulate to hardline American policies against Huawei as rejecting them could be seen as “undermining Washington’s efforts to reinvigorate the World Trade Organisation (WTO).” Another senior official said in The Telegraph that it’s becoming difficult to balance the need to improve mobile networks with the necessity of a free trade agreement as the US “keeps moving the goalposts”. This comes as President Trump Tweeted that he will allow certain purchases from Huawei which “which will not impact our National Security.”
I had a great meeting with President Xi of China yesterday, far better than expected. I agreed not to increase the already existing Tariffs that we charge China while we continue to negotiate. China has agreed that, during the negotiation, they will begin purchasing large…..
— Donald J. Trump (@realDonaldTrump) June 29, 2019
Ben Wood, an analysis for CSS Insight, claimed that uncertainty surrounding British policy towards Huawei’s involvement in 5G is harming mobile phone operators. He said: “It’s impossible for them to accurately assess what their addressable market will be and could trigger delays to the roll out of 5G”. This comes as Huawei says that it will lay off hundreds of employees in the US, citing the blacklist restrictions on trade resulting in decreased revenue. This is not the first time the US has put out statements in recent months regarding British internal policy. Secretary of State Mike Pompeo said in June that it would push back against a Jeremy Corbyn government in Britain, who has expressed distain for the Trump administration.
Israeli-Iranian relations have been poor for decades, with officials threatening one another repeatedly about what would happen in the event of war. Last week, responding to an Iranian MP’s warning that Israel’s “lifespan” would be cut short if the US attacked Iran, Prime Minister Netanyahu noted that all of Iran was in range of Israeli warplanes. The Israeli Defence Forces are the only military forces in the world capable of taking on Iran in the event of war, Prime Minister Benjamin Netanyahu has said. “At the moment, the only army in the world to fight Iran – this is the Israeli army,” Netanyahu said, speaking to members of Israel’s National Security College at his residence on Sunday, according to the Jerusalem Post. The prime minister also recalled his role in fighting the 2015 Iran nuclear deal, also known as the Joint Comprehensive Plan of Action, saying the agreement would have only given Iran “hundreds of billions of dollars” to “invest in their empire” and “pave the way for [an Iranian] nuclear arsenal.” “I had to fight alone to block the nuclear agreement,” Netanyahu said. “I had to fight against all the powers and against the president of the United States – I went to the US Congress.” “Today, you can judge whether we were right or not. So, first of all, you have to stop it,” Netanyahu said. According to the prime minister, “the only thing that the terrible nuclear deal gave” Israel was the “strong and sweeping rapprochement with major Arab countries,” whom Iran also allegedly threatened with nuclear annihilation. Netanyahu personally lobbied President Donald Trump to scrap the JCPOA, making a media presentation in 2018 based on information said to have been obtained by Israeli intelligence about Iran’s alleged attempts to hide its nuclear activities from the world. Days after the presentation, Trump announced that the US would be withdrawing from the agreement. Last week, after hearing that Tehran would soon surpass the uranium enrichment levels limit outlined by the JCPOA, Netanyahu said that the only possible reason for such an action was the creation of a nuclear bomb. He also compared Iran’s enrichment activities to the actions of Nazi Germany in the 1930s.
Iran has denied having any intention to pursue nuclear weapons, saying Islam “never approves of weapons of mass destruction.” Tehran has also recalled repeatedly that Israel has been the only state in the region with an actual nuclear weapons arsenal for many decades. Nick Bit: does anyone believe this shit. Do people really believe that want nuclear to generate electricity? With all their oil! My question is if they do not want nukes why are they enriching uranium more them 3.5% Enrichment above 3.5% has only one use. Fuel for a nuclear weapon!
HOUSTON (Reuters) – Tropical Storm Barry slowly moved on to the Louisiana coast and quickly weakened from hurricane strength on Saturday afternoon, leaving in its wake 70 percent of U.S. Gulf of Mexico oil production shut in, the U.S. government said. One refinery was taken out of production on Friday due to the threat of flooding, while seven others in southeastern Louisiana remain in operation on Saturday, the companies and sources familiar with plant operations said. The Louisiana Offshore Oil Port, the only U.S. location loading and offloading giant oil tankers, was operating normally on Saturday, a spokesman said. Barry reached hurricane strength on Saturday morning before coming ashore near Intracoastal City, Louisiana, at about 1 p.m. CDT (1800 GMT) and quickly weakened with maximum sustained winds of 70 miles per hour (115 km per hour).
The one shut refinery, Phillips 66’s (PSX.N) 253,600-barrel-per-day (bpd) Alliance, Louisiana, plant, was not significantly affected by Barry as it came ashore, said company spokesman Joe Gannon.
“Utilities at the facility remain active to allow for restart activities to begin as soon as it is safe to do so,” Gannon said. Barry is forecast to move slowly across Louisiana as it did across the Gulf since emerging off the coast of Florida on Wednesday. The storm is expected to drop 2 feet of water in areas east of its center over the weekend.Also in the U.S.-regulated areas of the Gulf of Mexico, natural gas output from offshore platforms had been cut by 56%, or 1.5 billion cubic feet per day, the U.S. Bureau of Safety and Environmental Enforcement (BSEE) said on Saturday. Oil producers have shut 283 offshore platforms, or 42%, in the northern Gulf of Mexico, BSEE said. Exxon Mobil Corp’s (XOM.N) 502,500-bpd Baton Rouge, Louisiana, refinery was continuing operations, spokesman Jeremy Eikenberry said. Royal Dutch Shell PLC’s (RDSa.L) 225,300-bpd Norco, Louisiana, refinery was running with essential staff only and no reduction in production, sources familiar with plant operations said. Shell spokesman Ray Fisher confirmed the Norco refinery and the company’s 221,270 bpd-Convent, Louisiana, refinery were operating, but did not discuss production levels. The major threat to the refineries is heavy rainfall, with wind seen as a lesser risk as the plants are east of the storm’s center, which produces the highest winds.
Last week, Tehran announced that its uranium enrichment levels would soon surpass limits set by the 2015 nuclear deal, and that it would continue to reduce its commitments under the treaty every 60 days unless other signatories meet their commitments.
The International Atomic Energy Agency has found traces of radioactive materials at a “secret atomic warehouse” which prove Iran’s violation the 2015 nuclear deal, but has avoided publicising this information, Israel’s Channel 13 broadcaster has reported, citing four senior Israeli officials said to be involved in the matter. ‘Top Israeli sources’ told Channel 13 that IAEA officials were holding back publicising information about the violations at the ‘secret’ site at Turquzabad, whose existence was reportedly revealed by Prime Minister Benjamin Netanyahu in his 2018 ‘Iran Lied’ speech. IAEA officials visited the Turquzabad site repeatedly by April 2019, taking samples from the site and promising to reveal their findings in June, but have yet to do so. Instead, the Jerusalem Post has alleged, the IAEA and others have been “distracted by Iran’s open violations of uranium enrichment limits,” including by the recent announcement by Iranian officials that Iran has begun enriching uranium beyond the 3.67 per cent limit outlined by the Joint Comprehensive Plan of Action (JCPOA) nuclear treaty. According to Channel 13, IAEA inspectors could conclude that there were “traces of radioactive material” at the site. The channel noted that “the storing of radioactive material in a secret facility without informing the IAEA is a breach of the Treaty on the Non-Proliferation of Nuclear Weapons, to which Iran is a signatory.” Iran maintains that it is not pursuing a nuclear weapon, with Islamic Revolutionary Guard Corps Commander Hossein Salami recently saying that such arms “have no place in Islam,” and that Iran is opposed to all weapons of mass destruction. Experts have pointed out that if Iran were to pursue nuclear weapons, it would have to ramp up enrichment of uranium-235 substantially from the current 3.67+ level, to at least 20 percent or higher, with weapons-grade uranium typically having a uranium-235 concentration of 85 percent or more. Last year, just days before US President Donald Trump announced that the US would be unilaterally withdrawing from the Iran nuclear deal, Prime Minister Netanyahu gave a media presentation based on Mossad intelligence accusing Iran of ‘lying to the world’ about its commitment to the JCPOA. Iran has vocally denied Netanyahu’s allegations, and has accused Tel Aviv of trying to “kill” the JCPOA, while recalling that Israel is the only state in the region with an actual nuclear arsenal.
On Wednesday, President Trump accused Iran of “secretly enriching” uranium in violation of the “terrible” JCPOA nuclear deal signed by his predecessors, and promised that sanctions would “soon be increased, substantially!”
A day earlier, US IAEA representative Jackie Wolcott said the US remained open to the “full normalization of relations” with Iran, in exchange for a full reversal of “its recent nuclear steps” and a halt in “any plans for further advancements in the future.”
Some advisers within U.S. President Donald Trump’s administration are allegedly urging secondary economic restrictions on Beijing for continuing to import Iranian oil despite American sanctions against the purchase, Politico reported this week, citing anonymous U.S. officials.
The news outlet acknowledged that additional restrictions on the Asian giant could further complicate the ongoing trade talks between China and the United States and further intensified tensions between the two largest economies of the world.
Senior administration officials now agree that China defied U.S. sanctions when it imported more than a million barrels of crude oil from Iran last month. But they are grappling with whether — and how — to hit back, according to three U.S. officials.
The State Department had considered issuing a waiver allowing Chinese companies to receive Iranian oil as payment in kind for their investment in an Iranian oil field, but that idea has been abandoned. China hawks on the National Security Council are now pushing for the U.S. to impose secondary sanctions on Chinese entities, a move that would complicate trade talks between the two countries and further strain the relationship.
After pulling the U.S. out of the controversial nuclear deal between Iran and U.S.-led world powers, including China, arguing that it was not tough enough, the Trump administration reimposed the suspended economic restrictions in addition to new sanctions, targeting the oil, gas, shipping, and banking sectors, among others. The multifaceted effort is part of an unprecedented maximum pressure campaign to convince Iran to negotiate a new accord in exchange for much-needed economic relief. Initially, President Trump granted temporary sanction waivers to Iran’s eight biggest customers — China, India, Italy, Greece, Japan, South Korea, Taiwan, and Turkey — to ensure the restrictions do not destabilize crude oil prices. However, the Trump administration announced an end to the waivers in April, warning them to stop purchasing oil from Iran by the beginning of May or face additional sanctions. China and its rival India, both home to swelling populations and the top two importers of Iranian oil, respectively, are reportedly expected to remain defiant amid the threat of U.S. sanctions given their substantial reliance on Tehran’s crude. Already, China is continuing to import Iranian crude oil in the face of the American sanctions.
In June, the Financial Times reported:
China is buying Iranian oil in defiance of US sanctions and providing what Tehran hopes will be a financial lifeline for the country’s buckling economy. Although Beijing customs data show crude purchases from Iran are down month-on-month, China is still importing Tehran’s oil despite US measures designed to cut exports to “zero”. Last week the Chinese received their first delivery of an Iranian oil cargo since the Trump administration in May scrapped exemptions on Iranian sanctions.
Boasting about its capability to circumvent long-term U.S. sanctions, Iran claims the United States is unable to prevent it from exporting its oil. Iran has threatened to blockade the Persian Gulf over the Trump sanctions to ensure that if they cannot transport oil, no oil moves through the region. The Persian Gulf is one of the most contested waterways through which an estimated 20 percent of the world’s tradeable oil passes on a daily basis. Last month, the United States and Saudi Arabia accused Iran of attacking foreign vessels — a Japanese and a Norwegian tanker — on the Strait of Hormuz, considered one of the most strategically important, crowded, and contested waterways in the world where the vast majority of oil from the Persian Gulf moves through. Overnight on Wednesday, the U.K. Royal Navy thwarted an attempt by three boats from the Islamic Revolutionary Guard Corps, a U.S.-designated terrorist organization, from seizing British tanker. The following day a still defiant Iran, hours after it was forced to withdraw when the British warship pointed its deck guns and issued verbal warnings, claimed none of Tehran’s enemies dare fire a “single bullet” at Iran, the state-run Tasnim News Agency reported. In February 2018, the U.S. military warned that the lifting of sanctions under the controversial nuclear deal between Iran and United States-led world powers, including China, allowed Beijing to enhance its relationship with Iran, designated by the Trump administration as the world’s leading state-sponsor of terrorism. China’s ambitious infrastructure and technology Belt and Road Initiative (BRI), considered a threat by the United States, is expected to run through Iran. Brian Hook, the U.S. Special Representative for Iran, told lawmakers last month that Trump’s maximum pressure campaign against Iran is “working,” noting that it has reduced Tehran’s ability to boost its military capabilities and fund its proxies, including anti-America Shiite militias in Iraq, home to thousands of U.S. troops, and the narco-terrorist organization Hezbollah, which operates in the Western Hemisphere. Hook recently said the Trump administration’s sanctions are “on track” to deprive Iran of $50 billion in oil revenue alone.
PARIS (Reuters) – Iran’s breaching of caps on its uranium enrichment after the United States pulled out of world powers’ nuclear deal with Tehran was “a bad reaction to … (a) bad decision”, raising fears of a stumble into war, France’s foreign minister said. Tensions have risen as Washington has blamed Iran for several attacks on oil tankers and Tehran shot down a U.S. surveillance drone, prompting President Donald Trump to order air strikes that he called off only minutes before impact. Trump withdrew the United States last year from the 2015 deal between Iran and world powers to curb its nuclear program, to the dismay of co-signatories France, Britain, Germany, Russia and China. Washington has since tightened sanctions to block Iran’s oil exports and other benefits accruing from the deal. Tehran has responded by enriching uranium beyond set limits and threatening to restart deactivated centrifuges and ramp up enrichment well above the level deemed normal for electricity generation. “The situation is serious. The rise of tensions could lead to accidents,” French Foreign Minister Jean-Yves Le Drian told reporters when asked about the risk of a wider Middle East war. “The fact Iran has decided to pull back from some of its engagements on nuclear proliferation is an additional worry. It is a bad decision, a bad reaction to another bad decision, that of the U.S. withdrawal from the nuclear deal a year ago,” he said, arriving for Paris’s annual Bastille Day military parade. The European powers do not support Trump’s sanctions squeeze on Iran, aimed at forcing it into negotiations on stricter nuclear limits and other security concessions, but have been unable to come up with ways to allow Iran to avert them. “No one wants a war. I’ve noticed that everyone is saying they don’t want to go to the summit of the escalation. Neither (Iranian) President Rouhani, nor President Trump or other Gulf leaders. But here there are elements of escalation that are worrisome,” Le Drian said. “Iran gains nothing from withdrawing from its engagement (with nuclear deal). The U.S. also gains nothing if Iran gets nuclear weapons, so it is important that de-escalation measures are taken to ease the tensions.” In Baghdad on Saturday, European Union foreign policy chief Federica Mogherini backed Iraq’s proposal for a conference between Iran and its regional rivals, U.S.-allied Gulf states like Saudi Arabia and the United Arab Emirates.
(CNN) Tropical Storm Barry was briefly a Category 1 hurricane before it made landfall Saturday and weakened back down to a tropical storm. The slow-moving storm still has heavy rain to come, threatening parts of Louisiana and Mississippi with life-threatening storm surge, flash flooding and river flooding, according to the National Hurricane Center. Officials are working to evacuate residents with their pets, saying that it is important and humane to keep the two together even in life-threatening conditions. It will not be an easy storm for the region to weather, but Louisiana Gov. John Bel Edwards says that the state will recover. “The people of Louisiana are resilient,” he added, “and while the next few days may be challenging, I am confident that we are going to get through this.” As Barry moves north-northwest over Louisiana, it is expected to weaken, becoming a tropical depression during the day Sunday, the NHC said early Sunday morning. Heavy rain and flooding are the primary threat to the state, the National Weather Service in New Orleans. State, local and federal officials spent days preparing for the storm and possible impacts. Nearly 3,000 National Guards troops had been deployed throughout Louisiana for potential storm response, and the state’s Emergency Operations Center remains fully active and staffed around the clock, according to Edwards’ office. Multiple places in Plaquemines Parish, southeast of New Orleans, saw levees overtopped on Saturday. The overtopping happened in less populated areas, but officials worry that possible flooding of Highway 23 could trap residents. At least 132,212 customers in Louisiana were without power as of the early hours of Sunday. While the storm has — and may continue to — cause problems for the Gulf Coast, New Orleans is not at risk for some of the dangers officials predicted before the storm hit.
Epstein was arrested by federal authorities last weekend and charged with sex trafficking and conspiracy to commit sex trafficking. Journalist Timothy L. O’Brien, an executive editor at Bloomberg and author of the 2005 biographical book, Trumpnation: The Art of Being the Donald, appeared on MSNBC’s “Deadline: Whitehouse” with Nicolle Wallace Saturday to discuss his experience shadowing Donald Trump while writing the book in the mid 2000’s and how some of what he witnessed may play a role as the case against Epstein moves forward. “When the president stands on the White House lawn and said he barely knew Jeffrey Epstein, that’s not supported by the fact pattern,” O’Brien said Saturday morning. “They knew each other well from 1987 to at least 2000. He traveled on Epstein’s jet at least once,” O’Brien continued, adding, “I spent about two years, a lot of time with Trump in the mid-2000s, and he routinely talked about Jeffrey Epstein as someone he admired, he felt they were in sync.” O’Brien then went into how Trump’s ties to Epstein had already placed him in legal peril. In a 2016 lawsuit filed against Trump by a woman in her thirties alleging that the President raped her when she was 13 in Epstein’s New York townhouse. Although the victim dropped the suit against Trump after repeatedly receiving death threats, federal investigators will very likely follow up on her allegations in pursuit of the case against Epstein.
“What is happening now with this investigation in the Southern District is they’re going to get access to Jeffrey Epstein’s videos,” O’Brien said.
“The other thing is, there is an outstanding claim, a Jane Doe claim that was filed right before the election by a woman in her 30s who said in the 90s when she was 13, Donald Trump raped her in Jeffrey Epstein’s townhouse in the upper east side. The veracity of that claim can be tested now by the Southern District. They’re investigating what occurred in Jeffrey Epstein’s townhouse.” In the 2016 lawsuit, Jane Doe claimed she was the victim of a “savage sexual attack” at the hands of Trump in 1994, during which he allegedly “tied [her] to a bed, exposed himself to [her], and then proceeded to forcibly rape [her].” The lawsuit also includes the account of a corroborating witness, Tiffany Doe, who claimed to have seen the underage victim perform sexual acts on both Trump and Epstein. However, it should be noted that Doe’s case against Trump was rife with problems from its inception. After dropping the third iteration of her lawsuit following Trump’s election, the left-leaning Vox.com described it as “the end of an incredibly strange case that featured an anonymous plaintiff who had refused almost all requests for interviews, two anonymous corroborating witnesses whom no one in the press had spoken to, and a couple of seriously shady characters — with an anti-Trump agenda and a penchant for drama — who had aggressively shopped the story around to media outlets for over a year.” O’Brien even went on to claim that the friendship between the two men was a major cause for concern during the 2016 election. The claim never went anywhere in court, though. “There’s a lot of similarities to how these two men approached the world. And it is not credible that the president didn’t have a close relationship with Jeffrey Epstein, and they were worried about it up until Election Day.” Nick Bit: I have it on good authority that Epstein made his money not as a hedge fund manager. But by entrapping wealthy people with sex with minors and blackmailing them. Could Trump have fallen into Epstien”s web?
Donald Trump abandoned the Iran nuclear deal to spite Barack Obama, according to a leaked memo written by the UK’s former ambassador to the US. Sir Kim Darroch described the move as an act of “diplomatic vandalism”, according to the Mail on Sunday. It says the memo was written after the then Foreign Secretary Boris Johnson appealed to the US in 2018 to stick with the nuclear deal. Under that agreement Iran agreed to limit its sensitive nuclear activities. It would also allow in international inspectors in return for the lifting of crippling economic sanctions. However, President Trump did not think that the deal went far enough. The newspaper reports that after Mr Johnson returned to the UK from the US, Sir Kim wrote that President Trump appeared to be abandoning the nuclear deal for “personality reasons” because the pact had been agreed by his predecessor, Barack Obama. The first memos criticising Trump’s administration, which emerged a week ago, prompted a furious reaction from the US president and resulted in Sir Kim resigning from his role. In the latest leak, the British ambassador is said to have highlighted splits amongst US presidential advisors and that the White House did not have a “day-to-day” strategy of what to do following withdrawal from the deal. The paper reports that Sir Kim wrote a memo to Mr Johnson, saying: “The outcome illustrated the paradox of this White House: you got exceptional access, seeing everyone short of the president; but on the substance, the administration is set upon an act of diplomatic vandalism, seemingly for ideological and personality reasons – it was Obama’s deal. “Moreover, they can’t articulate any ‘day-after’ strategy; and contacts with State Department this morning suggest no sort of plan for reaching out to partners and allies, whether in Europe or the region.”
The first leaked emails saw the then UK ambassador refer to the Trump administration as “clumsy and inept”. The US president responded by calling Sir Kim as “a very stupid guy” with whom he would no longer deal.
The personal rapport between the US and North Korean leaders was taken to a new level late last month after President Trump stepped into North Korea at the demilitarized zone to meet briefly with Chairman Kim Jong-un for talks. North Korea’s Hwasong-15 intercontinental ballistic missile is capable of hitting anywhere inside the continental United States in the event of war, US Forces Korea has confirmed in its 2019 Strategic Digest command publication. The missile, test-fired by the North Korean military in November 2017, is said to have an estimated striking range of 12,875 km (8,000 miles), giving it the theoretical ability to strike the US from coast to coast. An unnamed military source told Chosun Ilbo that the US Forces Korea estimate was based on a “comprehensive analysis of intelligence data collected from satellite, aircraft and radar surveillance” of North Korea’s recent missile testing efforts.
The report confirms earlier claims by North Korean media about the Hwasong-15’s capabilities and range. Following the November 2017 test launch, the Korean Central News Agency reported that the missile could strike “the whole of the mainland of the US,” and could be “tipped with [a] super-large heavy warhead” of an undisclosed weight. During the 2017 launch, the missile was said to have reached an altitude of 4,475 km and flown a linear distance equal to 950 km before coming down inside the sea area of Japan’s exclusive economic zone. US and South Korean intelligence have yet to confirm whether the Hwasong-15 can be fitted with a nuclear payload, although it is assumed to be capable of carrying a warhead weighing up to 1,000 kg, and possibly equipped with the ability to carry multiple warheads simultaneously. The Hwasong-14, another North Korean ICBM tested in mid-2017, was also mentioned in the report, and said to be capable of reaching “most” of the US mainland, given its 10,000km+ (6250 mile) range.
The personal friendly rapport between President Donald Trump and Chairman Kim Jong-un, exemplified late last month after Trump became the first US president to set foot inside North Korea, has been contrasted by continuing tensions between the countries over US sanctions policy against Pyongyang. Last week, the North Korean mission to the UN accused Washington of being “obsessed with sanctions and a pressure campaign” and “more and more hell-bent on hostile acts” against Pyongyang despite peace efforts. Kim and Trump’s June 30 talks were their third to date, and followed a landmark meeting in Singapore in in June 2018 during which the two leaders expressed commitment to denuclearization and de-escalation on the Korean peninsula, as well as the less successful talks in Vietnam in February 2019, which ended abruptly with no apparent agreement. Following the latest meeting, Trump said sanctions against Korea would remain in place, but added that the issue would be discussed in future talks between the two sides over the coming months. On Thursday, North Korea slammed South Korea over Seoul’s purchase of Lockheed Martin’s F-35 fighters, and vowed to develop and test unspecified “special armaments” capable of destroying the stealth planes if South Korea continued to deploy them. South Korea has a total of 40 of the US-made planes on order, with up to ten expected to be delivered before the end of the year.
- We believe supply-driven tightness in crude has been masked by investor macro concerns relating to demand, as well as the recent weather-impacted rise in US oil inventories.
- In our view, the magnitude of these supply factors more than offsets potential demand slippage and should result in a continuation of oil tightness.
- We see significant value in many oil-related equities, particularly those boosting free cash flow through enhanced operating efficiencies and capital spending discipline.
1. Iran – Following the end of US waivers on the Iranian export ban, oil exports from that country have come to a near standstill, dropping below 900,000 barrels per day in April, from roughly 2.7 million barrels per day (mmbpd) a year ago. Moreover, this figure is widely expected to fall significantly lower, as US officials have confirmed that any new Iranian oil purchases from May 2 are subject to US sanctions.
2. Venezuela – Crude output has fallen precipitously. Driven by US sanctions and overall political chaos, Venezuelan output now stands at just over 800k barrels per day, versus 2.4 mmbpd a few years ago and 1.2 mmbpd as recently as January.
3. Russia – Recent reports indicate that oil production continued to fall in May after shipments via the Druzhba pipeline, which supplies 1.5 mmbpd of Urals crude, was found to be contaminated in April.
On a global oil market of roughly 100 mmbpd, supply drops of this magnitude are quite significant, particularly if they are more than just short-term events, as the case with both Iran and Venezuela seem to be. Granted, US oil production has been on a tear. The latest figures (February 2019) from US Energy Information Administration (EIA) has US production at 11.7 mmbpd, up a dramatic 1.4 mmbpd from a year ago and 2.7 mmbpd higher than just two years ago. Production capacity also appears set to rise in other non-OPEC countries like Brazil and China. Still, these issues pale in comparison to the aforementioned recent global supply shocks, not to mention the continued support OPEC has shown to oil prices with its stated intention to extend its policy of 1.6 mmbpd of production cuts that were initiated at the beginning of this year.
Oil’s tightness is most evidenced by the shape of the future’s curve, also called “time spreads.” For Brent (the leading global price benchmark for Atlantic basin crude oil), the backwardation in the curve has steepened dramatically in recent months. As shown in Exhibit 4, the spot price for Brent is significantly higher than the forward price. This signals a greater demand for barrels today and an environment that discourages hoarding inventories given lower future prices (or positive “roll yield”). Granted, for WTI crude, contango (the opposite of backwardation) exists in nearer months on the curve (largely influenced by rising US inventories to be discussed below). However, the WTI curve remains substantially backwardated in 2020 and beyond.
So what gives? How has the spot price for oil weakened in spite of these price supportive supply factors?
- Worries with Demand. Thus far, we have only discussed the “S” in the Supply-Demand dynamic for oil. Naturally, demand concerns have played a major factor. The consensus of EIA and OPEC agency forecasts is for global demand to grow 1.2 – 1.3 mmbpd in 2019, a rate rather consistent with recent years. Still, macro concerns relating to trade and slowing emerging markets (e.g., China’s latest PMI report) has dominated investor sentiment and has many focused on potential oil demand slippage. For instance, China’s National Development and Reform Commission reported a 2.4% year-over-year decline in oil products consumption in April, the first decline in three years. Also, Energy Aspects has preliminarily reported that global demand actually fell 0.3 mmbpd in March, following robust demand figures in January and February of this year. This would mark only the third monthly year over year decline since the bottom in oil prices in early 2016. Such a one-month drop does not make a trend. Still, it is undeniable that demand worries and related potential destocking by end-users are at the heart of the recent drop in spot crude prices.
- Rising inventories: Blame it on the Rain. Recent weeks have seen a large rise in US crude inventories as reported by the U.S. Department of Energy (DOE), rising at their fastest pace since 2016. Some of this rise was previously explained by normal spring refinery maintenance downtime. However, the latest counter-seasonal increase has many oil pundits worried that it implies a sharp fall-off in demand, à la similar tariff-driven concerns at the end of 2018.
While the weekly DOE figures have been undeniably bearish, it’s hard to discern how much relates to unexpected pipeline outages and refinery shutdowns recently due to flooding in the US Midwest. For example, pipelines and refineries that have been recently shut or curtailed include the 360k bpd Ozark Pipeline, Tallgrass Energy’s Iron Horse and Pony Express Pipelines, the 200k bpd Diamond pipeline, and HollyFrontier’s 155,300 bpd Tulsa, Oklahoma refinery. The impact of heavy rains is most evidenced in the inventory figures for flood-victimized PADD 2 (the Mid-Continent district), which has accounted for the vast majority of the inventory build over the past month.
- Currency headwind. Typically, a more dovish US monetary policy would be a catalyst for a weaker USD. However, just the opposite has occurred, as the continued rise in the USD reflects its status as a safehaven in times of heightened global uncertainty. As a result, the USD has recently become more correlated to relative global equity performance, rather than country interest rate differentials.
Oil, and most commodities, are priced in USD. Therefore, a higher USD raises the price for consumers abroad paying in local currencies. This demand dampening effect has historically played a large role in oil price cycles. As shown in Exhibit 6, the trade-weighted Brent crude price has substantially outperformed the regularly-quoted Brent spot price over the past five years given the USD’s dramatic strengthening over this period (approximately +25%). This outperformance was particularly evident last Fall when the Brent oil price peaked well below the peak of last cycle (mid-2014), yet the trade-weighted price nearly reached the prior cycle high, thus resulting in a greater threat of demand destruction abroad.
- The paper market. Our discussion of the oil’s tightness and supply/demand influences relates to the physical market for oil. However, the day-to-day price performance of the commodity is often largely a function of positioning in the paper market (financial market), which is estimated to be as much as 40x the size of the global physical market. Thus, changes in open interest levels (outstanding contracts) can have a significant impact on the spot price. This can result in exaggerated, or even contrarian, price movements to oil fundamentals.
Exhibit 7 shows the total open interest levels for NYMEX Crude Oil as reported each Tuesday by the Commodity Futures Trading Commission (CFTC), as well as the spot price for Brent crude. As illustrated, the recent price drop was accompanied by a sharp decline in open interest levels by oil traders. We note that changes in oil prices and open interest levels are not always consistent, such as in early 2017. However, open interest activity is often a predictor (or even a driver) of upcoming oil price movements, particularly at the high or low-end of the price range.
Often forgotten: The Spot Price Doesn’t Drive Value
We appreciate that short-term worries regarding demand and the recent rise in US inventories could continue to overshadow a tightening global picture for crude oil. Still, we stress that even if oil prices in the short term remain under pressure from macro factors, we believe the major valuation element to the equities of oil producers (and secondarily to oil service companies) is their future cash flows under longer term oil prices. In our view, there remains considerable value in select oil-related equities even assuming rather conservative long-term prices for crude. Such value is being particularly driven by increased production efficiencies and greater cash flow generation under new strategies of enhanced capital spending discipline.
LONDON (Bloomberg) — Britain raised the threat level to the highest possible for ships operating in the Persian Gulf as tensions escalate in a region accounting for a third of seaborne petroleum trade. The UK government designated the region a level-3 risk on Tuesday, a day before British warship HMS Montrose had to stop Iranian vessels from impeding a BP Plc oil tanker as it exited the region, according to a person with knowledge of the matter. Though Iran’s attempts to block the passage of the British Heritage oil tanker were ultimately thwarted, they highlight a growing trend of disruptions to shipping in the area. Two tankers were sabotaged in the region last month, while four were struck in May. The situation is even more fraught for Britain after Royal Marines helped Gibraltar to seize a supertanker hauling Iranian crude in the Mediterranean Sea. Iran’s Revolutionary Guard Corps warned on Wednesday that it would “reciprocate.” “Iran will focus on retaliation towards UK assets,” says Olivier Jakob, managing director of consultant Petromatrix GmbH. “As far as escalation, I don’t know how far they want to escalate it, but they can do it just to be a nuisance.” The confrontation between the warship and the Iranian vessels was reported by the British government. Tehran said it didn’t happen. The British Heritage is registered in the Isle of Man, a British crown dependency, but flies the British flag. There are seven Isle of Man registered ships in or close to the Persian Gulf, according to data compiled by Bloomberg. London-based BP also charters ships to export crude from the region, and will sometimes take tankers on long-term charters. The Isle of Man Ship Registry confirmed that vessels registered there are currently operating in the Gulf. It said such carriers receive the same protection and support as UK ships, as deemed appropriate by the British government. At least one other ship flying the same flag, the supertanker Pacific Voyager, also got an escort, according to the vessel’s operator, Japan’s Mitsui O.S.K Lines Ltd. There are 15 freighters flying the flags of Gibraltar, the Isle of Man and the UK presently in or around the Persian Gulf, according to data compiled by Bloomberg on Thursday. They span a wide mix of different types of merchant vessels from tankers to LNG carriers, container and dry-bulk ships. “UK-flagged vessels, as well as broader flags of convenience and UK interests, continue to exist in a status of heightened but manageable risk,” Dryad Global, a London-based private intelligence firm advising energy companies, shipowners and commodity traders, said in a note. “It is highly likely that this latest incident will provide further impetus for a coordinated international response to provide naval escorts to vessels within the region.” The growing perils for vessels in the region has been seen most clearly in the cost of insuring tankers. Premiums for the ships and their cargoes sailing to and from the Persian Gulf soared more than tenfold late-last month, although it’s still unclear what impact the latest confrontation will have. The hike came not long after the Joint War Committee, a group that advises insurers, designated the entire Persian Gulf and waters just outside it a so-called Listed Area — the riskiest possible classification. The assessment gives underwriters room to charge more. Shipping groups have also been ramping up guidance to their members. Crews should be on alert for any approaches toward a ship, while also using spotlights and sonar equipment to deter approaching divers, according to the Oil Companies International Marine Forum. Last week, five groups jointly issued a statement advising owners not to use private armed guards, as that may exacerbate already high levels of tension. Using force against possible threats in the Gulf of Oman could escalate the situation and endanger ships and their crews, the groups said. “There is a greater risk shipping from the Persian Gulf, but this risk has been lingering around for quite a few months now,” says Warren Patterson, head of commodities strategy at ING Bank NV. “Obviously the latest action does little to calm those concerns.”
HOUSTON (Bloomberg) –The promise of the Permian is shrinking. Producers in the nation’s oil-rich shale basins are dialing back growth plans in the face of a growing panoply of problems that’s killing returns and keeping skeptical investors away. The constraints are manifold: pipeline limits, reduced flow from wells drilled too close together, low natural gas prices and high land costs.
But the most consequential is that shale-well production falls off at such a high rate—as much as 70% in the first year—that you need to keep spending cash on new wells just to maintain output.
In the five years since oil fell below $30/bbl from more than $100/bbl, a resilient shale industry has established the U.S. as the world’s top oil producer. Now, cracks are opening in that survival tale, with companies ranging from EOG Resources to tiny Laredo Petroleum dropping their 2019 growth rates by 3 percentage points to more than 40 below last year’s gains. “You’re having to spend more and more every year to grow at a faster rate,” said Noah Barrett, an energy analyst at Janus Henderson, in a telephone interview. “Companies routinely spent 120% to 130% of their cash flow never generating positive cash flow or earnings.” In the early years, Wall Street had been happy to fund shale growth, framing the budding sector as a young, technology-driven industry, ripe for future returns. But as the shale fields aged, the returns never came, and shareholders are now pushing for payback at the expense of additional oil growth. Most of the independent producers cut their capital budgets after oil prices slipped at the end of last year. While companies including Diamondback Energy and Devon Energy have bolstered buybacks, investors warn there’s a long road ahead to recovery. “They’ve been burned so many times in the past that there’s deserved skepticism” toward energy stocks, according to Barrett, whose firm manages $328 billion. “Just when we get progress, managements have short memories and start spending capital in an undisciplined manner.” The smallest companies have been among the hardest hit. Times should be good for Legacy Reserves and Approach Resources, two small producers working in the oil-rich Permian. Crude prices are edging up, and big drillers want to expand there. Yet they’ve lost 99% and 87% of their market value in the past year, and Legacy last month filed for Chapter 11 protection. But it’s not just the minnows that are struggling. Bigger producers, including Parsley Energy, QEP Resources, Centennial Resource Development, SM Energy and Cimarex Energy have all lost between 42% and 59% of their market value in the past year. Meanwhile, the price of West Texas Intermediate crude, the U.S. benchmark, is only down 14%. For the biggest companies—majors such as Exxon Mobil and Chevron—battling decline rates means drilling so many wells that they create a long, low-decline tail of production that makes money for years with little reinvestment. But that takes time and a lot of money, a luxury not available to many independent players. Stock offerings last year were the lowest since at least 2006 and were down more than 60% versus 2017. With public capital harder to come by, producers including Pioneer Natural Resources Co., Devon Energy Corp. and Apache Corp. have sold off less-important acreage as they seek to tap their most productive acreage. Other producers are tapping private capital to help drill wells outside of their regular capital expenditure program. One private equity firm puts the number of so-called DrillCo deals at more than $5 billion since mid-2015. In those arrangements, private equity investors pay to drill certain areas outside a producer’s budget. Once oil flows, the buyout firm receives the majority of the cash flow, but when costs are repaid and investors earn a pre-agreed profit, revenues revert to the producer. The strategies may be different but the goal’s the same: “It’s really just designed to accelerate this free cash flow generation and get these companies to try to prove earlier to investors that they are good businesses,” said Rob Thummel, managing director at Tortoise, which handles energy-related assets.
Such measures mean the U.S. will continue to see shale production, but the explosive surges of the past may be over, according to Janus’s Barrett.
“U.S. production in absolute terms will continue to grow,” he said. “But the pace of production increases will slow.” Nick Bit: I as the first one to get their on the shale boom. Its over next year the headlines will be the shale bust.
HOUSTON (Reuters) – An intensifying tropical storm in the U.S. Gulf of Mexico on Thursday cut more than half the region’s oil output, with energy companies evacuating staff from nearly 200 offshore facilities and a coastal refinery.
Oil firms shut more than 1 million barrels per day of oil production, 53% of Gulf of Mexico’s output, and 1.2 billion cubic feet per day of natural gas production, according to a U.S. regulator.
Tropical Storm Barry’s winds reached 50 miles per hour (85 km/h) late Thursday and are expected to intensify, possibly reaching at least 74 mph, a category one hurricane, as it nears the coast, the U.S. National Weather Service said. It expects as much as 25 inches (64 cm) of rain to fall, with flooding due to the rains and a storm surge. Despite the production cuts, U.S. crude, natural gas and gasoline futures slipped on Thursday after the Organization of the Petroleum Exporting Countries forecast weaker demand for its output next year.PSX.N) evacuated staff and halted operations at its 253,600-barrel-per-day (bpd) Alliance, Louisiana, refinery and pipeline operator Enbridge Inc (ENB.TO) also evacuated three offshore platforms and halted some deepwater Gulf of Mexico natural gas pipelines. The storm prompted Anadarko Petroleum Corp (APC.N), Chevron Corp (CVX.N), Royal Dutch Shell Plc (RDSa.L) and others to move staff out of the path of the storm and many halted production, according to company reports. U.S. crude futures, which rose more than 4% on Wednesday, settled at $60.20 a barrel on Thursday, down 23 cents on the day but near a six-week high. Gasoline futures slipped a fraction. The National Weather Service issued a hurricane warning for part of the Louisiana coast by Friday night and projected landfall over the state’s central or southeastern coast. Data provider Refinitiv said natural gas output in the Lower 48 states could drop to a seven-week low of 87.2 billion cubic feet per day (bcfd) on Thursday due to the closings, from a record high of 91.1 bcfd on July 5. Packing winds of 50 mph, the storm late Thursday was about 85 miles (135 km) southwest of the mouth of the Mississippi River, moving west at about 3 miles per hour (6 km per hour). It could make landfall late Friday or Saturday along the Louisiana coast and bring 10 inches to 20 inches (38 cm) of rain to the central Gulf Coast, forecasters said. A 3-foot to 6-foot (0.9-meter to 1.8-meter) storm surge was expected at the mouth of the Atchafalaya River, according to the National Weather Service. Phillips 66’s Alliance refinery sits next to the river 39 miles (63 km) south of New Orleans. The last hurricane to flood the refinery was 2012’s Hurricane Isaac. The refinery was also shut by Hurricane Gustav in 2008 and Hurricane Katrina in 2005. In 2017, Hurricane Nate led Phillips 66 to shut the refinery, which was restarted within days as the storm turned away from the area. Reporting by Erwin Seba in Houston and Scott DiSavino in New York; Editing by David Gregorio and Lisa ShumakerDozens of oil and gas producers have removed staff from 191 production platforms, according to offshore drilling regulator U.S. Bureau of Safety and Environmental Enforcement. It said seven rigs and 11 drill ships were evacuated or moved out of Barry’s path.Phillips 66 (
(CNN)The first shipment of the Russian-made S-400 air defense missile system equipment has arrived at the Murted Air Base in Ankara, according to the Turkish Defense Ministry. Turkey’s decision to purchase the Russian system solidifies ties that have been developed between Russia’s President Vladimir Putin and Turkey’s President Recep Erdogan, and is just the latest set-back to US-Turkish relations which have seen the two NATO allies at odds over issues such as Syria.
DUBAI (Bloomberg) — Saudi Arabia is fulfilling its pledge to make deeper cuts in oil output than the OPEC+ agreement on output requires, according to the first indication of the kingdom’s production since the supplier group extended curbs earlier this month.
The de facto leader of the Organization of Petroleum Exporting Countries will pump less than 10 MMbpd of crude in both July and August, according to a person familiar with Saudi energy policy. Saudi Arabia will limit exports to fewer than 7 MMbpd, said the person, who asked not to be identified because the information isn’t public.
OPEC and partners including Russia agreed to keep cutting production through the end of March. The alliance is seeking to mop up excess crude in the market and buoy prices. Brent crude has gained about 1% this month to near $67/bbl, helped by the extended cuts, geopolitical tensions and sanctions that crimped sales from Iran and Venezuela. Even as Saudi Energy Minister Khalid Al-Falih pledged that his country would continue doing more than its share to pare global supply, Middle Eastern oil producers are keeping Asia, their biggest regional market, well supplied. Consumption in Asia is picking up and will help boost demand in the second half, said the person. State oil company Saudi Aramco will supply full contractual amounts of crude to at least six buyers in Asia for August, in line with sales to that region in June and July. Persian Gulf producers are maintaining shipments to buyers that may be lacking crude from Iran, said Edward Bell, director of commodity research at Dubai-based bank Emirates NBD PJSC. The Saudis “need to make sure Asia stays well supplied, while taking away crude from regions that don’t need it as much,” Bell said. “Expect to see Saudi supplies to the U.S. constrained for the rest of the year.” OPEC, which pumps 40% of the world’s oil, said Thursday that it’s producing about 560,000 bpd more than will be needed next year as the ongoing surge in U.S. shale threatens to deliver another surplus. Global oil consumption will continue to grow in 2020 at the same pace as this year, OPEC said in its monthly report, with the expansion driven by emerging economies like India and China. Saudi Arabia’s crude exports to the U.S. hovered around 500,000 bpd in May and June and at about the same level so far in July, compared with just over 1 MMbpd in August of last year, according to data from the U.S. Energy Information Administration. Planned Saudi production for July and August would be little changed from previous months, with June output at 9.73 MMbpd, according to data compiled by Bloomberg.
SEOUL (Reuters) – Oil prices hovered near six-week highs on Friday as U.S. oil producers in the Gulf of Mexico cut more than half their output in the face of a tropical storm and as tensions continued to simmer in the Middle East. Brent crude LCOc1 futures were up 53 cents, or 0.8%, at $67.05 per barrel by 0606 GMT. The international benchmark settled down 0.7% on Thursday after hitting its highest since May 30 at $67.65 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures were up 42 cents, or 0.7%, at $60.62 a barrel. The U.S. benchmark marked its highest level since May 23 in the previous session at $60.94.
By Thursday, oil companies in the Gulf of Mexico had cut more than 1 million barrels per day (bpd) of output, or 53% of the region’s production, due to Tropical Storm Barry which could make landfall Saturday on the Louisiana coast.
The storm was forecast to become a category one hurricane with at least 74-mile-per hour (119 km-per-hour) winds. “Brent crude oil … extended its gains as storms in the Gulf of Mexico halted production of oil and U.S. oil inventories continued to recede more than expected,” ANZ Bank said in a note. U.S. crude oil inventories have decreased for four consecutive weeks. Crude stocks fell 9.5 million barrels in the week to July 5, the Energy Information Administration (EIA) said, a drop that was more than triple the 3.1 million-barrel draw expected by analysts. Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul, said a sharp drop in U.S. crude stocks and geopolitical risks are expected to keep both Brent and WTI at current levels. “As geopolitical risks involving Iran are likely to persist, that would support WTI to stay above $60 a barrel, while Brent is expected to stay above $65 per barrel but below $70 for the time being,” Kim said. Iran’s alleged attempt to block a British-owned tanker heightened tensions in the Middle East in the wake of attacks on tankers and the downing of U.S. drone by Iran in June. “While a full-scale military conflict remains the least likely scenario, the strong increases for cost of insurance will make for a most costly transportation of crude and see new routes explored, delaying crude arrivals,” said Edward Moya, senior market analyst at OANDA in New York. But a lower 2020 oil demand outlook from the Organization of the Petroleum Exporting Countries kept price gains in check. OPEC said the world would need 29.27 million bpd of crude from its 14 members in 2020, down 1.34 million bpd this year. Nick Bit: OPEC will cut output by double that amount and more. They wlil get their $90 a barrel oil!
OPEC expects that world demand for its crude oil will decline next year as rivals, including the U.S., pump more, a downgraded view that comes even as the cartel and its allies have extended a strategy to restrain supplies. The Organization of Petroleum Exporting Countries says demand for its crude is expected to average 29.3 million barrels per day in 2020, down by around 1.3 mb/d from 2019. OPEC has cut its 2019 oil-production growth forecast for its peers, including Russia, now expecting a smaller rise of 2.05 million barrels a day. Non-OPEC oil supply is forecast to grow by 2.4 mb/d in 2020, higher than in the current year. This is mainly due to the “debottlenecking” of oil infrastructure in North America and new project ramp ups in Brazil, Norway and Australia. The cartel’s updated monthly report published Thursday came just a week after the OPEC-plus group extended its reduced output pact for another nine months, a move it had largely telegraphed to the energy market in advance. Crude oil futures prices CLQ19, -0.02% BRNU19, -0.19% slipped in response. The decision came amid rising production from the U.S. — at least before a pullback in stockpiles in recent weeks — and signs of global economic slowing that could sap oil demand.Oil futures rallied Wednesday to settle at their highest since May, with U.S. prices up a fifth straight session for the longest streak of gains since February. Prices got a boost from data showing a fourth consecutive weekly decline in U.S. crude inventories, dovish comments from Federal Reserve Chairman Jerome Powell that pressured the U.S. dollar, and a storm in the Gulf of Mexico raised expectations for short-term disruptions to oil and natural-gas production in the region. With the OPEC report’s details, influential Saudi Arabia added to rising inventories with an output increase of 112,000 barrels in June. Nigeria reported a notable output increase of 307,000 barrels last month. OPEC, as well as the International Energy Agency and the U.S. Energy Information Administration, all lowered their view for 2019 oil demand in May and have remained cautious. “Although large uncertainties remain, current growth forecasts assume no further downside risks, and, in particular, that trade-related issues do not escalate further,” the report said. “Brexit poses an additional risk, as does a continuation in the current slowdown in manufacturing activity,” the group said. That said, “the downward revisions [to supply growth] are mainly due to the extension of the voluntary production adjustments by participating oil producing countries of the Declaration of Cooperation,” the organization said in its report. Non-OPEC countries Norway and Brazil also contributed to the forecast cut. Brazil was also the only major global economy to have its economic growth forecast downgraded by OPEC’s Secretariat, the report shows. The International Energy Agency is due to release its own monthly report Friday, which comes as traders assess Gulf of Mexico storms and the near-term impact on production as well as persistent tension between Iran and Western nations
Some 30 percent of the world’s crude oil passes through the Strait of Hormuz, a narrow waterway linking the Persian Gulf with the open sea.
On Wednesday, U.S. officials said a Royal Navy warship foiled at apparent attempt by Islamic Revolutionary Guard Corps (IRGC) personnel in fast boats to stop a British oil tanker in the Strait of Hormuz. About 1,300 miles to the south-west, the Bab el-Mandeb connects the Red Sea (and Suez Canal) with the Gulf of Aden and the Arabian Sea, and is also an important channel for oil and other goods. Ships in the narrow waterway, located between Djibouti and Yemen, have become vulnerable to attack by Iranian-backed Houthi rebels fighting in Yemen against a Saudi-led coalition. Last year the Saudis temporarily suspended oil exports through the Bab el-Mandeb, after attacks on tankers blamed on Houthis. Six tankers have been damaged in sabotage attacks near the Persian Gulf over the past two months. The U.S. and regional allies blame Iran, which denies involvement. After those incidents, BIMCO called it “unacceptable that the lives of innocent seafarers are put at risk in these unprovoked attacks.” Dunford said Tuesday he had discussed the sea-patrol proposal earlier in the day with Secretary of State Mike Pompeo and acting Defense Secretary Mark Esper. During recent travels to the Middle East and Europe, both Pompeo and Esper raised the issue. In the UAE on June 24, Pompeo told Emirati leaders the U.S. was proposing a plan that would involve the UAE, Saudi Arabia and another 20 countries, adding that “the president is keen on sharing that the United States doesn’t bear the cost of this.” Esper, at NATO headquarters in Brussels that same week spoke said the U.S. was encouraging NATO allies and regional partners “to help us deter further provocative acts [by Iran] by improving maritime security and demonstrating resolve.” Esper told reporters he had asked NATO colleagues “to consider joining a group of like-minded countries,” to support freedom of navigation, through maritime and air surveillance “all the way up to a picket line of ships to help protect the international waterways and to include maybe even escorts.” Over the past decade, naval vessels from the U.S., European nations, China, Japan, India and other countries have patrolled waters off the coasts of Somalia and Yemen to protect commercial ships from piracy. Iran’s Mehr news agency opined that the real U.S. motivation for the proposed patrolling of the region’s waters was to contain rival countries’ access to energy resources. “Many suspicious incidents and tensions created by Washington and its proxies in Persian Gulf region like attacking oil tankers can be interpreted as the White House’s measures to contain its global economic rivals in order to guarantee the U.S. hegemony and influence for the next decades,” charged the agency, which is owned by an Islamic ideology body established by the regime.
Iranian boats tried to impede a British oil tanker near the Gulf – before being driven off by a Royal Navy ship, a UK government spokesman has said. HMS Montrose positioned itself between the three boats and the tanker British Heritage before issuing verbal warnings to the Iranian vessels, he said. He described the Iranians’ actions as “contrary to international law”. Iran has been threatening to retaliate for the seizure of one of its tankers near Gibraltar last week. According to reports in US media, quoting US officials, boats believed to belong to the Iranian Revolutionary Guard Corps approached the British Heritage tanker as it was moving out of the Gulf into the Strait of Hormuz. Guns on HMS Montrose, the British frigate escorting the tanker, were reportedly trained on the Iranian boats as they were ordered to back off. They heeded the warning and no shots were fired. Last week, British Royal Marines helped the authorities in Gibraltar seize an Iranian oil tanker because of evidence it was heading to Syria in breach of EU sanctions. In response, an Iranian official said a British oil tanker should be seized if its detained ship was not released. Iran also summoned the British ambassador in Tehran to complain about what it said was a “form of piracy”. And on Wednesday Iranian President Hassan Rouhani mocked the UK, calling it “scared” and “hopeless” for using Royal Navy warships to shadow a British tanker in the Gulf. HMS Montrose had shadowed British tanker the Pacific Voyager for some of the way through the Strait of Hormuz, but that journey passed without incident. This latest row comes at a time of escalating tensions between the US and Iran. The Trump administration – which has pulled out of an international agreement on Tehran’s nuclear programme – has reinforced punishing sanctions against Iran. Its European allies, including the UK, have not followed suit. Nonetheless, the relationship between the UK and Iran has also become increasingly strained, after Britain said the Iranian regime was “almost certainly” responsible for the attacks on two oil tankers in June. The UK has also been pressing Iran to release British-Iranian mother Nazanin Zaghari-Ratcliffe who was jailed for five years in 2016 after being convicted for spying, which she denies. A UK Government spokesman said: “Contrary to international law, three Iranian vessels attempted to impede the passage of a commercial vessel, British Heritage, through the Strait of Hormuz. “We are concerned by this action and continue to urge the Iranian authorities to de-escalate the situation in the region.”
HOUSTON (Reuters) – Anadarko Petroleum Corp (APC.N) has joined major U.S. oil producers shutting production and withdrawing staff from offshore platforms in the U.S. Gulf of Mexico ahead of a storm threatening oil-producing areas. U.S. oil prices climbed 2.7% on Wednesday as more producers shut production and removed workers at Gulf oil and gas platforms. A tropical cyclone could form by Thursday, moving westward over the northern Gulf of Mexico, with the potential to produce a storm surge from Louisiana to the upper Texas coast, according to the National Hurricane Center. Anadarko said it is stopping all oil and gas production and removing all workers from four central Gulf facilities, the Constitution, Heidelberg, Holstein and Marco Polo platforms. It is also evacuating non-essential staff from its eastern Gulf platforms. Andarko’s total Gulf output averaged 166,000 barrels of oil equivalent per day in the first quarter. Operations at the Louisiana Offshore Oil Port, the only U.S. port where the largest crude tankers can operate, were normal on Wednesday morning, a spokeswoman said. Motiva Enterprises’ 607,000 barrel per day (bpd) Port Arthur, Texas, refinery, the nation’s largest, was monitoring the developing storm on Monday and preparing to implement its hurricane plan as needed, the company said in a statement. The Motiva refinery was one of four refineries in east Texas inundated by more than five feet of rain in a single day during 2017’s Hurricane Harvey. Marathon Petroleum Corp (MPC.N), the largest U.S. refiner, was also monitoring the storm, which is forecast to come ashore in Louisiana, where the company operates the 564,000 bpd Garyville refinery, spokesman Sid Barth said. Chevron Corp (CVX.N), Phillips 66 (PSX.N), Exxon Mobil Corp (XOM.N), Royal Dutch Shell Plc (RDSa.L) were preparing for heavy rain and wind at refineries in Louisiana, Mississippi and Texas. Chevron has now shut in production at five Gulf platforms – Big Foot, Blind Faith, Genesis, Petronius and Tahiti – and has begun to evacuate all workers at those facilities, spokeswoman Veronica Flores-Paniagua said. Its Gulf oil output last year averaged 186,000 barrels per day. Chevron is preparing its onshore facilities for a potential response, Flores-Paniagua said. BP, the second-largest producer in the Gulf, is shutting all production at its four Gulf platforms – the Thunder Horse, Atlantis, Mad Dog and Na Kika – which produce more than 300,000 barrels of oil equivalent per day. Shell and BHP Group Ltd (BHP.AX) were also removing staff from six other offshore energy platforms, according to company statements. Exxon Mobil Corp (XOM.N) was “closely monitoring” the weather disturbance to determine whether its facilities may be affected, a spokeswoman said. Two independent Gulf producers, Fieldwood Energy LLC and LLOG Exploration Company LLC, declined to comment.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 9.5 million barrels from the previous week. At 459.0 million barrels.
Total motor gasoline inventories decreased by 1.5 million barrels last week and are at the five year average for this time of year.
The downing of an American drone last month by the Islamic Revolutionary Guard Corps (IRGC), a United States-designated terrorist group, “shattered” U.S. military awe, commanders of the elite Iranian armed forces unit boasted on Tuesday, claiming that the Islamic Republic’s ground forces are invincible.
“The recent targeting of an intruding drone of the enemy changed the conditions in favor of the Islamic Republic and shattered the US awe and everyone understood more than ever that we are powerful,” Brig. Gen. Mohammad Pakpour, an IRGC commander, declared Tuesday during a gathering in Iran of the chiefs of the elite military unit’s ground force, the state-run Fars News Agency reports. “Today Iran has turned into a credible regional power, and this cannot be tolerated by the U.S.,” the IRGC ground force commander added. Describing the act as a “message to America,” the IRGC announced that it had shot down a U.S. “spy drone” on June 20, claiming it was flying over its territory. U.S. officials, however, said the Iranian forces shot the drone down over international waters and airspace in the Strait of Hormuz. During the same event in Iran on Tuesday, Maj. Gen. Hossein Salami, the IRGC’s commander-in-chief, commended the power and capability of the elite military force, stressing that defeating the Islamic Republic is impossible, Fars news adds in a separate article. “We will not be defeated in any war on the ground with God’s help and presence of the IRGC Ground Force and other armed forces which defend the revolution and the country,” Gen. Salami proclaimed on Tuesday. He went on to say that Iran is currently at war against its rivals, which primarily include the United States and Israel. “Today, the enemy is active in all arenas, and actually, we are at a full-scale and all-out war with [the] enemy,” he said. Last Wednesday, Gen. Salami reportedly credited Iran’s military might with prompting President Trump’s last-minute reversal on a June 21 attack on the Islamic Republic in response to the drone incident over concerns that the assault would kill scores of civilians. The IRGC commander claimed the U.S. fears war with Iran. “Today, our global power is very well known and credited, and it includes an extraordinary deterrence capacity; we have managed to shatter the United States’ awe in the world public opinion” on the scene of action, Salami said, echoing Gen. Pakpour’s remarks on Tuesday, Fars news notes. Military tensions between Iran and the United States have intensified in recent weeks, notably after Iran shot down the American drone on June 20. U.S. President Donald Trump’s unprecedented wave of economic sanctions, including those suspended under the controversial 2015 nuclear accord between Tehran and United States-led world powers, has also fueled the strained relationship between the two countries. Arguing that the deal was not tough enough on Iran, President Trump pulled the United States out of the pact. Other signatories — China, Russia, the United Kingdom, France, and Germany — have vowed to remain committed to the deal. However, on Sunday, Iran increased its uranium enrichment beyond the limit allowed by the nuclear agreement, bringing the Islamic Republic closer to weapons-grade levels while urging a diplomatic solution to intensified tensions with the United States. Iran’s move threatens the overall future of the deal. China and Russia have reportedly blamed Iran’s increased uranium enrichment on the Trump administration’s decision to abandon the agreement.On Monday, Iran’s Foreign Ministry gave the non-U.S. signatories of the deal an ultimatum: 60 days to find ways to circumvent the punishing American sanctions on Tehran or it would continue to violate the agreement, Deutsche Welle (DW) notes. Iran has vehemently rejected Trump administration offers to negotiate a different deal. The Trump administration believes its maximum pressure campaign will push Iran onto the negotiating table in exchange for economic relief. The Trump administration has asserted that the sanctions are “working,” noting that they have hindered Iran’s ability to enhance its military capabilities and continue funding its proxies, including anti-U.S. Shiite militias in Iraq and the Lebanese terrorist group Hezbollah, which operates on the Western Hemisphere. Trump’s sanctions have crippled the Iranian economy, triggering a deep recession and fueling rising inflation. Both Iran and the United States have said they do not want war but are ready to engage if necessary. Echoing Iran-allied Shiite militias in Iraq, Tehran has demanded that the United States pull out all its troops from the Middle East. Iran has cautioned the United States of a “stronger” response if it violates its borders.
A form of cognitive dissonance seems to be taking over oil market watchers, a sort of a blind belief that US shale oil production is set to grow, and grow at an aggressive rate, indefinitely. This erroneous belief seems to be the underlying cause for much of the pessimism as to the oil price outlook over the coming years. While, it is undeniable that US shale growth over the last several years has been nothing short of phenomenal, the US shale industry geological and financial resources are not infinite. The Hedge fund fake news or in the olden days what we called spin is US shale oil growth is virtually unlimited and OPEC is fighting for a lost cause. markets. organization that more off-putting. In 2014, prior to the shale induced oil price collapse, OPEC produced 30.6M barrels per day (OPEC Annual Statistical Bulletin). In Q1/19, OPEC produced 30.4M barrels per day (OPEC MOMR). A cursory review of the data indicates that OPEC has barely reduced its production since 2014. Furthermore, if one were to exclude Venezuela and Iran from the calculation due to US sanctions, one would notice that OPEC production actually increased during this period from to 24.8M bpd to 26.8M bpd, or a 2M barrels increase. In terms of market share (excluding Venezuela and Iran) OPEC market share actually increased from 26.8% in 2014 to 27.1% in Q1/19. It is obvipus the research underpinning much of the press critical of OPEC is not based on the facts. OPEC in collaboration with Russia, has been pursuing a very shrewd strategy of opening a path for US shale to claim a slice of the market with minimal market disruption possible. Saudi oil minister, Al-Falih, said on July 1st: “I have no doubt in my mind that U.S. shale will peak, plateau and then decline like every other basin in history.” In December 2018, Russian energy minister, Alexander Novak, took a similar position by voicing doubt as to US shale ability to grow in the medium term. Basically, OPEC and Russia are planning to wait out the strong growth phase in US shale, and the reality is they probably don’t have to wait too long. US shale growth due to a host of geological, financial and logistical factors is set to slowdown in the early 2020s. Rystad Energy, one of the staunchest believers in US shale, is expecting US production growth to slowdown meaningfully as early as next year: After having grown by 2.1M bpd in 2018, Rystad expects US oil production growth to slow to 1.3M bpd in 2019, followed by another slowdown to 900K barrels bpd by 2020. Said another way, Rystad expects US oil production growth to slow by 60% between 2018 and 2020. Rystad is not alone, the EIA, in its latest STEO, is forecasting US crude production growth to slow from 1.4M bpd in 2019 to 900K bpd in 2020, or a 35% decrease in the growth rate in one year. The IEA is no different, its expectating a slowing in US liquids growth from 1.7M bpd in 2019 to 1.3M bpd in 2020. The trend in all these forecasts is unmistakable: US production growth is set to deaccelerate sharply from 2020, and it will only get worse down the line as the sheer size of US oil production, and the industry persisting inability to generate positive cash flow, makes sizable production growth ever harder to sustain. Nothing captures the demoralized spirit of US shale producers as Scott Sheffield, CEO of Pioneer Natural resources, back in 2014, Mr. Sheffield Schlotterbeck, former CEO of EQT labelled the shale gas revolution as an “unmitigated disaster” while listing a total of 172 North American E&P companies, with nearly $100B in debt, that filed for bankruptcy since 2015, as well as, highlighting the 80% loss of value for the remaining key players. Echoing Mr. Schlotterbeck, Scott Sheffield at Pioneer Natural Resources said to this WSJ, “We lost the growth investor, now we’ve got to attract a whole other set of investors.” (Translation: Now that we’ve lost the confidence (and the money) of the first group of gullible investors, we need to find a new set of naïve investors.). Over the past 10 years, 40 of the largest independent oil and gas producers collectively spent roughly $200 billion more than they took in from operations according to the Wall Street Journal. Multiple datapoints and a host of reliable forecasters signal an impending flattening in US shale production growth, and as that flattening takes place, OPEC will claim ownership of the oil market once more. While, the US shale industry has grown its production significantly since the oil price collapse in 2014, OPEC’s core members have managed to protect and grow their market share. Most importantly, the surge in US oil production has drowned the US E&P industry in red ink: close to 200 E&P companies have filed for bankruptcy and hundreds of billions of dollars in US energy stocks market value have been lost. Furthermore, the E&P industry has lost access to the debt market and equity markets, meanwhile industry insiders are being forced to admit their mistakes, change their ways and walk down their rosy production forecasts. The OPEC+ policy of awaiting a projected flattening in US shale growth is the literal definition of an end game. As to the “abundance of supply”, it is not as much of oil as it is of cheap capital, and now that Wall Street has closed the money spigots, the illusion of unlimited US shale growth is soon to be shattered.
LONDON (Reuters) – The British pound fell towards its lowest levels in more than two years on Tuesday against the backdrop of a worsening economic outlook and rising fears about a no-deal Brexit under a new Prime Minister. With a key $1.25 level against the dollar giving way in early Asian trade, traders quickly pushed the British currency down half a percent against the dollar to a level not seen since April 2017, barring a flash crash in early January. The pound also weakened against the euro to a six-month low at 89.95 pence EURGBP=D3 and is on track for a tenth consecutive week of losses against the single currency. “All the fundamental factors point to a weaker pound and the downward momentum is still intact,” said Lee Hardman, a currency strategist at MUFG in London. In the latest sign of economic weakness, sales at British retailers rose at their slowest average pace on record over the past year, a survey from the British Retail Consortium showed on Tuesday. Concerns about the worsening economic outlook in Britain – some analysts expect the economy contracted in the second quarter – encouraged Bank of England Governor Mark Carney to signal last week that the central bank may strike a more dovish tone at its August policy meeting. The pound was trading 0.5% down versus the dollar at $1.2455 and within striking distance of an April 2017 low below $1.2409. It very briefly hit that low in January this year in chaotic trading during a currency market flash crash. Sterling has fallen for several days, its losses compounded by a dollar rallying after analysts scaled back expectations the Federal Reserve would cut interest rates by 50 basis points later this month. RBC Capital Markets strategist Adam Cole noted that betting markets were now pricing in a 95% chance of eurosceptic Boris Johnson, who some investors fear will push Britain towards a no-deal Brexit, becoming the next leader of the Conservative party and Prime Minister. “While a significant measure of Brexit risks have already been priced, the pound may still have more of its downside exposed, should the prospect of a no-deal Brexit ramp up meaningfully over the coming months,” said Han Tan, Market Analyst at FXTM.
HOUSTON (Reuters) – Oil futures edged up on Tuesday as OPEC supply cuts and Middle East tensions kept global benchmark Brent crude above $64 a barrel, while gains were limited by the U.S.-China trade dispute that has dragged on the global economy and crimped oil demand. OPEC and allied producers led by Russia agreed last week to extend their supply-cutting deal until March 2020. Brent has risen almost 20% in 2019, supported by the pact and tensions in the Middle East, especially the row over Iran’s nuclear programme. Brent rose 50 cents to $64.40 a barrel by 11:52 a.m. CST (1506 GMT). U.S. West Texas Intermediate crude was up 41 cents to $57.98. “Tightened supplies have provided an undercurrent of support,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut. “The market is showing signs of stabilizing.” Also supporting prices was an Iranian military official’s comments that Britain’s seizure last week of an Iranian oil tanker off the coast of Gibraltar will not be “unanswered,” according to the semi-official Tasnim news agency. “Iranian military talking about payback for the Gibraltar situation has put a little bid in the market here,” said Robert Yawger, director of energy futures at Mizuho in New York. Rising tensions have brought Iran and the United States close to conflict. The European Union on Tuesday urged Iran to reverse its scaled up uranium enrichment that breaches a nuclear deal it agreed in 2015 with world powers. Washington withdrew from the accord last year and re-imposed sanctions. Oil also gained support from forecasts that U.S. data would show U.S. crude stockpiles fell 3.6 million barrels in the latest week. The first supply report is due at 4:30 p.m. EDT (2030 GMT) from the American Petroleum Institute, an industry group. The U.S. Energy Information Agency reports on Wednesday morning. Russian oil output fell close to a three-year low in early July, industry sources told Reuters. This follows discovery of contaminated Urals crude that affected the Druzhba pipeline to Europe. “The Russian story definitely supports prices today. … lower Russian output together with elevated compliance from OPEC nations should rebalance the oil market faster,” said Giovanni Staunovo, oil analyst for UBS.
MOSCOW, July 9 (Reuters) – Russian pipeline monopoly Transneft curbed oil intake from Yuganskneftegaz, the main upstream unit of Rosneft, four industry sources told Reuters on Tuesday, leading to a fall in Russia’s oil production.
An industry source said oil output at Yuganskneftegaz, in West Siberia, fell 30% during July 1-8 compared with the June average.
Rosneft declined to comment, Transneft did not respond to a request for comment
LONDON (Reuters) – Oil rose above $64 a barrel on Tuesday as OPEC supply cuts and Middle East tensions outweighed the U.S.-China trade dispute that is dragging on the global economy and oil demand. OPEC and its allies last week agreed to extend their supply-cutting deal until March 2020. Brent has risen almost 20 percent in 2019 supported by the pact and also tensions in the Middle East, especially concerns about Iran’s nuclear program. Brent crude in early Tuesday morning trading,, the global benchmark, rose 38 cents to $64.49 a barrel by 0910 GMT. U.S. West Texas Intermediate crude was up 20 cents to $57.86. “OPEC and its allies are doing their best to support the market,” said Tamas Varga, an analyst with PVM. Rising tensions between Iran and the United States have brought the two countries close to conflict. Last month, President Donald Trump called off air strikes at the last minute in retaliation for Iran shooting down a U.S. drone. Iran on Monday threatened to restart deactivated centrifuges and step up its enrichment of uranium to 20% in a move that further threatens the 2015 nuclear agreement that Washington abandoned last year. Oil also gained support from reports expected to show a drop in U.S. crude inventories. U.S. crude stockpiles are forecast to fall 3.6 million barrels in a fourth consecutive weekly decline. The first of this week’s two supply reports is due at 2030 GMT from the American Petroleum Institute, an industry group.
DUBAI (Reuters) – Britain’s seizure of an Iranian oil tanker off Gibraltar last week will not be “unanswered”, Iran’s armed forces chief of staff, Major General Mohammad Bagheri, said on Tuesday, according to the semi-official Tasnim news agency. “Capture of the Iranian oil tanker based on fabricated excuses … will not be unanswered and when necessary Tehran will give appropriate answer,” Bagheri said. British Royal Marines boarded the ship, Grace 1, off the coast of Gibraltar on Thursday and seized it over accusations it was breaking sanctions by taking oil to Syria. Iran has demanded the immediate release of the oil tanker, while an Iranian Revolutionary Guards commander threatened on Friday to seize a British ship in retaliation.
LONDON (Reuters) – The British pound fell to a sixth-month on Tuesday low amid worries about the threat of a no-deal Brexit under the next prime minister and a deteriorating UK economy. In the latest sign of economic weakness, sales at British retailers rose at their slowest average pace on record over the past year, a survey from the British Retail Consortium showed on Tuesday. Concerns about the worsening economic outlook in Britain – some analysts expect the economy contracted in the second quarter – encouraged Bank of England Governor Mark Carney to signal last week that the central bank may strike a more dovish tone at its August policy meeting. Markets are now pricing in a BoE rate cut over the next 12 months, as central banks around the world adopt an easing bias in the face of economic uncertainty and trade tensions between the United States and China. Sterling has fallen for several days, its losses compounded by a dollar rallying after analysts scaled back expectations the Federal Reserve would cut interest rates by 50 basis points later this month. RBC Capital Markets strategist Adam Cole noted that betting markets were now pricing in a 95% chance of eurosceptic Boris Johnson, who some investors fear will push Britain towards a no-deal Brexit, becoming the next leader of the Conservative party and prime minister. Cole also noted that the recent retail sales data pointed to a “softening trend in consumer spending and consensus forecasts now have the UK economy contracting in Q2. The pound dropped 0.3% to $1.2480 GBP=D3, below last week’s six-month low and leaving the currency at its weakest since an early January “flash crash”.Against the euro, sterling also weakened 0.3% to 89.805 pence per euro EURGBP=D3, putting it just below its six-month low of 89.92 pence. “While a significant measure of Brexit risks have already been priced, the pound may still have more of its downside exposed, should the prospect of a no-deal Brexit ramp up meaningfully over the coming months,” said Han Tan, Market Analyst at FXTM. Nick Bit: Funny now that the pound has crashed they tell you it will crash. Those of you making the chippe trade from the start are making a killing.
NEW YORK (Reuters) – Oil prices firmed on Monday on tensions over Iran’s nuclear program but gains were capped by concerns about global economic growth and consequently oil demand. Iran on Monday threatened to restart deactivated centrifuges and step up its enrichment of uranium to 20% in a move that further threatens the 2015 nuclear agreement that Washington abandoned last year. Washington has imposed sanctions that eliminate benefits Iran was meant to receive in return for agreeing to curbs on its nuclear program under the 2015 deal with world powers. The confrontation has brought the United States and Iran close to conflict, with U.S. President Donald Trump calling off air strikes last month minutes before impact. On Sunday, Trump issued another warning over Iran’s nuclear activities. “They’d better be careful,” he said. Iran’s Oil Minister Bijan Zanganeh said on Sunday that he was very hopeful of an improvement in the country’s crude exports, state TV reported. “We see enough possibility of military conflict to cushion renewed price declines that might be driven by mounting expectations for a major slowing in the global economic growth path,” Jim Ritterbusch of Ritterbusch and Associates said in a note.
GENEVA/DUBAI (Reuters) – Iran threatened on Monday to restart deactivated centrifuges and ramp up its enrichment of uranium to 20 percent purity as its next potential big moves away from a 2015 nuclear agreement that Washington abandoned last year. The threats, made by the spokesman for Tehran’s nuclear agency, would go far beyond the small steps Iran has taken in the past week to nudge its stocks of fissile material just beyond limits in the nuclear pact. That could raise serious questions about whether the agreement, intended to block Iran from making a nuclear weapon, is still viable. The two threats would reverse major achievements of the agreement, although Iran omitted important details about how far it might go to returning to the status quo before the pact, when Western experts believed it could build a bomb within months.
Behrouz Kamalvandi, spokesman for Iran’s Atomic Energy Organisation, confirmed an announcement that Tehran had enriched uranium beyond the deal’s limit of 3.67% purity, passing 4.5%, according to the student’s news agency ISNA.
That followed an announcement a week ago that it had amassed a greater quantity of low-enriched uranium than permitted. Iran has said it will take another, third step away from the deal within 60 days but has so far held back from formally announcing what it plans. Kamalvandi said options included enriching uranium to 20% purity or beyond, and restarting IR-2 M centrifuges that were dismantled as one of the deal’s core aims. Such threats will put new pressure on European countries, which insist Iran must continue to comply with the agreement even though the United States is no longer doing so. Enriching uranium up to 20% purity would be a dramatic move, since that was the level Iran had achieved before the deal was put in place, although back then it had a far larger stockpile than it is likely to be able to rebuild in the short term. It is considered an important intermediate stage on the path to obtaining the 90% pure fissile uranium needed to make a bomb.
TOKYO (Reuters) – Crude prices were little changed on Monday European Markets as traders weighed geopolitical risks against the impact of the Sino-U.S. trade war on the global economy, although last week’s better-than-expected U.S. jobs data offered some supprt. Brent crude futures were down 3 cents by 0300 GMT at $64.20. U.S. West Texas Intermediate (WTI) was up 6 cents at $57.57 a barrel. “A very cautious open this morning supported by a better than expected (non-farm payrolls),” said Stephen Innes, managing partner at Vanguard Markets in Bangkok. “Traders remain incredibly cautious about the dimmer global economic overhang.” U.S. job growth rebounded strongly in June, with government payrolls surging, the Labor Department’s closely watched employment report showed on Friday, suggesting May’s sharp slowdown in hiring was probably a one-off. Employers added 224,000 jobs last month, the most in five months, the report showed. But the U.S.-China trade war has dampened prospects of global economic growth and oil demand. The lack of concrete progress in resolving the acrimonious trade war between the United States and China, however, means the bar could be very high for the U.S. Federal Reserve not to lower borrowing costs at its July 30-31 policy meeting. White House Economic advisor Larry Kudlow has confirmed top representatives from the United States and China will meet in the coming week to continue trade talks. Oil received some support from simmering tensions over Iran and after an extension last week to output cuts by OPEC and its allies. Iran said on Sunday it will shortly boost its uranium enrichment above a cap set by a landmark 2015 nuclear deal, prompting a warning ‘to be careful’ from U.S. President Donald Trump, who pulled out of the pact last year. “Geopolitical risks remain plentiful, but the start of the week could see Iran worries ease,” said Edward Moya, senior market analyst at OANDA. Meanwhile, U.S. energy companies this week reduced the number of oil rigs operating for the first time in three weeks as drillers follow through on plans to cut spending this year.
DUBAI (Reuters) – Iran said on Sunday it is fully prepared to enrich uranium at any level and with any amount, in further defiance of U.S. efforts to squeeze the country with sanctions and force it to renegotiate a 2015 nuclear deal with world powers. In a news conference broadcast live, senior Iranian officials said Tehran would keep reducing its commitments every 60 days unless signatories of the pact moved to protect it from U.S. sanctions.
“In a few hours the technical process will come to an end and the enrichment beyond 3.67% will begin,” said Behrouz Kamalvandi, the spokesman for Iran’s Atomic Energy Organisation.
“And tomorrow early in the morning, when the IAEA (U.N. nuclear watchdog) takes the sample we would have gone beyond 3.67%.” Under the pact, Iran can enrich uranium to 3.67% fissile material, well below the 20% it was reaching before the deal and the roughly 90% suitable for a nuclear weapon. Kamalvandi said Iran would enrich uranium for use in fuelling its Bushehr power plant, to the level of 5%, confirming what Reuters reported on Saturday. “We are fully prepared to enrich uranium at any level and with any amount,” he said. Iran shows no sign of caving in to pressure from U.S. President Donald Trump in a confrontation that has taken on a military dimension, with Washington blaming Tehran for attacks on oil tankers, and Iran shooting down a U.S. drone, prompting aborted U.S. air strikes. Long-tense relations between Tehran and Washington took a turn for the worse in May 2018 when Trump pulled out of the 2015 nuclear deal reached before he took office, and reimposed sanctions. Trump argues that the deal is too weak because some of its terms are not permanent, and because it does not cover non-nuclear issues such as Iran’s ballistic missile program and regional aspirations. Iran’s announcement challenging Washington is a test of European diplomacy. The Europeans, who opposed last year’s decision by Trump to abandon the agreement, had pleaded with Iran to keep within its parameters. Tehran has expressed frustration over what it says is the failure of European parties to the agreement to salvage the pact by protecting Iran’s economic interests from U.S. sanctions. “European countries have failed to uphold their commitments and they are also responsible,” Abbas Araqchi, Iran’s senior nuclear negotiator, told the news conference in Tehran. “The doors of diplomacy are open but what matters are new initiatives which are required.” In a sign of heightening Western concern, French President Emmanuel Macron said he and Iranian President Hassan Rouhani had agreed to seek conditions for a resumption of dialogue on the Iranian nuclear question by July 15. Under the 2015 deal between Iran and six powers, most international sanctions against Tehran were lifted in return for limitations on its nuclear work. Those restrictions were aimed at extending the time Iran would need to produce a nuclear bomb, if it chose to, to a year from roughly two to three months. Iran says its nuclear program is only for peaceful purposes, such as power generation, and not to make bombs. Iran’s main demand – in talks with the European parties to the deal and as a precondition to any talks with the United States – is to be allowed to sell its oil at the levels before Washington pulled out of the agreement and restored sanctions.
Iranian crude exports were around 300,000 barrels per day or less in late June, industry sources said, a fraction of the more than 2.5 million bpd Iran shipped in April 2018, the month before Trump withdrew from the nuclear deal.
Israel’s energy minister described as moderate on Sunday the announced increase of Iranian uranium enrichment but accused Tehran of breaking internationally agreed limitations on its nuclear projects and moving towards a potential bomb. “It means … that it is brushing off the red lines that were agreed (and) that it has begun its march, a march that is not simple, towards nuclear weaponry,” Yuval Steinitz, a member of Prime Minister Benjamin Netanyahu’s security cabinet, told Israel’s Ynet TV.
DUBAI (Reuters) – Iran said on Sunday it would further scale back its commitment to the 2015 nuclear deal with world powers, raising its uranium enrichment level beyond agreed levels to produce fuel for power plants. The announcement, confirming what Reuters reported on Saturday, signalled a growing challenge to escalating U.S. sanctions pressure. Nick Bit: In less then 12 months Iran will achieve nuclear break out. That means they will be able to build atomic bombs in quantity if they are not stoppedIn a news conference, senior Iranian officials said Tehran would keep reducing its commitments every 60 days, unless signatories of the pact moved to protect it from U.S. sanctions, but they left the door open to diplomacy. Before the deal was sealed, Iran produced 20% enriched uranium needed to fuel its Tehran reactor and the level of enrichment for its southern Bushehr nuclear power plant was 5%. “We will enrich uranium based on our needs … right now we don’t need to enrich uranium needed for Tehran reactor,” said Behrouz Kamalvandi, Iran’s Atomic Energy Organisation spokesman. “We will enrich uranium to the level that is needed for the Bushehr reactor.” In a sign of heightening Western concern, French President Emmanuel Macron said he and Iran’s President Hassan Rouhani had agreed to seek conditions for a resumption of dialogue on the Iranian nuclear question by July 15. Macron’s office added that he would keep on talking with Iranian authorities and other involved parties to “engage in a de-escalation of tensions related to Iranian nuclear issue.” Long-tense relations between Tehran and Washington took a turn for the worse in May 2018 when U.S. President Donald Trump pulled out of the 2015 nuclear deal reached before he took office, and reimposed sanctions. Under the pact, Iran can enrich uranium to 3.67% fissile material, well below the 20% it was reaching before the deal and the roughly 90% suitable for a nuclear weapon.
HAVANA (Reuters) – On the run from U.S. tax authorities, tech guru John McAfee puffs a cigar aboard his towering white yacht in a Havana harbor and says he can help Cuba evade the U.S. government too – by launching a cryptocurrency that defeats a U.S. trade embargo. The creator of the eponymous antivirus software in the 1980s, McAfee in an interview touted the anonymity of the digital currency while also outlining his belief that income tax is illegal and plans to run from Cuba for the Libertarian Party nomination for U.S. president. “It would be trivial to get around the U.S. government’s embargo through the use of a clever system of currency,” the 73-year-old said Thursday. “So I made a formal offer to help them for free … on a private channel through Twitter.” While Cuba had not responded, its Communist government said earlier this week it was studying the potential use of cryptocurrency to alleviate an economic crisis aggravated by tighter U.S. sanctions under President Donald Trump. Countries under U.S. sanctions such as Iran and Venezuela have floated the idea of using digital currency to trade although no scheme appears to have gotten off the ground. “You can’t just create a coin and expect it to fly. You have to base it on the proper blockchain, have it structured such that it meets the specific needs of a country or economic situation,” said McAfee. “There are probably less than 10 people in the world who know how to do that and I’m certainly one of them.” With him on the yacht are his wife, four large dogs, two security guards and seven staff for his campaign “in exile” for the Libertarian Party presidential nomination, McAfee said. He previously ran in 2016 and came in a distant third. McAfee said he did not pay income tax for eight years for ideological reasons and was indicted. The Internal Revenue Service declined comment. To avoid trial, he left the United States in January for the Bahamas. He arrived in Cuba a month ago after suspecting that U.S. law enforcement was trying to extradite him from the Bahamas. McAfee is nothing if not colorful. His past includes fleeing Belize where he lived for several years after police sought him for questioning in the 2012 murder of a neighbor, meeting his wife, Janice McAfee, when she solicited him as a prostitute while he was on the run and saying on Twitter last year that he has fathered 47 children. The cybersecurity expert said he hopes to extend his Cuban visitor visa indefinitely, breaking a U.S. ban on recreational vessels visiting the island imposed last month as well as travel restrictions. McAfee plans to use social media, where he has 1 million followers on Twitter, to campaign for the Libertarian nomination. Thousands of volunteers wearing masks depicting his face will campaign for him back home and abroad, he said. He believes Cuba would never extradite him to the United States. Both Cuba and the United States have a history of providing refuge to individuals wanted by the other country for crimes with political overtones, according to lawyer Pedro Freyre. Yet cooperation on criminal enforcement improved since a 2014 detente. Cuba last year extradited a U.S. citizen accused of murdering his girlfriend. Neither the Cuban government nor the U.S. Justice Department replied to a request for comment. “They just want to put me in jail and not let me speak again,” said McAfee. “I’m not going to allow that because I have too much to say.” Nick Bit: John i wish you well. I hope you have thought this through to the end! Please have a plan B as discussed! To my loyal subscribers… Understand John is a mathematical genus. He is hated by government. What you may not know is his ant virus software (still in use today) stopped a lot of government snooping tools!
Turkey’s decision to buy the advanced Russian-made air defence system has led to a significant souring of relations with Washington, which has threatened to slap Ankara with sanctions and to deprive the country of the F-35 fighters it had already bought and paid for. The first batch of Turkey-bound S-400s will be loaded onto planes at a Russian military base this coming Sunday and sent to Turkey sometime next week, Haberturk TV has reported, citing unnamed sources. According to the TV channel’s information, the delivery will be made using two cargo planes, with a team of nine Russian engineers responsible for installing the system in Turkey to arrive in the country by Monday. The delivery will bring one complete S-400 missile system to Turkey, Haberturk specified. On Thursday, a spokesman for the Turkish president said Ankara would receive its Russian-made air defence systems “very soon, in the coming days,” and promised that they “will be actively used.” The spokesman added that authorities are still examining options about where the S-400s will be placed, with discussions previously held about deploying them in Qatar or Azerbaijan to avoid exacerbating Turkish-US tensions over the purchase. Authorities had originally discussed placing the air defence systems around the Turkish capital. During their meeting in Osaka, Japan at the G20 summit last week, President Trump told Turkish President Recep Tayyip Erdogan that Washington treated Ankara ‘unfairly’ over its missile deal with Russia, blaming his predecessor Barack Obama for refusing to supply Turkey with its Patriot missile systems ahead of time. “You have to treat people fairly…and I don’t think he was treated fairly,” Trump said. In spite of Trump’s comments, the US has continued to threaten Turkey with sanctions under the Countering America’s Adversaries Through Sanctions Act (CAATSA), and has warned that it may drop Ankara from the F-35 fighter programme and scrap plans to deliver the planes to the country. Turkey, which has invested over a billion dollars into the programme and produces several components for the aircraft, has yet to take possession of a single F-35, with four F-35s destined for Turkey remaining at a US airbase. Last month, Turkish pilots training aboard the aircraft were grounded. Earlier in the week, commenting on the F-35 holdup, Erdogan accused the US of engaging in “robbery,” recalling that Washington and Ankara had previously signed an agreement on the sale of 116 F-35s to Turkey. Russia and Turkey penned a $2.5 billion agreement on the sale of four battalion sets of S-400s to Turkey in late 2018. A year later, the US cleared a $3.5 billion Patriot missile deal for the country, but Ankara has yet to accept it, saying its terms aren’t as good as those provided by Russia for the S-400s, which include a loan agreement. US and NATO officials have repeatedly alleged that the S-400 is ‘incompatible’ with alliance air defence standards, and claimed the system’s presence in Turkey might allow Russia to collect important information about the F-35 and other NATO systems. In May, a senior Pentagon official said the deployment of S-400s in Turkey would be “devastating,” both for the F-35 programme and in terms of Turkish interoperability with NATO.
MOSCOW – Russia will deliver its S-400 air-defense missile system to NATO-member Turkey in the coming days, a Kremlin spokesman said Friday, in a deal likely to trigger U.S. sanctions and test the bonds of the Western military alliance. But the scope of the possible response from Washington remains clouded by apparent conflicting messages. President Donald Trump has publicly shown sympathy for Turkish President Recep Tayyip Erdogan’s position on the Russian missile purchase. Secretary of State Mike Pompeo, however, has warned of tough measures that could include canceling the sales of F-35 fighter jets to Turkey. For the wider NATO alliance, the Turkish deal strikes at the heart of military coordination. NATO has expressed worry that the S-400 is incompatible with its possession of the U.S.-made F-35s, and would give Russia access to secrets of its stealth technology. For more than a year, the United States has urged Erdogan not to procure the sophisticated Russian air-defense system – a move that would bring mandatory U.S. sanctions against Turkey under a 2017 law on cooperation with “adversaries.” The U.S. measures, if carried out, would cause an extraordinary breach in U.S.-Turkey relations and almost certainly complicate ongoing negotiations between the two countries over other issues, including military strategy in Syria. But while U.S. officials have portrayed the sanctions against Turkey as a matter of certainty, Trump refrained from taking a hard line with Erdogan over the S-400s during talks last month at the Group of 20 summit in Japan. Trump noted that Turkey help bring U.S. jobs by paying a “tremendous amount of money” on the F-35 fighters. Trump, speaking to reporters at the summit, said Erdogan had first sought to buy Patriot missiles but had been “treated very unfairly” by the Obama administration, without giving specifics. But the United States had attempted to strike a deal with Ankara over the Patriot systems. Erdogan insisted that any deal include sharing technology so that Turkey can develop and build its own missiles. The Obama administration declined the offer. At the G-20 summit, Trump did not directly answer questions about whether the United States would impose sanctions on Turkey. Erdogan, however, said after his talks with Trump that Turkey would be spared the U.S. sanctions. Erdogan has portrayed the purchase as Turkey’s sovereign right and said that the United States failed to offer a comparable deal for the Patriot missile system. Asked by a reporter during a telephone briefing if Russia would deliver the system on Sunday, Kremlin spokesman Dmitry Peskov said, “I can confirm on behalf of the Kremlin that the S-400 deal is going according to plan.” Turkey’s private broadcaster Haberturk said the first shipment of the S-400s would be loaded onto cargo planes on Sunday and arrive in Turkey sometime next week.Washington has threatened to impose sanctions in response to the purchase of the Russian system, under the Countering America’s Adversaries Through Sanctions Act, which mandates U.S. sanctions against anyone making a “significant” deal with the Russian defense industry. U.S. officials have vigorously insisted over the last year that the only way for Turkey to avoid such sanctions was to abandon its purchase of the S-400’s. The State Department Friday repeated its previous warnings that Turkey is exposing itself to sanctions. “The United States has consistently and clearly stated that Turkey will face very real and negative consequences if it proceeds with its S-400 acquisition, including suspension of procurement and industrial participation in the F-35 program and exposure to sanctions,” said a State Department spokesman. Last month, the Pentagon, in a show of determination, said it would halt the training of Turkish pilots to fly the U.S.-made F-35 warplane. India also wants to buy S-400s from Russia, and it has defied the threat of U.S. sanctions by finalizing a deal to buy five S-400 batteries for $5.4 billion. Russia supplies many weapons systems to India. India has asked for waivers from U.S. sanctions, and the deal complicates the administration’s desire to expand trade and diplomatic relations with New Delhi. U.S. officials have said they are “urging” India not to buy the Russian missile system and “encouraging” it to find alternatives so as not to trigger sanctions. But during Pompeo’s visit to New Delhi last month, India showed little sign of backing down. Asked about the S-400 purchase in a press conference with Pompeo, Foreign Minister Subrahmanyam Jaishankar replied that India will act in its national interest, and noted that its relationships with other countries “have history.” Pompeo said the two countries are friends and partners, and vowed to “find a way to work through” the differences.
DUBAI (Reuters) – Britain should be “scared” about Tehran’s possible retaliation for the capture of an Iranian supertanker by Royal Marines in Gibraltar, the Fars semi-official news agency on Saturday reported an Iranian cleric as saying. “I am openly saying that Britain should be scared of Iran’s retaliatory measures over the illegal seizure of the Iranian oil tanker,” said Mohammad Ali Mousavi Jazayeri, a member of the powerful clerical body the Assembly of Experts. “We have shown that we will never remain silent against bullying …As we gave a staunch response to the American drone, the appropriate response to this illegal capture (of the tanker) will be given by Iran as well,” he said. British Royal Marines seized the supertanker Grace 1 on Thursday for trying to take oil to Syria in violation of EU sanctions in a move which drew Tehran’s fury and could escalate its confrontation with the West. Iran downed a U.S. military drone on June 20 that it said was flying over one of its southern provinces on the Gulf. Washington said the drone was shot down over international waters. An Iranian Revolutionary Guards commander threatened on Friday to seize a British ship in retaliation for the capture of an Iranian supertanker by Royal Marines.
BENGHAZI (Bloomberg) — Libya’s most powerful military leader said the state oil company in Tripoli has the sole right to sell the nation’s crude, a statement that might ultimately help stabilize production that has swung wildly for almost a decade because of ongoing conflict. The National Oil Corp., or NOC, in Tripoli has the “exclusive” right to export Libya’s crude, Eastern commander Khalifa Haftar said in a written response to questions from Bloomberg News. His remarks are telling because at one stage last year, he briefly handed control of key ports to another NOC based in the east of the country. Haftar pledged to continue to protect oil facilities while urging the state oil producer not to use its resources to “support terrorists and armed militias, and to avoid interfering” with his army or working against it. He denied accusations that his forces seized NOC airports, while retaining the right to use them if needed. “The army isn’t a trader,” Haftar said, referring to his self-styled Libyan National Army. “It doesn’t sell oil, legally or illegally.” Haftar began an offensive on Tripoli in April. Mustafa Sanalla, the chairman of the NOC in the Libyan capital, said in May that continued fighting could obliterate oil output, the country’s main source of revenue. Libya is divided between two rival governments with troops vying to control a country that holds Africa’s largest proven oil reserves.
“Sale of oil is an exclusive” jurisdiction of the Tripoli NOC, Haftar said. “The issue of selling crude is governed by a number of laws and binding legislations.”
Efforts to broker a cease-fire between the factions have failed. This week was unusually violent after an attack on a detention center in Tripoli killed at least 44 people in what the United Nations envoy called a war crime. The UN-backed government in Tripoli accused Haftar of ordering the strike. Haftar’s army said the Tripoli-based government was to blame, the pan-Arab TV channel Al-Hadath reported. The conflict is rapidly turning into another regional proxy war, pitting Egypt and the United Arab Emirates against Turkey. Libya is producing about 1.3 MMbopd, according to Sanalla, the highest level in six years. He has repeatedly warned of a potential collapse in output due to the conflict. Output has been among the most volatile of any producer in the world since the overthrow of dictator Muammar Qaddafi in 2011. The OPEC member’s oil production plunged by 800,000 bpd within a matter of days last June, when eastern officials blocked tankers hauling Tripoli-sold cargoes from loading, leading to the closure of eastern ports. Forces loyal to Haftar initially handed the facilities to the eastern NOC, which is based in Benghazi. Libya lost almost $1 billion in revenue before Haftar passed the terminals back to the Tripoli NOC. “The biggest fear of some countries, specifically those concerned with the global economy, is the effect of military operations on the oil industry,” Haftar said.
White House National Security Advisor John Bolton applauded the interception by Britain’s Gibraltar Thursday of a super tanker believed to be carrying Iranian crude oil to Syria, saying the ship was breaking international sanctions. The Grace 1 tanker was impounded in the British territory on the southern tip of Spain after sailing around Africa, the long route from the Middle East to the mouth of the Mediterranean. Iran’s foreign ministry summoned the British ambassador to voice “its very strong objection to the illegal and unacceptable seizure” of its ship. The diplomatic gesture lifted any doubt over Iran’s ownership of the vessel, which flies a Panama flag and is listed as managed by a company in Singapore. In a statement sent out on Friday, Iran’s foreign ministry said that in the meeting with the British ambassador, Tehran had “called for the immediate release of the oil tanker, given that it has been seized at the request of the US, based on the information currently available”. US National Security Advisor John Bolton said the British move was “excellent news.”
Excellent news: UK has detained the supertanker Grace I laden with Iranian oil bound for Syria in violation of EU sanctions. America & our allies will continue to prevent regimes in Tehran & Damascus from profiting off this illicit trade.
John Bolton (@AmbJohnBolton) 4 juillet 2019
“America & our allies will continue to prevent regimes in Tehran & Damascus from profiting off this illicit trade,” Bolton said on Twitter. Shipping data reviewed by Reuters suggests the tanker was carrying Iranian oil loaded off the coast of Iran, although its documents say the oil is from neighbouring Iraq. While Europe has banned oil shipments to Syria since 2011, it had never seized a tanker at sea. Unlike the United States, Europe does not have broad sanctions against Iran.
“This is the first time that the EU has done something so public and so aggressive. I imagine it was also coordinated in some manner with the US given that NATO member forces have been involved,” said Matthew Oresman, a partner with law firm Pillsbury Winthrop Shaw Pittman who advises firms on sanctions.
“This is likely to have been meant as a signal to Syria and Iran – as well as the US – that Europe takes sanctions enforcement seriously and that the EU can also respond to Iranian brinkmanship related to ongoing nuclear negotiations.” Authorities in Gibraltar made no reference to the source of the oil or the ownership of the ship when they seized it. But Iran’s acknowledgment that it owned the ship, and the likelihood that its cargo was also Iranian, drew a link between the incident and a new US effort to halt all global sales of Iranian crude.
Iran describes that as an illegal “economic war”. European countries have so far tried to appear neutral in the escalating confrontation between Tehran and Washington, which saw the United States call off air strikes against Iran just minutes before impact last month, and Tehran amass stocks of enriched uranium banned under a 2015 nuclear deal.
The Gibraltar government said it had reasonable grounds to believe that the Grace 1 was carrying crude oil to the Baniyas refinery in Syria.” That refinery is the property of an entity that is subject to European Union sanctions against Syria,” Gibraltar Chief Minister Fabian Picardo said. “With my consent, our port and law enforcement agencies sought the assistance of the Royal Marines in carrying out this operation.” A spokesman for British Prime Minister Theresa May welcomed Gibraltar’s move. Spain, which challenges British ownership of Gibraltar, said the action was prompted by a US request to Britain and appeared to have taken place in Spanish waters. Britain’s Foreign Office did not respond to a request for comment. Iran has long been supplying its allies in Syria with oil despite sanctions against Syria. What is new are US sanctions on Iran itself, imposed last year when President Donald Trump pulled out of an agreement that had guaranteed Tehran access to world trade in return for curbs on its nuclear programme. Those US sanctions have been tightened sharply since May, effectively forcing Iran from mainstream oil markets and making it desperate for alternative customers. Iran has grown more reliant on its own tanker fleet to transport whatever oil it can sell and to store a growing stockpile of unsold output. The US-Iranian confrontation has escalated in recent weeks, taking on a military dimension after Washington accused Tehran of attacking tankers in the Gulf and Iran shot down a US drone. Trump ordered air strikes but called them off at the last minute, later saying too many people would have died. Homayoun Falakshahi, Senior Analyst at London-based energy data firm Kpler told Reuters the ship had loaded Iranian crude in mid-April from Iran’s export port of Kharg Island. A maritime intelligence source said the ship may have made the journey around Africa to avoid the Suez Canal, where such a large super-tanker would have had to unload its cargo and refill after passing through, exposing it to potential seizure. Iran to boost uranium enrichment level ‘to any amount that we want. Nick Bit: every day that goes bay the Iranian crises ratchets up the pressure on middle east oil supplies. Soon their will be an explosion!
Turkish Foreign Minister Mevlut Cavusoglu earlier this day confirmed that the S-400 deal was done and the US-Turkish spat over the acquisition of the air defence systems started to die down. Deliveries of Russian state-of-the-art S-400 air defence systems to Turkey are expected to begin in the next few days, according to President Erdogan’s spokesperson Ibrahim Kalin as quoted by the Anadolu news agency. “The S-400 contract is a done deal, and we are rapidly approaching the last stage. Very soon, in the coming days, these systems will arrive in Turkey and will be actively used”, Kalin told reporters in Ankara. According to Kalin, the Turkish Defence Ministry is examining options for the placement of the Russian systems. Previously, Turkish authorities stated that the S-400s could be deployed in Qatar or Azerbaijan to avoid further tensions in US-Turkish relations. The spokesperson once again reiterated Ankara’s official stance that the systems would not present any threat to NATO security. Last week, during the G20 summit in Osaka, President Erdogan also confirmed that the delivery of the missile systems would begin “within ten days”. The head of the Turkish government also quoted President Trump as saying that Ankara would not be subject to sanctions over the S-400 deal. Moscow and Ankara signed the agreement on the shipment of the air defence systems in 2017. The move immediately drew ire from Washington, which claimed the systems were incompatible with NATO standards.The US also threatened Ankara with sanctions, warning that the US will stop Turkish forces from flying and receiving its F-35 jets. Turkey, in turn, repeatedly stressed that the purchase of military equipment is a sovereign right and ruled out the possibility of abandoning plans to acquire the S-400 systems.
MADRID (AP) — Authorities in Gibraltar said they intercepted Thursday an Iranian supertanker believed to be breaching European Union sanctions by carrying a shipment of Tehran’s crude oil to war-ravaged Syria. A senior Spanish official said the operation was requested by the United States. Iran’s state-run IRNA news agency described the incident as “an illegal seizure of an Iranian oil tanker.” Gibraltar port and law enforcement agencies, assisted by Britain’s Royal Marines, boarded the Grace 1 early Thursday, authorities on the British overseas territory at the tip of Spain said in a statement. It added that the vessel was believed to be headed to the Baniyas Refinery in Syria, a government-owned facility under the control of Syrian President Bashar Assad and subject to the EU’s Syrian Sanctions Regime. The EU and others have imposed sanctions on Assad’s government over its continued crackdown against civilians. They currently target 270 people and 70 entities. Iran later summoned the British ambassador in Tehran to answer questions about the operation. Iranian Foreign Ministry spokesman Abbas Mousavi said in a tweet that Rob Macaire was summoned over the “illegal interception” of the ship. Mousavi later called the ship’s seizure “odd and destructive.” ″It can cause an increase in tensions in the region,” he said in a live telephone interview on state television Thursday night. The Gibraltar authorities didn’t confirm the origin of the ship’s cargo but Lloyd’s List, a publication specializing in maritime affairs, reported this week that the Panama-flagged large carrier was laden with Iranian oil. The vessel likely carried just over 2 million barrels of Iranian crude oil, the data firm Refinitv said. Tracking data showed that the tanker made a slow trip around the southern tip of Africa before reaching the Mediterranean, it said. The tanker’s detention comes at a particularly sensitive time as tensions between the U.S. and Iran grow over the unraveling of a 2015 nuclear deal, which President Donald Trump withdrew from last year. Trump has also slapped sanctions onto Iran and recently approved the passage of a carrier group, bombers and fighter jets to the Persian Gulf. In recent days, Iran has broken through the limit the deal put on its stockpile of low-enriched uranium and plans on Sunday to boost its enrichment. Meanwhile, oil tankers near the Strait of Hormuz have been targeted in mysterious attacks as Iranian-backed rebels in Yemen launch bomb-laden drones into Saudi Arabia. The U.S. has rushed thousands of additional troops, an aircraft carrier, B-52 bombers and F-22 fighters to the region, raising fears of a miscalculation sparking a wider conflict. Last month Iran shot down a U.S. surveillance drone, further stoking those fears. Iran, which has provided vital military support to Assad, extended a $3 billion credit line for oil supplies beginning in 2013 but the Iranian aid dwindled as Washington restored tough sanctions. In November, the U.S. Treasury Department added a network of Russian and Iranian companies to its blacklist for shipping oil to Syria and warned of “significant risks” for those violating the sanctions.
American crude and gasoline stockpiles both fell for a third week. The Organization of Petroleum Exporting Countries and its allies agreed to extend output cuts into 2020. Oil is still down for the week after plunging 4.8% on Tuesday, its worst reaction to an OPEC meeting in more than four years. While the group’s Secretary-General Mohammad Barkindo described the drop as an “anomaly,” “Seasonal factors are pushing American stockpiles down, so we have to wait and see if the declines are really driven by strong demand,” said Sungchil Will Yun, a commodities analyst at HI Investment & Futures Corp. in Seoul. “While crude has slumped on weak economic data, a further decline in prices will be limited as we’re likely to see countries putting effort to revive economies and as OPEC is set to keep its supplies under control.” U.S. crude inventories dropped by 1.09 million barrels last week, according to the Energy Information Administration.. Gasoline stockpiles fell by 1.58 million barrels, compared with a forecast for a 2.4 million barrel loss. Oil production also remains near a record high. U.S. domestic output increased to 12.2 million barrels a day last week, resuming gains after dropping since the start of June, the EIA said. Crude exports from the US fell back to below 3 million barrels a day.
Iran’s president warned that Tehran will increase its enrichment of uranium to “any amount that we want” beginning on Sunday, putting further pressure on European nations to save its faltering nuclear deal and offer a way around intense U.S. sanctions. President Hassan Rouhani’s threat, combined with Iran surpassing the stockpile limits of the 2015 atomic accord, could narrow the estimated one-year window it would need to produce enough material for a nuclear weapon, something Iran denies it wants but the deal sought to prevent. But as tensions rise a year after President Donald Trump unilaterally withdrew America from the deal, it looks unlikely that Europe can offer Iran a way to sell its oil on the global market despite U.S. sanctions. All this comes the U.S. has rushed an aircraft carrier, B-52 bombers and F-22 fighters to the region and Iran recently shot down a U.S. military surveillance drone. On Wednesday, Iran also marked the anniversary of the U.S. Navy shooting down an Iranian passenger jet in 1988, a mistake that killed 290 people and shows the danger of miscalculation in the current crisis. “The Trump administration is pushing the center of Iranian politics to the right at the determent of the Iranian people and the entire region,” said Ali Vaez, an Iran analyst for the International Crisis Group. “Rouhani is clearly at the end of his rope and has no choice other than green lighting further escalation.” Rouhani, still viewed inside Iran as a relatively moderate cleric in the country’s Shiite theocracy, has taken an increasingly hard-line tone in his remarks to the West. Particularly, he and others in his administration target European signatories to the nuclear deal for not doing enough to ease restrictions on Iran’s oil and financial sectors. That continued Wednesday in a televised address to his Cabinet. His remarks seemed to signal that Europe has yet to offer Iran anything to alleviate the pain of the renewed U.S. sanctions targeting its oil industry and top officials. The deal saw Iran agree to limit its enrichment of uranium to 3.67%, which is enough for nuclear power plants but far below the 90% needed for weapons. It also limited its stockpile of enriched uranium to 300 kilograms (661 pounds). In exchange, Iran saw crippling economic sanctions lifted. But after Trump withdrew from the deal, those sanctions and even more-stringent newer ones took effect. On Monday, both Iran and the U.N.’s nuclear watchdog agency confirmed that Tehran had breached that stockpile limit. Rouhani some two months earlier set the Sunday deadline that Iran would increase its enrichment of uranium. Wednesday’s remarks underlined that. “From July 7 onward, the level of our enrichment will not be at 3.67% anymore,” Rouhani said. “We will put aside this commitment as much as we want to and to any level we think is necessary and we need.” However, Rouhani’s remarks, while strident, seemed to still insist last-minute diplomacy could be possible. “Our advice to Europe and the United States is to go back to logic and to the negotiating table,” he said. “Go back to understanding, to respecting the law and resolutions of the U.N. Security Council. Under those conditions, all of us can abide by the nuclear deal.” There was no immediate reaction in Europe, where the EU just the day before finalized nominations to take over the bloc’s top posts. On Tuesday, European powers separately issued a statement on Iran breaking through its stockpile limit, calling on Tehran “to reverse this step and to refrain from further measures that undermine the nuclear deal.” The heightened tensions between the U.S. and Iran have seen a series of incidents spiral across the wider Persian Gulf. Mysterious attacks have struck oil tankers near the Strait of Hormuz, which the U.S. and Israel blame on Iran, although Tehran denies involvement. Yemen’s Iranian-backed Houthi rebels have launched a series of bomb-laden drone attacks on Saudi Arabia. Iran also shot down an over $100 million U.S. military surveillance drone on June 20, nearly sparking a retaliatory American strike. Iranian state TV reported that the powerful Imam Reza Foundation, a religious body that manages vast endowments and businesses across Iran, awarded medals to those who shot down the U.S. drone. Meanwhile, relatives of those killed the 1988 downing of Iran Air Flight 655 by the U.S. Navy marked the day by visiting the site in the Strait of Hormuz where its debris fell.
BRUSSELS—International Monetary Fund chief Christine Lagarde is likely to become the first woman to run the European Central Bank, putting an experienced crisis fighter in charge and paving the way for a continuation of easy-money policies. Ms. Lagarde also would be the institution’s first president without a pedigree in central banking. That has raised doubts about whether she would command the same credibility in financial markets as current chief Mario Draghi, who emerged as a dominant figure in the global economy during his nearly eight years at the ECB. Her nomination comes as central bankers face challenges on a number of fronts. Inflation has weakened below target in many developed economies including the eurozone, while trade conflicts have crimped economic growth. But central bank rates are already super low or—in the case of Europe and Japan—negative, which spurs lending by reducing borrowing costs and making it unattractive to hold deposits.. Some central bankers are in the crosshairs of politicians. President Trump has routinely bashed Federal Reserve Chairman Jerome Powell for raising interest rates. And last month, he set his sights on Mr. Draghi, complaining that the ECB’s rate-cut signals were devaluing the euro. Days later, he praised the ECB president. The ECB operates under tremendous scrutiny in Europe because the 19-member eurozone doesn’t have a common finance ministry, making the bank the region’s dominant voice on economic and monetary affairs. “Ms. Lagarde is likely to take an expansive approach to both conventional and unconventional monetary policies that could support growth in the eurozone,” said Eswar Prasad, a former IMF economist who is now a professor at Cornell University. Ms. Lagarde, 63 years old, a former French finance minister, would be effective building consensus, he said, “but whether she can provide the sort of visionary and creative technocratic leadership that Draghi brought to the job remains to be seen.” On Twitter, Ms. Lagarde wrote that she was “honored to have been nominated” and that she was temporarily relinquishing her responsibilities as IMF chief. ECB officials have recently flagged the possibility of interest-rate cuts to raise inflation toward the bank’s target of just under 2%, but with the ECB’s deposit rate already at minus 0.4%, such a move could damage banks that must pay to park funds with the central bank.. Nick Bit: this is super good news for us. As you know the world is headed to negative interest rates. And Christie honey baby with all her Doctoral economist are BIG believers in negative rates. Thank GOD for our lovely zeroes
On Monday, Tehran confirmed its stockpiling of over 300 kilograms (660 pounds) of enriched uranium, something that Israeli Prime Minister Benjamin Netanyahu has described as a “significant step” toward obtaining a nuclear weapon. Israeli Foreign Minister Israel Katz has claimed that in the wake of its uranium enrichment ramp-up, Iran is veering toward a war in which it may suffer heavy losses. Speaking to Israel Army Radio, Katz pledged that the Jewish state would not “allow Iran to obtain nuclear weapons, even if it has to act alone on that”. Relations between Iran and Israel remain strained, with the Jewish state repeatedly accusing the Islamic Republic of supporting “terrorist” groups such as Hezbollah and Hamas, and of waging proxy wars in countries such as Syria which could pose a threat to Israel’s security. Iran denies the charges, accusing Israel and its allies of engaging in military aggression throughout the region. Katz referred to the Islamic Republic’s “mistakes in the grey area” which Katz claimed would “lead it to the red zone — a war in which it will be hit hard”. He also described Iran increasing its uranium enrichment volumes as a “wake-up call” for Europe. “Feeding the Iranian tiger will not help; only an aggressive policy and sanctions and support for the US policy will quickly show that it is a paper tiger”, Katz argued. The remarks come after US President Donald Trump accused Iran of “playing with fire,” while US Secretary of State Mike Pompeo warned that “the Iranian regime, armed with nuclear weapons, would pose an even greater danger to the region and to the world”, Pompeo said in a statement. US National Security Adviser John Bolton, for his part, tweeted, “There is no reason for Iran to increase its enrichment unless it’s part of an effort to reduce the breakout time to produce nuclear weapons”. This comes after the Iranian Students’ News Agency quoted Foreign Minister Javad Zarif as saying Monday that Tehran has stockpiled over 300 kilograms (660 pounds) of enriched uranium, which is out of sync with the 2015 Iran nuclear deal, also known as the Joint Comprehensive Plan of Actions (JCPOA). At the same time, Zarif’s spokesman Abbas Mousavi said that Tehran’s steps to decrease its commitments under the JCPOA are “reversible” and urged Europe to accelerate its efforts to save the deal. Tensions between the US and Iran have been on the rise since Trump announced Washington’s withdrawal from the JCPOA on 8 May 2018. Exactly a year after, Tehran suspended some of its obligations under the JCPOA, in what was followed by the US imposing more anti-Iranian sanctions and sending an aircraft carrier strike force to the Persian Gulf in a “direct message” to the Islamic Republic.
NEW YORK (Reuters) – Oil prices fell more than 3% on Tuesday, even after OPEC and allies including Russia agreed to extend supply cuts until next March, as weak manufacturing data had investors worried that a slowing global economy could dent oil demand. The Organization of the Petroleum Exporting Countries and other producers such as Russia, a group known as OPEC+, agreed on Tuesday to extend oil supply cuts until March 2020 as members overcame differences to try to prop up prices. The extension comes after Russian President Vladimir Putin said on Saturday he had agreed with Saudi Arabia to prolong the pact and continue to cut combined production by 1.2 million barrels per day, or 1.2% of world demand. “There seems to be some disappointment that OPEC didn’t make a larger production cut. Or a sense that demand is really bad,” said Phil Flynn, analyst at Price Futures Group in Chicago. Signs of a global economic slowdown, which could hit oil demand growth, means OPEC and its allies could face an uphill battle to shore up prices by reining in supply. “It was the bare minimum OPEC could agree on in order to prevent a major meltdown in prices. Member countries noted that global oil demand growth for this year has fallen to 1.14 mbpd (million barrels per day) whilst non-OPEC supply is expected to grow by 2.14 mbpd,” PVM analyst Tamas Varga wrote in a note. “It appears that the supply side of the oil equation is supportive for oil prices but demand concerns are forcing oil bulls to keep at least part of their gunpowder dry.” The United States and China agreed at the G20 leaders summit to restart trade talks, but factory activity shrank across much of Europe and Asia in June while U.S. manufacturing activity slowed to near a three-year low. Meanwhile, U.S. crude oil stockpiles were seen falling for a third consecutive week, a preliminary Reuters poll showed. Industry data will be released at 4:30 p.m. EDT (2030 GMT), with government data to follow on Wednesday. Nick Bit: They will cut and cut and cut all they need to. AND the global economy is NOT slowing and that will surprise the shit out of the market. Remember this is a colossal game of giant steps
Vienna — OPEC and its 10 non-OPEC allies, including Russia, on Tuesday ratified a charter formalizing their oil market management alliance after two and a half years of collective supply cuts aimed at bolstering prices.
The 24 countries control about half of global oil production, and ministers said at a signing ceremony at the OPEC secretariat that the charter would demonstrate their resolve to cooperate on supply management.
Saudi energy minister Khalid al-Falih called the OPEC/non-OPEC coalition “one of history’s strongest producer partnerships, spanning the entire world, from east to west, and which has committed itself to promoting market stability on an ongoing basis.” Russian counterpart Alexander Novak said the charter would provide a platform for the participants to continue regular meetings and to “react if necessary” to changing market conditions. The signing comes after OPEC agreed on Monday to a nine-month extension of its production cut agreement. Non-OPEC partners went into a meeting later Tuesday to consider their part of the cuts. The agreement calls for a 1.2 million b/d supply cut through the first quarter of 2020. Nick Bit: OPEC is bigger and badder then ever… They now control half the worlds oil supply. This is a big deal that the market s sleeping on
It was no surprise that Iran passed 300-kilogram enriched uranium threshold limit on Monday. If anything, it was a surprise that Tehran did not pass that limit last week when it had said earlier in June that it would violate the limit by June 27. It is already changing the conversation in the Israeli defense establishment. There is still a preference in most circles for a negotiated outcome, but now calls for discussion of a pre-emptive strike on Iran’s nuclear facilities by Israel will get louder. The Jerusalem Post has followed differing points of view within the Israeli defense establishment, and on this issue, there are fundamentally two major camps. One camp is not only committed to diplomacy, but has always believed that attacking Iran’s nuclear facilities is a massive risk that could lead to regional war, including tens of thousands of Hezbollah rockets raining down on Israel’s home front. Those in this camp, still sign off on Israel carrying out a pre-emptive strike on Tehran’s nuclear facilities if it has already enriched enough uranium for a bomb and is close to being able to deploy one, but broadly speaking, they oppose an attack before that final point. They also oppose too much public discussion of an Israeli attack before that final point, as they believe too much sword waving harms chances at diplomacy and makes the Trump administration feel it does not have an obligation to carry out the attack. This second camp prefers that the Trump administration carry out a pre-emptive strike if it becomes necessary, and cringes at the idea of Israel going at it alone unless there is really no other choice. The other camp is more triumphalist. They take the threat from Hezbollah and regional war with Iran seriously, but overall, they believe Israel’s military and deterrence are so strong that Jerusalem could order a surgical strike on the Islamic republic’s nuclear facilities and likely avoid a major conflict from Tehran’s proxies. Further, this camp believes that the Trump administration has lost respect in the eyes of the Iranians and that, therefore, only a clear threat from Israel might pressure Khamenei to be ready to compromise in the nuclear standoff.
Finally, this camp appears ready to order a pre-emptive strike earlier, possibly before Iran has enough enriched uranium for a bomb, even if it cannot yet deliver the explosive material.
The next Iran deadline is July 7. It is unclear what new escalated violation Iran will commit on July 7, but the latest reports from Tehran are that it will enrich uranium to 3.7% up from the nuclear deal’s 3.67% or start violating the 300-kilogram limit much more substantially. Nick Bit: it is my firm belief that a surgical attack on Iran’s Nuclear Facilities (underground) is imminent unless Iran backs down before its to late.
VIENNA (Reuters) – OPEC agreed on Monday to extend oil supply cuts until March 2020, three OPEC sources said, as the group’s members overcame their differences in order to prop up the price of crude amid a weakening global economy and soaring U.S. production. The move will likely anger U.S. President Donald Trump, who has demanded OPEC leader Saudi Arabia supply more oil and help reduce prices at the pump if Riyadh wants U.S. military support in its standoff with arch-rival Iran. OPEC and its allies led by Russia have been reducing oil output since 2017 to prevent prices from sliding amid soaring production from the United States, which has overtaken Russia and Saudi Arabia as the world’s top producer.
SINGAPORE (Reuters) – Oil prices rose more than $1 a barrel on Monday after Saudi Arabia, Russia and Iraq backed an extension of supply cuts for another six to nine months ahead of an OPEC meeting in Vienna. Front-month Brent crude futures for September touched an intraday high of $66.75. U.S. crude futures for August rose $1.90 to $60.26 a barrel the highest in over five weeks. The Organization of the Petroleum Exporting Countries (OPEC) and its allies look set to extend oil supply cuts until the end of 2019 after top producers on Sunday endorsed a policy aimed at propping up the price of crude. OPEC, Russia and other producers, an alliance known as OPEC+, meet on Today and Tuesday to discuss supply cuts. The group has been reducing oil output since 2017 to prevent prices from sliding amid a weakening global economy and soaring U.S. output. Russian President Vladimir Putin said on Sunday he had agreed with Saudi Arabia to extend existing output cuts of 1.2 million barrels per day (bpd) by six to nine months. Stephen Innes, managing partner at Vanguard Markets in Bangkok, said oil prices could also be supported in the medium term because of geopolitical tensions in the Middle East and as China’s central bank eases monetary policy to offset the impact from U.S. tariffs.
VIENNA (Reuters) – OPEC and its allies look set to extend oil supply cuts this week at least until the end of 2019 as Iran joined top producers Saudi Arabia, Iraq and Russia in endorsing a policy aimed at propping up the price of crude amid a weakening global economy.
Iranian Oil Minister Bijan Zanganeh told reporters on Monday he would support prolonging output cuts by six to nine months. Tehran has in the past objected to policies put forward by arch-rival Saudi Arabia, saying Riyadh was too close to Washington.
“I have no problem with a production cut… It’s going to be an easy meeting as my stance is very clear,” Zanganeh told reporters upon arriving in Vienna. The United States is not a member of OPEC, nor is it participating in the supply pact. Washington has demanded Riyadh pump more oil to compensate for lower exports from Iran after slapping fresh sanctions on Tehran over its nuclear program. OPEC and its allies led by Russia have been reducing oil output since 2017 to prevent prices from sliding amid soaring production from the United States, which has become the world’s top producer this year ahead of Russia and Saudi Arabia. Fears about weaker global demand as a result of a U.S.-China trade spat have added to the challenges faced by the 14-nation Organization of the Petroleum Exporting Countries in recent months. Russian President Vladimir Putin said on Saturday he had agreed with Saudi Arabia to extend existing output cuts of 1.2 million barrels per day, or 1.2% of global demand, by six to nine months – until December 2019 or March 2020. Saudi Energy Minister Khalid al-Falih said the deal would most likely be extended by nine months and no deeper reductions were needed. “It’s a rollover and it’s happening,” Falih, whose country is the de facto leader of OPEC, told reporters on Sunday. Iran’s exports have plummeted to 0.3 million barrels per day in June from as much as 2.5 million bpd in April 2018 due to Washington’s fresh sanctions. The sanctions are putting Iran under unprecedented pressure. Even in 2012, when the European Union joined U.S. sanctions on Tehran, the country’s exports stood at around 1 million bpd. Oil represents the lion’s share of Iran’s budget revenues. “Worsening tensions between the U.S. and Iran add potential for oil price volatility that could be tricky for OPEC members to manage,” said Ann-Louise Hittle, vice president, macro oils, at consultancy Wood Mackenzie.
OSAKA (Reuters) – The United States and China agreed on Saturday to restart trade talks after President Donald Trump offered concessions including no new tariffs and an easing of restrictions on tech company Huawei in order to reduce tensions with Beijing. China agreed to make unspecified new purchases of U.S. farm products and return to the negotiating table. No deadline was set for progress on a deal, and the world’s two largest economies remain at odds over significant parts of an agreement. Financial markets, which have been rattled by the nearly year-long trade war, are likely to cheer the truce. Washington and Beijing have slapped tariffs on billions of dollars of each other’s imports, threatening to put the brakes on an already slowing global economy. Those tariffs remain in place while negotiations resume. “We’re right back on track,” Trump told reporters after an 80-minute meeting with Chinese President Xi Jinping at a summit of leaders of the Group of 20 (G20) major economies in Osaka, Japan. “We’re holding back on tariffs and they’re going to buy farm products,” Trump said, without giving details about the purchases. The U.S. president had threatened to slap new levies on roughly $300 billion (£236 billion) of additional Chinese goods, including popular consumer products, if the meeting in Japan proved unsuccessful. Such a move would have extended existing tariffs to almost all Chinese imports into the United States. Trump offered an olive branch to Xi on Huawei, the world’s biggest telecom network gear maker. The Trump administration has said the Chinese firm is too close to China’s government and poses a national security risk, and has lobbied U.S. allies to keep Huawei out of next-generation 5G telecommunications infrastructure. Trump’s Commerce Department has put Huawei on its “entity list,” effectively banning the company from buying parts and components from U.S. companies without U.S. government approval. But Trump said on Saturday he did not think that was fair to U.S. suppliers, who were upset by the move. “We’re allowing that, because that wasn’t national security,” he said. Financial markets and businesses worldwide were eager to get relief from the U.S.-China trade war. “Returning to negotiations is good news for the business community and breathes some much needed certainty into a slowly deteriorating relationship,” said Jacob Parker, a vice-president of China operations at the U.S.-China Business Council. Nick Bit: so much for the China trade war slowing the global economy. In fact just the opposite will happen
SEOUL, South Korea — President Donald Trump stepped foot into North Korea on Sunday during an extraordinary last-minute meeting with Kim Jong Un, becoming the first sitting U.S. president to enter the secretive, nuclear-armed nation. Although the unprecedented encounter comes despite the lack of any measurable progress on denuclearization between Washington and Pyongyang, Trump declared the meeting a success. Both leaders predicted it would lead to better things to become between their two countries. “Stepping across that line was a great honor,” Trump said after the two walked toward each other and shook hands. As he and Kim met in a nearby room minutes later, Trump declared: “This was a special moment.”
Kim also cast the brief meeting as a major diplomatic milestone — the first time U.S. and North Korean leaders have met at the heavily fortified Demilitarized Zone separating North and South Korea.
He said he and Trump have an “excellent relationship” that made such a meeting — hastily arranged following an invitation by Trump on Twitter late Friday — possible.
“This means that we can feel at ease,” Kim said through a translator. “I believe that this will have a positive force on all of our discussions in the future.” He also told Trump that he “never expected” to see the president “at this place.”
Yet for all the fanfare, there are no signs that the U.S. and the North have made progress on the nuclear weapons issue that has led to North Korea’s estrangement from the world in the first place.
“We can only call it historic if it leads to something,” Victor Cha, a former Asia director at the White House and an NBC News contributor, said on MSNBC. Trump’s last summit with the North Korean leader — in Hanoi, Vietnam, in February — collapsed abruptly, with a planned signing ceremony scrapped and Trump explaining to reporters that “sometimes you have to walk.” At the center of that failure, U.S. officials have said, was Kim’s insistence that all nuclear sanctions be lifted in exchange for only some concessions sought by the U.S. from Pyongyang related to its nuclear program. But a senior Trump administration official told NBC News on Sunday that one possible outcome from Trump’s handshake with Kim is that it could jump-start negotiations between the U.S. and North Korea at a lower level being led by Stephen Biegun, the U.S. special representative for North Korea. Those talks could then focus on making more substantive progress on the nuclear issues.
Still, national security hawks and many of Trump’s critics have warned that such meetings give legitimacy to Kim and remove pressure needed to get the North to rid itself of nuclear weapons without accomplishing anything concrete.
“I’m never in a rush,” Trump said. “If you’re in a rush, you get yourself in trouble.” Trump also invited the North Korean leader to Washington. “I’ll invite him to the White House right now,” he said. Kim said it would be a “great honor” if Trump visited Pyongyang. Neither of those are likely to occur in the short term given the immense logistical and security challenges of arranging such a visit between countries that do not have diplomatic relations. Underscoring the extraordinary nature of Sunday’s meeting between the leaders, U.S. officials were unsure that it would actually happen until the moment Kim arrived, the senior official said, even though North Korea had agreed to it. The handshake and Trump’s visit to the DMZ unfolded in chaotic fashion under overcast skies as even White House officials accompanying the president were unsure what would happen next and journalists jostled to capture the historic encounter. Trump said that the security situation in the area had gotten better. “There was great conflict here prior to our meeting in Singapore,” Trump said. “After our first summit, all of the danger went away.” He added: “It’s all working out. It always works out.” Trump then traveled a short distance to speak with U.S. and South Korean troops who patrol the South Korean side of the border. “You are terrific people, you’ve done a tremendous job, and we’re with you all the way,” Trump said. Trump was already the first U.S. president to meet a North Korean leader while in office, having met with Kim twice before. This marks the first meeting in the no-man’s-land between North and South since the end of the Korean War.
Now, the death of Otto Warmbier has brought fresh scrutiny to the regime’s brutal torture camps under leader Kim Jong Un. The 22-year-old student passed away from mysterious brain damage he suffered while a prisoner in the isolated state. He succumbed to his horrifying injuries just six days after he was released from North Korea back to his parents in a vegetative state following 17 months in custody. Its believed he spent some of that time in one of Kim’s prison camps, where thousands of his citizens are believed to have died.
Warmbier’s doctors in Cincinnati said that the student had suffered ‘extensive loss of brain tissue in all regions of his brain’ consistent with oxygen deprivation for a prolonged period. The isolated North Korean regime is believed to have as many 120,000 political prisoners in its harsh labor camps. Grotesque stories of torture offer among the few clues to Warmbier’s fate.
In a 2014 report, the United Nations Human Rights Commission called North Korea ‘a state that does not have any parallel in the contemporary world’ due to the country’s ‘systematic, widespread and gross human rights violations’. Beatings are widespread in the camps, in which guards are given near-absolute authority to abuse and kill prisoners, according to survivors who have survived to speak out.Escapees have said that the sounds of beatings were so extreme each night that it was impossible to sleep.
One woman interviewed for the UN report, who had been imprisoned for practicing Christianity, told of a torture room with a water tank in which suspects could be immersed to simulate drowning. ‘She indicated that she was fully immersed in cold water for hours,’ the report said. ‘Only when she stood on her tip-toes would her nose be barely above the water level. She could hardly breathe. She was gripped by panic, fearing that she might drown.’ Other baroque torture methods of the North Korean regime have come to light as well.
One Ministry of People’s Security official who defected revealed that the agency made use of small metal cages in the Pyongyang offices of its pre-trial investigative bureau.
‘Victims would be crammed into the cage for several hours so that the circulation of blood to extremities becomes interrupted and other parts of the body swell up,’ according to the UN report. ‘The victim turns into a rusty brown color. After removal from the cage, the victim is abruptly “unfolded” causing further excruciating pain,’ the report said. The same witness recalled receiving formal training on torture techniques, including ‘how to cut off a suspect’s blood circulation using straps, while simultaneously placing the suspect in physical stress positions in order to inflict the maximum level of pain.’
OSAKA (Reuters) – Russia has agreed with Saudi Arabia to extend by six to nine months a deal with OPEC on reducing oil production, Russian President Vladimir Putin said.Putin, speaking after talks with Saudi Crown Prince Mohammed bin Salman, told a news conference the deal would be extended in its current form and with the same volumes. The Organization of Petroleum Exporting Countries, Russia and other producers, an alliance known as OPEC+, meet on July 1-2 to discuss the deal that involves curbing oil output by 1.2 million barrels per day (bpd). The pact expires after June 30. “We will support the extension, both Russia and Saudi Arabia. As far as the length of the extension is concerned, we have yet to decide whether it will be six or nine months. Maybe it will be nine months,” said Putin said, who met the crown prince on the sidelines of a G20 summit in Japan.. A nine-month extension would mean the deal runs out in March 2020. Kirill Dmitriev, the chief executive of Russian Direct Investment Fund who helped design the OPEC-Russia deal, said the pact in place since 2017 has already lifted Russian budget revenues by more than 7 trillion roubles ($110 billion). “The strategic partnership within OPEC+ has led to the stabilisation of oil markets and allows both to reduce and increase production depending on the market demand conditions, which contributes to the predictability and growth of investments in the industry,” Dmitriev said.
Trump may sanction Iranian STFI: informed source
According to wall Street Journal, “in the mix are sanctions against Iran’s Special Trade and Finance Instrument (STFI), the mirror company to Europe’s Instrument for Supporting Trade Exchanges, a special-purpose vehicle set up to try to circumvent US sanctions,” a person familiar with Treasury discussions said.
One possible channel for ratcheting up the pressure would be to penalize banks, insurers, traders or any other companies outside Iran that are still helping the country, a move supporters say would stifle the remaining flows of cash keeping the country and regime on life support, the report said about other possible new US sanctions for Iran.
Other sanctions could target economic sectors not already hit such as consumer- or industrial-goods manufacturing, or entities that move money or products in and out of Iran, such as trading houses or shipping concerns, the same report confirmed. The US Treasury Department, which is responsible for levying sanctions, has declined to comment about the issue according to WSJ. Trump said Saturday he planned “major” new sanctions against Iran to take effect Monday, without providing details. According to Iranian officials, STFI is ready to start operation and Europeans have to purchase Iranian oil or establish a financial line with Iran to have it operational. STFI was established to ease INSTEX implementation and if the financial instrument is decided to become operational, there is be no problem having it run in Iran.
North Korea said Saturday President Donald Trump’s offer to meet leader Kim Jong Un at the Korean Demilitarized Zone is a “very interesting suggestion,” brightening prospects for a third face-to-face meeting between the two leaders. The North’s First Vice Foreign Minister Choe Son Hui said that the meeting, if realized, would serve as “another meaningful occasion in further deepening the personal relations between the two leaders and advancing the bilateral relations.” Choe still said that North Korea hasn’t received an official proposal for the DMZ meeting from the United States. Her statement was carried via the North’s official Korean Central News Agency. Earlier Saturday, Trump invited Kim to shake hands during his planned visit the DMZ, which has served as a de-facto border between the Koreas since the end of the 1950-53 Korean War. Trump is scheduled to fly to South Korea later Saturday for a two-day trip after attending the G-20 summit in Osaka, Japan. Trump tweeted that “If Chairman Kim of North Korea sees this, I would meet him at the Border/DMZ just to shake his hand and say Hello(?)!” “All I did is put out a feeler if you’d like to meet,” Trump said later of the invitation, adding that he’s not sure of Kim’s whereabouts. Trump and Kim have met twice since Kim entered talks with the United States early last year to deal away his advancing nuclear arsenal in return for political and economic benefits. Their first summit in Singapore in June last year ended with Kim’s promise to work toward complete denuclearization of the Korean Peninsula, which lacked any specific timetable and roadmap. In Singapore, the two leaders also agreed to improve bilateral relations and build lasting peace on the peninsula. They met again in Vietnam in February, but that second summit collapsed due to disputes over how much sanctions relief North Korea should win in return for dismantling its main nuclear complex a limited denuclearization step. Kim has since asked Trump to work out acceptable proposals to salvage the negotiations by the end of this year. U.S. officials said sanctions on North Korea would stay in place until North Korea takes firmer steps toward nuclear disarmament.Talks of a revival of diplomacy have flared again since Kim and Trump recently exchanged personal letters. Kim called Trump’s letter “excellent” while Trump described Kim’s as “beautiful.” The United States and North Korea are in a technical state of war because the 1950-53 Korean War ended with an armistice, not a peace treaty. About 28,500 American soldiers are deployed in South Korea as deterrence against potential aggression from North Korea.
OSAKA (Reuters) – The United States and China have agreed to restart trade talks and Washington will not level new tariffs on Chinese exports, China’s official Xinhua news agency said on Saturday, as U.S. President Donald Trump said the talks were “back on track”. Saturday’s high-stakes meeting between Trump and Chinese President Xi Jinping was being closely watched in hopes that it would ease tension rather than plunge the world’s two biggest economies into a deeper trade war. The dispute has already cost companies in both countries billions of dollars, disrupted global manufacturing and supply lines, and roiled markets. “The U.S. side said it would not add new tariffs on Chinese exports,” Xinhua said in a brief report, adding that negotiators of both countries would discuss specific issues, but gave no details. Trump told reporters he had an excellent meeting with the Chinese leader and that talks were “back on track”. The two met in Japan’s western city of Osaka, on the sidelines of a summit of leaders of Group of 20 (G20) developed economies. “We had a very good meeting with President Xi of China, excellent, I would say excellent, as good as it was going to be,” Trump said. “We discussed a lot of things and we’re right back on track and we’ll see what happens.” Ahead of the talks, Trump had said a fair trade deal would be “historic”, but gave no details. The trade dispute, which includes a feud over Huawei Technologies Co [HWT.UL] has fanned fears it could threaten global growth. “The trade relations between China and the United States are difficult, they are contributing to the slowdown of the global economy,” European Commission President Jean-Claude Juncker said on Friday, the summit’s first day. The U.S. president has said he would extend existing tariffs to cover almost all imports from China into the United States if the meeting brought no progress on wide-ranging U.S. demands for economic reforms. At the start of Saturday’s talks, Xi told Trump he was ready to exchange views on fundamental issues and stressed the need for dialogue rather than confrontation. “Cooperation and dialogue are better than friction and confrontation,” he said. The G20 leaders will agree on Saturday to accelerate reforms of the World Trade Organization, but stop short of calling for the need to resist protectionism in their closing communique, Japan’s Nikkei newspaper said. The United States says China has been stealing U.S. intellectual property for years, forces U.S. firms to share trade secrets as a condition for doing business in China, and subsidizes state-owned firms to dominate industries. China has said the United States is making unreasonable demands and must also make concessions. The dispute escalated when talks collapsed in May after Washington accused Beijing of reneging on reform pledges. Trump raised tariffs to 25% from 10% on $200 billion of Chinese goods, and China retaliated with levies on U.S. imports. As ties have soured, the dispute has spread beyond trade. The U.S. administration has declared Chinese telecoms giant Huawei a security threat, effectively banning U.S. companies from doing business with it. U.S. officials have also pressed other governments to drop Huawei from plans to develop fifth generation, or 5G, networks. Trump has suggested easing U.S. restrictions on Huawei could be a factor in a trade deal with Xi. China has demanded the U.S. drop the curbs, saying Huawei presents no security threat.
VIENNA (Reuters) – World powers warned Iran to respect the terms of their nuclear deal in talks on Friday that Tehran said were the “last chance” to save the pact, as Washington vowed to choke off all sales of Iranian oil. “We will sanction any imports of Iranian crude oil… There are right now no oil waivers in place,” Brian Hook, the U.S. Special Representative On Iran, told reporters in London. The United States would study reports of Iranian crude going to China, Hook said when asked about the sale of Iranian crude to Asia, adding: “We will sanction any illicit purchases of Iranian crude oil.” Washington has re-imposed tough sanctions on Iran since President Donald Trump pulled the United States out of the 2015 nuclear accord, which lifted sanctions on Iran in return for curbs on its nuclear programme, verified by the International Atomic Energy Agency (IAEA).
The Trump administration aims to cut Iran’s oil sales to zero to force Tehran to negotiate a broader deal that includes its missile capabilities and regional influence.
Hook said the United States was on track to deprive Iran of $50 billion (£39 billion) in oil revenues and told European companies to choose between doing business with the United States or Iran. His comments ratcheted up pressure on European allies who are struggling to save the nuclear deal, also signed by Russia and China, in the face of U.S. sanctions. Tehran is threatening to pull out of the accord unless it secures a reprieve from U.S. measures that have led to a collapse in sales of crude, its main export. Hook’s statement further lowered expectations of a breakthrough at the Vienna talks, where senior diplomats from Britain, China, France, Germany and Russia met with Iranian officials around midday (1000 GMT). Tehran is threatening to exceed the maximum amount of enriched uranium it is allowed under the deal unless fellow signatories of the deal rein in the United States, adding to fears of a military escalation in the region. “We will repeat to the Iranians that nuclear issues are not negotiable. We want them to stay in the accord, but we won’t accept them messing us around,” a senior European diplomat said before the meeting. Iran’s Foreign Ministry spokesman Abbas Mousavi on Friday described the talks as a “last chance for the remaining parties … to gather and see how they can meet their commitments towards Iran.” An Iranian official told reporters ahead of the meeting that his country’s main demand was to sell its oil at the same levels that it did before Washington withdrew from the accord. However, he cautioned that Tehran had lost patience with the European signatories. Until its demand is met, Iran will continue on its current path and go over limits of the deal one by one, starting with the uranium enrichment level, the official said, although none of the actions are irreversible. “For one year we exercised patience. Now it is the Europeans’ turn to exercise patience,” he said. “They should try to find solutions, practical solutions and there’s always enough time for diplomacy and there’s always the possibility to go back, to reverse.”
Singapore — The UAE became the largest crude supplier to Japan in May after it halted imports of Iranian oil, creating a need for some its refiners to search for light sour crudes to blend with heavy grades from Ecuador. Japan’s crude imports from the UAE surged 66.1% year on year and were up 42.8% month on month to average 1.03 million b/d in May, preliminary data released Friday by the Ministry of Economy, Trade and Industry showed. The UAE was the largest crude supplier to Japan in May for the first time since June 2016, while Japan hiked its total imports in May to the highest level since July 2015, a METI official said. Japan imported 1.5 million barrels of crude from Ecuador in May — including Oriente crude for the first time since May 2015 at 376,080 barrels, the METI data showed. Total Ecuadorian crude imports in May, which also included 1.14 million barrels of Napo crude, were the highest since April 2017, the METI official said. Refiner Fuji Oil, which had been one of Japan’s major importers of Iranian crude, has said it is using Napo as the main basis for replacing Iranian Heavy, blending it with other grades from the Middle East, including Abu Dhabi crudes and Qatar Marine. Fuji Oil finds Ecuadorian crude “very heavy” as a replacement for medium or medium-heavy crudes from Iran and is “looking at Upper Zakum and Banoco Arab Medium as replacement for Iran,” a source familiar with the matter said. Japanese refiners completed their imports of Iranian oil by mid-April before the US allowed sanctions waivers to Iran’s top oil buyers to expire in early May. Japan last suspended Iranian oil imports over November-January, with refiners importing last barrels from Iran early last October. Confusion surrounding shipping, insurance and banking rules under the US sanctions kept some other countries from resuming imports after the US granted the waivers on November 5 last year. Japan typically bought mostly Iranian Heavy crude from Iran prior to the end of the US sanctions waiver. The light sour Abu Dhabi grades have been fetching increasingly higher premiums over Iranian Heavy during the last few trading cycles, possibly making a case for Japanese refiners to consider looking for cheaper alternatives later in the year. “It’s never easy finding cheap alternatives because Iranian crude and condensate have always been among the most affordable feedstock grades … but Japanese refiners would need to diversify crude procurement options because Abu Dhabi grades are indeed rather expensive,” a trading desk manager at a Japanese refiner said.
London — Three months ago, OPEC and its allies deferred a decision on extending their oil production cuts beyond the first half of the year, cancelling a planned April meeting to get a better read on the market. Receive daily email alerts, subscriber notes & personalize your experience. With the 1.2 million b/d cut agreement set to expire in three days and OPEC ministers set to meet Monday in Vienna, the signals appear no clearer. Bearish outlooks for demand and unresolved global trade disputes have kept a lid on prices, even as many forecasters predict a tight market ahead on supply risks caused in large part by US sanctions. Heightened Middle East geopolitical tensions following a series of attacks on oil tankers and other infrastructure in the Middle East in recent weeks have failed to reverse the bearish sentiment. Faced with the uncertainty and with oil prices still slumping, many OPEC ministers have signalled that an extension of the cuts is the preferred option. The exact length and level of the cuts is yet to be negotiated, with some Russian oil companies pushing for their country’s quota to be eased, while Algeria has reportedly floated a deeper cut to provide a price boost. But a rollover of the current agreement is the most likely scenario, Russia’s public ambivalence nonwithstanding, said Shin Kim, S&P Global Platts Analytics’ head of supply and production. It is the fear of substantial price declines from this level if the cut is not extended that the Russian government fears.” The OPEC/non-OPEC coalition also has flexibility to raise output and still maintain the parameters of the deal, given that
Saudi Arabia has voluntarily lowered its production some 600,000 b/d below its quota to “lead by example” and sanctions-hit Iran and Venezuela continue to see their volumes slide.
The OPEC schedule, finalized only days ago after a prolonged spat over the meeting date, calls for a delegate-level Joint Technical Committee to convene Sunday morning and the nine-country Joint Ministerial Monitoring Committee to meet Monday morning, followed by the regular OPEC ministerial meeting Monday afternoon. Russia and the nine other non-OPEC partners in the supply accord will then join the talks Tuesday. Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman are scheduled to meet at the G20 summit and could announce an agreement on OPEC/non-OPEC production policy ahead of the Vienna meeting. “We should wait, including for meetings during the G20,” Russian energy minister Alexander Novak said Tuesday, declining to commit to a rollover. “We will see what issues will be discussed there, how the economy and the market situation will develop. We will have a clearer idea of the situation by the OPEC/non-OPEC meeting.” Increasingly messy geopolitics may, however, color the meeting, given the escalation in attacks in the Middle East that have raised concerns about oil supply security. Saudi Arabia and the US have accused Iran of being behind the incidents that have targeted six oil tankers and a key Saudi oil pipeline.
Iran has denied involvement but has repeatedly threatened to shut down traffic through the narrow Strait of Hormuz if its oil exports are further choked off by US sanctions, which have already caused Iran’s oil output to fall almost 1.4 million b/d — more than one third — in the span of a year, according to Platts’ monthly survey of OPEC production.
Iranian officials have complained that Saudi Arabia and its close ally the UAE were destroying OPEC comity by backing the US in its sanctions. Saudi Arabia has been among the most outspoken OPEC members in advocating for a cut extension, and Iran’s primary interest is in protecting its threatened market share. “While an extension of the OPEC agreement is looking fairly straightforward, the mounting tensions between Iran and its regional rivals will likely be on full display in Vienna,” Croft
WASHINGTON (Reuters) – U.S. economic growth accelerated in the first quarter, the government confirmed on Thursday, but the export and inventory boost to activity masked weakness in domestic demand, some of which appears to have prevailed in the current period. week acknowledged the temporary lift to economic growth from trade and inventories, which he described as “components that are not generally reliable indicators of ongoing momentum.” The U.S. central bank last Wednesday signaled interest rate cuts as early as July, citing rising risks to the economy, especially from an escalation in the trade conflict between the United States and China, and low inflation. “First-quarter GDP paints a misleading picture of the U.S. economy’s vigor at the start of the year, and second-quarter GDP will come as a timely reminder that the economy is now well past its inflection point,” said Lydia Boussour, a senior U.S. economist at Oxford Economics in New York. Gross domestic product increased at a 3.1% annualized rate, also driven by more spending on highways and defense, the Commerce Department said in its third reading of first-quarter GDP. That was unchanged from its estimate last month and in line with economists’ expectations. The economy grew at a 2.2% pace in the October-December period. Despite the unchanged reading, growth in consumer spending was revised lower and business investment in intellectual property products was stronger than previously estimated. There were also upward revisions to spending on nonresidential structures and government expenditure. Revisions to the trade deficit and inventory accumulation were minor. Excluding trade, inventories and government spending, the economy grew at only a 1.3% rate in the first quarter. That was the slowest rise in this measure of domestic demand since the second quarter of 2013. When measured from the income side, the economy grew at a tepid 1.0% rate in the last quarter. Gross domestic income (GDI) was previously reported to have increased at a rate of 1.4%. The income side of the growth ledger was curbed by a dip in profits. After-tax profits without inventory valuation and capital consumption adjustment, which correspond to S&P 500 profits, fell at a 0.2% rate as earnings of domestic nonfinancial corporations decreased. The average of GDP and GDI, also referred to as gross domestic output and considered a better measure of economic activity, increased at a 2.1% rate in the January-March period, down from the 2.2% growth pace estimated last month. Inflation was also muted in the first quarter. A gauge of inflation tracked by the Fed increased at a 1.2% rate, revised up from the previously reported 1.0% pace. The economy will mark 10 years of expansion in July, the longest on record. But momentum is slowing, with manufacturing struggling, the trade deficit widening again and the housing sector still mired in a soft patch. While consumer spending appears to have regained speed in the second quarter, business investment in equipment is expected to have contracted further following Wednesday’s weak report on durable goods orders in May. The trade war between Washington and Beijing is hurting both business and consumer confidence. “Just as the expansion is set to become the longest in U.S. history, recession fears have increased,” said Scott Hoyt, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “U.S. businesses appear spooked by the president’s capricious trade policy.” The Atlanta Fed is forecasting GDP growth to rise at a 1.9% annualized rate in the April-June quarter.
VIENNA/TOKYO (Reuters) – Iran is on course to breach a threshold in its nuclear agreement with world powers within days by accumulating more enriched uranium than permitted, although it has not done so yet, diplomats said, citing the latest data from U.N. inspectors. Iran began fuelling its first nuclear power plant on Saturday, a potent symbol of its growing regional sway and rejection of international sanctions designed to prevent it building a nuclear bomb. France, one of the European powers caught in the middle in an escalating confrontation between Washington and Tehran, said it would ask U.S. President Donald Trump to suspend some sanctions on Iran to allow negotiations to defuse the crisis. A week after Trump called off air strikes on Iran minutes before impact, world leaders are trying to pull the two countries back from the brink, warning that a mistake on either side could lead to war. “I want to convince Trump that it is in his interest to re-open a negotiation process (and) go back on certain sanctions to give negotiations a chance,” French President Emmanuel Macron said in Japan, where he is due to meet Trump on the sidelines of a summit in coming days.
President Donald Trump said Wednesday he does not want a war with Iran but warned that if fighting does break out, it “wouldn’t last very long,” even as Iran prepared to scale back its commitments under the 2015 nuclear deal scuppered by Washington. Asked if a war with Iran was brewing, Trump told Fox Business Network: “I hope we don’t but we’re in a very strong position if something should happen.” “I’m not talking boots on the ground,” the US president said. “I’m just saying if something would happen, it wouldn’t last very long.”The comments come just days after Trump cancelled air strikes minutes before impact, with allies warning that the increase in tensions since the United States pulled out of a nuclear pact with Iran last year could accidentally lead to war. Iran has suggested it will breach a threshold in the agreement that limited its stockpile of uranium on Thursday, a move that would put pressure on European countries that have tried to remain neutral to pick sides. The fate of the 2015 nuclear deal, under which Iran agreed to curbs on its nuclear programme in return for access to international trade, has been at the heart of the dispute which has escalated and taken on a military dimension in recent weeks. Washington sharply tightened sanctions last month, aiming to bar all international sales of Iranian oil. It accuses Iran of being behind bomb attacks on ships in the Gulf, which it denies. Last week, Iran shot down a US drone it said was in its air space, which Washington denied. Trump ordered retaliatory air strikes but called them off at the last minute, later saying too many people would have died. His latest remarks came after Iranian President Hassan Rouhani tried to rein in the crisis between the two arch foes, saying that Iran “never seeks war” with the United States. Rouhani spoke earlier by phone with his French counterpart Emmanuel Macron and told him Iran has “always been committed to regional peace and stability and will make efforts in this respect”. Although the United States and Iran both say they do not want war, last week’s aborted US strikes have been followed by menacing rhetoric on both sides. On Tuesday Trump threatened the “obliteration” of parts of Iran if it struck US interests, while Rouhani, who normally presents Tehran’s mild-mannered face, called White House policy “mentally retarded”. The standoff creates a challenge for Washington which, after quitting the nuclear deal against the advice of European allies, is now seeking their support to force Iran to comply with it. Over the past few weeks Iran has set a number of deadlines for European countries to protect its economy from the impact of US sanctions or see Tehran reduce compliance with the deal. ‘Iran does not see this as a violation of the nuclear deal,’ says FRANCE 24’s correspondent in Tehran A spokesman for Iran’s Atomic Energy Organisation said on Wednesday that one of those deadlines would expire the following day, with Iran potentially exceeding a limit imposed under the deal to keep its stockpile of enriched uranium below 300 kg. “The deadline of the Atomic Energy Organization for passing the production of enriched uranium from the 300 kg limit will end tomorrow,” the IRIB news agency quoted spokesman Behrouz Kamalvindi as saying. He added that after the deadline Iran would speed up its rate of producing the material. Another threshold bars Iran from enriching uranium to a purity beyond 3.67 percent fissile material. It has set a deadline of July 7 after which it could also breach that. Any such moves would put European countries that oppose Trump’s tactics under pressure to take action. They have tried to salvage the nuclear deal by promising to provide Tehran with economic benefits to offset the harm from US sanctions. But so far they have failed, with Iran largely shut from oil markets and all major European companies cancelling plans to invest. Iran says it would be Washington’s fault if it exceeds the 300 kg stockpile threshold. The 2015 deal allows Iran to sell excess uranium abroad to keep its stockpile below the limit, but such sales have been blocked by US sanctions. The Trump administration says the deal reached under his predecessor Barack Obama was too weak because it is not permanent and does not cover issues outside of the nuclear area, such as Iran’s missile programme and its regional behaviour. US officials say new sanctions are necessary to force Iran back to the negotiating table, and Trump is open to talks without pre-conditions. Iran says talks are impossible unless Washington lifts sanctions first. Tehran said a further move by Washington this week to impose personal sanctions on Iran’s Supreme Leader Ali Khamenei and threaten them against Foreign Minister Mohmmad Javad Zarif had closed off diplomacy permanently.
UNITED NATIONS (Reuters) – Iran warned the U.N. Security Council on Wednesday that it would no longer be burdened with preserving a 2015 nuclear deal with world powers as European states pushed Tehran to stick with the agreement because there is “no credible, peaceful alternative.” U.S. President Donald Trump withdrew from the deal last year, inflaming tensions between Tehran and Washington that led to Iran shooting down a U.S. drone last week. Trump ordered retaliatory air strikes but called them off at the last minute. Under the deal to curb Tehran’s nuclear programme most U.N. and western sanctions on Iran were lifted, however the United States has imposed new sanctions that it says are designed to force Iran back to the negotiating table. “The U.S. withdrawal from the JCPOA and re-imposition of its sanctions, rendered the JCPOA almost fully ineffective,” Iran’s U.N. Ambassador Majid Takht Ravanchi told the 15-member Security Council, using the acronym for the deal’s formal name, the Joint Comprehensive Plan of Action. “Iran alone cannot, shall not and will not take all of the burdens any more to preserve the JCPOA,” he said. European powers have been trying to save the deal, but Iran has given them a deadline of July 8. It has said it is ready to go through with a threat to enrich uranium to a higher level than permitted under the deal if Europe cannot shield Tehran from U.S. sanctions. “The JCPOA is a nuclear agreement that has been working and delivering on its goals. There is also no credible, peaceful alternative,” European Union U.N. Ambassador Joao Vale de Almeida warned the U.N. Security Council. The nuclear deal is endorsed in a 2015 Security Council resolution. U.N. Secretary-General Antonio Guterres reports every six months on implementation of that resolution, which also subjects Iran to an arms embargo and other restrictions. Acting U.S. Ambassador to the United Nations Jonathan Cohen described Iran’s actions as “deeply counterproductive.” “Iran’s defiance of the Security Council and its reckless behaviour threatening peace and security globally must not be downplayed in the name of preserving a deal that doesn’t fully cut off Iran’s path to a nuclear weapon,” he said. He noted that the U.N. resolution endorsing the nuclear deal “provides a mechanism for the council to address significant non-performance of Iran by its nuclear commitments.” Under the nuclear deal there is a process culminating at the U.N. Security Council that can trigger a so-called snapback of all sanctions if Iran violates the agreement. French U.N. Ambassador Francois Delattre warned that the end of the deal “would mean a dangerous step backwards” and urged Tehran not to breach the deal. Russian U.N. Ambassador Vassily Nebenzia said Moscow wanted Iran to remain committed to the nuclear deal, but also accused the United States of sending mixed signals.
TOKYO (Reuters) – Oil prices fell on Thursday to erase some of the previous session’s strong gains, as traders wait for the G20 summit in Japan and for a meeting of OPEC and other crude producers to decide on an extension of output cuts. Oil prices rose more than 2% on Wednesday to their highest in about a month, buoyed by U.S. government data showing a larger-than-expected drawdown in crude stocks as exports hit a record-high and surprise drops in refined product stockpiles. However, traders said concerns that a hoped-for breakthrough on trade at the G20 may not eventuate and some nervousness about continued output cuts were crimping follow-through buying. “Investors are split as what to expect from the G20, a positive reset to trade talks … could do wonders in the short-term for the demand-side argument for higher crude prices,” said Edward Moya, senior market analyst at OANDA. U.S. President Donald Trump will meet with Chinese President Xi Jinping at the Group of 20 summit that starts on Friday in Osaka, Japan to seek a breakthrough in negotiations to end a trade war that has been hitting global economic growth. Trump said on Wednesday that a deal was possible but also spoke of a Plan B that would involve reducing business ties with China. “With Trump stirring up trade war dust via “Plan B” there is still that element of the unknown,” said Stephen Innes, managing partner at Vanguard Markets in Bangkok. Almost immediately after the G20 summit ends on Saturday, the Organization of the Petroleum Exporting Countries (OPEC) meets on Monday to discuss an extension of production cuts to support prices. The day after that OPEC members meet with other producers including Russia in a grouping known as OPEC+, which agreed in December to reduce supply by 1.2 million barrels per day from Jan. 1. The agreement is due to expire on June 30. Crude inventories in the United States, the largest producer and consumer of oil, fell 12.8 million barrels last week, the Energy Information Administration said, far surpassing analyst expectations for a decrease of 2.5 million barrels. That was the most since September 2016, according to the statistical arm of the Department of Energy. Net U.S. crude imports fell last week by 1.2 million barrels per day (bpd). Overall crude exports rose to 3.8 million bpd, beating the previous record of 3.6 million bpd in February. Nick Bit: so far this year a paltry 200,000 bpd increase in US oil exports… Tell me how this piss aunt production increase is going to cover the 10 million bpd short fall when revolution, war, trade sanctions OPEC production cuts and increasing world demand bite
Washington — Oil and gas production increased in second-quarter 2019 throughout Texas, the 11th consecutive quarter of growth, but that growth is beginning to slow and a lack of investment could accelerate an output fall, the Federal Reserve Bank of Dallas said in its quarterly survey of oil and gas firms Wednesday. Overall activity in the oil and gas sector was flat in Q2 following three years of record growth, the Dallas Fed said. The survey’s business activity index, a broad measure of economic conditions in the Dallas Fed’s district, dropped below zero in Q2, due to declines in activity from exploration and production and oilfield services companies, the Dallas Fed said. “Positive survey readings generally indicate expansion; those below zero suggest contraction,” the survey said. In anonymous comments released with the survey, E&P executives repeatedly pointed to a loss of investment in both the conventional and unconventional oil and gas plays. This is already hindering new exploration and will likely increase the likelihood of future bankruptcies and mergers, according to the comments.
“It is very true that cash is drying up, and it is going to be hard to get financing to drill our wells,” one E&P executive wrote.
“The erratic nature of energy prices makes it very hard to invest currently,” wrote another. “It also makes hedging a very difficult decision.” “Industry decision-making is slowing and everybody is trying to delay spending,” wrote another. Credit available from banks has declined, companies are more focused on living within cash flow and expansion plans have slowed, according to the comments. “We are confining our ‘new’ business to acquisition of existing production,” another executive wrote. “From the day-to-day event-driven market price for crude, coupled with the perpetually growing production levels, there is little basis for engaging in ‘wishful’ projections that ignore the reality of supply in excess of demand without apparent change in either component in the near or intermediate term.” Other comments focused on trade war fears, political instability ahead of the 2020 US presidential elections, pipeline constraints out of the Permian, and oversupply of both oil and gas amid weakening demand. “There are many darkening clouds on the horizon at the moment,” an executive with an oilfield services company wrote.
Iranian Foreign Minister Mohammad Javad Zarif this week demanded that the United States pull its troops out of the Persian Gulf region, arguing that such a move is “fully in line” with the interest of America and the world.
His comments, made via his official Twitter account on Monday, came amid skyrocketing U.S.-Iran tensions, mainly stemming from Tehran’s decision to shoot down an American drone this month. The incident is bringing the two countries closer to a military conflict. Both have warned they are ready for war. “[U.S. President Donald Trump] is 100% right that the US military has no business in the Persian Gulf. Removal of its forces is fully in line with interests of US and the world,” Zarif wrote. He went on to say the Trump administration “is not concerned with US interests — they despise diplomacy, and [have a] thirst for war.”
.@realDonaldTrump is 100% right that the US military has no business in the Persian Gulf. Removal of its forces is fully in line with interests of US and the world. But it’s now clear that the #B_Team is not concerned with US interests—they despise diplomacy, and thirst for war.
— Javad Zarif (@JZarif) June 24, 2019
Since May, President Trump has approved the deployment of an additional 2,500 American troops and military equipment to the Middle East. Before his decision, there were an estimated 70,000 American troops deployed to the region, including about 5,200 in Iraq and 2,000 in Syria, the Associated Press (AP) reported in May. The Trump administration has begun to withdraw some troops from Syria, but it plans to leave a residual force to combat the lingering Islamic State (ISIS/ISIL) threat and Iran. The Islamic Republic maintains a presence in Syria in support of the Russian-backed dictator Bashar al-Assad. In Iraq, American troops are already on heightened alert stemming from the threat posed by Iran-allied Shiite militias in the country. Referring to the menace posed by Iran-allied fighters in the region, U.S. Central Command — charged with American military activities in and around the Middle East — declared in May:
U.S. Central Command, in coordination with Operation Inherent Resolve [OIR], has increased the force posture level for all service members assigned to OIR in Iraq and Syria. As a result, OIR is now at a high level of alert as we continue to closely monitor credible and possibly imminent threats to U.S. forces in Iraq.
OIR refers to the international mission against the Islamic State (ISIS/ISIL). Factions from the Baghdad-sanctioned umbrella organization for predominantly Shiite militias in Iraq, the Popular Mobilization Forces (PMF), have repeatedly threatened to push out American forces from Iraq. The Pentagon’s Office of the Inspector General (OIG) warned in November 2018 that the PMF and other Iranian proxies in Iraq and Syria pose a threat to American troops in the region. U.S. officials have already accused Iran of carrying out attacks against U.S. targets in Iraq. Punishing economic sanctions imposed by the Trump administration are fueling the ongoing tensions between Iran and the United States.
NEW DELHI (Reuters) – The United States will ensure India receives adequate supplies of oil as New Delhi stops buying Iranian crude in line with U.S. sanctions, U.S. Secretary of State Mike Pompeo said on Wednesday. India, the world’s third-biggest oil importer, bought about 184,000 barrels per day (bpd) of oil from the United States between November 2018 and May 2019, compared with about 40,000 bpd in the same period a year earlier, tanker data obtained from shipping and industry sources shows.
London — Norway’s oil and gas output could be disrupted starting Friday as offshore workers are threatening strike action, employers’ group the Norwegian Shipowners’ Association said. Around 1,600 members of two trade unions, SAFE and Industri Energi, were set to strike if mandatory mediation talks on Thursday failed, the employers’ group said. The impact on production was unclear, but the Asgard C, Knarr and Statfjord C facilities are among those affected, as is the Johan Sverdrup development project. “Notice of collective work stoppage has been filed by SAFE for 667 members on 12 installations, and by Industri Energi 937 members on 20 installations,” the association said in an emailed comment. It said wage negotiations had broken down on May 28. Norway produced 1.6 million b/d of oil and 319 MMcf/d of gas in May, partly reflecting seasonal maintenance and, for gas, demand levels, as well as technical problems.
WASHINGTON/GENEVA (Reuters) – U.S. President Donald Trump said on Wednesday he was “not talking boots on the ground” should military action be necessary against Iran, and said any conflict would not last long. Asked if a war was brewing, Trump told Fox Business Network: “I hope we don’t but we’re in a very strong position if something should happen.” “I’m not talking boots on the ground,” Trump said. “I’m just saying if something would happen, it wouldn’t last very long.” The comments come just days after Trump cancelled air strikes minutes before impact, with allies warning that the increase in tensions since the United States pulled out of a nuclear pact with Iran last year could accidentally lead to war. Iran suggested it was just one day from breaching a threshold in the agreement that limited its stockpile of uranium, a move that would put pressure on European countries that have tried to remain neutral to pick sides.
WASHINGTON/DUBAI (Reuters) – U.S. President Donald Trump threatened on Tuesday to obliterate parts of Iran if it attacked “anything American,” in a new war of words with Iran which condemned fresh U.S. sanctions on Tehran as “mentally retarded.” But Trump later left the door open for talks, saying that Iran should speak to the United States “peaceably” to ease tensions and potentially lift U.S. economic sanctions. The U.S. president on Monday signed an executive order imposing additional, largely symbolic, sanctions against Iranian Supreme Leader Ayatollah Ali Khamenei and other senior figures, with punitive measures against Foreign Minister Mohammad Javad Zarif expected later this week. Iran shot down a U.S. drone last week and Trump said he had called off a retaliatory air strike with minutes to spare, saying too many people would have been killed. It would have been the first time the United States had bombed the Islamic Republic in four decades of mutual hostility. Nick Bit: Tell me Mr. President are you hearing laughter?
Iraq’s prime minister is denying allegations that drones which targeted Saudi oil pipelines last month could have taken off from Iraq, rather than Yemen. The attack — claimed by Yemen’s Iranian-backed Houthi rebels who are at war with Saudi Arabia — was part of a series of incidents that escalated tensions in the Persian Gulf amid a crisis between Washington and Tehran. Prime Minister Adel Abdul-Mahdi told reporters in Baghdad late on Tuesday that American officials contacted the Iraqis recently, alleging the drones may have taken off from Iraq. He said Iraqi military and intelligence haven’t confirmed such claims. The May 14 attack on a Saudi pipeline forced a brief shutdown but caused no casualties. Iraq hosts more than 5,000 U.S. troops, and is also home to powerful Iranian-backed militias.
Rising geopolitical risks stemming from tensions between the US and Iran keep momentum tilted to the upside for the oil complex. Secretary of State Pompeo highlighted that significant sanctions would be announced for Iran, thus tensions between the two nations will remain high, as such, a further escalation raises the risk of oil price spikes going forward. Iran Planning to Break Nuclear Deal Limit On June 27th, Iran plans to breach the limit on its stockpile of enriched uranium set by the nuclear deal, which in turn should see the rising geopolitical risk premium keep oil prices buoyed. Elsewhere, despite US sanctions impacting the production in both Iran and Venezuela, the fragile nature of the oil given the concerns of a global slowdown should see OPEC rollout the production cuts throughout the rest of the year.
Iran on Tuesday sharply criticized new U.S. sanctions targeting the Islamic Republic’s supreme leader and other top officials
Oil prices, trading at multiweek highs in recent sessions, cooled on Tuesday, although heightened tensions between the U.S. and Iran remained front of mind for the energy market. Oil did climb up from the day’s deepest losses, a mild recovery that traders pinned on underlying optimism for a break in the trade stalemate between President Trump and China’s Xi. The hefty climb for U.S. prices last week and to start this week came on the heels of expectations that Middle East tensions may lead to a disruption in the oil markets. Oil bulls had also cheered signs that economy-boosting central bank policy would be delivered this year. Iran on Tuesday sharply criticized new U.S. sanctions targeting the Islamic Republic’s supreme leader and other top officials, saying the measures spell the “permanent closure” for diplomacy between the two nations, the Associated Press reported. For his part, Iran’s president described the White House as “afflicted by mental retardation.” President Hassan Rouhani went on to call the sanctions against Supreme Leader Ayatollah Ali Khamenei “outrageous and idiotic,” especially as the 80-year-old Shiite cleric has no plans to ever travel to the United States. From Israel, Trump’s national security adviser John Bolton said talks with the U.S. were still possible and that the U.S. is leaving an “open door” for Iran to walk through. “Investors appeared more preoccupied with profit taking… as the thought the U.S. would scale back its Gulf Naval presence reduces the chance of an accident or even a rogue policy mistake,” said Stephen Innes, managing partner at Vanguard Markets. “So while things look calm on the surface, there’s undercurrent tension building around targeting sanctions on the Supreme Leader as it’s more likely to provoke Iran hardliners and proxies.” The Trump administration has turned up the economic pressure on Tehran since Trump pulled the U.S. out of the 2015 nuclear deal in May 2018, hoping to drive Iran to accept a tougher agreement that would end uranium enrichment and curb its regional ambitions. The U.S. is seeking ultimately to drive the Islamic Republic’s oil exports to zero to prompt the nuclear concessions. Washington has blamed Iran for attacks on tankers, which Tehran denied. Iran downed a U.S. drone and has threatened to violate some terms of the 2015 pact.Meanwhile, the Organization of the Petroleum Exporting Countries and its allies will hold meetings on July 1-2. The session was originally scheduled for June 25-26. “The market is largely expecting that OPEC+ will continue” with current production caps in the second half of the year, ING analysts said in a note. “This is something that a number of OPEC members, including Saudi Arabia, have stated that the market needs,” they said. Russia is perhaps the biggest unknown in the mix, so statements out of Moscow will be closely scrutinized. The impetus behind delaying the meeting of OPEC and its closes allies is a wait-and-see approach. OPEC officials want to see the outcome of the Group of 20 summit first, and they hope Trump and China President Xi, meeting for a bilateral as part of the Osaka conference, can make some progress on a trade deal, analysts have said. traded at $2.294 per million British thermal units, down 0.4%
Fed doesn’t know what it is doing, Trump says
President Donald Trump on Monday unveiled new sanctions targeting Iran’s leaders as he called on China to shoulder the responsibility for protecting a key waterway. Trump signed an executive order he called “hard-hitting” targeting Iran’s leaders including the Supreme Leader of Iran. “I think a lot of restraint has been shown by us – a lot of restraint – and that doesn’t mean we’re going to show it in the future,” Trump said. At a separate press briefing, Treasury Secretary Steven Mnuchin said the sanctions impact “billions of dollars” and said some of the sanctions were in the works before Iran shot down a U.S. drone. Incorrectly spelling “Strait” as “Straight,’ Trump over two tweets said China and Japan should either pay or actually patrol a key Middle Eastern waterway, the Strait of Hormuz, that has been the source of recent tension between the U.S. and Iran.
MarketWatch columnist Paul Brandus explored this subject in a column, arguing that China’s lack of involvement in the Middle East also allows the country to pursue its priorities in the Western Pacific and South China seas. Trump also made another round of Federal Reserve criticism, saying over Twitter that the central bank “doesn’t know what it is doing.” Last week the Federal Reserve held interest rates unchanged though it positioned itself to cut rates as early as July.
Washington (CNN)President Donald Trump announced new sanctions against Iran Monday in retaliation for the downing of a US drone last week. Speaking to reporters in the Oval Office, Trump said he signed an executive order imposing “hard hitting” sanctions on Iran that will deny Iran’s Supreme Leader Ayatollah Ali Khamenei and others access to financial instruments. “We will continue to increase pressure on Tehran,” Trump said. “Never can Iran have a nuclear weapon.” Trump had told reporters Saturday that the punitive measures were coming. “Some of them are already in place,” Trump said on the South Lawn before departing to Camp David on Saturday. “We’re putting additional sanctions on, they’re going on slowly and, in some cases, pretty rapidly, but additional sanctions are being put on Iran.”
Steve Schlotterbeck, who led drilling company EQT as it expanded to become the nation’s largest producer of natural gas in 2017, arrived at a petrochemical industry conference in Pittsburgh Friday morning with a blunt message about shale gas drilling and fracking. “The shale gas revolution has frankly been an unmitigated disaster for any buy-and-hold investor in the shale gas industry with very few limited exceptions,” Schlotterbeck, who left the helm of EQT last year, continued. “In fact, I’m not aware of another case of a disruptive technological change that has done so much harm to the industry that created the change.” “While hundreds of billions of dollars of benefits have accrued to hundreds of millions of people, the amount of shareholder value destruction registers in the hundreds of billions of dollars,” he said. “The industry is self-destructive.” Schlotterbeck is not the first industry insider to ring alarm bells about the shale industry’s record of producing vast amounts of gas while burning through far more cash than it can earn by selling that gas. And drillers’ own numbers speak for themselves. Reported spending outweighed income for a group of 29 large public shale gas companies by $6.7 billion in 2018, bringing the group’s 2010 to 2018 cash flow to a total of negative $181 billion, according to a March 2019 report by the Institute for Energy Economics and Financial Analysis. But Schlotterbeck’s remarks, delivered to petrochemical and gas industry executives at the David L. Lawrence Convention Center in Pittsburgh, come from an individual uniquely positioned to understand how major Marcellus drillers make financial decisions — because he so recently ran a major shale gas drilling firm. Schlotterbeck now serves as a member of the board of directors at the Energy Innovation Center Institute, a nonprofit that offers energy industry training programs. His warnings on Friday were also offered in unusually stark terms.
‘Destroyed on Average 80 Percent of the Value of Their Companies’
“The technological advancements developed by the industry have been the weapon of its own suicide,” Schlotterbeck added, referring to the financial impacts of shale gas drilling on shale gas drillers. “And unfortunately, the industry still has not fully realized how it’s killing itself. Since 2015, there’s been 172 E&P company bankruptcies involving nearly a hundred billion dollars of debt.” “In a little more than a decade, most of these companies just destroyed a very large percentage of their companies’ value that they had at the beginning of the shale revolution,” he said. “It’s frankly hard to imagine the scope of the value destruction that has occurred. And it continues.” At the Friday conference, he displayed a slide showing the stock prices of eight major Marcellus shale gas drillers: Antero, Range Resources, Cabot Oil and Gas, Southwestern Energy, CNX Gas, Gulfport, Chesapeake Energy, and EQT, the company that Schlotterbeck ran until he resigned in March 2018. Seven of the eight companies saw their stock prices fall between 40 percent and 95 percent since 2008, the slide showed. “Excluding capital, the big eight basin producers have destroyed on average 80 percent of the value of their companies since the beginning of the shale revolution,” Schlotterbeck said. “This is not the fall from the peak price during the shale decade, this is the drop in their share price from before the shale revolution began.” “The fact is that every time they put the drill bit to the ground, they erode the value of the billions of More recently, shale gas producers have begun to feel the heat from investors who are pushing to see signs that the gas can be produced not just in high volume, but also at a profit. “As a result of investor pressure, all these companies have committed to lower growth rates and to live within cash flow,” said Schlotterbeck. He noted that the drillers had slashed their gas production growth forecasts from over 20 percent down to 11 percent this year. “Yet both the gas commodity market and the equities market are saying this is not nearly enough of a cut.” “Over the past year or so, most of the producers have shifted away from the phenomenal growth rates of the past to more moderate growth projections,” Schlotterbeck said. “The market is clearly telling them that they haven’t slowed down enough.”
Frackers Projected Returns ‘Should Not Exist’ — and Don’t
“Reality indicates to me that there’s a lot of these companies that still don’t get it,” he said. “They still think they’re gonna earn 40, 50, 60 percent returns on their investment, even after six years now of saying that and getting negative returns.”
National Security Advisor John Bolton, speaking in Israel at the weekend, said neither the regime in Tehran “nor any other hostile actor, should mistake U.S. prudence for weakness.” He quoted President Trump as having said that he had called off a military strike against Iran “at this time.”
DUBAI/WASHINGTON (Reuters) – U.S. President Donald Trump said on Saturday he would impose fresh sanctions on Iran but that he wanted to make a deal to bolster its flagging economy, an apparent move to defuse tensions following the shooting down of an unmanned U.S. drone this week by the Islamic Republic. On Thursday, an Iranian missile destroyed a U.S. Global Hawk surveillance drone, an incident that Washington said happened in international airspace. Trump later said he had called off a military strike to retaliate because it could have killed 150 people. Tehran repeated on Saturday that the drone was shot down over its territory and said it would respond firmly to any U.S. threat .Speaking in Washington on Saturday before heading to the U.S. presidential retreat at Camp David, Trump indicated the government was taking a diplomatic path to put pressure on Tehran by moving to impose new sanctions.Military action was “always on the table,” the president said, but he added that he was open to quickly reaching a deal with Iran that he said would bolster the country’s flagging economy. “We will call it ‘Let’s make Iran great again,’” Trump said. He later wrote on Twitter from Camp David: “We are putting major additional Sanctions on Iran on Monday. I look forward to the day that Sanctions come off Iran, and they become a productive and prosperous nation again.” The Trump administration has sought to use promises of economic revival to solve other thorny foreign policy challenges, including the Israel-Palestinian peace process, with the White House outlining on Saturday a plan to create a global investment fund to lift the Palestinian and neighboring Arab state economies.
Trump warns Iran it would face ‘obliteration’ if conflict broke out, as aids reveal the president agonized over the decision to launch attacks
President Trump has said the United States does not want a war but warned Iran it would face ‘obliteration’ if conflict broke out, as senior aids reveal how he agonized over the decision of whether to launch attacks against three Iranian sites. Speaking about his decision to NBC on Friday evening, Trump said the US was open to renewed talks with Iran but the possibility of them developing nuclear weapons was out of the question. And warned Iran that if conflict does come, there will be ‘obliteration like you’ve never seen before,’ before adding ‘but I’m not looking to do that,’ the president told NBC’s Chuck Todd for ‘Meet the Press.’ Trump said Friday he was ready to attack the sites on Thursday night but he called off the strikes after learning the assault would kill an estimated 150 innocent people. ‘We were cocked & loaded to retaliate last night on 3 different sights when I asked, how many will die. 150 people, sir, was the answer from a General. 10 minutes before the strike I stopped it,’ he said in tweets, ‘not proportionate to shooting down an unmanned drone.’ President Trump has said the United States does not want a war but warned Iran it would face ‘obliteration’ if conflict broke out, as senior aids reveal how he agonized over the decision of whether to launch attacks against three Iranian sites The president gave further insight into his tough decision not to launch attacks against the Iranian sites, adding: ‘I didn’t like it. I didn’t think it was proportionate.’ ‘I thought about it for a second and I said, you know what, they shot down an unmanned drone, plane, whatever you want to call it, and here we are sitting with 150 dead people that would have taken place probably within a half an hour after I said go ahead,’ he told NBC. Tehran claimed that it had received a warning via the Gulf state of Oman that an attack was imminent and that Trump wanted to talk to Iran directly. There was no confirmation of that claim from the US. Tensions have continued to surmount between the two countries, with the US accusing Iran of attack oil tankers in the region, after Iran announced it would soon exceed international agreed limits on its nuclear programme (Iran says the above are debris from a downed US drone recovered inside its territorial waters) The US has now asked the UN Security Council to meet on Monday to discuss Iran. ‘We have additional avenues of sanctions pressure to impose. We have got additional sanctions for sure,’ a senior administration official said, according to CNN. ‘I would not say that the President is thinking about military options. The primary thing we’re thinking about is additional sanctions.’ This official cautioned, however, that the President has not taken military action entirely off the table. ‘That’s an option the President maintains
DUBAI (Reuters) – Iran said on Saturday it would respond firmly to any U.S. threat against it, the semi-official Tasnim news agency reported, amid escalating tension between Tehran and Washington over the shooting down of an unmanned U.S. drone by the Islamic Republic. On Thursday, an Iranian missile destroyed a U.S. Global Hawk surveillance drone. Tehran said the drone was shot down over its territory and Washington said it had occurred in international airspace. U.S. President Donald Trump said on Friday he aborted a military strike to retaliate for Iran’s downing of the U.S. drone because it could have killed 150 people, and signalled he was open to talks with Tehran. Iran has vowed to defend its borders. “Regardless of any decision they (U.S. officials) make… we will not allow any of Iran’s borders to be violated. Iran will firmly confront any aggression or threat by America,” foreign ministry spokesman Abbas Mousavi told Tasnim. Worries about a confrontation between Iran and the United States have mounted despite Trump saying that he has no appetite to go to war with Iran. Tehran has also said it is not seeking a war but has warned of a “crushing” response if attacked. A senior Arab diplomat said the sharply increased tensions would further harm “De-escalation is very important because tempers are flaring … It’s very important we avoid confrontation right now,” the senior diplomat told Reuters on condition of anonymity. “Confrontation, whatever we think about Trump or Iran, will be disastrous for everyone.” “Any mistake by Iran’s enemies, in particular America and its regional allies, would be like firing at a powder keg that will burn America, its interests and its allies to the ground,” the senior spokesman of Iran’s Armed Forces, Abolfazl Shekarchi, told Tasnim on Saturday. Tensions began to worsen significantly when Trump pulled out of a 2015 nuclear deal between Iran and six powers and reimposed sanctions on the country. The sanctions had been lifted under the pact in return for Tehran curbing its nuclear programme.
Already poor relations between Tehran and Washington got worse Thursday morning after Iranian air defence forces shot down a US spy drone they said was operating in Iranian airspace. US President Donald Trump issued a multipart statement on Friday morning confirming that he had “stopped” a military strike against three sites in Iran after finding out that about 150 people would die in the attack. The tweets followed earlier reports by US media that Trump had reportedly approved an attack on Iran in response to Thursday’s drone shoot-down, but backtracked at the last minute.
….On Monday they shot down an unmanned drone flying in International Waters. We were cocked & loaded to retaliate last night on 3 different sights when I asked, how many will die. 150 people, sir, was the answer from a General. 10 minutes before the strike I stopped it, not….
— Donald J. Trump (@realDonaldTrump) 21 июня 2019 г.
Trump said ten minutes before the strike was set to be carried out, he “stopped it,” saying it was “not proportionate to shooting down an unmanned drone.”
….proportionate to shooting down an unmanned drone. I am in no hurry, our Military is rebuilt, new, and ready to go, by far the best in the world. Sanctions are biting & more added last night. Iran can NEVER have Nuclear Weapons, not against the USA, and not against the WORLD!
— Donald J. Trump (@realDonaldTrump) 21 июня 2019 г.
“I am in no hurry,” Trump said, boasting that the US military has been rebuilt and was “ready to go,” and that anti-Iranian sanctions were “biting” and that more have been added after the drone shootdown incident. In the tweets, Trump also accused his predecessor Barrack Obama of making a “desperate and terrible deal with Iran,” accusing him of giving them a “free path to Nuclear Weapons, and SOON.” According to the US president, his decision to terminate the deal and to impose tough sanctions have left Iran a “much weakened nation” that was economically “Bust!”
(Reuters) – Fire ripped through a Pennsylvania oil refinery early on Friday, triggering a huge explosion that local media said rocked homes several miles away. Video footage showed the 335,000-barrels-per-day Philadelphia Energy Solutions refinery, where another fire broke out 11 days ago, engulfed in flames. There were no immediate reports of casualties at the complex, which NBC Philadelphia said employs around 1,000 people. It quoted officials as saying the fire had been contained. The crude section at the Girard Point portion of the refinery was shut down due to the fire, intelligence provider Genscape said. Philadelphia Energy Solutions spokespeople were not immediately available for comment. Nearby roads were closed and thick smoke blanketed most of central and south Philadelphia, NBC Philadelphia said. “Philadelphia Fire Department is asking residents and businesses east of the fire location in south Philadelphia to shelter in place until further notice,” the City of Philadelphia Office of Emergency Management said in a tweet. Three fire stations and a hazardous materials response crew were mobilised, a fire department official said. Fire broke out on June 10 at the same refinery, which according to a source familiar with plant operations affected a 50,000-barrels-per-day catalytic cracking unit.
WASHINGTON — President Trump approved military strikes against Iran in retaliation for downing an American surveillance drone, but pulled back from launching them on Thursday night after a day of escalating tensions. As late as 7 p.m., military and diplomatic officials were expecting a strike, after intense discussions and debate at the White House among the president’s top national security officials and congressional leaders, according to multiple senior administration officials involved in or briefed on the deliberations. Officials said the president had initially approved attacks on a handful of Iranian targets, like radar and missile batteries. The operation was underway in its early stages when it was called off, a senior administration official said. Planes were in the air and ships were in position, but no missiles had been fired when word came to stand down, the official said. The abrupt reversal put a halt to what would have been the president’s third military action against targets in the Middle East. Mr. Trump had struck twice at targets in Syria, in 2017 and 2018. It was not clear whether Mr. Trump simply changed his mind on the strikes or whether the administration altered course because of logistics or strategy. It was also not clear whether the attacks might still go forward. Nick Bit: That will show them who is boss. Talk about a loser. commander and wimp
The US is likely to take military action against Iran in the coming days for Tehran’s downing a U.S. drone in international airspace on Wednesday near the Strait of Hormuz. The Central Command said an RQ-4 Global Hawk drone aircraft was shot down by an Iranian surface-to-air missile system while operating in international airspace around 7:35 p.m. on Wednesday. President Trump suggested retaliation for the attack is coming. “Iran made a very big mistake,” the president tweeted. Later during an Oval Office meeting with Canadian prime minister Justin Trudeau, Trump was asked about a military strike against Iran and repeated that Iran “made a very big mistake” because the drone was flying over international waters. “Iran made a big mistake. This drone was in international waters, clearly,” he said. “We have it all documented scientifically, not just words. And they made a very bad mistake.” Trump suggested that the drone was mistakenly shot down and noted that “I have a big, big feeling” an Iranian air defense operator erred in attacking the drone, someone “loose and stupid who did it.” Asked what will come next, the president said “You’ll find out.” Air Force Lt. Gen. Joseph Guastella, commander of Central Command air forces, said the RQ-4 drone was conducting surveillance over the Gulf of Oman and the Strait of Hormuz in international airspace near recent IRGC attacks on two tankers. The drone was struck by an IRGC surface-to-air missile fired from a base near Goruk, Iran, he said. “This was an unprovoked attack on a U.S. surveillance asset that had not violated Iranian airspace at any time during its mission,” Guastella said in a statement. “This attack is an attempt to disrupt our ability to monitor the area following recent threats to international shipping and free flow of commerce.” The three-star general also said that Iran falsely claimed the aircraft was shot down over Iran. “The aircraft was over the Strait of Hormuz and fell into international waters.” “At the time of the intercept, the RQ-4 was operating at high-altitude approximately 34 kilometers from the nearest point of land on the Iranian coast,” he said. “This dangerous and escalatory attack was irresponsible and occurred in the vicinity of established air corridors between Dubai, UAE, and Muscat Oman, possibly endangering innocent civilians.” “Iranian reports that the aircraft was over Iran are false,” said CENTCOM spokesman Capt. Bill Urban. “This was an unprovoked attack on a U.S. surveillance asset in international airspace.” Tensions have increased with Iran since last week when the Islamic Revolutionary Guards Corps, Tehran’s shock troops, were caught removing a limpet mine from the hull of a Japanese tanker that had been hit by other mines the United States has concluded came from Iran. “They would be making a big mistake if they doubted the president’s resolve on this,” Bolton added, echoing the president’s tweet. The latest confrontation sent crude oil prices higher over concerns of a new Middle East war. Oil prices increased more than $3 to $63 a barrel, Reuters reports. Options are expected to range from covert action against Iranian military targets using special forces commandos to airstrikes against Iranian bases. The administration is weighing what it regards as proportional responses to recent Iranian actions. That would likely mean an airstrike against Iranian air defense batteries located near the Strait of Hormuz that were involved in shooting down the Global Hawk drone.
The Pentagon revealed Wednesday that the US’ latest troop deployment to the Middle East will also include a Patriot Missile battalion, drones and manned surveillance aircraft. Additionally, the Pentagon has indicated that it doesn’t want war with Iran, but that it is “postured and ready to defend US forces and interests in the region,” Reuters reported. The latest development comes days after then acting Defense Secretary Patrick Shanahan announced on Monday that the US would be sending an additional 1,000 troops to the Middle East to counter alleged Iranian aggression. In a statement released at the time, Shanahan stated that the servicemembers would be used “for defensive purposes to address air, naval and ground-based threats” in the region. “The recent Iranian attacks validate the reliable, credible intelligence we have received on hostile behavior by Iranian forces and their proxy group that threaten United States personnel and interests across the region,” the statement adds. The Monday reveal in addition to the previous deployment of a US aircraft carrier strike group earlier this year was prompted by the US’ claims that Iran was to blame for the recent attacks on oil tankers in the region. Iran has repeatedly rejected the notion that it had anything to do with the strikes. Relations between the US and Iran have largely remained at a simmer since the US opted to pull out of the 2015 Joint Comprehensive Plan of Action, an act which subsequently triggered the restart of a series of sanctions.
TEHRAN, Iran (AP) — Iran’s Revolutionary Guard shot down a U.S. surveillance drone on Thursday amid heightened tensions between Tehran and Washington over the collapsing nuclear deal with world powers, American and Iranian officials said, though they disputed the circumstances of the incident. The Guard said it shot down the RQ-4 Global Hawk drone over Iranian airspace, while the U.S. said the downing happened over international airspace in the Strait of Hormuz. The different accounts could not be immediately reconciled. The U.S. military’s Central Command called it an “unprovoked attack” and President Donald Trump tweeted that “Iran made a very big mistake” in shooting it down. Previously, the U.S. military alleged that Iran had fired a missile at another drone last week that was responding to the attack on two oil tankers near the Gulf of Oman. The U.S. blames Iran for the attack on the ships; Tehran denies it was involved.
DUBAI/WASHINGTON (Reuters) – Iran has shot down a U.S. drone which the elite Revolutionary Guards said on Thursday was flying over southern Iran, raising fears that a major military confrontation could erupt between Tehran and Washington. Guards website Sepah News said the “spy” drone was brought down over the southern Iranian province of Hormozgan, which is on the Gulf. While Iran’s state news agency IRNA carried the same report, identifying the drone as an RQ-4 Global Hawk, a U.S. official said a U.S. Navy MQ-4C Triton had been shot down in international airspace over the Strait of Hormuz.. The MQ-4C Triton’s manufacturer, Northrop Grumman, says on its website that the Triton can fly for over 24 hours at a time, at altitudes higher than 10 miles, with an operational range of 8,200 nautical miles. The U.S. military has in recent days confirmed an attempt by Iran to shoot down a U.S. drone last week as well as the successful shooting down of one on June 6 by Iran-aligned Houthi forces in Yemen. A senior Iranian security official said on Wednesday Iran would “strongly respond” to any violation of its airspace. “Our airspace is our red line and Iran has always responded and will continue to respond strongly to any country that violates our airspace,” the semi-official Tasnim news agency quoted the secretary of Iran’s Supreme National Security council as saying. Tension between Iran and the United States has spiked since last year when President Donald Trump withdrew from a 2015 nuclear deal between Iran and major powers and reimposed sanctions on it. Concern about a military confrontation has increased since attacks on two oil tankers in the Gulf of Oman last week and on four tankers off the United Arab Emirates on May 12, both near the Strait of Hormuz, a major conduit for global oil supplies. The United States and its regional ally, Saudi Arabia, blamed Iran for the incidents. Iran has denied responsibility. The U.S. military has sent forces, including aircraft carriers, B-52 bombers and troops to the Middle East. However, Trump said he does not seek war with Iran. Iran said last week that it was responsible for the security of the Strait of Hormuz, calling on American forces to leave the Gulf. In protest at Trump’s “maximum pressure”, in May Iran said it would start enriching uranium at a higher level unless other European signatories to the nuclear deal protected its economy from the U.S. sanctions within 60 days.
Oil futures turned higher Wednesday after a U.S. government snapshot of crude supplies revealed a larger-than-expected drawdown in crude stockpiles, the first in three weeks. The market also digested news that the Organization of the Petroleum Exporting Countries and their allies will now hold their ministerial meetings on July 1 and July 2. They had previously been scheduled for June 25-26, but analysts said some producers wanted the meetings to follow the Group of 20 leaders summit held of June 28-29.“Middle East conflict is sure to influence crude prices, with a frenetic end to the month of June as the G20 meeting and more details to emerge on the possibility of an extension to the OPEC+ supply cut agreement,” said Alfonso Esparza, senior market analyst at Oanda, in an email update. West Texas Intermediate crude for July delivery CLN19, -0.45% rose 22 cents, or 0.4%, to $54.12 a barrel on the New York Mercantile Exchange. The July contract, which expires at Thursday’s settlement, had been trading lower ahead of the supply data. August Brent crude BRNQ19, -0.19% added 14 cents, or 0.2% to $62.28 a barrel on ICE Futures Europe. It wrapped up Tuesday at $62.14, the highest settlement in a week. The Energy Information Administration reported Wednesday that U.S. crude supplies fell by 3.1 million barrels for the week ended June 14. That followed two consecutive weeks of gains. The American Petroleum Institute on Tuesday reported an 812,000-barrel fall, according to sources. The EIA data also showed that gasoline inventories were down 1.7 million barrels, while distillate stockpiles edged lower by 600,000 barrels last week. The S&P Global Platts survey had shown expectations for supply increases of 1 million barrels each for gasoline and distillates. Broader financial market action continues to color energy market sentiment. Tuesday’s oil-price gains came after a tweet from U.S. President Donald Trump suggested progress in trade talks with China, lifting benchmark stock indexes and easing concerns over energy demand.
Iraq is looking to draft contingency plans in case the heightened tension in the Middle East results in some kind of blockade of Iraq’s oil exports through the Persian Gulf—a key lane for almost all of the exports of OPEC’s second-largest oil producer, oil ministry spokesman Assem Jihad told AFP on Monday. “There is no replacement for the southern port and our other alternatives are limited. It’s a source of anxiety for the global oil market,” Jihad told AFP on Monday. Tensions in the Gulf and in the Middle East have dramatically risen since Thursday, when two oil tankers were apparently attacked in the Gulf of Oman, just outside the Strait of Hormuz which connects the Persian Gulf with the Gulf of Oman and the open seas. The daily flows of oil through the Strait of Hormuz account for around 30 percent of all seaborne-traded crude oil and other liquids. Iran’s Foreign Minister Mohammad Javad Zarif tweeted early on Thursday that “Suspicious doesn’t begin to describe what likely transpired this morning,” referring to the attacks, while the United States directly blamed Iran for the attacks.
The Persian Gulf and then the Strait of Hormuz, which Iran has repeatedly threatened to block, are the key export routes of more than 3 million bpd of Iraqi crude oil from its southern ports lying on the Persian Gulf. According to officials who spoke to Reuters last month, Iraq’s exports from the Gulf ports averaged 3.454 million bpd in May.
Cutting off Iraq’s crude oil exports would be disastrous for the country, which relies very much on oil revenues for its budget income, so the Persian Gulf and the Strait of Hormuz are the lifelines of Iraqi state revenues, industry analyst Ruba Husari told AFP. If Iran tried and closed the Strait of Hormuz, “it’s not going to be closed for long,” U.S. President Donald Trump told Fox & Friends in an interview on Friday, in which he also directly blamed Iran for Thursday’s attacks on the tankers in the Gulf of Oman. “We’re going to guarantee freedom of navigation throughout the straits,” U.S. Secretary of State Mike Pompeo said on Sunday. Iran said on Monday that the Chief of Staff of the Iranian Armed Forces, Major General Mohammad Hossein Baqeri, “said his country is strong enough to act in broad daylight if it intends to stop the flow of oil exports from the Persian Gulf, rejecting accusations about Iran’s involvement in the recent sabotage attacks on 2 oil tankers in the Sea of Oman.” “He added that the Iranian Armed Forces are at present monitoring the enemies’ moves wisely, precisely and round the clock and will give a crushing and open response to any enemy move and in a very broad region,” Iran’s Fars news agency reports.
ORLANDO, Fla. — It was everything Donald Trump wanted, and so much more. The optics-obsessed president was greeted by thousands of adoring supporters when he arrived here on Tuesday to kick off his bid for a second term. In lieu of a red carpet, a sea of red, white and camouflage hats provided the backdrop for his first official campaign rally of the 2020 cycle.As soon as Trump took the stage in his signature red tie, the crowd seemed pleased to have waited. They greeted him with “USA” chants as he recalled the “movement” he started four years ago. “It turned out to be more than just a great political campaign. It turned out to be a great political movement because of you,” the president said, echoing the same nationalist message that became a staple of his first presidential run. “It’s a movement made up of people … who believe that a nation must care for its own citizens first.” Fans camped out since dusk on Monday to secure a spot inside the 20,000-seat Amway Center. They began chanting familiar slogans as anticipation built for the evening’s main act and familiar characters took the stage. Trump’s eldest son, Don Jr., riled up the crowd with a series of attacks against Joe Biden, a telling sign that his father views the former vice president as his likeliest opponent. Vice President Mike Pence promised the crowd that four more years “means more jobs, more judges … and at least four more years to drain the swamp.” Trump picked up where his vice president left off as he took the mic, ticking through the items he can accomplish if granted another term and highlighting what he’s done so far. He talked about passing a criminal justice bill and healthcare reforms for veterans, doubling the child tax credit for American families and confronting the opioid crisis. “Together we’re breaking the most sacred rule of Washington politics: We are keeping our promises to the American people,” he said. But the president couldn’t help but focus on the trials of his first White House bid, too — time he might have otherwise spent targeting his current Democratic opponents. Trump’s re-election launch — with an all-day tailgate party beforehand and a festival-like feel — borrowed a key ingredient from the unorthodox announcement speech he delivered four years ago: Nothing about it was normal, but it was a captivating show. “The days of stealing American jobs and American companies, American ideas and wealth —those days are over,” Trump boldly declared. He argued that the economy was booming thanks to his administration’s deregulatory agenda and the GOP-led tax cuts; that undocumented immigration was finally being confronted thanks to his forceful approach and negotiations with Mexico; and that America was respected again by its allies and adversaries because of his no-nonsense attitude toward foreign leaders. “We’ve made America great again, but how do you give up the number one theme, logo, statement in politics? There’s a new one that really works, and that’s called ‘Keep America Great,’” Trump said, encouraging his supporters to embrace the new slogan. The president repeated his “no collusion” refrain Tuesday night, claiming that the Mueller report on Russian election interference was a “win” for him, even as House Democrats tighten their grip on multiple congressional investigations into his actions before and after becoming president. On Tuesday night, he assured his supporters that he had already fulfilled many of those promises and could do even more if they delivered him four more years. He gave them a show they’ll talk about for weeks and one that he will try to replicate again and again over the next 17 months — a ride that many expect to be every bit as unpredictable as 2016, but the same in so many other ways. “We are one movement, one people, one family and one glorious nation under God. And together we will make America wealthy again, we will make America strong again, we will make America safe again and we will make America great again,” Trump said, exiting the stage to the same Rolling Stones tune that has closed so many of his rallies since 2016.
US Acting Secretary of Defence Patrick Shanahan previously announced that the Pentagon had greenlighted the deployment of an additional 1,000 troops, citing “defensive purposes”. China has warned against opening Mideast ‘Pandora’s box’ after the United States authorised the dispatching of additional military personnel to the Middle East “to address air, naval, and ground-based threats” in the region, according to AFP. China’s Foreign Minister Wang Yi stated following a press conference with his Syrian counterpart Walid Muallem that Beijing is urging Tehran to keep its commitments under the nuclear deal, and has warned against scrapping the pact ‘so easily’. Wang noted that the International Atomic Energy Agency had confirmed on multiple occasions that the Islamic Republic has remained committed to its obligations under the nuclear treaty. “The International Atomic Energy Agency has confirmed 15 times that Iran fulfills its obligations under the JCPOA. In the existing situation we hope that Iran will very thoroughly contemplate its decision and will not reject the deal so easily”, Wang said at a press conference held after his talks with Syrian Foreign Minister Walid Muallem. Wang Yi added that China remains firmly committed to protect the Joint Comprehensive Plan of Action, including through cooperation with other signatories for the sake of Arak nuclear reactor modernisation. “China’s commitment to protect the JCPOA remains unchanged. As a specific measure, China will closely cooperate with all the sides in order to reach progress in modernising the Arak nuclear reactor”, Wang said at a press conference held after his talks with Syrian Foreign Minister Walid Muallem. His comment came one day after the Atomic Energy Organization of Iran announced that the country would in late June exceed the enriched uranium stockpile limit outlined in the JCPOA, while it could also exceed the heavy water stockpile limit and the level of uranium enrichment specified in the deal. Iran first announced that it would start suspending some of its voluntary commitments under the JCPOA within 60 days on 8 May – exactly one year after the US unilaterally pulled out from the deal and decided to reinstate all sanctions against the Islamic Republic. The Joint Comprehensive Plan of Action (JCPOA), commonly known as the Iran nuclear deal, was signed in 2015 by Iran and the P5+1 nations — Russia, the US, China, France, the UK plus Germany — after years of tense negotiations. The multilateral accord sought to curb Iran’s nuclear ambitions in exchange for the gradual lifting of economic sanctions on Tehran.
WASHINGTON (Reuters) – U.S. President Donald Trump would consider using military force to prevent Iran from gaining a nuclear weapon but left open the question if it involved protecting oil supplies, he told Time magazine in an interview published on Tuesday. Striking a different tone than some Republican lawmakers who have urged a military response, Trump told Time the impact of the recent attacks on Norwegian and Japanese oil tankers in the Gulf of Oman had been “very minor” so far. Asked whether he would consider military action against Iran to prevent it from obtaining nuclear weapons or ensure the free flow of oil through the gulf, the president said, “I would certainly go over nuclear weapons, and I would keep the other a question mark.” The United States has blamed Iran for the tanker attacks, citing as evidence a series of images showing an Iran Revolutionary Guard Corps boat removing an unexploded limpet mine from the hull of the Japanese oil tanker attacked on June 13. Acting U.S. Defense Secretary Patrick Shanahan said on Monday the United States was deploying about 1,000 more troops to the Middle East for defensive purposes, citing concerns about the threat from Iran. Tensions have been stoking between Washington and Tehran since the Trump administration decided last year to pull out of the Iran nuclear deal and reimpose sanctions on the Islamic republic. Concerns about a possible confrontation between the two countries have been growing since last week’s tanker attacks. Iran said on Monday it would soon breach internationally agreed curbs on its stock of low-enriched uranium in 10 days, despite calls for it to abide by the limits. Trump said he agreed with U.S. intelligence assessments that Iran was behind the tanker attacks, but he said Tehran had been less hostile toward the United States since he became president. “If you look at the rhetoric now compared to the days when they were signing that agreement (the 2015 Iran nuclear deal), where it was always ‘death to America, death to America, we will destroy America, we will kill America,’ I’m not hearing that too much anymore,” Trump told Time. “And I don’t expect to.”
TEHRAN, LONDON and CAIRO (Bloomberg) — OPEC proposed mid-July meetings with its allies in Vienna to discuss extending production cuts, after talks between Russia and Iran made some progress toward resolving a standoff over the date. The oil producers group, which pumps more than half the world’s crude, has been bickering for a month about the timing of ministerial talks. Their failure to agree a date just weeks before their production cuts expire gives turbulent markets little reassurance as crude prices extend their slump. After discussions with his Russian counterpart on Monday, Iran’s Oil Minister Bijan Namdar Zanganeh said he was willing to hold a meeting on July 10 to 12, a week later than most other members had wanted. The Organization of Petroleum Exporting Countries formally proposed those dates to members on Tuesday and said it would await their responses, according to a delegate from the group. While this marked a small victory for Zanganeh, Iran had to drop its previous insistence that OPEC should gather next week. “I don’t have a problem with July 10 to 12,” Zanganeh told reporters in Tehran on Monday. “I cannot meet 3rd or 4th of July. It’s not that I’m opposed to it, I can’t meet then.” Five delegates from the group, who asked not to be named while discussing internal deliberations, said on Monday that they weren’t certain that Iran’s proposal would be accepted by other members. Russian Energy Minister Alexander Novak said he is ready to consider holding the meeting on July 10 to 12, but hasn’t yet discussed the dates with his Saudi counterpart Khalid Al-Falih, according to reports from Interfax and RIA Novosti. The original request to shift the date of the meeting from June to July came from Russia, which despite being an outsider has exerted a strong influence over the group since joining forces almost three years ago. Differences over the timing began as a mere scheduling clash, but escalated rapidly into a diplomatic spat that pitted long-standing regional rivals Saudi Arabia and Iran against each other. The dispute played out amid a broader geopolitical confrontation as the Saudis — and the U.S.– accused Iran of complicity in attacks on two oil tankers near the Strait of Hormuz on June 13. Iran, which is under U.S. sanctions, denied culpability. Algeria, like Iran, initially opposed pushing the meeting to July, saying the new date would conflict with a planned election in the North African country. The Algerians later canceled their July 4 vote, leaving Iran as the sole holdout against the rescheduled meeting. Zanganeh, when asked about Russian minister Novak‘s response to his proposal for July 10-12, said: “He’s not the decision maker, the decision maker is OPEC and OPEC must reach a consensus.” Novak left the meeting in Tehran without speaking to reporters. For all the uncertainty over the meeting date, OPEC and its allies appear to be heading for an extension of their production cuts amid doubts about the strength of global demand as the economy shows signs of slowing. Saudi minister Al-Falih said earlier this month that he was “sure” the curbs will continue beyond June. “There will not be room for the cartel to increase output for the rest of 2019 in our view,” Rystad Energy’s Chief Oil Market Analyst Bjornar Tonhaugen said in a note on Tuesday. “As non-OPEC+ adds more supply than global demand is increasing by, OPEC+ will still be pressured to manage production in order to balance the global market.”
The Pentagon announced on Monday that the US is sending 1,000 additional troops and other military resources to the Middle East amid belligerent threats against Iran by the Trump administration. The troop movement follows the previous deployment of the USS Lincoln aircraft carrier and its battle group to the Persian Gulf, along with a bomber strike group led by nuclear capable B-52s. An article from the Israeli website Maariv Online, republished in the Jerusalem Post, reported that the Trump administration is actively preparing a “tactical assault” on Iran. The report, based on diplomatic sources at the UN in New York, stated that “since Friday, the White House has been holding incessant discussions involving senior military commanders, Pentagon representatives and advisers to President Donald Trump.” According to Maariv Online, the unnamed officials said that “the military action under consideration would be an aerial bombardment of an Iranian facility linked to its nuclear program.” A Western diplomat commented: “The bombing will be massive but will be limited to one target.” Announcing the troop deployment, acting US Defence Secretary Patrick Shanahan stated: “The recent Iranian attacks validate the reliable, credible intelligence we have received on hostile behaviour by Iranian forces and their proxy groups that threaten United States personnel and interests across the region.” He then absurdly added: “The United States does not seek conflict with Iran.” In reality, the current explosive situation in the Persian Gulf is entirely of Washington’s manufacture. In breach of UN resolutions, the Trump administration unilaterally abrogated the 2015 deal between Iran and the five permanent members of the UN Security Council plus Germany to limit its nuclear program in return for sanctions relief. The US subsequently re-imposed and strengthened its crippling sanctions on Iran aimed at cutting off all oil exports and collapsing the Iranian economy. It also threatened to take punitive economic measures against companies breaching its unilateral sanctions. Washington’s actions amount to an economic blockade of Iran and an act of war. With US Secretary of State Mike Pompeo in the lead, the Trump administration is exploiting attacks on two tankers in the Persian Gulf last Thursday as the pretext for threatening to strike Iran. On Sunday, Pompeo declared that the US was “considering a full range of options,” including “a military response.” The UN sources quoted in the Jerusalem Post article claimed that Trump himself had not been enthusiastic, but had lost his patience and given the green light to Pompeo, who has been pushing for action. Pompeo is due to travel today to US Central Command (CENTCOM) headquarters in Florida. He will meet with two top military leaders—CENTCOM commander General Kenneth McKenzie and General Richard Clarke, head of the Special Operations Command—to “discuss regional security concerns and operations.” CNN noted that the visit was “unusual” as Pompeo was not accompanied by acting US Defence Secretary Shanahan, who was remaining in Washington to “continue to develop options.” The US has also seized on Iranian statements on Monday warning that its low-level enrichment of uranium will exceed the limit set under the 2015 agreement within 10 days to further wind up tensions. Speaking to the media on Monday, US National Security Council spokesman Garrett Marquis branded Iran’s actions as “nuclear blackmail” and insisted it must be met with “increasing international pressure.”
Berlin (CNSNews.com) – The European Union remained tight-lipped Monday on the tense situation in the Persian Gulf region, but called for de-escalation as it continues efforts to salvage the nuclear deal with Iran. On Monday, the Iranian regime announced that it will in the coming days exceed the 300 kilogram limit of low-enriched uranium (LEU), set by the 2015 Joint Comprehensive Plan of Action (JCPOA) nuclear agreement. Not only would the limit be exceeded, Iran’s Atomic Energy Organization spokesman Behrouz Kamalvandi told Iranian television, but the pace of production beyond that point would be increased “drastically.” It’s the latest scaling back of Tehran’s commitments under the JCPOA, whose future has been in the balance since President Trump withdrew unilaterally in May last year. Iran previously warned the E.U. that it would increase uranium enrichment, should the E.U. fail to find a way to salvage the deal in light of restored U.S. sanctions. The move comes amid new tensions in the region, following armed incidents including attacks on tankers which the U.S. and Britain are blaming on Iran. After a meeting of E.U. foreign ministers in Brussels, E.U. foreign policy chief Federica Mogherini told reporters, “Our focus is to keep the agreement in place and keep the implementation of it.”
For it was Trump who pulled us out of the Iran nuclear deal, though, according to U.N. inspectors and the other signatories – Britain, France, Germany, Russia, China – Tehran was complying with its terms. Trump’s repudiation of the treaty was followed by his reimposition of sanctions and a policy of maximum pressure. This was followed by the designation of Iran’s Revolutionary Guard as a “terrorist” organization. Then came the threats of U.S. secondary sanctions on nations, some of them friends and allies, that continued to buy oil from Iran. U.S. policy has been to squeeze Iran’s economy until the regime buckles to Secretary of State Mike Pompeo’s 12 demands, including an end to Tehran’s support of its allies in Lebanon, Syria, Iraq and Yemen. Sunday, Pompeo said Iran was behind the attacks on the tankers in the Gulf of Oman and that Tehran instigated an attack that injured four U.S. soldiers in Kabul, though the Taliban claimed responsibility. “This unprovoked attack on commercial shipping warrants retaliatory military strikes,” said Sen. Tom Cotton on Sunday.
IRAN announced today it intends to smash the strict uranium stockpile limits set under the nuclear deal it struck with the world’s leading powers. The hardline country’s shock statement is another blow to a pact already crumbling since the US’s high-profile withdrawal. President Rouhani said his country would stop observing restrictions on its stocks of enriched uranium “Today the countdown to pass the 300 kilograms reserve of enriched uranium has started and in 10 days time we will pass this limit,” said Iran’s atomic energy organisation spokesman Behrouz Kamalvandi. “This is based on the Articles 26 and 36 of the (nuclear deal), and will be reversed once other parties live up to their commitments.” Kamalvandi acknowledged the country has already QUADRUPLED its production of low-enriched uranium. The news is bound to ramp up tensions between Iran and the West already at breaking point following the shock bomb attack on two tankers in the Gulf of Oman. Many international observers believe the attack was an act of “revenge” by Iran after the White House imposed crippling economic sanctions after Donald Trump pulled out of the nuclear deal. Just last month, Iranian President Hassan Rouhani announced his country would stop observing restrictions on its stocks of enriched uranium and heavy water agreed under the 2015 deal. Enriched uranium is essential for developing nuclear weapons and power stations. As part of the agreement Iran also agreed to only enrich their uranium up to 3.67 per cent over the next 15 years. In addition they were barred from building any more heavy-water faculties – a type of nuclear reactor which uses heavy water (deuterium oxide) as a coolant to maintain temperatures in the reactor.Also under the agreement the International Atomic Energy Agency was granted regular access to all Iranian nuclear facilities to ensure Iran maintains the deal. The deal said that if Iran abides by it the nation would receive relief from the US, European Union, and the United Nations Security Council on all nuclear-related economic sanctions. The agreement was reached on July 14 2015 and the world powers signed it in Vienna. Iran, China, France, Russia, UK, USA, Germany and the EU all signed up to the deal.. Under the agreement, Iran pledged to reduce its nuclear capacities and allow inspectors inside the country to monitor its activities in return for relief from international sanctions. The deal set a limit on the number of uranium-enriching centrifuges, and restricted its right to enrich uranium to no higher than 3.67 per cent -well below weapons-grade levels of around 90 per On Sunday Mike Pompeo revealed America is now “considering a full range of options” including using its mighty military amid the rising tensions. The US Secretary of State spoke out after he accused the hardline state of launching the tanker attacks.
“The United States is considering a full range of options. We have briefed the President a couple of times, we’ll continue to keep him updated,” he said. “We are confident that we can take a set of actions that can restore deterrence which is our mission set,” Pompeo said in an interview on CBS’s Face The Nation. When questioned if a military response was one of the options, Pompeo responded: “Of course.”
Saudi Arabia announced that two pumping stations serving the pipeline system between its eastern oil province and its export terminal at Yanbu, on the western coast, had suffered a drone attack and had to be put out of service temporarily. The targets of these two attacks are particularly relevant to global oil market security as they are, in themselves, oil-export security infrastructure built by the UAE and Saudi Arabia to reduce their reliance on tanker shipping in the Persian Gulf and Strait of Hormuz. Fujairah is an oil export terminal and bunkering centre for tanker traffic in and out of the Persian Gulf region. In the 2000s, the Abu Dhabi National Oil Company built a pipeline linking its crude oil production and treatment facilities near the Persian Gulf across the country to its eastern port of Fujairah, on the Gulf of Oman. Along with sizeable investments in oil storage and export infrastructure, this pipeline significantly reduced the UAE’s dependence on the Persian Gulf and Strait of Hormuz for its oil exports, opening an export route directly onto the Indian Ocean. It also allowed for the emergence of Fujairah as a successful bunkering services provider, competing with Singapore for Asia-bound tanker traffic. Therefore, the attack on Fujairah shows that the UAE’s investment in bypassing the Strait of Hormuz is not immune to security risks. The same is true of the reported drone attack on two pumping stations that are part of the east-to-west pipeline system across Saudi Arabia, which was claimed by Yemeni Houthi forces. This pipeline system – sometimes called Petroline – has been built and upgraded in stages, since the 1990s, to service oil refineries and an export terminal on the Red Sea port of Yanbu. Similar to the Abu Dhabi-to-Fujairah one, the Petroline pipeline reduces Saudi Arabia’s dependence on shipping via the Gulf and Hormuz for its oil exports. The attack of Tuesday 14 April does not nullify the security logic for this infrastructure, but shows that the insurance bought by Saudi Arabia against shipping disruptions in the Persian Gulf and Strait of Hormuz is itself subject to security risks.
Yemeni TV channel reported that the group launched drone attacks on Saudi city of Abha and Jizan airports. Saudi forces have intercepted a ballistic missile targeting the city of Abha in southwest of Saudi Arabia, Al-Arabiya TV channel reported. The attack comes a day after another Houthi strike on Saudi Arabia’s Abha Airport with drones. On Wednesday, the Saudi-led coalition confirmed that 26 people were injured as a result of another missile attack by Houthis. The Abha International Airport in Saudi Arabia was continuing operating in regular mode after being hit by a missile strike, the airport informed back then. A Saudi-led coalition has been carrying out airstrikes against the Houthis in Yemen at the nation’s President Abdrabuh Mansour Hadi’s request since March 2015. Yemen, a small nation in the south of the Arabian peninsula, has been engulfed in an armed conflict between the government forces, led by Hadi, and the rebel Houthi movement for several years. The conflict has resulted in a massive humanitarian crisis in the war-torn country.
Iran missed a hit on a US drone watching over the site of the attacked tankers in the Gulf of Oman by ‘approximately one kilometer’, U.S. Central Command has said. The MQ-9 had observed the Norwegian Front Altair on fire – which 23 mariners were later rescued from – and a spokesperson said it was likely an attempt to intercept the observation from the incident on Thursday. ‘According to our assessment, a modified Iranian SA-7 surface-to-air missile attempted to shoot down a U.S. MQ-9, at 6:45 a.m. local time, June 13, over the Gulf of Oman, to disrupt surveillance of the IRGC attack on the M/T Kokuka Courageous,’ CENTCOM’s Lt. Col. Earl Brown told ABC News on Saturday. ‘The SA-7 was ineffective and its closest point of approach to the MQ-9 was approximately one kilometer. Subsequent analysis indicates that this was a likely attempt to shoot down or otherwise disrupt the MQ-9 surveillance of the IRGC attack on the M/T Kokuka Courageous.’ Iran missed a hit on a US drone watching over site of attacked Gulf of Oman tankers. This undated handout photo provided by the U.S. Air Force shows a MQ-9 Reaper
The United States has accused Iran of orchestrating attacks on two oil tankers in the Gulf of Oman on 13 June, having released video “evidence” which is considered by some of its allies insufficient to prove that Tehran is to blame. The Islamic Republic, for its part, has strongly denied the allegations as groundless. The Japanese government considers the US allegations about Iran’s involvement in the attack on tankers in the Gulf of Oman unconvincing and has asked Washington to provide additional evidence to corroborate the claims, Kyodo news agency reported, citing several government sources. “The government does not share the US view of Iran’s involvement in attacking tankers near the Strait of Hormuz and, as it turned out, appealed to the American side for additional evidence. The opinion is that the US statements are not sufficiently convincing”, the agency wrote. The reported statements follow the release of a video by the US Central Command claiming to show Iranian sailors removing an unexploded mine from the hull of one of the tankers as “proof” of Tehran being the culprit. “I do not think there was a time bomb or an object attached to the side of the ship. A mine doesn’t damage a ship above sea level. We aren’t sure exactly what hit, but it was something flying towards the ship”, Katada was cited as saying by the Japanese media. Iran has vehemently denied its involvement in the incident and urged the United States to stop the “blame game” and false flag operations in the region. US President Donald Trump has, nonetheless, reiterated the accusations by bringing up CENTCOM’s video: “Iran did do it and you know they did it because you saw the boat. You saw the boat at night, successfully trying to take the mine off and that was exposed. I guess one of the mines didn’t explode and it’s probably got essentially Iran written all over it”, Trump told Fox News on Friday.
Saudi forces on Friday intercepted five drones launched by Iran-aligned Yemeni rebels, a Riyadh-led military coalition said, in a second assault on an airport in the kingdom’s in two days. The drones targeted Abha airport, where a rebel missile on Wednesday left 26 civilians wounded, and the nearby city of Khamis Mushait, which houses a major airbase, the coalition said in a statement released by Saudi state media. The latest raid comes amid spiralling regional tensions after Washington accused Iran of carrying out attacks that left two tankers ablaze in the Gulf of Oman, the second such incident in a month in the strategic sea lane. ‘The royal Saudi air defence force and air force successfully intercepted and destroyed five unmanned drone aircraft launched by Huthi militia towards Abha international airport and Khamis Mushait,’ the coalition statement said without reporting any casualties. The airport was operating normally with no fights disrupted, the statement added. Huthi-run Al-Masirah TV reported earlier that the Iran-aligned rebels had carried out drone attacks on Abha Airport. Wednesday’s missile strike hit the civil airport in the mountain resort of Abha, which is a popular summer getaway for Saudis seeking escape from the searing heat of Riyadh or Jeddah. The latest drones targeted Abha airport, where a rebel missile on Wednesday left 26 civilians wounded (pictured, wreckage at the regional airport earlier this week) During a media tour of the airport on Thursday, Saudi authorities said they had closed a part of the arrival lounge after the missile tore a hole in the roof and disrupted flights for several hours. The area was covered in bamboo scaffolding and littered with concrete debris and shards of broken glass. Two passengers, including an Indian national, who suffered mild injuries recalled pandemonium and screams after a loud explosion triggered a blaze, leaving the lounge covered in smoke. A Saudi civil aviation official said authorities were still investigating rebel claims that they fired a cruise missile at the airport. If confirmed that would represent a major leap in the rebels’ military capability, experts say. The official also confirmed that it had not been intercepted by the kingdom’s Patriot anti-missile batteries. Saudi Arabia has repeatedly accused Iran of arming the rebels with sophisticated weapons, a charge Tehran denies. The coalition vowed to ‘take stern action’ to deter the rebels and protect civilians after the missile attack, which drew international condemnation including from the European Union. The coalition intervened in support of the Yemeni government in 2015 when President Abedrabbo Mansour Hadi fled into Saudi exile as the rebels closed in on his last remaining territory in and around second city Aden. Since then, the conflict has killed tens of thousands of people, many of them civilians, relief agencies say. It has triggered what the UN describes as the world’s worst humanitarian crisis, with 24.1 million Yemenis – more than two-thirds of the population – in need of aid.
WINSLOW, Neb./CHICAGO (Reuters) – Midwestern farmers have been gambling they could ride out the U.S.-China trade war by storing their corn and soybeans anywhere they could – in bins, plastic tubes, in barns or even outside. Now, the unthinkable has happened. Record floods have devastated a wide swath of the Farm Belt across Iowa, Nebraska, South Dakota and several other states. Early estimates of lost crops and livestock are approaching $1 billion in Nebraska alone. With more flooding expected, damages are expected to climb much higher for the region. As river levels rose, spilling over levees and swallowing up townships, farmers watched helplessly as the waters consumed not only their fields, but their stockpiles of grain, the one thing that can stand between them and financial ruin. “I’ve never seen anything like this in my life,” said Tom Geisler, a farmer in Winslow, Nebraska, who said he lost two full storage bins of corn. “We had been depending on the income from our livestock, but now all of our feed is gone, so that is going to be even more difficult. We haven’t been making any money from our grain farming because of trade issues and low prices.” The pain does not end there. As the waters began to recede in parts of Nebraska, the damage to the rural roads, bridges and rail lines was just beginning to emerge. This infrastructure is critical for the U.S. agricultural sector to move products from farms to processing plants and shipping hubs. The damage to roads means it will be harder for trucks to deliver seed to farmers for the coming planting season, but in some areas, the flooding on fields will render them all-but-impossible to use. The deluge is the latest blow for the Farm Belt, which has faced several crises in the last five years, as farm incomes have fallen by more than 50 percent due to a global grain glut. President Donald Trump’s trade policies cut off exports of soybeans and other products, making the situation worse. Soybeans were the single most valuable U.S. agricultural export crop and until the trade war, China bought $12 billion worth a year from American farmers. But Chinese tariffs have almost halted the trade, leaving farmers with crops they are struggling to sell for a profit. As prices plummeted last year amid the ongoing trade fight, growers, faced with selling crops at a loss, stuffed a historic volume of grain into winding plastic tubes and steel bins. Some cash-strapped families piled crops inside their barns or outside on the ground. Farmers say they are now finding storage bags torn and bins burst open, grain washed away or contaminated. Jeff Jorgenson, a farmer and regional director for the Iowa Soybean Association, said he has seen at least a dozen bins that burst after grains swelled when they became wet. Under U.S. Food and Drug Administration policy, flood-soaked grain is considered adulterated and must be destroyed, according to Iowa State University. Some farmers had been waiting for corn prices to rise just 10 cents a bushel more before making sales, which would earn them a few extra thousand dollars, Jorgenson said. “That’s the toughest pill to swallow,” Jorgenson said. “This could end their career of farming and the legacy of the family farm.”
As of Dec. 1, producers in states with flooding – including South Dakota, Nebraska, Kansas, Minnesota, Iowa, Missouri, Wisconsin and Illinois – had 6.75 billion bushels of corn, soybeans and wheat stored on their farms – 38 percent of the total U.S. supplies available at that time, according to U.S. Department of Agriculture data.
Iowa suffered at least $150 million in damage to agricultural buildings and machinery, and 100,000 acres of farm land are under water, said Keely Coppess, a spokeswoman for the Iowa Department of Agriculture and Land Stewardship. Jorgenson surveyed more than two dozen local farmers to assess the damage and tallied about 1.25 million bushels of corn and 390,000 bushels of soybeans lost just in Fremont County, Iowa, worth an estimated $7.3 million. expect more flooding in coming weeks. “We should have been getting into planting for next season, but now all of our equipment is flooded and it’s going to take at least three to four weeks to bring back that equipment into shape,” said Geisler.
DUBAI/WASHINGTON (Reuters) – The United States on Friday blamed Iran for attacks on two oil tankers at the entrance to the Gulf and said it was seeking international consensus about the threat to shipping, despite Tehran denying involvement in the explosions at sea. Thursday’s attacks raised fears of a confrontation in the vital oil shipping route at a time of increased tension between Iran and the United States over U.S. sanctions and military moves in the Middle East, Tehran’s proxy groups in the region and its nuclear program. “Iran did do it and you know they did it because you saw the boat,” U.S. President Donald Trump told Fox News. He was referring to a video released on Thursday by the U.S. military which said it showed Iran’s Revolutionary Guards were behind the blasts that struck the Norwegian-owned Front Altair and the Japanese-owned Kokuka Courageous in the Gulf of Oman, at the mouth of the Gulf. Iran said the video proved nothing and that it was being made into a scapegoat. “These accusations are alarming,” Foreign Ministry spokesman Abbas Mousavi said. Iran has dismissed earlier U.S. charges that it was behind the attacks and has accused the United States and its regional allies such as Saudi Arabia and the United Arab Emirates of “warmongering” by making accusations against it. Last month, the United States sharply tightened economic sanctions that are damaging the economy of Iran, which in response has threatened to step up its nuclear activity. Tehran has said it could block the Strait of Hormuz, the main route out for Middle Eastern oil, if its own exports were halted.
Trump, who last year pulled the United States out of an agreement between world powers and Tehran to curb Iran’s nuclear program in exchange for some sanctions relief, said any move to close the Strait of Hormuz would not last long but added that he was open to negotiations with Iran. Iran has repeatedly said it will not re-enter talks with the United States unless it reverses Trump’s decision to withdraw from the 2015 nuclear deal. Tehran and Washington have both said they have no interest in starting a war. But this has done little to assuage concerns that the two arch foes could stumble into a conflict. A U.S. official told Reuters on Friday a surface-to-air missile was fired from Iranian territory on Thursday morning at a U.S. drone that was near Front Altair following the attack on the tanker. The missile did not hit the drone, the official said. Trump’s administration is focused on building international consensus following the attacks, U.S. Defense Secretary Patrick Shanahan said. Asked whether he was considering sending more troops or military capabilities to the Middle East, Shanahan said: “As you know we’re always planning various contingencies.” But he emphasized the issue of building consensus. “When you look at the situation, a Norwegian ship, a Japanese ship, the Kingdom of Saudi Arabia, the UAE, 15 percent of the world’s oil flows through the Strait of Hormuz,” he said. “So we obviously need to make contingency plans should the situation deteriorate. We also need to broaden our support for this international situation,” he told reporters. Oil prices rose about 1% on Friday, reflecting the jitters. Insurance costs for ships sailing through the Middle East have jumped by at least 10% after the attacks, ship insurers said. China, the European Union and others have called for restraint from all sides. In a notable signal that close U.S. allies are wary of Washington’s position, Germany said the U.S. video was not enough to apportion blame for Thursday’s attack.
Iran’s crude exports fell to about 400,000 barrels per day (bpd) in May, starving Iran’s economy of its main source of revenue.
DUBAI (Reuters) – Iran said on Friday it was responsible for maintaining the security of the Strait of Hormuz in the Gulf, state radio reported, adding that blaming Tehran for attacks on two oil tankers in the Gulf of Oman was alarming. “We are responsible for ensuring the security of the Strait and we have rescued the crew of those attacked tankers in the shortest possible time,” Radio quoted Foreign Ministry spokesman Abbas Mousavi as saying. “Obviously, accusing Iran for such a suspicious and unfortunate incident is the simplest and the most convenient way for (U.S. Secretary of State Mike) Pompeo and other U.S. officials. These accusations are alarming.” The United States blamed Iran for attacks on two oil tankers in the Gulf of Oman on Thursday that drove up oil prices and raised concern about a new U.S.-Iranian confrontation. It was not immediately clear what caused the explosions that forced the crews to abandon ship and leave both the Norwegian-owned Front Altair and Japanese-owned Kokuka Courageous adrift in waters between Gulf Arab states and Iran. The blasts, south of the Strait of Hormuz, followed last month’s sabotage attacks on vessels off the Fujairah emirate, one of the world’s largest bunkering hubs. Iran has distanced itself from the attacks.
Almost a fifth of the world’s oil passes through the Strait – some 17.2 million barrels per day (bpd). Consumption was about 100 million bpd in 2017, data from analytics firm Vortexa showed.
Iran has repeatedly warned it would block the Strait of Hormuz if it cannot sell its oil because of U.S. sanctions.
Tensions have increased further since Trump reimposed sanctions on Iran and acted at the beginning of May to force Iran’s oil customers to slash their imports to zero or face draconian U.S. financial sanctions. Iran’s oil exports, its economy’s lifeblood, have dropped to about 400,000 bpd in May from 2.5 million bpd in April last year.
IRAN has accused the US of lying about the “torpedo attack” on an American-linked oil tanker as tensions reach breaking point. US Secretary of State Mike Pompeo blamed Iran for the “blatant” attacks on two tankers which burst into flames in the Gulf of Oman on Thursday. But Iran has hit back at the “unfounded and reckless” claims and accused the US of “warmongering” as part of a “disinformation campaign”. “The US and its regional allies must stop warmongering and put an end to mischievous plots and false flag operations in the region,” Iran’s mission to the United Nations said. “Warning, once again, about all of the US coercion, intimidation and malign behaviour, Iran expresses concern over suspicious incidents for the oil tankers that occurred today.” It came after Pompeo pointed the finger at Iran and the Pentagon released images and footage as “proof” of Iranian involvement.
- Two oil tankers were seriously damaged in the suspected torpedo attack
- The US believes Iran is definitely to blame for the shocking attacks
- Tehran has accused America of ‘Iranophobia’ and says it is innocent
- Almost 50 sailors had to be rescued from the stricken tankers in the Gulf
- Oil prices surged by 3.5 per cent after today’s suspected terror attack
- Iran’s foreign minister has branded the explosions as “suspicious”
- The US Navy’s 5th Fleet is now investigating the suspected torpedo attack
Pompeo said the attacks were part of a “campaign” of “escalating tension” by Iran which posed a threat to international peace and security. Iran blasted his “inflammatory remarks” and said they amounted to “another Iranophobic campaign”. “Iran categorically rejects the U.S. unfounded claim with regard to 13 June oil tanker incidents and condemns it in the strongest possible terms,” the Iranian mission said in a statement. The hardline Islamic nation added that the US poses the “most significant threat” to the peace and security of the Persian Gulf region. “The US economic war and terrorism against the Iranian people as well as the massive military presence in the region have been and continue to be the main sources of insecurity and instability in the wider Persian Gulf region and the most significant threat to its peace and security,” the statement said. Iran’s foreign minister later dismissed the US accusations as “sabotage diplomacy”.
Two tankers have sustained damage in suspected attacks in the Gulf of Oman and the crew have been evacuated, shipping sources said on Thursday, a month after a similar incident in which four tankers in the region were struck. Oil tanker Front Altair (operating under a Marshall Islands flag) was carrying 75,000 tonnes of naphtha, a petrochemical feedstock, when it was “suspected of being hit by a torpedo” around noon Taiwan time (0400GMT), Wu I-Fang, a senior company official for Taiwan’s state oil refiner CPC Corp told Reuters. He said all crew members have been rescued. The other tanker, The Kokuka Courageous (operating under a Panama flag), was also damaged in the incident, a spokesman for the vessel’s manager BSM Ship Management (Singapore) said. The spokesman said 21 crew had abandoned ship after the incident, which resulted in damage to the ship’s starboard hull. The master and crew were quickly rescued from a lifeboat by the Coastal Ace, a nearby vessel. According to sources cited by IRNA, Iran’s state news agency, Iranian search and rescue teams picked up 44 sailors from the two damaged tankers and took them to the Iranian port of Jask. The vessels were about 70 nautical miles from Fujairah and about 14 nautical miles off Iran.
Statement from owners A statement from the owners of the Kokuka Courageous BSM Ship Management (Singapore), said they are launching “a full-scale emergency response following a security incident on board our managed products carrier the Kokuka Courageous in the Gulf of Oman earlier today. The United Kingdom Maritime Trade Operations, part of the Royal Navy, earlier said it was aware of an incident in the Gulf of Oman. “UK and its partners are currently investigating,” the group said without elaborating. U.S. Naval forces are assisting tankers in the Gulf of Oman after receiving two distress calls on Thursday, the U.S. Navy’s Bahrain-based Fifth Fleet told Reuters. “We are aware of the reported attack on tankers in the Gulf of Oman. U.S. Naval Forces in the region received two separate distress calls at 6:12 a.m. local time and a second one at 7:00 a.m.,” Joshua Frey of the Fifth Fleet said Oil prices surged by 4% after the report that raises tensions in the Gulf, which have been heightened by a dispute between Iran and the United States. The area is near the Strait of Hormuz, a major strategic waterway through which a fifth of global oil consumption passes from Middle East producers.
US Fifth Fleet Receives Distress Calls From 2 Tankers in Gulf of Oman After Reported Attack
Reports about the incident emerged in Middle Eastern media a month after an attack on four vessels off the Emirati coast, which UAE investigators blamed on an unspecified “state actor”. The US Navy’s 5th Fleet said on Thursday that it was assisting two oil tankers targeted in a “reported attack” near the Strait of Hormuz, after the vessels sent disstress calls.
It was not immediately clear who attacked the vessels, one of which has been identified as Front Altair, a crude oil tanker owned by Norway’s Frontline and carrying the flag of the Marshall Islands.
According to shipping newspaper Tradewinds, Frontline’s oil tanker had been “torpedoed” off the coast of the Emirate of Fujairah. Taiwan’S energy firm CPC said it had suspicions that Front Altair, which was carrying 75,000 tonnes of naphtha, was hit by an unknown onject. Meanwhile, shipping company Bernhard Schulte said that its oil tanker Kokuka Courageous was also damaged in the incident. Kokuka was sailing from Saudi Arabia to Singapore with a cargo of methanol. “The hull has been breached above the water line on the starboard side,” the company said in a statement. “All crew are reported safe and only one minor injury reported.” Iran’s state-run Press TV said that two successive blasts affected two oil tankers on Thursday morning in what it described as “attacks”. Reuters says, citing four sources in shipping and trade, that two tankers have been evacuated in the Gulf and that the crew are safe. Brent crude climbed 4.5 per cent in the wake of the reports.Meanwhile, the UK Maritime Trade Operations, a maritime safety group run by the Royal Navy, has warned about an unspecified incident in the Gulf of Oman between the Emirate of Fujairah and Iran’s coast. The group urged “extreme caution”, given the ongoing tensions in the region between the United States and Iran, and said that an investigation is underway.
It comes a month after another apparent attack on vessels in the Gulf. On 12 May, four oil tankers — two Saudi, one Emirati and one Norwegian — were targeted off the coast of Fujairah in what the UAE Foreign Ministry described as acts of sabotage. The three countries whose ships were damaged said in a joint statement that limped mines had been placed in a “sophisticated and coordinated operation” by divers. The UAE suggested that it was likely the work of a “state actor” but stop short of identifying the culprit.
US officials, however, were quick to point the finger at Iran. “It’s clear that Iran is behind the Fujairah attack. Who else would you think would be doing it? Someone from Nepal?” said US National Security Adviser John Bolton.
In turn, US Secretary of State Pompeo alleged that Iran had attacked the tankers to raise the global price of oil. Tehran has denied any involvement and called for an investigation.
At least 26 civilians have been injured in a missile attack by Yemen’s rebel Houthi movement on an airport in south-western Saudi Arabia, state media say. Three women and two children were among those hurt when the missile struck Abha airport early on Wednesday, a military spokesman was quoted as saying. A rebel source had earlier claimed that the facility was hit “with precision”. Saudi Arabia leads a coalition of Arab states backing Yemen’s government in its four-year war with the Houthis. Yemen has been devastated by a conflict that escalated in March 2015, when the rebels seized control of much of the west of the country and forced President Abdrabbuh Mansour Hadi to flee abroad.
Alarmed by the rise of a group they believed to be backed militarily by regional Shia power Iran, Saudi Arabia and eight other mostly Sunni Arab states began an air campaign aimed at restoring Mr Hadi’s government.
Coalition military spokesman Col Turki al-Maliki said the missile fired by the Houthis hit the arrival hall at Abha International Airport at 02:21 on Wednesday (23:21 GMT on Tuesday), the official Saudi Press Agency reported. Three women – one Yemeni, one Indian and one Saudi – and two Saudi children are among those hurt. Eight people were taken to hospital after suffering moderate injuries, while 18 others were treated at the scene for minor injuries. Col Maliki said the attack on a civilian airport, which is about 200km (125 miles) north of the border with Yemen, was a serious violation of international humanitarian law and that it might constitute a war crime. The coalition would “take urgent and timely measures to deter this terrorist militia, and to ensure the protection of civilians and civilian objects”, he added. Col Maliki said work was under way to identify the type of missile involved, but Houthi-run Al-Masirah TV cited a rebel source as saying it was a cruise missile. “The latest US systems were unable to stop the missile. This strike hit the enemy with panic and fear and caused great confusion in their ranks,” the source added. Al-Masirah said it was the second time the Houthis had fired a cruise missile. The first reportedly targeted a nuclear power plant in Abu Dhabi, in the United Arab Emirates, in December 2017. Earlier this week, a Houthi military spokesman said it would target every airport in Saudi Arabia and that the coming days would reveal “big surprise
Singapore — Crude oil futures were lower during mid-morning trade in Asia Wednesday, amid a build reported in US crude stocks last week while demand and supply concerns continued to exert downward pressure. At 10:35 am Singapore time (0235 GMT), ICE Brent August futures were down 86 cents/b (1.38%) from Tuesday’s settle at $61.43/b, while the NYMEX July light sweet crude futures contract lost 85 cents/b (1.60%) at $52.42/b. According to analyst reports quoting data released Tuesday by the American Petroleum Institute, US crude stocks for the week ended June 7 were up by 4.85 million barrels. “Crude oil futures edged lower … as the American Petroleum Institute reported a surprise build in US stockpile levels,” Benjamin Lu, investment analyst at Phillip Futures, said. Analysts surveyed Monday by S&P Global Platts were looking for US crude stocks for the same period to have increased by 80,000 barrels.The API report was mixed for refined products — a US gasoline stock build of 830,000 barrels and a distillate stock draw of 3.5 million barrels, analysts said. API also reported a stock build of 2.37 million barrels at Cushing, Oklahoma, the delivery point for the NYMEX crude contract. The more definitive US inventory data is due for release from the US Energy Information Administration later Wednesday. “Looks like API is trying to get in line with EIA. Cushing builds are wild! Yet distillate draw is huge!” Price Futures Group senior market analyst Phil Flynn said. “Demand-side concerns became the most salient issue during the past month and contributed to volatility and price declines for risk assets such as commodities and equities,” EIA said in its Short-Term Energy Outlook. The US-China trade conflict, potential tariffs on Mexico and lower industrial activity contributed to concerns of lower-than-expected economic growth, which would curtail oil demand growth. Meanwhile, investors are waiting on the sidelines awaiting a decision from OPEC and non-OPEC members who are set to meet at Vienna on June 25 on their production cut agreement. “OPEC continues to set the scene ahead of this month’s bi-annual meeting. Russia and Saudi Arabia both warned earlier this week that prices could fall if OPEC+ didn’t agree to more supply cuts in H2 2019,” ANZ analysts said in a note. “Oil prices though gathering support from supply cut expectations (OPEC+), look poised to show for lackluster conditions before a firm announcement is made,” Lu said.
London — US oil demand surged 500,000 b/d last year, the biggest increase in more than a decade as the country’s new wave of petrochemical plants soaked up more of its fast-rising, shale-sourced ethane production, BP said Tuesday. The world’s biggest oil consumer saw demand for crude and liquids rise 2.5% to 20.46 million b/d in 2018, accelerating a trend of rising oil demand since a recent trough in 2009, BP said in its annual Statistical Review. The figures showed the US was harnessing more value from its shale-led oil and gas supply boom and the rise of petrochemicals as a key plank in the future world oil demand outlook. “The increased importance of petrochemicals in driving oil demand growth was also evident in the global production breakdown, with products most closely related to petrochemicals accounting for around half of the overall growth in demand,” BP’s chief economist, Spencer Dale, said while presenting the review. The US became the world?s top exporter of ethane in 2015, surpassing Norway, the only other country to ship ethane internationally, according to the US’s Energy Information Administration. Since then, a raft of petrochemical steam crackers, fed by ethane, have been commissioned, mostly on the Texas Gulf Coast and focused on export markets. US ethane production alone, which is separated from raw natural gas at processing plants, surged 20% last year to 1.71 million b/d, EIA data showed. Growing oil demand from the US petrochemicals sector meant the country has become an ‘outlier’ within the developed, high-income OECD economies, Dale said, noting that OECD oil demand resumed a decline trend in 2018 as oil prices firmed. US production of tight oil and natural gas liquids from shale plays jumped 2.2 million b/d last year, BP said, while shale gas acreage saw US gas production surge 86 Bcm, or 12%. In both oil and gas, US hydrocarbon growth marked the biggest ever annual output increase by any country, Dale said. “What you saw last year was really quiet amazing, a unique double first for the US,” Dale told reporters ahead of the presentation. “In case there was any doubt, the US shale revolution is alive and kicking.”Overall, global oil demand grew by an above-average 1.4 million b/d, or 1.5%, to 99.84 million b/d last year, BP said, a slowdown from 1.7 million b/d growth seen in 2017.
China saw the biggest oil demand growth at 700,000 b/d, while India rose by 300,000 b/d, with the developing economies together making up two thirds of of the global increase.
BP’s oil demand figures, which include biofuels and GTL consumption, are higher than the International Energy Agency.
Remain vigilant. That’s the apparent message the Cboe Volatility Index is flashing, even as cash equities race toward records.
The VIX Index – often referred to as the market’s “fear gauge” – is up over the past three sessions, as of 1:40 pm. in New York. At north of 16, it’s implying that US stocks will tend to move more than 1 per cent per day over the next month. In recent years, it hasn’t lingered above this level unless equities were weakening.The higher reading belied the brisk advance of more than 2 per cent for the S&P 500 Index over the same three-day stretch. It’s the first time implied volatility has failed to decline amid stock gains of this magnitude since 2009, when the bull market was in its infancy. The two variables tend to move in opposite directions. During Friday’s 1.1 per cent advance in the S&P 500, the VIX – which measures the 30-day implied volatility of the S&P 500 based on out-of-the-money options prices – also moved higher. That’s despite the weekend effect that typically sees the gauge move lower on Fridays, and the passage of a market-moving event – the May non-farm payrolls report. This marked just the 11th time since 2004 that the VIX advanced while the stock benchmark rose at least 1 per cent, according to Macro Risk Advisors derivatives strategist Vinay Viswanathan.”The options market is unwilling to lower its pricing of risk further despite impressive market strength,” he wrote. “The stocks up/vol up move could be a sign from the option market that while equities were performing well, there is still plenty of risk worth protecting against (especially with China trade talks/G-20 lingering on the horizon).” The event premium built into options that encompass the month-end G-20 summit – at which US President Donald Trump and his Chinese counterpart Xi Jinping are slated to talk trade – is off its recent highs, Viswanathan notes. He recommends July put options on the S&P 500 as an opportunity for investors nervous about the outcome to purchase relatively cheap protection. Pravit Chintawongvanich, Wells Fargo’s equity derivatives strategist, said in a note that the fierceness of market rallies is contributing to firmness in the volatility index. For the most part, US stocks have taken the staircase down from a record close on April 30, and rebounded via the elevator. “Up moves count as vol too, and have been pushing realised vol higher,” he wrote. “VIX actually looks low relative to realised vol.” On Monday, the signal sent by a relatively muted retreat in the VIX appears to be a mirage linked to the demand for upside. The most heavily traded options are S&P 500 calls that expire on June 21 with strike prices of 2,900, 3,000 and 3,100. It’s an indication that fund managers who missed most of the 2019 might be looking for a way to get exposure to further gains without worrying about losses should equities reverse lower.
VIENNA (Reuters) – Iran has followed through on its threat too accelerate its production of enriched uranium, the U.N. nuclear watchdog’s chief Yukiya Amano said on Monday. Iran’s nuclear deal with major powers caps the amount of low-enriched uranium Iran can produce. Given fluctuations in production, it was not clear when Iran might reach that limit, Amano told a news conference, declining to elaborate further on the production rate.
Russia has conducted a ‘successful’ military test of its state-of-the-art new interceptor missile intended to neutralise incoming Western attacks. The Kremlin declined to name the rocket system shown on video blasting off from Sary-Shagan, an anti-ballistic training range in Kazakhstan. But it is believed to be the deadly PRS-1M hypersonic interceptor missile, crucial to protecting Moscow and other strategic sites in the region from potential incoming NATO or other enemy missiles.
Footage shows the huge missile launching from six different angles, including behind a Russian flag
Hypersonic missiles are so named because they fly faster than the speed of sound. They can be launched from land, air or sea Footage tweeted by the Russian defence ministry shows the unfolding and preparation of the weapon’s vehicle and the moment of launch from six different angles. The missile is shown shooting upwards from the ground leaving a trail of smoke and dust behind it. ‘Another test-launch of a new Russian interceptor missile was successfully conducted,’ said the ministry. The Kremlin declined to name the rocket system shown on video but it is believed to be the PRS-1M interceptor missile The missile will be key to protecting Moscow and other strategic sites from ‘incoming aerospace weaponry’ Footage posted on Twitter by the Russian defence ministry shows the unfolding and preparation of the weapon’s vehicle ‘After a series of trials, the new interceptor missile confirmed its characteristics and successfully completed the task by striking an assigned target with precision.’ Russian state news agency TASS indicated that the tests were linked to earlier trials at Sary Shagan last year. These involved the upgraded PRS-1M interceptor missile which is described as ‘much faster and deadlier than its predecessor’. The Russian defense ministry intend to use the missile to neutralise incoming Western or NATO attacks Russian state news agency TASS indicated that the most recent tests were linked to earlier trials at Sary Shagan involving the upgraded PRS-1M interceptor missile If the successfully tested missile is indeed the PRS-1M, it carries a nuclear warhead of several kilotons This new missile is a development of the older 53T6 which ‘previously flew several times faster than a bullet and accelerated within seconds to 3 km per second, making it the world’s fastest missile’, said gazeta.ru ‘The modernised version’s speed has already approached 4km per second.’ This is 1.86 miles per second and 2.48 miles per second respectively. State-owned news channel Russia-24 said in a report that the missile launch was successful because it struck ‘an assigned target with precisio. Russia’s President Vladimir Putin described his hypersonic arsenal last year as ‘invincible’ during a state-of-the-nation address ‘The new product’s kill zone is practically one and a half times greater in terms of altitude and range,’ reported gazeta.ru in analysing the PRS-1M. ‘Interception of enemy ICBM warheads is now assured at an altitude substantially higher than 50 km (31 miles). ‘The missile carries a nuclear warhead of several kilotons.’
CALGARY, Alberta/NEW YORK (Reuters) – Upheavals in the Canadian crude market are providing unique opportunities for firms with sizeable long-term leases on Alberta storage tanks, a cluster that sources say includes Mercuria Energy Group and oil major BP Plc’s trading arm. Canada holds the world’s third-largest crude reserves, but years of delay in building new pipelines has led to oil production outpacing takeaway capacity. A glut of crude has thus been created, increasing demand for storage tanks in the oil sands province of Alberta, which this year introduced production cuts to deal with the oversupply. The opportunity for traders comes from monthly pipeline “apportionment”, when demand to ship crude on certain pipelines exceeds capacity, forcing pipeline operators to ration the number of barrels each shipper can move. The practice is a long standing source of frustration for Canadian producers but offers a lucrative, though risky, play for traders able to swoop in and capitalize on post-apportionment price volatility. Bulging storage tanks are contributing to high apportionment on Canada’s main conduit to the United States, the 2.85 million barrel-per-day (bpd) Enbridge Mainline network.
Even with the Alberta cuts, oil inventories in western Canada hit a record 37.1 million barrels in April and are close to 34 million barrels in May, according to energy information provider Genscape.
One Calgary-based trader said that 37 million barrels is as full as storage can get and that anybody with tankage has been making money. Genscape monitors roughly 62 million barrels of storage in western Canada but at most only 67% is utilized because of pipeline operations and the need to separate grades. Some traders and storage companies are benefiting. BP does not disclose its storage lease position in Canada but the company owns large refineries in the U.S. Midwest which run Canadian heavy crude. BP also declined to comment. Storage rates are not publicly disclosed and vary widely, with long-term tankage cheaper than short-term. One trading source said three-month deals were being offered at around $2 per barrel per month. A four-year deal in Canada costs about $1.50 a barrel a month compared to 30-40 cents per barrel in the U.S. Gulf Coast, other sources said. Monthly storage rates at the U.S. futures hub of Cushing, Oklahoma, are about 30 cents a barrel. Gibson is the dominant storage owner in Hardisty, with 10 million barrels built and this year sanctioned another 2.5 million barrels. Its storage contracts are all long-term leases, averaging 10 years, and its main customers are large oil sands producers. “We get requests all the time for short-term storage but we do not have tanks to do that,” Gibson Chief Executive Officer Steve Spaulding said. Nick Bit: Despite the bullshit the most expensive oil in the world is from the US and Canada is locked up because of lack of pipelines and oil terminals… Here is a news flash the few new pipelines planned are years away….
TEL AVIV – Iran could have a nuclear bomb in six to eight months, the former deputy head of the UN’s nuclear watchdog has warned.
Olli Heinonen, who was the deputy director-general of the International Atomic Energy Agency until 2010, said that Israel and the Gulf states “have a reason to worry.” “Israelis need to be worried, and the Gulf states also have reason for concern,” he told Israel’s Army Radio. “How will you be able to ensure your security if Iran achieves nuclear abilities?” He also said that Tehran has not been sticking to its side of the nuclear deal. “Iran is actually weaponizing uranium enrichment without making a weapon,” he claimed. “If they put in their maximum effort,” he said, Iran could produce nuclear weapons in as little as half a year. Heinonen also said that President Donald Trump’s decision to withdraw from the nuclear deal may not have been the best move and could play into Iran’s hands. “I think they felt comfortable [with the Trump decision]. They have the enrichment technology and they can create more centrifuges. Probably they [will be] able to withstand a lot of sanctions,” he stated.“The Ayatollahs can handle the new sanctions, and in the meantime they’re making new centrifuges,” he said. The head of IDF military intelligence on Wednesday claimed that the economic sanctions on Iran were having adverse effects, including Tehran’s decision to increase uranium enrichment as well as attacks — attributed by Israel and the U.S. to Iran — on UAE oil tankers in the Gulf of Oman.“Iran is under growing pressure that is forcing it to take actions connected to oil and to its nuclear project — though for now there are no changes to its policies,” Maj Gen. Tamir Heyman said.
Wells Fargo agreed to pay at least $385 million to settle a class-action lawsuit that it allegedly scammed millions of auto-loan customers into buying insurance they didn’t need. The settlement covers customers who were bilked out of tens of millions of dollars for about 11 years through September 2016, according to court papers filed in Central California federal court. National General Insurance, which was allegedly in cahoots with the bank to place the unnecessary insurance with the customers, will also pay $7.5 million to the class. The US’ third-biggest bank and the insurer “engaged in a more than decade-long scheme that forced millions of Wells Fargo customers to pay for [insurance] they did not need or want, bilking tens of millions of dollars from them in the process,” according to the court filing. The agreement, which is about six times higher than the $64 million Wells initially proposed, will also compensate customers whose credit scores were harmed because of the scam, and pay back customers who lost their vehicles because they couldn’t afford the unnecessary insurance, according to the filing. The total settlement, which still has to get approved by a judge, is likely to be much higher than the total $393.5 million, since lawyers’ fees are not included in the settlement. The alleged scam is one of many that have come to light in the wake of revelations that Wells had opened millions of fake accounts and credit cards in order to meet arbitrary quotas — and inadvertently harmed customers with bruised credit scores and erroneous fees. “Reaching this agreement, which leverages remedies available in our existing remediation plan, is an important step in making things right for customers impacted by this issue,” Nicole Brown, a spokeswoman for Wells Fargo, said in a statement. “We will continue sending individualized letters to customers that clearly set out the remediation amount due to them, as well as a check for that amount. This process will continue until the remediation is complete.”
The companies behind the U.S. fracking boom are turning to asset sales, drilling partnerships and other alternative – and costly – financing to supplement their cash flow as they face dwindling access to traditional sources of capital after routinely failing to turn a profit for years, according to a WSJ analysis. Producers mostly have avoided borrowing in 2019: There has not been an issuance of public equity by a fracking company since late last year, the longest gap since 2014, and bond issuances by shale companies are on pace to reach their lowest levels in more than a decade. Permian producer Pioneer Natural Resources (NYSE:PXD) is looking to pay for drilling some of its less promising acreage through joint ventures; CEO Scott Sheffield tells WSJ the company is seeking financing for wells it otherwise would not drill for 10-15 years.
Over 170 shale companies have declared bankruptcy since 2015, affecting $100 billion in debt, including 8 bankruptcies already this year.
Describing the current climate for shale companies, Sheffield says, “It’s been a 10-year run and the equity markets are closed, and the investors want return to themselves.” A new report from the Institute for Energy Economics and Financial Analysis and Sightline Institute studied 29 North American shale companies and found a combined $2.5B in negative free cash flow in Q1, even worse than the $2.1B in negative cash flow from Q4 2018 and despite a 16% Q/Q decline in capital spending. “Until fracking companies can demonstrate that they can produce cash as well as hydrocarbons, cautious investors would be wise to view the fracking sector as a speculative enterprise with a weak outlook and an unproven business model,” the report says. Nick Bit frackers cannot make any money at the present price of oil. At best US oil production will increase by 200,000 Barrels a day this year. Venezuela alone has taken 1.5 million BPD out of the market. Now add Iran, Libya and massive production cuts just confirmed by Russia and the Saudis and you can see why 200,000 barrels are not squat compared to the 10 million BPD that will be taken out of the market. And while you are at do not buy into the bulshit of a global trade induced slow down. Presidentie bullshitter has one of 2 choice… get reelected or go to jail. And even that old fool knows that he better have a booming economy to get reelected.
Giant technology companies might cause significant disruption to the world’s financial system, the head of the International Monetary Fund has warned. Christine Lagarde said just a few firms with big data access and artificial intelligence could run the global payment and settlement arrangements. Her warning came as the G20 finance ministers met in Japan. The summit is also discussing the need to close tax loopholes for internet giants like Facebook and Google. One of the options being considered is to tax such companies where they make their profits – rather than where they base their headquarters. “A significant disruption to the financial landscape is likely to come from the big tech firms,” Ms Lagarde said in Japan’s south-western city of Fukuoka. She said such firms “will use their enormous customer bases and deep pockets to offer financial products based on big data and artificial intelligence”. “This presents a unique systemic challenge to financial stability and efficiency,” she added. She cited China as a most recent example. “Over the last five years, technology growth in China has been extremely successful and allowed millions of new entrants to benefit from access to financial products and the creation of high-quality jobs,” Ms Lagarde said. “But it has also led to two firms controlling more than 90% of the mobile payments market.”
Turkey has been given a deadline of the end of July to choose between buying US fighter jets and Russian anti-aircraft missile systems. Acting US Defence Secretary Patrick Shanahan set out the ultimatum in a letter to his Turkish counterpart, Hulusi Akar. Turkey, he said, could not have both America’s F-35 advanced fighter jets and Russia’s S-400 systems. The two Nato allies have been locked in a row over the S-400 for months. America argues that the Russian systems are both incompatible with Nato defence systems and pose a security threat, and wants Turkey to buy its Patriot anti-aircraft systems instead. Turkey, which has been pursuing an increasingly independent defence policy, has signed up to buying 100 F-35s, and has invested heavily in the F-35 programme, with Turkish companies producing 937 of the plane’s parts. Mr Shanahan says in his letter that the US is “disappointed” to hear that Turkish personnel have been sent to Russia to train on the S-400. “Turkey will not receive the F-35 if Turkey takes delivery of the S-400,” he writes. “You still have the option to change course on the S-400.” The first four F-35s due to be delivered to Turkey have still not left the US, officially to allow Turkish pilots to train in them in America. Turkish President Recep Tayyip Erdogan said on Tuesday his country was “determined” to proceed with the S-400 deal. “Unfortunately we haven’t received a positive proposal from the American side on the subject of Patriots like the S-400s from Russia,” he said. Turkey has the second-largest army in Nato, a 29-member military alliance set up to defend against what was at the time the Soviet Union. The head of Russia’s state defence conglomerate Rostec, Sergei Chemezov, was quoted as saying on Friday that Russia would start delivering the S-400 to Turkey in “about two months”.
LONDON and MOSCOW (Bloomberg) –Saudi Arabia’s top oil official said he was sure that OPEC+ will extend production cuts into the second half of the year after holding talks with Russia. Ministers from the countries voiced similar concerns about the impact of a slowing global economy on oil prices and talked up the benefits of cooperation. The unified front presented on Friday appeared to resolve signs of division visible in the previous days. Still, the two leaders of the coalition between OPEC and several non-members stopped short of any specific commitments on production volumes after the current output deal expires at the end of this month. They were also unable to fix a date for a meeting to discuss the matter with fellow ministers.“I don’t think the question is at all whether we will extend or not,” Saudi Energy Minister Khalid Al-Falih said after a panel at the St. Petersburg International Economic Forum chaired by Bloomberg TV. “A rollover is almost in the bag for OPEC. The question is to calibrate with non-OPEC if there needs to be an adjustment from the first half.” Diverging interests and surging market volatility are making the ministers’ decisions more difficult. Oil is torn between the bearish influence of U.S.-instigated trade wars and the bullish threat of supply disruptions from Iran to Venezuela. “I don’t think there will be a need to deepen the cut, but whether we need to scale it back a little bit will depend on what happens in Iran, Venezuela, other countries,” Al-Falih said. Russian Energy Minister Alexander Novak said. “The situation in the market is far from being a positive one” and demand growth may slow to below 1 MMbpd, so the OPEC+ deal “is a very great instrument for dealing with this uncertainty.” While the Saudis have clearly wanted for some time to extend the group’s production curbs beyond their expiry at the end of this month, Russia had been at best non-committal. President Vladimir Putin showed little concern this week about the latest market moves and said his country was better placed to withstand lower prices than its Gulf ally. Saudi Arabia is able to tolerate lower crude prices than almost anyone else, Al-Falih said. However, letting the market slump again like it did in 2015 — when Brent traded in the $30s―would be “unacceptable,” he said. The kingdom pumped about 9.65 MMbpd in May, which is 700,000 bpd below its target in the OPEC+ deal, Al-Falih said. The kingdom will keep output below its 10.3 MMbpd limit through July, but there’s no need to deepen the cuts, he said. OPEC and its allies haven’t yet confirmed a date for its next ministerial meeting in Vienna. Originally set for late June — just days before the group’s cuts expire — scheduling conflicts mean it has been postponed. Most members have confirmed they can gather in the Austrian capital from July 2 to 4, Novak said. “I’m very confident that when we do meet in a few weeks, we will come to the right decision,” Al-Falih said. If it does extend the cuts, the group can still be responsive to changes in the market. “We can adjust up and down as the need may be.”
London — Russia and OPEC have divergent views on a “fair price” for oil, but the two sides will continue to cooperate on managing the market, Russian President Vladimir Putin said Thursday. Receive daily email alerts, subscriber notes & personalize your experience. Russia is comfortable with an oil price in the range of $60-$65/b, given that the Russian budget is built on a $40/b price assumption, Putin said, according to a report by Russia’s Prime news agency. At the same time, OPEC’s largest producer and de facto leader, Saudi Arabia, which has a less diversified economy, is seeking higher oil prices as its budget is based on higher oil price levels, Putin said. That makes Saudi Arabia more eager to extend the OPEC/non-OPEC coalition’s production cuts beyond their expiry at the end of the month, but Putin declined to say whether Russia would agree. “We have certain disagreements, linked to a different understanding of the fair price,” he said in St Petersburg. “We have to take into account all the factors: output drop in Iran [and] Venezuela, problems in Libya, Nigeria,…and an increase in consumption in the summer season. I won’t tell you now what considerations we have over what we need to do in the second half of the year, but we will be taking a consolidated decision together with our colleagues in OPEC.” OPEC and 10 non-OPEC allies led by Russia agreed in December to cut a combined 1.2 million b/d in supplies through June. Saudi energy minister Khalid al-Falih is due to meet with Russian counterpart Alexander Novak at the St. Petersburg International Economic Forum this week, as well as in Moscow next week. Venezuelan oil minister Manuel Quevedo, OPEC’s president for this year, is also at the forum. Among his tasks are brokering an agreement for the date of the next OPEC/non-OPEC meeting in Vienna.
Originally scheduled for June 25-26, Russia has requested a date change to July 3-4, but several members, notably Iran, Algeria and Kazakhstan, have said they are opposed to moving the meeting. Putin said Russia has no plans for OPEC membership, “but we have a certain mechanism of cooperation and the decisions will be consolidated”
BAGHDAD — The top commander of U.S. forces in the Middle East says he believes the Iranians or their proxies may orchestrate an attack at any moment. “I think the threat is imminent,” Marine Gen. Frank McKenzie said in an exclusive broadcast interview with NBC News in the Iraqi capital. “We continually evaluate our force posture in the region.” The U.S. has beefed up its military presence in the region in an effort to deter Iran and protect American forces and allies. Over the last month, the Trump administration announced that it was sending an aircraft carrier strike group and Air Force bombers to the Middle East, as well as Patriot missiles and additional troops, amid heightened concerns of an Iranian attack.
McKenzie said he was “heartened” by the efforts of the Iraqi government to protect American forces and its allies in the region. Roadside bombs have posed the major danger to American forces in Iraq, McKenzie added, but he said the threat from the Iranians is evolving. “They probe for weakness all the times,” McKenzie said. “I would say the threat has probably evolved in certain ways even as our defensive posture has changed and become more aggressive, and we certainly thank our Iraqi partners for many of the things they’ve done.” “I think we’re still in the period of what I would call tactical warning,” he said. “The threat is very real. ” McKenzie declined to go into specifics on the nature of the threats. A day after the U.S. announced it was sending additional military assets to the region to “send a clear and unmistakable message” to Iran, four oil attackers were attacked in the Persian Gulf. The U.S. suspects Iran was responsible for the attacks; the Iranian government has denied having any role in the incident.
LONDON — In a wide-ranging interview on President Trump said there was “a chance” of military action against Iran, cast his ban on transgender people serving in the military as an economic decision and admitted using the word “nasty” in connection with Meghan, Duchess of Sussex. He made the remarks on ITV’s “Good Morning Britain” to Piers Morgan, the show’s co-host who was the winner of “The Celebrity Apprentice” in the United States in 2007-8 and someone Mr. Trump considers a friend. Mr. Trump’s state visit has been a whirlwind of ceremonial events with the royal family, including a state banquet on Monday; tea with Prince Charles and his wife, Camilla, Duchess of Cornwall; and political and business meetings on Tuesday with Mrs. May and other top officials in which he urged Britain to forge ahead with plans to quit the European Union, dangling the prospect of a “phenomenal” trade deal with the United States. But his trip has been marked by a continuing feud with the mayor of London, Sadiq Khan, and protests that brought thousands of people to the streets of London with new and old props, including the Trump baby balloon and one called Dump Trump, which shows the president sitting on a golden commode. Mr. Trump, who is often unsettled by reports of protests, sought to play down the demonstrations, calling them “fake news” in a news conference with Mrs. May on Tuesday and tweeting on Wednesday morning that there were actually “big crowds” supporting him. Mr. Trump had set the stage for his second trip to Britain as president with interviews in The Sun and The Sunday Times, both Rupert Murdoch-owned newspapers. Asked by The Sun’s reporter about criticisms that the former Meghan Markle, Prince Harry’s wife, made about him in 2016, Mr. Trump replied, “I didn’t know she was nasty.” He later denied saying the word nasty, even though the exchange had been recorded. Mr. Trump acknowledged to Mr. Morgan: “They said some of the things that she said and, it’s actually on tape. And I said, ‘Well, I didn’t know she was nasty.’ I wasn’t referring to she’s nasty. I said she was nasty about me. And, essentially, I didn’t know she was nasty about me.” When Mr. Morgan told him that his “nasty” comment could be read different ways, he insisted: “She was nasty to me. And that’s O.K. for her to be nasty. It’s not good for me to be nasty to her, and I wasn’t.” The president said he had had a warm exchange with the duchess’s husband, Prince Harry. “In fact, he spent a lot of time talking to Ivanka and talking to my family. I went up — he couldn’t have been nicer,” Mr. Trump said.
New York — US crude inventories likely fell 1.7 million barrels the week ending May 31, as refiners increased runs while production remained stable, a survey of analysts by S&P Global Platts showed Monday. Crude inventories typically decline heading into the summer as refiners increase runs. Analysts were looking for refiners to increase operations by 0.5 percentage points to 91.7% of capacity, based on last week’s US Energy Information Administration data. However, crude runs likely would have been higher were it not for flooding in the Midwest, which caused operational problems at some refineries, notably HollyFrontier’s 125,000 b/d Tulsa, Oklahoma, plant. Looking forward, US refinery runs are expected to climb to 17.45 million b/d in June, according to S&P Global Platts Analytics. A crude stock draw could also be tempered by healthy supplies. Crude production is expected to remain at roughly 12.3 million b/d, based on last week’s EIA data. US production was up 100,000 b/d the week ending May 24, and up 1.5 million b/d from the same week in 2018. While US rig counts have fallen, output continues to rise, driven by unconventional plays. The Permian Basin has seen a drop of 30 rigs since the beginning of the year, but producers have been tapping into an abundance of drilled but uncompleted wells (DUCs). Permian crude output averaged 4.387 million b/d in May, and is projected to average 4.52 million b/d in July, according to Platts Analytics. Crude prices have fallen in recent weeks, with front-month Cushing WTI down roughly $10/b since May 20. The Midwest flooding also caused Tallgrass the shut the southern leg of its 400,000 b/d Pony Express crude line, which runs from Guernsey, Wyoming, to Cushing, Oklahoma, the WTI delivery and pricing point. The flooding also caused a temporary closure of the 360,000 b/d Ozark Pipeline, which runs from Cushing to Midwest refiners. Considering Midwest refinery demand for crude was lower, Cushing crude inventories likely increased last week. This was reflected in the Cushing WTI discount to Brent, which widened to $11.13/b May 31 from $9.28/b May 24, S&P Global Platts data showed. Crude imports are expected to have risen last week, with US Census data showing increases from Colombia, Brazil and Nigeria. Refining margins are strong throughout the US, and should encourage higher refinery runs and imports. Census data shows more crude from West Africa and Canada entering the US Atlantic Coast last week. While cracking margins show for Bakken railed from North Dakota as more competitive than waterborne grades, rail capacity is limited. Crude exports likely remained high last week. Platts cFlow trade-flow software shows lower crude exports to the Caribbean and Latin America offset by steady exports to Europe, and a jump in exports to Asia, primarily driven by China. However, refining margins in Asia have weakened, and are in some cases negative, which could cause a decline in demand for imported crude down the road if the regional refined products surplus is not cleared. Analysts expect US gasoline inventories to have increased by 208,000 barrels last week, and distillate inventories to have fallen 1.08 million barrels. EIA data for the week ending May 24 showed an unexpected rise in gasoline inventories, and decline in implied demand, which helped push the futures complex lower towards the end of last week. The bulls were looking for signs of a demand increase, considering recent global demand worries stemming from the ongoing US-China trade war. However, the US economy remains strong, and a recovery in implied demand will likely emerge in the EIA data for the week ending May 31, according to Platts Analytics. Economic strength is also bullish for diesel demand. Flooding has likely decreased implied demand for gasoline in the Midwest, but marginally so. Also, while refiners are expected to have increased runs, they have been maximizing diesel production over gasoline. The flooding has delayed plantings, and thus the seasonal increase in Midwest diesel demand. Farmers are expected to increase diesel buying in the coming weeks as they boost activity, although diesel use for farming will likely be below average this year.
New York — Despite negative margins, China is expected to increase volumes of Forties crude in June as North Sea production comes back online after maintenance and repairs, an analysis by S&P Global Platts showed Monday. However, the widening of the Brent-WTI spread last week could send Chinese buyers after more economic US barrels. Last week, Asian cracking margins for Forties fell deeper into negative territory, averaging minus $3.02/b for the week ended May 31, down from the minus $2.80/b the week earlier, Platts Analytics refining margin data showed. Softer demand in China is likely driving margin weakness, with overall Chinese oil demand down 0.3% or about 40,000 b/d, year to date, according to a Monday Tudor Pickering Holt research note, noting this includes “an especially bearish” 2.4% drop in April. TPH notes that China distillate consumption is down 5.9% year to date while gasoline demand is up 3.6% year over year. However, Chinese refinery runs are expected to increase, according to Platts Analytics forecasts, which forecasts June runs at 12.9 million b/d up from the 12.7 million b/d in May as planned refinery work ebbs, increasing the need for more crude. In May, China was the leading importer of Forties, taking in 4.1 million barrels or about 43% of all the crude exports out of the loading point of Hound Point, UK, according to Platts cFlow. Shipping and trade sources report that up to four VLCCs are fixed for June, compared with the two in May as North Sea production returns to more normal levels after planned and unplanned work on fields and facilities. As Ekofisk maintenance begins to wind down, North Sea loadings of BFOE are set to return to more normal levels in July increasing supply. In total, 50 cargoes of Brent, Forties, Oseberg, Ekofisk and Troll are scheduled to load in July for a total of 30 million barrels, up from the 8.4 million barrels in June. But a proposed strike for midnight Monday by Norwegian oil and gas union members over pay and conditions could cut 440,000 b/d of oil equivalent, including from fields such as Oseberg Ost and possibly Ekofisk. Union members are engaged in mandatory talks with Norwegian Oil & Gas mandated after talks held early in May failed to reach a resolution. And although China is seen eyeing North Sea crude, the widening of the Brent-WTI spread last week is making US crude more attractive to Asian refiners, which could have them eschewing North Sea crude for Permian barrels. The WTI-MEH cracking margin in Singapore rose last week to $2.44/b from $1.08/b the week earlier, as the Brent-WTI spread for the week moved out to averaged $11.20/b, creating better economics for US crudes. Platts Analytics expects US crude exports to be 3.35 million b/d, compared with the 3.3 million b/d the week earlier.
|US Atlantic Coast Refining Margin Averages ($/b)|
|Bakken cracking||Bonny Light cracking||Arab Light cracking||Hibernia cracking|
|Week ending May 31||6.79||9.97||15.12||5.43|
|Week ending May 24||7.44||10.31||15.04||6.44|
|Q2 to date||8.68||9.29||14.93||8.11|
|US Gulf Coast Refining Margin Averages ($/b)|
|LLS cracking||Mars coking||Maya coking||WCS coking|
|Week ending May 31||9.8||6.27||9.49||7.95|
|Week ending May 24||9.26||5.96||8.97||7.52|
|Q2 to date||9.62||7.67||8.48||7.73|
|US Midwest Refining Margin Averages ($/b)|
|Bakken cracking||WTI cracking||WTS coking||WCS coking|
|Week ending May 31||22.62||20.62||19.61||20.95|
|Week ending May 24||23.05||21.71||20.21||21.28|
|Q2 to date||20.33||18.71||17.9||17.48|
|US West Coast Refining Margin Averages ($/b)|
|ANS cracking||Mixed Light Swt cracking||Escalante coking||Oriente coking|
|Week ending May 31||16.51||19.08||16.21||20.04|
|Week ending May 24||16.76||20.09||16.81||20.87|
|Q2 to date||22.88||25.85||21.73||28.22|
|Singapore Refining Margin Averages ($/b)|
|Arab Heavy cracking||Arab Medium cracking||Dubai cracking||Qatar Land cracking|
|Week ending May 31||0.41||-2.8||-0.57||1.08|
|Week ending May 24||0.77||-0.62||0.31||2.1|
|Q2 to date||3.05||1.37||2.38||4.11|
|ARA Refining Margin Averages ($/b)|
|Arab Light cracking||Brent cracking||Houston light sweet crack||Urals cracking|
|Week ending May 31||3.83||5.88||4.01||5.64|
|Week ending May 24||5.32||7.09||5.03||6.75|
|Q2 to date||5.58||6.64||4.74||5.51|
|Italy Refining Margin Averages ($/b)|
|Urals cracking||Azeri Light cracking||CPC Blend cracking||Houston light sweet cracking|
|Week ending May 31||2.91||6.11||3.1||6.46|
|Week ending May 24||2.98||6.18||3.14||5.46|
|Q2 to date||3.19||6.1||3.64||4.98|
|Source: S&P Global Platts; Turner, Mason & Co.|
Oil prices resumed their slide on Wednesday, dragged down by a surprise gain in U.S. inventories and comments from the head of Russian state oil producer Rosneft questioning the point of a deal with OPEC to withhold supplies. Oil prices have fallen sharply on fears about slowing global demand, but won a respite on Tuesday after a global stock market rally on hopes of a cut in U.S. interest rates. U.S. crude stocks rose unexpectedly last week, while gasoline and distillate inventories built more than expected, industry group the American Petroleum Institute said on Tuesday. Crude inventories rose by 3.5 million barrels in the week to May 31 to 478 million, compared with analysts’ expectations for a decrease of 849,000 barrels. Official numbers from the U.S. Energy Information Administration (EIA) are due out later on Wednesday. “It was a very bearish number and if confirmed by the EIA it will hammer prices,” said Stephen Innes, managing partner at SPI Asset Management in Bangkok. The oil market has been weighed down by concerns about slowing global growth from the U.S.-Sino trade war and President Donald Trump’s threats last week to place tariffs on Mexican imports. To prevent oversupply and prop up the market, the Organization of the Petroleum Exporting Countries (OPEC), together with allies including Russia, has been withholding production since the start of the year. The group plans to decide later this month or in early July whether to continue the supply curbs. But on Tuesday, the head of oil giant Rosneft, Igor Sechin, said Russia should pump at will and he would seek compensation from the government if cuts were extended. Russia’s average daily oil output has nonetheless dropped to a three year-low after contaminated crude clogged its main export route. Further pressuring oil prices and undermining OPEC’s efforts to tighten the market has been surging U.S. output to record highs, leading to more of its crude being exported. “Does it make sense (for Russia) to reduce (oil output) if the U.S immediately takes (our) market share?” Sechin was quoted as saying by Interfax news agency. “We have to defend our market share,” he said.
LONDON (Reuters) – Glencore’s head of oil, Alex Beard, who helped make the firm one of the world’s top three oil trading houses, will retire this month, the company said on Monday in yet another management shake-up amid U.S. probes into its activities. Glencore, founded by trader Marc Rich, has come under U.S. scrutiny in the past year over its business in the Democratic Republic of Congo, where it produces cobalt and copper, and in Venezuela and Nigeria, where it trades oil and refined products. Beard, 52, will be replaced by the head of oil marketing, Alex Sanna, who was key in expanding Glencore’s refined products trading in recent years. Beard’s move follows the retirement of other top allies of Glasenberg – Chris Mahoney, the long-serving head of Glencore’s agricultural business, and Aristotelis Mistakidis, the head of copper. Glencore is worth $44 billion and Mistakidis held a 3.2% stake in the company, worth $1.4 billion at current prices, while Beard held a 2.5% stake worth $1.1 billion. Glasenberg is the largest shareholder of Glencore, with 8.8%, and built the firm from predominantly a trading house into a mining giant via its merger with Xstrata in 2012. He has said he may retire within the next three to five years. Glasenberg, 62, revealed his retirement plans a few months after news broke about U.S. investigations into Glencore. Last July, Glencore said it had received a subpoena from the Department of Justice (DOJ) requesting documents and records on compliance with the U.S. Foreign Corrupt Practices Act and money-laundering statutes. A previous U.S. probe nearly destroyed Marc Rich in the 1980s when the United States accused the company of “trading with the enemy”, Iran. It indicted Rich, who was pardoned years later by President Bill Clinton in 2001 during Clinton’s last days in office. Rich died in 2013. Sources told Reuters the current DOJ investigation was focusing on the role of intermediaries and how they helped Glencore obtain contracts, including in oil trading. In April, Glencore said the U.S. Commodity Futures Trading Commission was also investigating whether the company and its units may have violated certain regulations through “corrupt practices”.The company said that probe was at an early stage and had a scope similar to that of the DOJ investigation. Oxford-educated Beard joined Glencore in 1995 from BP, the biggest trading desk at that time, and became head of oil in 2007. He embarked on expanding the firm into upstream, something trading houses had rarely done before, but the venture into Chad and Equatorial Guinea led to writedowns of over $700 million.
Glencore’s traded oil volumes fluctuated between 4.5 and 6.0 million barrels per day in recent years – on par with rival Trafigura but behind the world’s top trading house, Vitol.
Last year, Glencore’s volumes shrank 17% because of unfavorable market conditions. Sanna’s trading division will continue to report to chief executive Ivan Glasenberg, but oil assets, previously under Beard, will be transitioned to Peter Freyberg, the head of industrial assets, Glencore said on Monday. Sanna, who studied economics in France, holds a master’s degree in international trade from Panthéon-Sorbonne University in Paris.
NEW YORK (Reuters) – Oil prices steadied on Monday, supported by Saudi Arabia’s comments indicating OPEC and its allies would continue to tighten the crude market following deep losses last week. Saudi Arabia signaled that the Organization of the Petroleum Exporting Countries, together with Russia, would continue managing global crude supplies to avoid a surplus. “We will do what is needed to sustain market stability beyond June. To me, that means drawing down inventories from their currently elevated levels,” Energy Minister Khalid al-Falih was quoted as saying by the Saudi-owned Arab News newspaper. “There’s no doubt that Saudi Arabia has shown a lot of frustration with the price of oil,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “They’re scratching their heads, saying, ‘Hey, we think the market has it wrong and to prove that’s the case, we’re going to keep cutting production until the market gets it right.’” Brent crude prices have dropped almost 20% from their 2018 peak as global supplies tighten following output curbs by OPEC and Russia, as well as a reduction in Iranian and Venezuelan exports due to U.S. sanctions.
Saudi Arabia pumped 9.65 million barrels of oil per day (bpd) in May, a deeper cut than its production target under the global pact to reduce oil supply, a Saudi oil industry source said on Monday. The nation’s output target under the OPEC-led pact is 10.3 million bpd.
A planned June 4 strike by Norwegian workers could also lead to tighter global supply and buttress prices, potentially cutting Norway’s oil and gas output by about 440,000 barrels of oil equivalents per day if mediation efforts fail. Concerns that a U.S.-China trade war, and threats of tariffs on Mexico from the United States, would diminish global crude demand, however, weighed on oil prices. “Focus has shifted from the supply to the demand side as a U.S.-China trade agreement has proven elusive and as worries over the debilitating effects of tariffs on global economic growth have now shifted to Mexico,” Jim Ritterbusch of Ritterbusch and Associates said in a note. High-level talks were set to begin on Monday between Mexican and U.S. officials.
July Asia-bound Light OSP differential raised by 60 cents. July Asia-bound Arab Medium and Heavy OSP differential at 7-year highs
Singapore — Saudi Aramco has raised the price differentials for all of its five crude oil grades loading in July and bound for Asia, the company said in a notice Sunday. Aramco hiked the July price differential for its flagship Arab Light grade by 60 cents/b to a premium of $2.70/b to the average of Oman/Dubai, the highest since January 2014, when it was a premium of $3.75/b to Oman/Dubai. The Arab Medium and Heavy grade July price differentials were raised by 50 cents/b from June to a premium of $1.95/b to Oman/Dubai and 60 cents/b from June to a premium of 75 cents/b to Oman/Dubai respectively. This was the highest differential for both grades since January 2012, when the Arab Medium grade price differential was at a premium of $2.75/b to Oman/Dubai, and the Arab Heavy grade price differential at a premium of $1.35/b to Oman/Dubai. Aramco also raised the July OSP differential for its Arab Extra Light crude grade bound for Asia by 50 cents/b from June to a premium of $3.20/b to Oman/Dubai. It raised the July OSP differential for Arab Super Light by 30 cents/b from June to a premium of $4.85/b to Oman/Dubai. The July Arab Extra Light grade price differential was the highest since July 2018, when it was at a premium of $3.30/b to Oman/Dubai, while the July Arab Super Light grade price differential was the highest since November 2018, when it was at a premium of $5.45/b to Oman/Dubai.
SAUDI ARAMCO’S JUNE OSP DIFFERENTIALS FOR ASIA ($/B)
Singapore — Shipping and maritime insurers have already started charging war risk premiums in the waters around the Middle East bunkering hub of Fujairah after the insurance coverage area was expanded to include the Persian Gulf and the Gulf of Oman, according to industry executives. Following attacks on four oil tankers near Fujairah on May 12, the Joint War Committee of insurance body Lloyd’s Market Association on May 17 issued a circular adding the Persian Gulf and adjacent waters including parts of Gulf of Oman to the list of areas under risk of “Hull War, Piracy, Terrorism and related perils.” The JWC said the premium will vary and is not automatically added for the insurance cover. Given the circumstances in the Persian Gulf, it would be expected that underwriters are reviewing voyages on a case-by-case basis and acting according to the risk presented, Neil Roberts, secretary for JWC in the Lloyd’s Market Association, told S&P Global Platts. This may involve changing the terms and conditions of the policy, which can also include charging an additional premium, Roberts said. However, he said this premium does not get automatically added. War policies have a seven-day cancellation notice and so the new area is already effective a week after the individual underwriters would have given notice to their clients, he said. Since the JWC circular was issued on May 17, the new notification will have started from May 24, Roberts said. Shipping industry sources said it is the prerogative of the insurers to charge such a premium from the owners, who can then strive to pass it on to the charterers if the market situation so warrants. They confirmed that some of the underwriters are already charging the war risk premium. A dry bulk Supramax owner whose ships pass the Gulf of Oman told Platts that “our underwriters are already charging [war risk] premium” from us. Japan relies heavily on crude imports from the Middle East — most of which transit through the Strait of Hormuz. Middle Eastern supplies accounted for 89% of Japan’s crude imports of 3.15 million b/d in January-April, according to government data. The expansion of the war risk area comes after Saudi Arabia said two of its oil tankers were victims of a “sabotage attack” off the coast of Fujairah on May 12, while two other vessels — identified by market sources as UAE-flagged and Norwegian-flagged — were also attacked. Fujairah is one of the world’s biggest bunkering hubs and lies just outside of the Strait of Hormuz, a critical chokepoint through which 30% of the world’s seaborne oil transits, giving it a strategic location for oil trading.
Jeddah, Saudi Arabia (CNN)King Salman of Saudi Arabia has pulled off in Mecca what many had thought unlikely — getting 20 or so disparate Arab nations to unite in a common position against Iran.
(CNSNews.com) – Saudi King Salman on Thursday demanded that the international community “use all means” to counter Iranian threats to maritime navigation and terror sponsorship, charging that the absence of a “firm” response up to now has encouraged an escalation in malign behavior. Addressing Gulf Cooperation Council (GCC) counterparts in Mecca, Salman accused Iran of responsibility for the sabotage of four oil tankers near the Persian Gulf, as well as drone attacks on key oil infrastructure in Saudi Arabia. Iranian threats to maritime navigation ‘jeopardize world oil supplies,” he said. Secretary of State Mike Pompeo, heading for a European visit where Iran will be on the agenda, told reporters flying with him that the recent incidents “were efforts by the Iranians to raise the price of crude oil throughout the world.” The official Saudi Press Agency quoted Salman as telling GCC leaders their nations must work seriously to preserve security in the light of “the recent criminal acts targeting one of the world’s most important trade routes through sabotage act against four commercial carriers close to the territorial waters of the United Arab Emirates in addition to targeting two oil pumping stations and a number of vital installations in the kingdom.” He argued that a “lack of a deterrent and firm stance to confront the subversive activities of the Iranian regime in the region has led the Iranian regime to continue and escalate these activities as we see today.” “We demand the international community to shoulder its responsibilities towards the threat posed by Iranian practices to the international peace and security, use all means to stop the Iranian regime from interfering in the internal affairs of other countries, sponsoring terrorist activities in the region and the world, and threatening the freedom of maritime navigation in the international straits.” Saudi Arabia on Thursday night opened two of three major “emergency” summits it is hosting this week, with a strong focus on Iran. The summit of the six-member GCC (Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Oman and Bahrain) was followed by an Arab League summit, while an Organization of Islamic Cooperation (OIC) summit was taking place on Friday. During a visit to the UAE Wednesday, National Security Advisor John Bolton characterized the U.S. response to the Iranian aggression as measured – and evidently effective, noting that there had been no further incidents since the first “three attacks.” The “three attacks” referred to were the sabotage of the oil tankers on May 12 – which Bolton attributed to “naval mines, almost certainly from Iran” – the drone attacks on the Saudi oil infrastructure on May 14, and the firing of a rocket that landed near the U.S. Embassy in Baghdad on May 19. “I think there is no doubt in anybody’s mind in Washington who is responsible for this,” Bolton said. “And I think it’s important that the leadership in Iran know that we know.” Before the three incidents occurred the Trump administration, citing “troubling and escalatory indications and warnings,” sped up the deployment of an aircraft carrier strike group and sent strategic bombers to the region to send a message to Iran. Following the attacks, President Trump approved a request from U.S. Central Command for 1,500 additional U.S. troops to be sent to the region for force protection, including some 600 already deployed to man a Patriot missile defense battery. During a visit to London on Thursday, Bolton said again he did not think anyone who knows the region had any doubt who was responsible for the attacks. The countries whose tankers were targeted – Saudi Arabia, the UAE and Norway – could soon make public the result of their investigations, he told Sky News. Asked what it would take for the U.S. to take action against Iran – since it hadn’t after the allies were targeted – Bolton said, “We’ve made it particularly clear that if American citizens or facilities are threatened or attacked, that there will be a very strong response.” The Iranian regime has denied responsibility for the attacks, and a foreign ministry spokesman called Bolton’s allegation about naval mines “ridiculous.”