Tokyo — The US continues to pursue a zero-tolerance policy for its Iran oil sanctions and is urging importers to eliminate all purchases from the Middle East country, Francis Fannon, assistant secretary at the US State Department’s Bureau of Energy Resources, said Monday during a visit to Japan. “The US policy is to drive Iranian exports to zero,” Fannon said during a media briefing in Tokyo. “That policy has not changed. We are unwavering in our policy.” Fannon was asked whether Washington would consider extending Iran sanctions waivers when they expire in May, given falling supplies from Saudi Arabia as a result of the production cut agreement by OPEC and allies, and the ongoing crisis in sanctions-hit Venezuela. He said it was premature to say whether the State Department would grant new waivers in May to the eight countries that were allowed to continue importing Iranian oil in return for promising to significantly cut their dependence on the supplies. Fannon is in Japan after visiting South Korea early last week. Both oil-importing countries are asking Washington to grant them new 180-day waivers to import Iranian crude when the current exemptions expire May 4.
;Asked whether he discussed with Japan efforts to find new crude sources, Fannon said: “We encourage all countries to diversify sources away from Iran.” He said that message was for all of Iran’s customers: “It’s not unique to any one country.” “We recognize that countries need supplies, and are continued to be encouraged that there are alternative sources,” Fannon said, adding that the US Energy Information Administration is projecting a surplus of about 440,000 b/d in 2019 and 630,000 b/d in 2020.
All transactions under the US State Department’s current “significant reduction exemptions” must be completed by May 4. Fresh waivers would start May 5 for countries that the US determines to have been able to significantly reduce Iranian imports in the previous six months. South Korea’s Deputy Foreign Minister Yun Kang-hyeon, Fannon and his counterpart “talked about the Iranian crude issue and South Korea’s efforts toward diversification of sources of crude imports,” a diplomatic source in Seoul told S&P Global Platts.
Saudi Aramco has signed agreements to acquire a 9% stake in the Zhejiang petrochemical project in the Chinese province of Zhejiang for an undisclosed price The Zhejiang petrochemical project to be built in the city of Zhoushan is planned to have a capacity of 800,000 barrels per day. Saudi Aramco signed an agreement with the Zhoushan government to acquire its 9% stake in the refinery and petrochemical complex. The Arabian company has signed a second agreement with Rongsheng Petrochemical, Juhua Group, and Tongkun Group, the other shareholders of Zhejiang Petrochemical, the holding company of the Chinese petrochemical project. Saudi Aramco said that its involvement in the project will come with a long-term crude supply agreement and the ability to use Zhejiang Petrochemical’s large crude oil storage facility to cater to its customers in Asia.
On Tuesday’s broadcast of CNN’s “AC360,” former Acting FBI Director Andrew McCabe said it is “possible” that President Trump could be a Russian asset. Host Anderson Cooper asked, “Do you still believe the president could be a Russian asset?” McCabe answered, “I think it’s possible. I think that’s why we started our investigation. And I’m really anxious to see where Director Mueller concludes that.”
“This would be [approximately] 500,000 barrels per day less than stipulated in the production cuts agreement, meaning significant over compliance with the requirements,” said analysts at Commerzbank in a research note. Also Wednesday, the International Energy Agency said in a monthly report that global supply fell by 1.4 million to 99.7 million barrels a day in January.The gains for crude come despite data from the Energy Information Administration Wednesday that revealed domestic crude supplies rose by 3.6 million barrels for the week ended Feb. 8. That marked a fourth-straight week rise, and was larger than the 2.7 million-barrel rise expected by analysts polled by S&P Global Platts. The American Petroleum Institute data on Tuesday showed a decline of 998,000 barrels, according to sources. “Despite a big drop in imports due to inclement weather on the Gulf Coast last week, a plumbing of the depths in terms of refinery maintenance has meant we have still seen a build to crude inventories,” said Matt Smith, director of commodity research at ClipperData. Separately, a monthly EIA report released Tuesday revealed higher U.S. crude production forecasts for 2019 and 2020. The report also included higher WTI and Brent price forecasts for this year, but reduced the 2020 price views for both benchmarks by more than 4%. On Tuesday, OPEC said its crude output fell by 797,000 barrels a day in January, month on month, to average 30.81 million barrels a day, in the cartel’s separate monthly production update.
The sleeping pro-Europe majority must be mobilized to defend its values, George Soros says Chris McGrath/Getty Images
MUNICH, Germany (Project Syndicate) — Europe is sleepwalking into oblivion, and the people of Europe need to wake up before it is too late.
If they don’t, the European Union will go the way of the Soviet Union in 1991. Neither our leaders nor ordinary citizens seem to understand that we are experiencing a revolutionary moment, that the range of possibilities is very broad, and that the eventual outcome is thus highly uncertain.
Most of us assume that the future will more or less resemble the present, but this is not necessarily so. In a long and eventful life, I have witnessed many periods of what I call radical disequilibrium. We are living in such a period today. The first step to defending Europe from its enemies, both internal and external, is to recognize the magnitude of the threat they present. The second is to awaken the sleeping pro-European majority and mobilize it to defend the values on which the EU was founded. The antiquated party system hampers those who want to preserve the values on which the EU was founded, but helps those who want to replace those values with something radically different. This is true in individual countries and even more so in trans-European alliances. The EU’s dominant country is Germany, and the dominant political alliance in Germany — between the Christian Democratic Union (CDU) and the Bavaria-based Christian Social Union (CSU) — has become unsustainable. The alliance worked as long as there was no significant party in Bavaria to the right of the CSU. That changed with the rise of the extremist Alternative für Deutschland (AfD). In last September’s länder elections, the CSU’s result was its worst in over six decades, and the AfD entered the Bavarian Parliament for the first time. The AfD’s rise removed the raison d’être of the CDU-CSU alliance. But that alliance cannot be broken up without triggering new elections that neither Germany nor Europe can afford. As it is, the current ruling coalition cannot be as robustly pro-European as it would be without the AfD threatening its right flank. In the United Kingdom, too, an antiquated party structure prevents the popular will from finding proper expression. Both Labour and the Conservatives are internally divided, but their leaders, Jeremy Corbyn for Labour and Theresa May for the Tories, are so determined to deliver Brexit that they have agreed to cooperate to attain it. The public is also becoming aware of the dire consequences of Brexit. The chances that May’s deal will be rejected on Feb. 14 are growing by the day. That could set in motion a groundswell of support for a referendum or, even better, for revoking Britain’s Article 50 notification.
Italy’s predicament Anti-European forces may look good in comparison: at least they have some principles, even if they are odious.
Europe’s interests It is difficult to see how the pro-European parties can emerge victorious from the election in May unless they put Europe’s interests ahead of their own.
Russia is losing its faith in Venezuelan President Nicolas Maduro’s ability to emerge victorious from the political crisis gripping the country, Kremlin sources say. Moscow still publicly backs Maduro’s regime but ‘recognizes that the disastrous state of Venezuela’s economy is inexorably draining what remains of his public support’. The unidentified sources also pointed out that the army, part of which is currently deployed to block an aid shipment of food and medicine from entering the country from Colombia, will be reluctant to continue crack downs on fellow Venezuelans. This comes as Venezuelan army continues its blockage of a bridge on the border with Colombia ahead of an anticipated humanitarian aid dispatch. Maduro claims humanitarian aid is a forerunner of a US-led invasion, and defended his decision to order a barricade of the bridge by saying that ‘no one will enter, not one invading soldier.’ Opposition leader Juan Guaido, now recognised as interim president by the West and the US, claims that up to 300,000 people face death if the aid being blocked by Maduro’s army is not delivered. The opposition-dominated National Assembly, led by presidential challenger Guaido, had warned the armed forces that blocking aid would mean crossing a ‘red line’. ‘You know there’s a red line, you know well there’s a limit, you know that medicines, food and medical supplies are that limit,’ lawmaker Miguel Pizarro said in a message to the military. Venezuelan military officers used a tanker truck and huge shipping container to block access to the Tienditas bridge, which links Cucuta, Colombia to Urena, Venezuela. Franklyn Duarte, an opposition lawmaker from the border state of Tachira, told AFP that troops from the armed forces were blocking the crossing. The aid delivery was being coordinated by Guaido, who has declared himself interim president of the oil-rich country and now enjoys the backing of some 40 countries as Venezuela’s legitimate leader. Maduro, 56, has repeatedly accused the United States of fomenting a coup. His blockage of food, medicine and necessities to hundreds of thousands of starving Venezuelans came as weapons were discovered in cargo which the government claims was sent from Florida. The weapons, including 19 rifles and high-calibre ammunition, were found at an airport in the city of Valencia, having been transported on an Airbus jet that flew in on Sunday, the Interior Ministry wrote on Twitter. It is not known who the intended recipient of the weapons was. The US, which has not ruled out a military intervention in crisis-wracked Venezuela, was the first to recognize him as acting president, followed by a dozen Latin American countries. In his State of the Union address Tuesday night, President Donald Trump reaffirmed US support for Guaido, saying ‘we stand with the Venezuelan people in their noble quest for freedom.’ Britain, France, Germany and Spain were among 20 EU nations to side with Guaido this week after Maduro ignored their demands that he announce new presidential elections by February 3. Guaido is trying to force Maduro from power, set up a transitional government and hold a new presidential poll.
Singapore — Crude oil futures fell during mid-morning trade in Asia Thursday as the Energy Information Administration reported higher crude stocks. Additionally, record high domestic output has also capped prices, analysts said. Receive daily email alerts, subscriber notes & personalize your experience. According to EIA data released Wednesday, US crude inventory rose by 1.26 million b/d to 447.21 million barrels, which was well under analysts’ expectations of a 3.7 million-barrel build in an S&P Global Platts survey of analysts conducted on Monday. Meanwhile, record high domestic output, coupled with slowing factory output in Germany also capped prices, analysts said. Despite this, market participants felt that prices would be higher on lower OPEC productions, US sanctions on Venezuela’s PDVSA and supply side issues. OPEC’s oil production fell to a near four-year low in January, according to an S&P Global Platts survey, as the cartel’s new output cuts designed to halt the price slide of late-2018 went into force. OPEC’s crude output plunged to 30.86 million b/d last month, a fall of 970,000 b/d from December, excluding flows from Qatar, which left the production group at the start of the year, the survey of industry officials, analysts and shipping data showed. The month-on-month fall was the biggest since December 2016 and the lowest OPEC output since March 2015, the survey found. In other news, US sanctions on PDVSA, Venezuela’s state-owned oil company, have already had a dramatic impact on global crude and diluent flows and is likely to hasten the already historic collapse of the South American nation’s oil sector. While the sanctions have yet to affect oil prices significantly, that could change if the crisis in Venezuela drags on, S&P Global Platts reported.