Trump says China trade talks ‘back on track,’ new tariffs on hold

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

Trump meets Kim Jong Un, becomes first sitting U.S. president to step into North Korea

“Stepping across that line was a great honor,” Trump said after the two walked toward each other and shook hands.

Hell on earth: The horrors of North Korean torture camps

North Korean leader Kim Jong-Un is said to preside over a brutal system of torture camps imprisoning as many as 120,000 citizens of his isolated regime.
North Korean leader Kim Jong-Un is said to preside over a brutal system of torture camps imprisoning as many as 120,000 citizens of his isolated regime.

US student Otto Warmbier died on Monday at age 22, just days after his release from North Korea in a vegetative state following 17 months in custody.
US student Otto Warmbier died on Monday at age 22, just days after his release from North Korea in a vegetative state following 17 months in custody.

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.

Bodies of prisoners in the gulag: 'The mice eat the eyes, nose, ears, and toes of the corpses'. Photo / UN
Bodies of prisoners in the gulag: ‘The mice eat the eyes, nose, ears, and toes of the corpses’. Photo / UN

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.

This drawing depicts prisoners foraging among live wild animals. In the Korean description: 'out of starvation and hunger, find snakes and rats and you eat them'.
This drawing depicts prisoners foraging among live wild animals. In the Korean description: ‘out of starvation and hunger, find snakes and rats and you eat them’.

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.

'Scale, airplane, motorcycle.' Survivors told the U.N. that they had to stay in stress positions until they collapsed. 'Scale, airplane, motorcycle.' Survivors told the U.N. that they had to stay in stress positions until they collapsed. Photo / UN
Survivors told the U.N. that they had to stay in stress positions until they collapsed. Photo / UN

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.

Horrendous: This drawing by a former North Korean prison guard depicts a position called 'pigeon torture' where prisoners are beaten on the chest until they vomit blood. Photo / UN
Horrendous: This drawing by a former North Korean prison guard depicts a position called ‘pigeon torture’ where prisoners are beaten on the chest until they vomit blood. Photo / UN

‘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.’

A rare glimpse of life inside a North Korean prison camp is seen in this undated image.
A rare glimpse of life inside a North Korean prison camp is seen in this undated image.

Nick Bit: Trump calls a brutal dictator a great man and his friend. Kim should be charged with crimes against humanity and put on trial at the Hague. I am outraged what this president will do for a publicity stunt. And i am Amazed that Americans fall for this shit. Sleeping Americans deserved to be Nuked by North Korea. And mark my words it will happen

Russia agrees with Saudi to extend OPEC deal by 6-9 months: Putin

Russia’s President Vladimir Putin shakes hands with Saudi Arabia’s Crown Prince Mohammed bin Salman during a meeting on the sidelines of the G20 Summit in Osaka, Japan June 29, 2019. Yuri Kadobnov/Pool via REUTERS

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. Russia, Saudi deal shows commitment to oil market stability: Novak 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 said Saturday he planned “major” new sanctions against Iran to take effect Monday

Trump may sanction Iranian STFI: informed source

Trump may sanction Iranian STFI: informed source
TEHRAN, Jun. 24 (MNA) – While Trump and his aides haven’t elaborated on what additional sanctions would look like a person familiar with Treasury discussions said that the US President may wish to sanction Iran’s Special Trade and Finance Instrument (STFI).

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.

Trump proposes third meeting with North Korea’s Kim

SAUL LOEB / AFP | US President Donald Trump (R) and North Korea’s leader Kim Jong Un hold a meeting during the second US-North Korea summit at the Sofitel Legend Metropole hotel in Hanoi on February 28, 2019.

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.

China agrees to restart U.S. trade talks as Trump says ‘back on track’

U.S. President Donald Trump and China’s President Xi Jinping shake hands ahead of their bilateral meeting during the G20 leaders summit in Osaka, Japan, June 29, 2019. REUTERS/Kevin Lamarque

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.

With Iran nuclear deal on the brink, U.S. vows to choke off Iranian oil sales

FILE PHOTO: Iran’s national flags are seen on a square in Tehran February 10, 2012, a day before the anniversary of the Islamic Revolution. REUTERS/Morteza Nikoubazl/File Photo

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.”

UAE becomes Japan’s largest crude supplier in May as Iran oil imports halt

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.

OPEC and its allies grapple with murky market outlook as they prepare to meet in Vienna

OPEC meets in the shadow of Trump's showdown with Iran

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  

U.S. economic growth surges in first-quarter, but momentum fizzling

Federal Reserve Chairman Jerome Powell

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.

Iran on course to exceed nuclear pact limit within days – diplomats

 EDITORS’ NOTE: Reuters and other foreign media are subject to Iranian restrictions on leaving the office to report, film or take pictures in Tehran. A security official stands in front of the Bushehr nuclear reactor, 1,200 km (746 miles) south of Tehran, August 21, 2010.

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.

Trump warns any war with Iran ‘wouldn’t last long’

Trump warns any war with Iran ‘wouldn’t last long’

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.

Iran says saving nuclear deal not its problem, EU warns no alternative

FILE PHOTO : Iranian Ambassador to the United Nations Majid Takht-Ravanchi speaks to the media outside Security Council chambers at the U.N. headquarters in New York, U.S., June 24, 2019. REUTERS/Shannon Stapleton

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.

Oil prices drop slightly as traders wait for G20, OPEC+ meetings

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

US oil executives see slowing output as investment declines: Dallas Fed

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.

Iran Demands Full Withdrawal of American Forces from Middle East

CAMP BOST, AFGHANISTAN - SEPTEMBER 11: U.S. service members walk off a helicopter on the runway at Camp Bost on September 11, 2017 in Helmand Province, Afghanistan. About 300 marines are currently deployed in Helmand Province in a train, advise, and assist role supporting local Afghan security forces. Currently the …
Andrew Renneisen/Getty Images
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.”

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.

U.S.’s Pompeo promises to ensure oil supplies to India after Iranian crude ban

U.S. Secretary of State Mike Pompeo speaks during a news conference with Indian Foreign Minister Subrahmanyam Jaishankar at the Foreign Ministry in New Delhi, India, June 26, 2019. Jacquelyn Martin/Pool via REUTERS

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.

Strike threat puts Norway’s oil and gas output at risk from Friday

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.

Trump says ‘not talking boots on the ground’ if action taken against Iran

FILE PHOTO: U.S. President Donald Trump talks about the United States imposing fresh sanctions on Iran before signing an executive order in the Oval Office of the White House in Washington, U.S., June 24, 2019. REUTERS/Carlos Barria

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.

Trump threatens ‘obliteration,’ Iran calls White House ‘mentally retarded’

Trump Goes Ballistic On Twitter After Iranian Supreme Leader Calls Him “Mentally Retarded”

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?

Iraqi PM denies allegations attack drones targeting Saudi pipeline took off from Iraq

Getty Images A Saudi Aramco oil facility.

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.

Crude Oil Analysis: Risks Tilted to Upside, Iran Plans to Break Nuclear Deal Limit

Please add a description for the image.
Brent Crude Price: Daily Time Frame (Sep 2018 – Jun 20

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.

Oil prices pull back from multiweek highs though Iran tensions persist

Iran on Tuesday sharply criticized new U.S. sanctions targeting the Islamic Republic’s supreme leader and other top officials

Reuters Iranian President Hassan Rouhani

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%

Trump  unveils new sanctions against Iran as he calls on China to patrol Strait of Hormuz

Fed doesn’t know what it is doing, Trump says
US President Donald Trump meets with US Vice President Mike Pence(R) and US Secretary of Treasury Steven Mnuchin at the White House on June 24, 2019, before signing ‘hard-hitting sanctions’ on Iran’s supreme leader.

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.

Trump announces ‘hard hitting’ new sanctions against Iran

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.”

Former Shale Gas CEO Says Fracking Revolution Has Been ‘A Disaster’ For Drillers, Investors

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.”

 

Trump says new sanctions on Iran to start Monday

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. Iran lawmakers chant ‘Death to America’ as U.S. called ‘terrorist’Any conflict in region could spread: Iran general 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 says the United States does not want war

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 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

Iran says it will respond firmly to any U.S. threat as tension spikes

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.

Tehran had received a message from U.S. President Donald Trump warning

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.

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.”

“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!”

Huge fire rips through Philadelphia refinery, no casualties reported

(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.

Trump Approves Strikes on Iran, but Then Abruptly Pulls Back

Donald Trump wearing a suit and tie: “Let’s see what happens,” President Trump said Thursday after Iran shot down an American surveillance drone.
© Erin Schaff/The New York Times “Let’s see what happens,” President Trump said Thursday after Iran shot…

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

U.S. Expected to Strike Back for Iran’s Downing of Drone

Trump: ‘Iran made a big mistake

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.

Pentagon: New US Troop Deployment to Middle East to Include Patriot Missiles, Drones

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.

Iran Revolutionary Guard shoots down US drone amid tensions

Iran’s Revolutionary Guard shot down a U.S. RQ-4 Global Hawk on Thursday, June 20, 2019, amid heightened tensions between Tehran and Washington over its collapsing nuclear deal with world powers, American and Iranian officials said, though they disputed the circumstances of the incident. (Airman 1st Class D. Blake Browning/U.S. Air Force via AP)

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.

Oil prices jump as downed U.S. drone stokes Middle East tensions

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.

EIA data show first U.S. crude-supply decline in 3 weeks

Bloomberg News

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’s Contingency Plan If US-Iran Standoff Blocks Its Oil Exports

Iraq

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.

Trump stages his greatest show yet

Donald and Melania Trump, Mike and Karen Pence
The president’s elaborate reelection rally in Florida featured thousands of adoring supporters.

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.

China Warns of Unpredictable Consequences Amid US Troop Deployment to Middle East

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.

Trump would consider military force vs Iran to prevent nuclear weapon

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.”

OPEC+ proposes mid-July meeting to settle dispute over dates

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.”

Trump calls attacks on oil tankers ‘very minor,’ but says he’d go to war with Iran over nuclear weapons

Trump calls attacks on oil tankers 'very minor,' but says he'd go to war with Iran over nuclear weapons
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President Trump called an oil tanker attack the U.S. has blamed on Iran “very minor” but said in an interview with Time Magazine he would be willing to go to war to prevent the nation from acquiring nuclear weapons. Trump was noncommittal on whether protecting international oil supplies would be a justification for war, telling the magazine “I would certainly go over nuclear weapons, and I would keep the other a question mark.” Trump told the magazine the Gulf of Oman, where the attack occurred, is less strategically important to the U.S. than it has been in years past, adding it was more relevant to Chinese and Japanese interests. “Other places get such vast amounts of oil there,” Trump told the magazine. “We get very little. We have made tremendous progress in the last two and a half years in energy.” Trump added that while he agreed with assessments blaming Iran for the attack, he believed Iran’s government has been less hostile toward the U.S. since his inauguration. “If you look at the rhetoric now compared to the days when they were signing [the 2015 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,” he said. The comments come after several days of the Pentagon and State Department indicating all options are on the table in response to the Thursday attack, for which Iran has denied responsibility. Secretary of State Mike Pompeo said Sunday that the U.S. is looking at “a full range of options,” including a potential military response, and is scheduled to visit U.S. Central Command, which oversees U.S. military operations in the Middle East, on Tuesday. Acting Defense Secretary Patrick Shanahan, meanwhile, announced Monday evening the Defense Department has authorized the deployment of about 1,000 additional troops to the region for “defensive purposes.” “The recent Iranian attacks validate the reliable, credible intelligence we have received on hostile behavior by Iranian forces and their proxy groups that threaten United States personnel and interests across the region,” he said in a statement. The U.K. and Saudi Arabia have said they agree with the U.S. assessment, but Germany’s foreign minister has said the U.S. must present further evidence. The owner of one of the two ships involved in the attack has also contradicted the U.S. account. In recent months, Iran has announced it will scale back some of its commitments under the 2015 deal, with Trump withdrew the U.S. from more than a year ago.

US preparing “assault” against Iran

An American guided missile cruiser fires a tomahawk missile during the 2003 US invasion of Iraq [Credit: US Navy]
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.”

EU Cautious About Gulf Tensions; Frets About Iran Nuclear Deal

E.U. foreign policy chief Federica Mogherini and Iranian Foreign Minister Javad Zarif at the Munich Security Conference in 2016. (Photo by Lennart Preiss/Getty Images)

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.”

War with Iran would become ‘Trump’s war’

President Donald Trump cannot want war with Iran. Such a war, no matter how long, would be fought in and around the Persian Gulf, through which a third of the world’s seaborne oil travels. It could trigger a worldwide recession and imperil Trump’s reelection. It would widen the “forever war,” which Trump said he would end, to a nation of 80 million people, three times as large as Iraq. It would become the defining issue of his presidency, as the Iraq War became the defining issue of George W. Bush’s presidency. And if war comes now, it would be known as “Trump’s War.”

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.

Continue reading “War with Iran would become ‘Trump’s war’”

Iran reveals it will break uranium stockpile limits dramatically ramping up tensions with Trump

 President Rouhani said his country would stop observing restrictions on its stocks of enriched uranium

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.

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“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.”

Abu Dhabi and Saudi oil-security infrastructure is itself a target

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.

Saudi Forces Intercept Ballistic Missile Targeting City of Abha – Reports

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 ‘tried to shoot down a US drone

US MQ9 Drone

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

Oil Tanker Attack: Japan Doesn’t Consider US Accusations Against Iran ‘Convincing’

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 Arabia intercepts five drones fired by Iran-linked rebels at same airport that was hit two days ago in missile attack that wounded 26

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)

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.

U.S. farmers face devastation following Midwest floods

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.

Trump says ‘Iran did do it,’ as U.S. seeks support on Gulf oil tanker attacks

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.

Iran says it is in charge of security of Strait of Hormuz – state Radio

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’s key regional rival Saudi Arabia said that Riyadh was committed to providing reliable oil supplies to global markets. One source said the blast on the Front Altair, which caught fire and sent a huge plume of smoke into the air, may have been caused by a magnetic mine. The firm that chartered the Kokuka Courageous tanker said it was hit by a suspected torpedo, but a person with knowledge of the matter said torpedoes were not used. Tension between Iran and the United States has risen since May last year, when U.S. President Donald Trump pulled out of a 2015 nuclear deal between Iran and major powers that aimed to curb Tehran’s nuclear ambitions in exchange for sanctions relief.

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 accuses the US of LYING about the ‘suspicious’ attack on American-linked oil tanker and denies ordering ‘torpedo’ assault

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 oil tankers damaged and crew evacuated in Gulf of Oman after roclet attack

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.

Gulf of Oman 2 Oil Tankers Attacked

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.

A damaged ANDREA VICTORY ship is seen off the Port of Fujairah, United Arab Emirates, May 13, 2019.
© REUTERS / Satish Kumar Video Allegedly Exposing Iranian ‘Sabotage’ of Tanker Shows Men Doing Stunt on Greek Ship – Report

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.

Yemen war: Houthi missile attack on Saudi airport ‘injures 26’

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

Crude oil futures fall on bearish API data, demand concerns

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.

US oil demand surging on a wave of new petrochemical plants: BP

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.

Trump says “make coal great again” but use of the rock at a 41-year low

U.S. coal consumption last year dropped to its lowest level since 1978, according to the U.S. Department of Energy. Demand for other energy sources, particularly natural gas, is taking market share from coal. The Trump administration is investing millions in bolstering the coal industry despite shifts away from coal, including renewable energy. President Donald Trump likes to tout coal, calling it “indestructible” and proclaiming that “coal is back.” Around the U.S., use of the fossil fuel shows a different trend: Coal consumption is at its lowest level in more than 40 years. That’s according to the latest data from the U.S. Department of Energy, which on Monday said coal usage fell to 687 million short tons, its lowest since 1978. Production also fell to its second-lowest level since 1978, the agency said.  Most of that coal is used to produce electric power. Despite the decline in both production and demand, the Trump administration is investing in the coal industry, with the Energy Department on Monday pledging $39 million for research into improving the efficiency of coal plants. “The Trump administration remains committed to ensuring a coal-fueled power plant fleet that provides stable energy to the power grid,” said Assistant Secretary for Fossil Energy Steven Winberg in a statement. Despite the Trump administration’s efforts, coal consumption and production were higher during the Obama administration. The reason: Competing energy sources, especially natural gas, are now taking market share away from coal. The costs of wind and solar energy have also dropped sharply, with a growing number of states and cities embracing renewable energy due to concerns about climate change.  Slumping demand for coal hasn’t been lost on some Trump administration critics. Former New York City Mayor Michael Bloomberg earlier this month pledged $500 million toward an effort to close all remaining domestic coal plants by 2030. His goal is to put the U.S. on a path toward 100% clean energy. Bloomberg noted that 51 coal-fired plants have closed since the 2016 presidential election. “Despite all the bluster from the White House, as a matter of fact, since Trump got elected the rate of closure has gone up,” Bloomberg said. Despite the shrinking U.S. coal industry, coal remains the main driver of carbon emissions, which rose to a new high last year, according to the International Energy Association. Despite such political boosterism, coal sector employment around the U.S. has been decreasing for decades, a victim of shifting demand for new energy sources as well automation and more efficient mining practices. Since 1950, the number of mining jobs around the country has tumbled 88 percent. In West Virginia today, about 14,000 people work in West Virginia’s mines, CBS News recently reported in a look at the state’s coal industry. The dropping price of coal has also has driven eight U.S. coal companies into bankruptcy since 2015, including the three largest—Peabody Energy, Arch Coal and Cloud Peak Energy.

Wall Street’s ‘fear gauge’ is sounding an alarm

Remain vigilant. That’s the apparent message the Cboe Volatility Index is flashing, even as cash equities race toward records.
Wall Street could be in for a rocky ride over the next month.
Wall Street could be in for a rocky ride over the next month. Credit:AP

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.

Iran has accelerated production of enriched uranium, IAEA says

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 ‘successfully tests’ hypersonic interceptor missile that can shoot down Western weapons and travels 2½ miles in one second

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.

Russia's new hypersonic interceptor missile blasted-off from Sary-Shagan training range in Kazakhstan
Russia’s new hypersonic interceptor missile blasted-off from Sary-Shagan training range in Kazakhstan

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

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.’

Canadian oil pipeline congestion sets up lucrative storage play

FILE PHOTO: Crude oil storage tanks at Enbridge’s facility in Sherwood Park are seen against the skyline of Edmonton, Alberta REUTERS/Chris Helgren

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….

Ex-IAEA Deputy General Warns Iran Could Have Nuclear Bomb in Six Months

Iran's stocks of nuclear materials still within limits: IAEA
Iranian Presidency/AFP/File Handout
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 to pay at least $385 million to settle scam allegations

 

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.”

Banks Are Tired of Losing Money on Fracking Loans

Shale firms explore costly financing options as traditional methods dwindle

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.

IMF warns of giant tech firms’ dominance

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.”

US gives Turkey ultimatum on Russian missiles

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”.

Saudis optimistic about OPEC+ cut extension after talks with Russia

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.”

Russia, OPEC have ‘different understanding of the fair price’ of oil: Putin

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”

U.S. commander on Iran: ‘The threat remains very real’

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 stressed that tensions remain high. “I don’t actually believe the threat has diminished,” McKenzie said after holding a series of meetings with the Iraqi prime minister and defense chief. “…I believe the threat is still very real.”

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.

Trump Says There’s a ‘Chance’ of Military Action Against Iran

Image President Trump at a news conference in London on Tuesday during his first state visit to Britain.CreditCreditDoug Mills/The New York Times

 

 

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.

US crude inventories likely down 1.7 million barrels as refiners increase runs

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.

Refinery margin tracker: China seen increasing Forties flows in June despite weak margins

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 ($/b)
Bakken cracking Bonny Light cracking Arab Light cracking Hibernia cracking
Week ending May 31 6.79 9.97 15.12 5.43
Week ending May 24 7.44 10.31 15.04 6.44
Q2 to date 8.68 9.29 14.93 8.11
Q2-18 9.65 11.56 12.66 8.85
Q1-19 4.45 6.38 8.57 3.73
Q4-18 4.22 26.56 18.25 3.21
US Gulf Coast Refining Margin Averages ($/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
Q2-18 9.82 9.04 11.25 9.4
Q1-19 8.42 5.19 5.99 5.94
Q4-18 7.07 2.78 6.55 4.92
US Midwest Refining Margin Averages ($/b)
Bakken cracking WTI cracking WTS coking WCS coking
Week ending May 31 22.62 20.62 19.61 20.95
Week ending May 24 23.05 21.71 20.21 21.28
Q2 to date 20.33 18.71 17.9 17.48
Q2-18 15.72 18.37 13.82 15.91
Q1-19 11.61 11.22 11.65 10.04
Q4-18 21.04 31.36 11.98 14.12
US West Coast Refining Margin Averages ($/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
Q2-18 15.77 20.9 18.32 22.18
Q1-19 13 15.19 11 16.02
Q4-18 12.64 16.24 13.61 16.7
Singapore Refining Margin Averages ($/b)
Arab Heavy cracking Arab Medium cracking Dubai cracking Qatar Land cracking
Week ending May 31 0.41 -2.8 -0.57 1.08
Week ending May 24 0.77 -0.62 0.31 2.1
Q2 to date 3.05 1.37 2.38 4.11
Q2-18 1.35 0.01 0.8 2.63
Q1-19 2.47 0.14 0.76 2.84
Q4-18 2.34 1.43 4.63 3.31
ARA Refining Margin Averages ($/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
Q2-18 5.12 6.69 5.4 6.44
Q1-19 3.15 3.64 3.02 3.72
Q4-18 3.71 4.37 3.82 5.09
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
Q2-18 5.96 7.61 5.75 6.32
Q1-19 2.91 5.28 3.46 3.52
Q4-18 3.48 5.43 3.59 3.43
Source: S&P Global Platts; Turner, Mason & Co.

 

Oil prices fall on rise in US inventories, supply worries

Reusable: Petrobras oil platform Rio De Janeiro 150703
A Petrobras oil platform floats in the Atlantic Ocean near Guanabara Bay in Rio de Janeiro.

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.

Glencore’s head of oil, Alex Beard, retires amid U.S. probes

FILE PHOTO: Alex Beard, head of oil at trading firm Glencore

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.

Oil prices steady as Saudi Arabia indicates prolonged supply cuts

 Pipework is seen at the fuel refining units at Galp Energia SGPS SA’s oil refining plant in Sines, Portugal, on Friday, April 12, 2013. Galp Energia, Portugal’s biggest oil company, increased output in the first quarter from Brazil as its refineries processed more crude. Photographer: Mario Proenca/Bloomberg via Getty Images

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.

Saudi Aramco raises all July Asia-bound crude by 30-60 cents/b

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)

Mar Apr May Jun Jul Change
Super Light 3.05 3.05 3.35 4.55 4.85 0.30
Extra Light 0.95 1.45 1.70 2.70 3.20 0.50
Arab Light 0.7 1.20 1.40 2.10 2.70 0.60
Arab Medium 0.45 0.85 1.05 1.45 1.95 0.50
Arab Heavy -0.65 -0.45 -0.25 0.15 0.75 0.60

 

Ship insurers ‘already charging’ war risk premium around Fujairah post-sabotage attacks

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.

Russia’s May Oil Output Hits 11-Month Low on Dirty Oil Crisis

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(AP)

Saudi Arabia united the Arab world against Iran. That means conflict could be one step closer

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.
And while this achievement came without bellicose threats or new red lines, it is an important milepost on a road that may yet lead to regional conflict.
In middle-of-night, back-to-back summits at Islam’s holiest of sites, the aging but still-attentive Saudi monarch got a double endorsement of his claims that Iran is destabilizing the Middle East and a backing of his call for “the international community to shoulder its responsibility. The six-nation Gulf Cooperation Council and 21 Arab League nations present called for Iran to stop “interfering in the internal affairs” of its neighbors and denounced Tehran’s “threat to maritime security” in the Persian Gulf. For its part, Iran hit back, criticizing the allegations as “baseless” and accusing Saudi Arabia of promoting an “American and Zionist” agenda. Still, Tehran appeared tone-deaf to not one, but two unifying summit communiques urging it to change its behavior.
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US pressure was applied to get Qatar to send a high-level delegation to the summits. When the country’s prime minister, Sheikh Abdullah bin Nasser al-Thani, showed up, he was the only leader not to get a customary kiss from the King. While he didn’t get much eye contact from some of the leaders gathered around the GCC table, al-Thani did back the Saudi monarch, saying: “Our participation comes from our support to join Arab and Islamic work and our common security and stability.” It marked the sign of a possible thaw in relations, but also the reemergence of Saudi Arabia from pariah to regional power broker again, which is good timing for its key ally, US President Donald Trump, as he doubles down on sanctions and pressure on Iran.. King Salman himself admitted that “failure to take a firm position against the Iranian regime” in the past had “led to the escalation we see today.”
What we saw in Mecca was a mark being set, that the status quo with Iran will no longer be tolerated by Saudi and its allies. What happens next is in Iran’s court. Talks are an option, but terrorism, insofar as it is perceived as such by Tehran’s neighbors, is not.