The Risk Of A Middle East Oil Crises is REAL and The US has NO Oil Reserves

  • Commodity experts are now saying the oil markets have underpriced the risk of further escalation of the Israel-Hamas conflict.
  • The price response to the escalation in the Middle East tensions has so far been modest.
  • StanChart: Middle East geopolitical risk is currently being significantly under-priced and the current fundamentalsalone are enough to justify a complete reversal of this month’s price undershooting.

Last week, the Israeli government ordered its state-run electricity company to halt power supply to the Gaza Strip days after Palestinian militant group Hamas launched a surprise attack on the country. The Israeli prime minister’s office revealed that the security cabinet has approved several steps to destroy the military and governmental capabilities of Hamas and Islamic Jihad “for many years”, in a war that has seen more than 3,000 Palestinians and about half as many Israelis killed. But now there’s a growing risk this could escalate into a regional conflict after Lebanon-based Hezbollah warned that it’s ready to fully enter the war in support of Hamas. Indeed, there are growing fears that Hezbollah may open a new front against Israel at the behest of its leaders and their Iranian backers while Iran has warned of preemptive action against Israel if it goes ahead with a ground offensive. And some commodity experts are now saying the oil markets have underpriced this risk, and oil prices could skyrocket if the situation above unfolds. Commodity analysts at Standard Chartered have pointed to a medium-term reduction in Iranian oil exports as being the most likely consequence of shifts in the geopolitical landscape. Middle East tensions up till now have been modest; however, the Israel-Gaza war is likely to cause a significant shift in U.S. policy on Iran due to its open support and backing for Hamas. StanChart says that changes in positioning in the oil futures markets have been modest despite a significant increase in volatility. The analysts note that it is not an extreme tail of the distribution as might be expected in a full-blown Middle East crisis, adding that speculative positioning is also not extreme, particularly in Brent. The latest fund manager data shows that prices are about USD 6 per barrel (bbl) lower than in late September,  Middle East geopolitical risk is currently being significantly under-priced and that current fundamentals alone are enough to justify a complete reversal of this month’s price undershooting. If anything, oil fundamentals have strengthened considerably. According to StanChart, global oil demand has already exceeded the pre-Covid oil demand set in August 2019, averaging 102.33 million barrels per day (mb/d), good for a m/m increase of 1.2 mb/d and a y/y increase of 2.3 mb/d. The analysts have refuted arguments by some Wall Street analysts that high oil prices have already triggered demand destruction. U.S. crude oil inventories  at Cushing, Oklahoma, remained close to the operational minimum, falling 0.32 mb to a 15-month low of 21.77mb. US strategic stockpiles that were built just for a time like this have been depleted. The Biden administration squandered the reserves in a futile attempt to keep oil prices from climbing over $60 a barrel. This could get real ugly real fast.

Israel Says It’s Discussing Starlink Wartime Backup With SpaceX

Israel says it’s in talks with SpaceX on setting up Starlink internet services to bolster its wartime communications, ahead of its expected ground invasion in the Gaza Strip. The announcement comes as Israel goes to war with Hamas in Gaza, following a deadly cross-border invasion on Oct. 7 that killed more than 1,400 Israelis, mostly civilians. The Israeli army has responded with heavy airstrikes in Gaza, which have killed more than 2,800 Palestinians, and stopped fuel, water and electricity supply into the Hamas-run Strip while amassing hundreds of thousands of troops along the front lines. SpaceX didn’t immediately respond to a request for comment. In a statement on Tuesday, Israel’s Communications Ministry said the move would ensure towns on the frontlines would have continuous internet service. It will be the first time Israel has relied on Starlink, which will serve as a backup in case other systems are disrupted, a spokesperson for the ministry added. The Israeli ministry said it is also considering disconnecting the internet and phone services it provides to Gaza. It also confirmed it was working to shut down the Israel offices of Qatari state-owned news network Al-Jazeera, “which is used for Hamas propaganda, incitement and harm to national security during wartime.” NN: Your internet will be going down at some point. Starlink is bullet proof. Its a mesh system free of ground based infrastructure. And it will soon link up with your cell phone. Nothing to do if you have an account. Which i want to give you. Attack the internet ground system in the US and you bring the economy to its knees… They can for sure do it anytime they want.

Iran Calls For Oil Embargo On Israel As Middle East Tensions Flare Up

  • Iran has called for a complete and immediate oil embargo on Israel as air strikes on the Gaza Strip continue.
  • The calls came hours after a blast at a hospital in Gaza killed a reported 500 people, with both sides blaming each other for the blast.
  • Oil prices climbed on Wednesday morning as rising tensions in the Middle East threaten supply.

Iran is calling for an oil embargo on Israel over the latest deadly air strikes on the Gaza Strip amid growing tensions in the Middle East just as U.S. President Joe Biden arrived in Israel. Iran wants “an immediate and complete embargo on the Zionist regime by Islamic countries, an oil embargo against the regime,” according to a statement from the foreign ministry on Telegram quoted by Bloomberg.  Iran’s Foreign Minister Hossein Amirabdollahian has also called for Muslim countries to expel their respective Israeli ambassadors if they have diplomatic relations with Israel. Amirabdollahian warned, “If the war crimes do not stop and the ongoing genocide by the apartheid Zionist regime in Gaza continues, the situation in the region will spiral out of control”. Amirabdollahian met with his Kuwaiti counterpart on the sidelines of an extraordinary meeting of the Organization of Islamic Cooperation (OIC)’s Executive Committee in Jeddah, Saudi Arabia. The emergency meeting is taking place hours after a missile strike on a hospital in Gaza killed about 500 people, with Israel’s army and Hamas blaming each other for the attack, which sent oil prices jumping by more than 2% early on Wednesday. Meanwhile, U.S. President Biden arrived in Israel on Wednesday to discuss the conflict. Following the bombing of the hospital, a meeting of Arab leaders and Biden in Jordan was canceled. Biden claimed that, from what he has seen, the explosion at the hospital was not carried out by Israel but by “the other team”. Israel is a small oil importer, but the further escalation of the Hamas-Israel war into the wider Middle East is not being ruled out, and analysts are increasingly concerned about supply from the world’s most important oil-exporting region. With Saudi Arabia also taking a pro-Palestine stance in its recent conversations with the U.S., the possibility for a quick end of the fighting is fading away while the possibility of greater regional involvement appears to be rising if oil prices are any indication.

Netanyahu insists ‘barbaric terrorists’ targeted Gaza hospital

Israeli Prime Minister Benjamin Netanyahu insisted on Tuesday that a deadly hospital strike in Gaza was carried out by “barbaric terrorists” and not the Israeli Defense Forces (IDF).

In a post on X, formerly known as Twitter, Netanyahu underlined that “the whole world knows” who is to blame. “[Those] who brutally murder our children, also murder [their own] children,” the Israeli official wrote. The two sides have been going back and forth, blaming one another. NN: you better figure it out. Their is nothing Israel or America for that matter can do. The lefty liberals have sold out to the radial minorities and radial Islam. Its nothing new,,, They did the same thing with Hitler. Appeasement never works. Its war and their is no such thing as a human war.  You do the best you can. But in the end the US bombed Hiroshima full of innocent people and no military targets of real value…..

Buildup to Armageddon……

It seemed crystal clear on Thursday: the IDF counter-invasion of Gaza would start either Friday or Saturday. The IDF had given certain deadlines for Palestinians to evacuate northern Gaza, with the deadlines expiring by midday Friday. The drum beat toward an invasion had started as early as Sunday-Monday and was only getting louder, with the air force having already paved the way with several days of withering bombing. Yet, now we have arrived at late Tuesday, and if anything, the signs (which could also be psychological warfare) are that the invasion is further away, and not yet imminent. A number of factors seem to have caused a delay, but sources report that one factor has been a growing concern that Hezbollah is waiting for the moment that most IDF ground forces are committed to Gaza to open a full front with the IDF in the north. In this narrative, the fact that Hezbollah did not engage at the start of the war Saturday morning and has kept its attacks on Israel at a fairly low threshold does not prove that it is deterred but is part of an elaborate fake-out to lure the IDF into a false sense of security, similar to what Hamas pulled off in the south.  As fodder for such suspicions, sources would note that Israeli intelligence and the political echelon must have a new level of humility about their assessments of enemy intentions after missing the boat regarding Hamas in the south.  This will not stop the IDF from invading Gaza, but it may have caused a delay to better double-check signs regarding Hezbollah’s intentions as well as to further reinforce the northern forces in case the worst comes to pass. There is also a deepening recognition in the IDF and at the political level, that the IDF has not done anything like this in decades, and that rushing in unprepared, simply to more quickly satisfy the wider population’s thirst for retribution, could be a large mistake. In this perspective, the 2006 Second Lebanon War ground invasion was a complete mess, with the airpower being the successful part, with both the 2008-9 and 2014 invasions of Gaza being more symbolic. In other words, with all of the many “rounds” of conflict, the IDF should not be overconfident about its talent at conducting large land invasion operations. In other words, with all of the many “rounds” of conflict, the IDF should not be overconfident about its talent at conducting large land invasion operations. While achieving strategic “surprise” would be impossible given that Hamas started this war, the IDF would also like to achieve at least a tactical surprise against Hamas, which requires planning. A number of other delaying factors could be US pressure to avoid civilian casualties, domestic concerns about Israeli hostages in Gaza, and giving more time for Palestinians to evacuate. Another factor is the US and world response to date. Currently, Israel feels huge support and like it has more time to work with to deal with Hamas.  One question that arises at this point though is whether top IDF and civilian leaders are misjudging the clock. According to Hamas’ numbers, already a couple thousand Palestinians are dead and many more wounded. In 2014, when 2,000 Palestinians were killed, at least half were civilians despite the IDF’s attempts to avoid civilian casualties. Such is the fog of war. The second that those numbers balloon, which will likely be when the invasion starts in a real way, there will be powerful US and world pressure to stop. Also, the Post has confirmed from many sources that no one has yet decided what will happen to Gaza after the IDF will supposedly topple Hamas’ rule. This and all of the other above factors have left top Israeli officials huffing and puffing for new superlatives for what they will do to Hamas… while still basically having done very little new for about a week. Only after the war will we know whether this extra time was spent wisely crafting a smarter and more effective invasion and post-invasion plan, or whether the delay will be looked back on as having wasted precious days to “change the reality in Gaza” and avoid future near term Hamas attacks. NN: Israel is under extreme pressure to stand down. The trick here is the savage slaughter of innocent Jews is acceptable since radical Islam is acceptable to the liberal masses. AND Jew protecting themselves from a barbaric Savage attacks i s a human rights violation. Here is where the masses rise up and arm themselves and change their leaders…. And tell the US to kiss their ass. It has a name its called the mindless march to Armageddon… 

Odds Are Israel-Hamas war spreads beyond Gaza, threatening oil supplies

The Israel-Hamas war will draw in militant groups from Lebanon or Syria and could prduce a direct conflict with Iran — creating more oil disruptions than financial markets currently think. Strategists are contemplating the potential ramifications of the conflict on financial markets, even as investors appeared to be relatively calm for now. Traders shook off concerns about the Middle East, with all three major U.S. stock indexes closing higher on Monday. Two-  through 30-year Treasury yields also finished higher as investors sold off government debt and abandoned the flight-to-safety trades seen last week. Meanwhile, oil futures settled lower following a sharp gain on Friday, with November West Texas Intermediate crude falling 1.2% to $86.66 a barrel on the New York Mercantile Exchange. Their is a significant chance the war will expand to include Hezbollah and other militant groups in Lebanon and Syria, producing “a regional war with higher risk of impacting oil, but not necessarily a direct impact.”

 Israel will attack Iran, its assets across the region, or its “core sphere of influence” Iraq — a scenario “that could force Iran to respond militarily, which would include disrupting oil supply to tell the U.S. to restrain Israel. Brent crude prices have not risen materially so far, but a significant escalation in tensions would cause crude oil prices to top $150 a barrel.

Blinken meets resistance in courtship of Egypt and Saudi Arabia on Gaza war

CAIRO — U.S. Secretary of State Antony Blinken faced stiff resistance from the Arab world’s most powerful strongmen on Sunday, trying to convince Egypt’s Abdel Fatah El-Sisi and Saudi Arabian Crown Prince Mohammed bin Salman to embrace Washington’s view of the Israel-Hamas conflict, despite deep public sympathies for the Palestinian cause in the respective countries. “I heard a lot of good ideas about some of the things we need to do moving forward,” Blinken told reporters on Sunday following his meetings with the two leaders. But differences of views emerged immediately on Israel’s right to wage a massive offensive in Gaza, which both Sisi and Mohammed raised concerns about. The top U.S. diplomat is hopscotching the Middle East with the goal of convincing Arab partners to condemn Hamas’s horrific assault in Israel and refrain from stoking domestic unrest in response to Israel’s devastating bombing campaign in Gaza. The violence has resulted in the death of more than 1,300 Israelis and more than 2,600 Palestinians.

In Riyadh, the Saudi ruler kept Blinken waiting several hours for a meeting presumed to happen in the evening but which the crown prince only showed up for the next morning.

Once the meeting began, Mohammed “stressed” the need to stop the military operations “that claimed the lives of innocent people” — a reference to Israel’s offensive — and lift the “siege of Gaza” that has left the Palestinian territory without water, electricity or fuel, according to the Saudi summary of the meeting. The crown prince also called for a halt in the “current escalation” in the conflict, a direct contradiction of U.S. policy, which has backed Israel to pursue its maximalist goal of eradicating Hamas.

A leaked State Department memo, confirmed by The Washington Post and first published by HuffPost, warned U.S. diplomats from using the phrases “de-escalation/ceasefire,” “end to violence/bloodshed” and “restoring calm” as the words did not comport with current U.S. policy.

Saudi Arabia, the birthplace of Islam and home to its two holiest sites, is an influential voice in shaping Arab perceptions of the conflict. While Riyadh prizes its role as a defender of Palestinians, it views Hamas as a spoiler to greater regional integration, including the crown prince’s flirtations with normalizing relations with Israel. But efforts to convince Riyadh to condemn Hamas have failed thus far, and the Saudi foreign ministry has denounced Israel’s extensive bombing campaign in Gaza, calling it an assault on “defenseless civilians.” U.S. engagement with Egypt has faced even more hurdles. On Saturday, U.S. officials announced that they had reached an agreement with Cairo for a temporary opening at the Rafah border between Gaza and Egypt for U.S. citizens seeking to flee the violence and Israeli bombardment. The announcement resulted in scores of the estimated 500- to 600 Palestinian Americans in Gaza rushing to the border, but none have been able to cross into Egypt amid contradictory remarks between U.S. and Egyptian officials about why the border won’t reopen. The Rafah border crossing — the only egress that Israel does not control — has also remained closed to critical supplies of food, water, fuel and medicine that aid groups and friendly nations, with Egypt’s coordination, are trying to send into Gaza.

“Egypt has put in place a lot of material support for people in Gaza, and Rafah will be opened,” Blinken said about his discussions with Sisi on the border. “We’re putting in place with the United Nations, with Egypt, with Israel, with others, the mechanism by which to get the assistance in, and to get it to people who need it.” President Biden appointed former ambassador David Satterfield on Sunday to lead the United States’ humanitarian efforts related to the conflict. Satterfield is scheduled to arrive in Egypt on Monday to help coordinate aid to Gaza, Blinken said. The United States and Egypt are conveying different messages about the conflict itself. During Blinken’s meeting at the presidential palace in Cairo on Sunday, Sisi said Israel’s assaults have exceeded “the right of self-defense,” and turned into “collective punishment.”The Egyptian president also commented on Blinken’s recent remarks in Israel in which the U.S. diplomat invoked his own Jewish heritage in explaining his understanding of Jewish oppression. Sisi, an authoritarian leader, has harshly cracked down on Islamists in Egypt. Still, Christian churches and religious leaders have frequently come under attack by Islamist extremist.

While Sisi denounced Hamas’s assault on Israelis, he blamed Israel for driving Palestinians to desperation given the lack of progress toward a two-state solution.

After Sisi met with his national security council earlier Sunday, his office put out a statement calling for an international summit “to study the future of the Palestinian cause.” Blinken told reporters he supported the idea but “we have to get through this crisis first.” NN: Their is no support for Israel in the Arab world. They all have their domestic Islamic crazies problem. They play to the crowd or they get overthrown.

 

 

Oil up on Middle East tensions

The prices of oil futures advanced by 2% on Friday amid the alleged renewed strains in the relations between the United States and Iran, which emerged from the former reportedly persuading Qatar not to release the latter’s frozen funds due to its support for Hamas’s attacks on Israel. Meanwhile, the spokesperson for the Iranian mission to the United Nations (UN), Ali Karimi Magham, noted the US does not have the right to do that.

Meanwhile, the US posted a new report on its crude inventories, which showed that the country’s refineries operated at a significantly lower level than expected, which is 85.7% of their capacity.

West Texas Intermediate (WTI) for November’s settlements jumped by 2.23% at 3:43 am ET to sell for $84.76 per barrel. At the same time, Brent for December’s deliveries soared by 2.09% to go for $87.74 per barrel. BlackMask Pod Cast:

This Could Get Real Ugly Real Fast

Russia Says Oil Products Are Included In Its 300,000-Bpd Export Cut Pledge

Russia’s commitment to reduce its oil exports by 300,000 barrels per day (bpd) includes oil products, Russian Deputy Prime Minister Alexander Novak said on Thursday in remarks that sowed further confusion about how much oil supply Russia is really withholding from the market. Russia has pledged to reduce its oil exports by 300,000 bpd until the end of 2023, in a show of solidarity with its OPEC+ partner Saudi Arabia, which is voluntarily reducing its oil production by 1 million bpd until 2023. While the Saudis essentially stick to their promises, Russia appears to be looking for excuses for the fact that it hasn’t delivered on the pledged export cuts. Months ago, when Russia first announced a 500,000-bpd cut – later lowered to a 300,000-bpd reduction – analysts expressed doubts about Russia’s actual supply cut, due to the opaque nature of Russian oil trade and the lack of data from Moscow, which has stopped reporting volumes after the invasion of Ukraine.  Today, Novak said, as carried by Russian news agency TASS, “When we talk about the oil market, about production, oil is extracted and supplied to markets and for processing, everything is considered together.” “The final product takes into account the production volumes that are produced,” Novak added. In September, Russia’s total crude and petroleum product exports rose by 460,000 bpd to 7.6 million bpd, with crude oil accounting for 250,000 bpd of the increase, the International Energy Agency (IEA) said in its monthly report published on Thursday. As a result of higher export volumes and narrower discounts of the key Russian crude grades to international benchmarks, Russia’s oil export revenues surged in September to the highest level since July 2022, the IEA has estimated. Russian oil export revenues jumped by $1.8 billion to $18.8 billion in September 2023—the highest level since July last year. The weighted average crude export price rose by $8 per barrel to $81.80 a barrel of Russian crude, narrowing the discount to North Sea Dated to $12.20 a barrel, its lowest since March 2022, per the IEA.   NN: 

An Appeaser Is One Who Feeds a Crocodile, Hoping It Will Eat Him Last

     BlaskMask Pod Cast:

Feeding the crocodile

 

IEA: Middle East turmoil has oil market ‘on edge’ Oil, gas prices rise after S. Arabia, IEA remarks

The International Energy Agency (IEA) cautioned on Thursday that the “sharp” escalation of tensions in the Middle East has put global oil markets “on edge,” as the region accounts for more than one-third of the world’s seaborne oil trade. In its latest monthly oil market report, the agency underlined that although the geopolitical turmoil in the region did not yet have “direct impact on physical supply,” markets are expected to remain on “tenterhooks as the crisis unfolds.” The global oil demand growth is anticipated grow by 2.3 million barrels per day (bpd) this year, the agency revealed, adding that global demand is projected to average 900,000 bpd in 2024 due to slower economic recovery. The global supply is projected to reach 1.5 million bpd in 2023 and 1.7 million bpd in 2024. The agency cautioned that voluntary output cuts could keep oil market in deficit.

Oil, gas prices rise after S. Arabia, IEA remarks

The prices of oil futures increased on Thursday after Saudi Arabia hinted at the possibility of additional extensions of its crude production cut. Moreover, the International Energy Agency (IEA) warned that the clashes between Israel and Hamas and the prospect of the conflict spreading to the entire Middle East endangered the stability of the global oil market. Meanwhile, the prices of European gas futures went up amid concerns about the supply of the commodity amid the uncertainty of its transport through Israel and the damage done to the Balticconnector pipeline. West Texas Intermediate (WTI) for deliveries in November grew by 0.93% at 6:38 am ET to sell for $84.26 per barrel. At the same time, Brent for settlements in December advanced by 1.14%, going for $86.86 per barrel. UK Natural Gas for December’s deliveries jumped by 8.19% at 6:45 am ET to sell for 137.980 pence per therm. A minute later, Dutch TTF for November’s settlements surged by 11.% to go for €51.25 per megawatt hour.