Written by rjs, MarketWatch 666
Here are some more selected news articles about the oil and gas industry from the week ended 11 November 2018. Go here for Part 1.
This is a feature at Global Economic Intersection every Monday evening.
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Dumping the dollar: Iran & South Korea agree cross-currency trade — South Korea and Iran have agreed to switch to national currencies in trade exchanges as the sides aim to strengthen relations despite the US sanctions on Tehran. The agreement is of great importance to both countries, Yonhap News Agency reported, explaining that the deal indicated Korea’s concerns about relations with Iran. The countries also agreed to make payments and settle their financial and banking accounts using the South Korean national currency, the won. That will allow South Korean and Iranian companies to continue their extensive exchanges in various fields. The volume of bilateral trade surpassed the $12-billion benchmark last year, according to Iran’s ambassador to Seoul Saeid Badamchi Shabestari, who told Press TV that the Iranian and Korean economies complement one another. The fact that Tehran-Seoul relations had been founded on “reality” would keep the countries determined to deepen the ties in the face of America’s “hostile and illegal unilateral actions,” the ambassador said. Earlier, South Korean Ambassador to Tehran Ryu Jeong-hyun said that despite many European companies leaving Iran under the pressure of US sanctions, South Korean firms understand the significance of the Iranian market and have chosen to stay.
EU struggles to find host for Iran trade mechanism (Reuters) – The European Union has so far failed to find a country to host a special mechanism to trade with Iran and beat newly reimposed U.S. sanctions, three diplomats said, as governments fear being targeted by U.S. counter measures. Voicing opposition to U.S. policy on the day Washington announced a new raft of sanctions on Iran, the European Union reissued its Nov. 2 statement on Monday saying it was still setting up the so-called special purpose vehicle (SPV). The European Union had hoped to ready its SPV, which is designed to circumvent the U.S. sanctions, by Monday’s sanctions announcement by the United States. However, no EU country has so far volunteered to host the entity, the EU diplomats said. Several states have been asked by EU foreign policy chief Federica Mogherini to consider being the headquarters, as the bloc tries to uphold the arms control accord, which U.S. President Donald Trump withdrew from in May. While the European Commission declined to comment on Monday, European Economic Affairs Commissioner Pierre Moscovici said “the European Union does not approve of” the reimposition of U.S. sanctions lifted under the 2015 nuclear deal. Brian Hook, Washington’s special representative for Iran, underscored the risks for European companies, warning that any EU country hosting the SPV could potentially be sanctioned. “The United States will not hesitate to sanction any sanctionable activity in connection with our Iran sanctions regime,” Hook told a telephone call with European reporters when asked about the vehicle. The SPV, which could incorporate a barter system, aims to sidestep the U.S. financial system by using an EU intermediary to handle trade with Iran. It could ensure, for example, that Iranian oil bought by Europeans could be paid for with EU goods and services of the same value. A senior French diplomat said Paris was confident the mechanism would be legally in place soon, but things needed to be fully cemented first.
SWIFT Caves To US Pressure, Defies EU By Cutting Off Iranian Banks – Shortly after Trump reimposed nuclear sanctions on Tehran on November 5, the international financial messaging system SWIFT announced the suspension of several Iranian banks from its service. “In keeping with our mission of supporting the resilience and integrity of the global financial system as a global and neutral service provider, SWIFT is suspending certain Iranian banks’ access to the messaging system,” SWIFT said.The Belgium-based financial messaging service added:“This step, while regrettable, has been taken in the interest of the stability and integrity of the wider global financial system.”SWIFT’s decision has further undermined EU efforts to maintain trade with Iran and save an international deal with Tehran to curtail its nuclear program, after President Donald Trump pulled the US out in May. Being cut off from SWIFT makes it difficult for Iran to get paid for exports and to pay for imports, mostly of oil.As a further note, the EU was one of the few entities not to receive a sanctions waiver from the US earlier this week.The European Commission was understandably displeased, and on Wednesday said it found the SWIFT decision “regrettable” “We find this decision rather … regrettable,” Commission foreign affairs spokeswoman Maja Kocijancic told a briefing.As we reported over the weekend, last Friday Treasury Secretary Steven Mnuchin warned SWIFT it could be penalized if it doesn’t cut off financial services to entities and individuals doing business with Iran. However, by complying with Washington, SWIFT now faces the threat of punitive action from Brussels.Washington has been pressuring SWIFT to cut off Iran from the financial system as it did in 2012 before the nuclear deal. Six years, ago the EU imposed sanctions on Iranian banks, forcing SWIFT, which is subject to EU laws, to cut financial transactions with at least 30 of Iran’s financial institutions, including the central bank. Iranian banks were reconnected to the network in 2016 after the Iran nuclear deal came into force, allowing much needed foreign cash to flow into Tehran’s coffers.
France Vows to Protect Iran Against US Acting as World’s “Trade Policeman” – France has vowed to fulfill plans to defy the US’ sanctions on Iran while increasing the international role of the euro in order to prevent Washington from acting as the world’s “trade policeman”. After President Donald Trump pulled out of the Iranian nuclear in May, the European Union – along with Russia and China – remained committed to the agreement, and has insisted on defying the sanctions and facilitating trade with Tehran.
France Takes The Lead In Protecting Iran Oil Trade From U.S. Sanctions – France aims to lead the European Union (EU) efforts in defying U.S. sanctions on Iran, by supporting the creation of a payment mechanism to keep trade with Iran and making the euro more powerful, France’s Economy Minister Bruno Le Maire said in an interview with the Financial Times. “Europe refuses to allow the US to be the trade policeman of the world,” Le Maire told FT, adding that the EU needs to “affirm its sovereignty” in the rift between the EU and the United States over the sanctions on Iran. The EU has been trying to create a special purpose vehicle (SPV) that would allow the bloc to continue buying Iranian oil and keep trade in other products with Iran after the U.S. sanctions on Tehran return. The idea behind the SPV is to have it act as a clearing house into which buyers of Iranian oil would pay, allowing the EU to trade oil with Iran without having to directly pay the Islamic Republic. As the U.S. sanctions on Iran snapped back on Monday, the SPV hasn’t been operational and reports have had it that the undertaking is very complicated and politically sensitive. The bloc is also said to be struggling with the set-up, because no EU member is willing to host it for fear of angering the United States, the Financial Times reported recently, citing EU diplomats. On Monday, the Belgium-based international financial messaging system SWIFT said that it would comply with the U.S. sanctions on Iran and would cut off sanctioned Iranian banks from its network. This was a blow to the EU’s attempts to defy the U.S. sanctions. The decision by SWIFT highlights the need for an SPV, France’s Le Maire told FT, but he refused to name countries that could host such a special vehicle. Yet, there have been expressions of interest, he told FT.
Iran Shuts Off Oil Tanker Tracking System As US Sanctions Start – The US on Monday (Nov 5) is reimposing disciplinary measures targeting Iran’s oil, shipping, insurance, and banking sectors in what US Secretary of State Mike Pompeo called “the toughest sanctions ever placed” against Iran. In response, Tehran has reportedly turned off all oil tanker tracking systems as the sanctions take effect today. Analysts at TankerTrackers.com, a watchdog that monitors production, refinement, shipping, and trading of crude oil on a global scale, revealed in late October all Iranian tanker vessels turned off their transponders to avoid international tracking for the first time since 2016. “It’s the first time I’ve seen a blanket black-out. It’s very unique,” TankerTrackers co-founder Samir Madani told Sputnik News.Madani said with the transponders turned off, the vessels can only be monitored using private satellite imagery. He believes that such a shift to lesser transparency is a ploy by Iran’s leadership to keep the international supply chains open amid US sanctions.“Iran has around 30 vessels in the Gulf area, so the past 10 days have been very tricky, but it hasn’t slowed us down. We are keeping watch visually,” said co-founder Lisa Ward.The analysts suggested that going dark could pose significant problems in pinpointing the date when a tanker loaded its crude cargo. Between 2010 and 2015, when Iran was slapped with international sanctions, its oil industry discovered that it could keep crude on tankers off the Gulf coast to avoid supply chain disruptions.
Iran Is Preparing For A Long Siege As The Global Squeeze Begins – On Monday the harshest and highest level economic and energy sanctions that can be imposed on any country have been imposed unilaterally on Iran. The US establishment will try its best to bring the Islamic Republic to its knees and Tehran will do its best to cross the US minefield. Whatever the outcome, Iran will never submit to Washington’s twelve conditions. Iran is not a fledgling country ready to collapse at the imposition of the first tight sanctions, nor will Iran allow its oil exports to be frozen without reacting. In fact, US and UN sanctions against Iran date to the beginning of the Islamic Revolution and the fall of the Shah in 1979. No doubt the Iranian economy will be affected. Nevertheless, Iranian unity today has reached new heights. President Trump has managed to bring reformists and radicals together under the same umbrella! Iranian General Qassem Soleimani has said to President Hassan Rouhani: “You walk and we stand ahead of you. Don’t respond to Trump’s provocations because he is insolent and not at your level. I shall face him myself”. Rouhani believes “US policy and its new conspiracy will fail”. All responsible figures in the Iranian regime are now united under the leadership of Imam Ali Khamenei against the US policy whose aim is to curb the regime. Under the previous worldwide sanctions regime, Iran began developing missile technology and precision weapons. Iran has never yielded in support of its allies because these alliances are an integral part of its ideology. Today, Tehran is not standing alone against the US and is waiting to see what course global sanctions will take before reacting. Officials in Tehran, convinced that Trump will win a second term, are preparing for a long siege. Sayyed Ali Khamenei said his country will never strike any deal with the US and won’t be a party to any future agreement because the US is fundamentally untrustworthy. Iran relies on the unity of its own citizens and on the support of its partners in the Middle East, Europe (a crucial strategic ally), and Asia. Europe, notably, is trying to disengage itself from the US sanctions, but so far with little success. Its leaders are begging in vain for an exemption for trade in food and medicine to reduce the population’s suffering.
South Korea buyers heading to Iran for talks on resuming oil imports: sources (Reuters) – A South Korean delegation including oil buyers is expected to head to Iran next week to discuss resuming Iranian oil imports after a three-month halt, three sources with knowledge of the matter said. South Korea is one of eight countries that received waivers from the United States to continue importing Iranian oil for 180 days. It can import up to 200,000 barrels per day (bpd) of Iranian oil, mostly condensate, the sources said, without invoking U.S. economic sanctions re-imposed on Iran on Nov. 5. The North Asian country was the third-biggest buyer of Iranian oil and also the largest importer of its condensate before it stopped imports in September ahead of U.S. sanctions. South Korea’s condensate imports from Iran stood at 159,770 bpd in January-August, down about 49 percent from 311,885 bpd in the same period last year, according to Reuters calculations based on the Korea National Oil Corp (KNOC) data. Condensate is an ultra light oil processed at splitters, typically to produce naphtha for petrochemicals. While the waiver has given South Korea the green light to resume Iranian oil imports, the sources said issues such as payment, shipping and insurance needed to be worked out. “The actual (import) volume will depend on next week’s negotiations,” one of the sources said, adding that the oil’s price will be a key factor. The U.S. sanctions waivers have eased pressure on Iran to further discount its oil against Saudi Arabia’s.
How US Sanctions on Iran Could Herald a Profound Global Power Shift –In the medium term, the US will lose influence as Iran gains confidence; in the worst case scenario, there will be a war whose consequences will be incalculable. – On Monday, the US will ratchet up its brutal and merciless economic war against Iran, raising sanctions to a new level. The Trump administration has said its goal is to reduce Iranian oil exports to zero, although waivers were being negotiated with some countries.Such a move could bankrupt Iran and destroy the government’s ability to deliver public services, fomenting popular rebellion.John Bolton, President Donald Trump’s national security adviser, has been clear about the logic behind this: he wants to install a new government friendly to the US. He spelled out these plans to the opposition group Mujahedin-e-Khalq (MEK) at a Paris conference last year, although he has subsequently backtracked, saying regime change is “not American policy“. The US is not simply intent on waging an economic war, but also wants to build up a military and strategic coalition against Iran. This seems to have been the most important item on the agenda of last week’s Manama dialogue in Bahrain, where US Defence Secretary James Mattis took aim at Iran. Mattis is keen on the creation of a what amounts to an Arab NATO built around a regional network of Sunni Arab states in the shape of the emerging Middle East Strategic Alliance, potentially including Benjamin Netanyahu’s Israel. The primary outside backers would be the US, France and Britain. But this twin-pronged military-economic strategy is doomed to failure, and will likely end in humiliation for the US. In the medium term, it will backfire; the US and its allies will lose influence, while Iran will gain confidence and power. In the worst case scenario, it will result in a war whose consequences will be incalculable.For starters, Trump’s sanctions policy is beset by contradictions. It will not and cannot work, because the US will be unable to isolate Iran in the way it hopes to. The problem was set out clearly in an excellent article by Gardiner Harris in the New York Times earlier this week, which noted that China and India, the largest buyers of Iranian oil, will continue to make substantial purchases. Turkey and Russia are likely to do the same, which is not much of a surprise.
Russia clashes with Western oil buyers over new deals as sanctions loom (Reuters) – Russian energy majors are putting pressure on Western oil buyers to use euros instead of dollars for payments and introducing penalty clauses in contracts as Moscow seeks protection against possible new U.S. sanctions. Seven industry sources told Reuters that Western oil majors and trading houses have clashed with Russia’s third and fourth biggest producers, Gazprom Neft and Surgutneftegaz, over 2019 oil sales contract terms during unusually tough annual renegotiation in recent weeks. The development mirrors a similar stand-off between Western buyers and Russia’s top oil producer, Rosneft. Earlier this week, trading sources told Reuters that Rosneft wants Western oil buyers to pay penalties from 2019 if they fail to pay for supplies in the event that new U.S. sanctions disrupt sales. Now sources have told Reuters that Surgutneftegaz and Gazprom Neft have also clashed with their buyers over penalties and the use of euros and other currencies to replace the dollar in contracts. “It is part of the same trend – the Russian oil industry is working on mitigating new sanctions risks. The buyers in turn argue they cannot carry those risks so we are trying to find compromises,” said one source with a Western buyer involved in negotiations, asking not to be named as the talks are confidential. Russia has been under U.S. and EU sanctions since 2014 when it invaded Ukraine’s Crimean peninsula. The sanctions have been repeatedly widened to include new companies and sectors, making it tough for Russian oil firms to borrow money abroad, raise new capital or develop Arctic and unconventional deposits. President Vladimir Putin’s administration has been hoping for a thaw in relations with the United States since President Donald Trump came to power but Washington has imposed new sanctions instead,
Russian Oil Output Nears All-Time High With October Ramp-Up – Russian oil production moved closer to an all-time high before the nation meets with OPEC partners to discuss future supply.The country’s crude and condensate output averaged 11.412 million barrels a day last month, according to data from the Energy Ministry’s CDU-TEK unit released Friday. That’s about 160,000 barrels a day more than two years ago, before Russia agreed to cut supply with OPEC. It’s a post-Soviet record, and not far off the highest-ever output.The production boom comes amid mixed signals from global oil producers. Russia suggested last Saturday it could push output to a fresh record, just days after a committee representing the Organization of Petroleum Exporting Countries and its allies signaled the group could cap supply again in 2019.Crude prices are down by more than 15 percent since hitting a four-year high last month. The market is beset by bearish forces: rising oil inventories; higher production from Russia, OPEC and the U.S.; there’s also great uncertainty about the impact of American sanctions on Iran’s exportsand concerns over global demand.Russia, which relies on energy for almost half its budget revenue, has repeatedly said that its plans for future output will depend on cooperation with OPEC. The cartel’s production in October climbed to the highest level since 2016 as increases by Saudi Arabia and Libya offset losses from Iran, according to a Bloomberg survey. ussian oil output peaked during the Soviet era, averaging 11.416 million barrels a day in 1987, according to BP Plc data. No monthly numbers are available, and the figures account differently for some liquids derived from natural gas. This would make it hard to pinpoint when exactly the country may set a new historic peak. Maintaining current production levels is also not a given, especially since volumes can dip in the freezing winter months, and during summer-season maintenance.
Russian Oil May Gain a Lot by Giving a Little on OPEC U-Turn — Russia’s oil industry is feeling the pressure of a possible return of production caps. In fact, by sacrificing a fraction of output, the companies could see their stocks rise. Fresh output curbs may push crude prices up, benefiting Russian producers just as they did during the cuts that began last year. The Moscow Oil & Gas Index has gained about 40 percent since the initial output pact between OPEC and Russia was reached almost two years ago. The Organization of Petroleum Exporting Countries has signaled it will consider a return to cutting supply next year as oil prices wilt in the face of another surge in U.S. shale production. A new deal would come just as Russia’s production climbs to a post-Soviet high — following its June agreement with OPEC to ease supply caps — and its oil companies generate record cash. “History shows that we are able to turn production cuts to our advantage,” said Alexander Kornilov, an Aton LLC analyst in Moscow. “If we look at how the Russian oil and gas index has moved since 2016 — when the country first agreed on production cuts with OPEC — everything becomes clear.” Russian oil executives met with Energy Minister Alexander Novak Thursday to share their views as they put together investment plans for next year. It was a surprisingly low-level meeting, with only one chief executive in attendance, and addressed general cooperation with OPEC rather than specific output figures, according to Lukoil PJSC. “We haven’t discussed yet” whether further cooperation means output cuts in 2019, Lukoil First Vice President Ravil Maganov said after the meeting in Moscow, adding “I can’t rule out” production curbs. OPEC and its allies, including Russia, are scheduled to meet for talks this weekend in Abu Dhabi. While Novak and Saudi Energy Minister Khalid Al-Falih have discussed the agenda, Russia isn’t yet ready to take any decision on renewed supply curbs, an official familiar with the matter said. Any OPEC+ agreement that can stabilize crude prices above current levels will benefit Russian oil companies, according to Alexander Losev, chief executive officer of Sputnik Asset Management. “Producing less at $80 per barrel is better than producing at current levels and at $70 per barrel,” he said. “A certain output decline will also help the companies to reduce operating costs and further improve their financials, including free cash flow.”
Russia and Saudi Arabia’s oil-market management challenge: Kemp (Reuters) – Russia and Saudi Arabia have started to discuss cutting production next year following steep falls in oil prices in the last month, according to a report by Russia’s TASS news agency. The report has not been confirmed but has arrested the rapid decline in prices, at least temporarily, and should not come as a surprise given the altered dynamics in the oil market. The oil market is best thought of as a complex adaptive system, characterised by long lags and positive feedback mechanisms, which exaggerate the impact of even small changes in production and consumption. OPEC, led by Saudi Arabia, and its non-OPEC allies, led by Russia, have stated that their objective is to keep the market as close as possible to balance and minimise damaging price swings. But in the history of the oil market, production and consumption have rarely been balanced except accidentally and not usually for very long. The market’s natural state is one of imbalance, with deep and prolonged cycles in spot prices and inventories as it alternatives between periods of under- and over-supply. In this context, the best market management strategy for OPEC+ involves timely, frequent and small adjustments in production in response to changing estimates of production and consumption. Prompt action in response to incoming information about potential future market imbalances may be able to forestall the need for much larger adjustments later. Other members of OPEC+ have no spare production capacity and are not needed to show much production flexibility to keep the market close to balance.
Return to oil production cuts in 2019 cannot be ruled out: OPEC sources (Reuters) – A return to oil production cuts by OPEC and its allies next year cannot be ruled out, two OPEC sources said on Wednesday, to avert a possible supply glut that could weigh on prices. The sources were responding to a report by Russia’s TASS news agency that Russia and Saudi Arabia had started bilateral discussions over possible curbs to output in 2019. Saudi-led OPEC and its allies including Russia decided in June to relax output curbs in place since 2017, after pressure from U.S. President Donald Trump to reduce oil prices and make up for supply losses from Iran. Asked whether discussions pointed to a return to supply cuts in 2019, one of the two sources, who are delegates from the Organization of the Petroleum Exporting Countries, said: “Certainly not the other way around.” Oil prices have come under downward pressure from rising supplies, even though Iranian exports are expected to fall because of new U.S. sanctions. Forecasts of a 2019 supply surplus and slowing demand have also dented the market. Brent crude had dropped from a four-year high in October above $86 a barrel to $71 on Tuesday. Prices rallied back above $73 on Wednesday, supported by the TASS report. Separately, a top OPEC official from Iran, which has been angered by higher production in Saudi Arabia and Russia in response to Trump’s calls, said Riyadh and Moscow needed to cut output by 1 million barrels per day. “There is no other way for Saudi Arabia and Russia,” Hossein Kazempour Ardebili, who represents Iran on OPEC’s board of governors, told Reuters when asked whether producers needed to trim output in 2019. The extra supply has caused a drop in crude prices, hurting income for other oil producers while helping Iran’s foe Trump in the U.S. midterm elections, Kazempour said. “They pushed the prices $15 a barrel lower in one month and only made U.S. gasoline cheaper for Trump. They lost billions on revenue and caused losses to poor producers in Africa and South America,” he said. A ministerial committee of some OPEC members and allies meets on Sunday in Abu Dhabi to discuss the market and outlook for 2019. Iran is not a member of this committee, which it wants scrapped. This group, called the JMMC, could make a recommendation on 2019 output policy to the next decision-making meeting of OPEC and non-OPEC oil ministers, a third OPEC source said. That meeting takes place on Dec. 6-7 in Vienna.
Hedge funds turn negative on oil (Reuters) – Hedge fund managers were net sellers of petroleum-linked futures and options for a fifth week running last week as concerns about sanctions on Iran evaporated and investors refocused on economic worries. The net long position in the six most important petroleum-linked futures and options contracts was cut by a further 73 million barrels in the week to Oct. 30. Portfolio managers have been net sellers of 371 million barrels since the end of September, taking their net long position to the lowest level for 15 months, according to records published by regulators and exchanges. The sharpest sell-offs last week were in Brent (-54 million barrels) and U.S. gasoline (-11 million) with smaller reductions in NYMEX and ICE WTI (-2 million), U.S. heating oil (-4 million) and European gasoil (-2 million). Position changes are no longer confined to long liquidation. Fund managers have started to establish short positions betting on further price falls (https://tmsnrt.rs/2P8LQ1S). Short positions across all six contracts have doubled over the past five weeks to 192 million barrels, the highest level for more than 10 months. Fund managers still favour bullish long positions over bearish short ones by a ratio of almost 5:1, but the ratio has sunk from more than 12:1 only five weeks ago. The hedge fund community’s bullish bias is the lowest for a year and positioning now looks far less stretched than it did a month ago. With hedge fund positions concentrated in near-dated futures and options contracts, the sell-off has hit the front-end of the curve especially hard and accelerated the shift from backwardation to level or contango.
The Rapid Acceleration Towards Peak Oil Demand – The drumbeat towards peak oil demand is accelerating, but since much of the acceleration is happening outside of the United States, its cadence is muted. To be clear, the developed world passed peak oil demand a decade ago and has for years been forecast to continue reducing its demand. Increasing demand in industrializing countries, particularly China and India, each with a population tantamount to that of the OECD, slightly overpowers declines in the developed world, and as a result, global demand continues to increase. In its 2015 World Energy Outlook, the IEA forecast 1.5% y/y increase outside the OECD, -1.2% y/y in the OECD, and an overall growth of 0.5%. Global peak demand will likely occur while developing world demand is still growing. Increased decline in the first world could crest demand, but merely slowing the growth in the rest of the world is the more likely to tip the global balance to plateau then decline. Demand for oil is dominated by transportation (cars, trucks/trains, planes and boats) and industry (plastics, fertilizers, steam/heat). Passenger vehicles comprise about 25% of global oil demand and thus are the number one target for major emissions reductions. When the IEA released its 2015 World Energy Outlook mentioned above, not a country on the planet had stated plans to ban new sales of oil-fueled cars. Only Japan and Portugal had even created incentives for electric vehicles. In 2016, three European countries outlined plans to end sales of new gasoline and diesel engines. Before the year was over, IEA revised its OECD forecast downward to -1.3% per year. In 2017 a rash of targets to constrain fossil fuels for cars led Forbes to declare it to be “The Year Europe Got Serious about Killing the Internal Combustion Engine.” In 2018, even more European countries have joined the list, stating their intent to end the sale of new petroleum vehicles at some point between 2030 to 2040. Also this year, the trend has expanded out of Europe to Israel, Costa Rica, and Taiwan, with targets as early as 2021. Over the same three years, 2016 to present, 20 metropolitan areas from these and other countries announced their own plans to end the use (not just sale) of gasoline and/or diesel vehicles, and mostly before or by 2030.
Oil prices rise as US sanctions on Iran begin, Tehran defiant –Oil prices rose on Monday as U.S. sanctions against Iran’s fuel exports began but were softened by waivers allowing major buyers to import Iranian crude for a while, as Tehran said it would defy Washington and continue to sell. Brent crude oil was up 98 cents a barrel, or 1.4 percent, at $73.81 by 9:30 (1440 GMT). U.S. light crude was 64 cents, or 1 percent, higher at $63.78 a barrel. “Oil bulls have long pinned their hopes on the Iran factor and today’s dearth of upside potential will be a major source of concern,” said Stephen Brennock, analyst at brokerage PVM Oil. Both oil price benchmarks have lost more than 15 percent since hitting four-year highs in early October, as hedge funds have cut bullish bets on crude to a one-year low, data show. Washington imposed sanctions against Iran on Monday, restoring measures lifted under a 2015 nuclear deal negotiated by the administration of former U.S. president Barack Obama, and adding 300 new designations including Iran’s oil, shipping, insurance and banking sectors.In response, Iranian President Hassan Rouhani said in speech broadcast on state TV that Iran would break the sanctions and continue to sell oil.And Washington said on Friday it will temporarily allow eight importers to keep buying Iranian oil.”U.S. sanctions against Iran … created serious concerns with traders earlier in September. But they are turning into a damp squib,” said Fiona Cincotta, market analyst at City Index.On Monday, the Trump administration identified the eight jurisdictions that will receive waivers: China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey.South Korea said earlier on Monday it had been granted a waiver, at least temporarily, to import condensate, a super-light form of crude oil, from Iran. It was also allowed the continue financial transactions with the Middle East country, it said. Chinese foreign ministry spokeswoman Hula Chunking expressed regret at the U.S. decision, but would not directly say if China had or had not been granted an exemption.
Oil mixed as U.S. imposes sanctions on Iran, Tehran defiant (Reuters) – Oil prices were mixed on Monday after a steep five-day fall, as the United States formally imposed punitive sanctions on Iran but granted eight countries temporary waivers allowing them to keep buying oil from the Islamic Republic. The sanctions are part of U.S. President Donald Trump’s effort to curb Iran’s missile and nuclear programs and diminish its influence in the Middle East. Oil markets have been anticipating the sanctions for months. Prices have been under pressure as major producers, including Saudi Arabia and Russia, have ramped up output to near-record levels, while weak economic figures in China have cast doubt on the demand outlook. News of waivers on the sanctions weighed on prices, analysts said. “There’s some doubt that the sanctions are going to have the bite the market originally thought.” Brent crude futures rose 34 cents to settle at $73.17 a barrel. U.S. West Texas Intermediate (WTI) crude futures fell 4 cents to settle at $63.10 a barrel. Both oil benchmarks have slid more than 15 percent since hitting four-year highs in early October. Hedge funds have cut bullish bets on crude to a one-year low. The United States has granted exemptions to China, India, Greece, Italy, Taiwan, Japan, Turkey and South Korea, allowing them to continue buying Iranian oil temporarily, Secretary of State Mike Pompeo said on Monday. Some of the countries are OPEC member Iran’s top customers. Trump on Monday said he wants to impose sanctions on Iran’s oil gradually, citing concerns about shocking energy markets and causing global price spikes. U.S. officials have said the aim of the sanctions is eventually to stop all Iran’s oil exports. Pompeo said more than 20 countries have already cut oil imports from Iran, reducing purchases by more than 1 million barrels per day. Sanctions have already cost Iran billions of dollars in oil revenue since May, U.S. Special Representative for Iran Brian Hook told reporters on a call on Monday. Iran said on Monday it would break the sanctions and continue to sell oil abroad.
Oil Trades Near 7-Month Low — Oil held near the lowest level in seven months as concerns over a supply crunch eased after the U.S. granted waivers to eight governments to continue buying some Iranian crude. Futures in New York slid as much as 0.6 percent after declining 6.6 percent in the past six sessions. While American sanctions targeting Iranian oil sales formally kicked in on Monday, Secretary of State Michael Pompeo confirmed that China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey have been given temporary exemptions from the restrictions. Meanwhile, U.S. crude inventories are forecast to have risen a seventh week. Crude has fallen more than 17 percent from a four-year high last month as American crude inventories continued to expand at a time when chances grew of the Trump administration granting waivers to lower gasoline prices ahead of the U.S. midterm elections. Meanwhile, a trade dispute between Washington and Beijing stoked concerns over slowing global growth that underpins energy consumption. West Texas Intermediate crude for December delivery dropped as much as 40 cents to $62.70 a barrel on the New York Mercantile Exchange, and traded at $62.85 on the New York Mercantile Exchange at 7:48 a.m. in London. Futures settled at $63.10 on Monday, down 4 cents. Total volume traded was in line with the 100-day average. Brent futures for January settlement slid 49 cents, or 0.7 percent, to $72.68 a barrel on the London-based ICE Futures Europe exchange. Prices gained 34 cents to $73.17 on Monday. The global benchmark crude traded at a $9.73 premium to WTI for the same month. As criticism increased from some U.S. conservatives who didn’t think Donald Trump should have issued any waivers, the U.S. President defended the move by saying he didn’t want to shock energy markets by forcing all buyers to halt Iranian oil purchases. The exemptions were only temporary measures to ease buyers’ transition and avoid destabilizing the market, Pompeo also reiterated. Meanwhile, U.S. crude stockpiles are forecast to have risen by 2 million barrels last week, according to a Bloomberg survey before Energy Information Administration releases data Wednesday. That would be the longest streak of increases since March 2017.
Brent Crude, Natural Gas Post Gains – Crude oil futures posted mixed results Monday. The December West Texas Intermediate (WTI) crude oil price slipped by four cents Monday to settle at $63.10 a barrel. The WTI traded from a high of $64.14 down to $62.52. The January Brent, meanwhile, posted a 34-cent increase to settle at $73.17 a barrel. Monday also marked an occasion that oil traders have anticipated for months: the Trump administration’s re-imposition of economic sanctions on OPEC member Iran to constrain its nuclear program. In a press conference Monday, U.S. Secretary of State Mike Pompeo noted that eight countries – China, India, Italy, Greece, Japan, South Korea, Taiwan and Turkey – will be allowed to continue importing Iranian crude on a temporary basis to “ensure a well-supplied oil market.” Despite the waivers, however, an analyst with Wood Mackenzie pointed out that the downward trend in Iran’s exports of crude oil and condensate should continue. “Beyond November 5, we expect crude exports to fall to 1 million barrels per day, though it could vary month to month; and condensate to 100,000 barrels per day. Crude sales will be concentrated around a core of supportive state buyers, China, India and Turkey.” In contrast, Iran’s exports peaked at 2.8 million barrels per day in April 2018, noted Falakshahi. He added that Iran faces difficulty maximizing its exports when virtually all trade in crude oil is cleared in U.S. dollars. That puts international oil companies, many national oil companies, traders and banks off limits, he explained. “Crude exports contribute one-third of government revenues, so there’s a huge incentive for Iran to use every conceivable lever,” . “We’ve seen Iranian crudes discounted by US$1 per barrel compared with similar Middle East grades, the biggest for a decade. Iran is hoping the EU’s barter proposal – goods as indirect payment for oil – opens doors, though we doubt any big oil traders will leap at the opportunity.” Front-month reformulated gasoline (RBOB) settled at $1.69 a gallon, losing two cents for the day. December RBOB peaked at $1.72 and bottomed out at $1.68. Compared to Friday’s settlement price, December Henry Hub natural gas futures posted an impressive 8.5-percent gain on Monday. The benchmark rose by 28 cents to settle at $3.57.
Oil slips on worries that economic slowdown could weigh on fuel demand –Oil prices slipped on Tuesday, weighed down by exemptions from Washington that will allow Iran’s biggest oil customers to keep buying from Tehran, as well as concerns that an economic slowdown may curb fuel demand growth. U.S. West Texas Intermediate (WTI) crude futures were at $62.95 a barrel at 0355 GMT, down 15 cents, or 0.2 percent, from their last settlement. International Brent crude oil futures were down 28 cents, or 0.4 percent, at $72.89 a barrel. Analysts said expectations of an economic slowdown in coming months were weighing on the fuel demand outlook, while concerns eased on the supply-side after Washington granted eight importers of Iranian oil sanctions waivers that will allow them to continue purchases. Washington gave 180-day exemptions to eight importers – China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey. These are Iran’s biggest buyers, meaning Iran will be allowed to still export some oil for now. Currency weakness is putting pressure on key growth economies in Asia, including India and Indonesia. At the same time, the trade dispute between the United States and China is threatening growth in the world’s two biggest economies.
Oil Prices Tumble On Iran Uncertainty – Oil prices rose a bit on Monday, but fell hard in early trading on Tuesday. The market is looking for some direction now that Iran sanctions are in place. The U.S. confirmed that it granted waivers to eight countries, allowing them to continue to import oil from Iran for the next six months. The countries include South Korea, Japan, India, China, Turkey, Taiwan, Italy and Greece. That ensures that Iran will continue to import oil, although there is a great deal of disagreement among analysts over how much Iran’s exports will fall. “This is bad news for oil prices, as it means that the supply situation on the oil market is set to ease further,” Commerzbank said in a note. The investment bank predicts that Iran’s oil exports will stabilize at around 1 million barrels per day, and “could even increase again in the coming months because Japan and South Korea have hardly been buying any Iranian oil,” and they were given waivers to allow them to continue buying. To be sure, not everyone agrees on this point, and some see the hawkish government in Washington tightening the screws in the months ahead. The U.S. agreed to grant waivers to eight countries importing Iranian oil, seemingly backtracking a policy to cut Iran’s oil exports to zero. However, Secretary of State Mike Pompeo said that the “maximum pressure” campaign will continue and that the administration hopes to get to zero. The waivers were granted to countries that “need a little bit more time,” he said. . Hedge funds and other money managers continued to reduce their bullish bets on crude oil last week. As it became clear that the U.S. would be offering waivers on secondary sanctions last week, investors turned bearish. The net-length in the six months important oil futures contracts declined for the fifth consecutive time in the last week of October. The recent price correction for oil leaves a lot of room for a rebound, and Citigroup said that because refineries will end maintenance season and begin ramping up operations again, oil prices are “biased to the upside” for the rest of 2018. Brent could average $80 per barrel in the fourth quarter, Citi’s Ed Morse said, and might even temporarily spike as high as $90 or $100 per barrel. Iran will be central to this scenario, while outages are possible in Nigeria as elections loom.
Oil prices drop over 2 percent on Iran sanctions waivers (Reuters) – Oil prices fell on Tuesday, with U.S. crude futures hitting an eight-month low, a day after Washington granted sanction waivers to top buyers of Iranian oil and as Iran said it has so far been able to sell as much oil as it needs to. Brent crude LCOc1 futures fell $1.04 to settle at $72.13 a barrel, down 1.42 percent. The global benchmark hit a session low of $71.18 a barrel, the lowest price since Aug. 16. U.S. West Texas Intermediate (WTI) crude CLc1 futures fell 89 cents, or 1.41 percent, to settle at $62.21 a barrel. The session low was $61.31 a barrel, the weakest price since March 16. Iran said it has so far been able to sell as much oil as it needs and urged European countries opposed to U.S. sanctions to do more to shield Iran. The United States on Monday restored sanctions targeting Iran’s oil, banking and transport sectors and threatened more action. Treasury Secretary Steven Mnuchin said Washington aimed to bring Iranian oil exports to zero, but 180-day exemptions were granted to eight importers: China, India, South Korea, Japan, Italy, Greece, Taiwan and Turkey. This group takes as much as three-quarters of Iran’s seaborne oil exports, trade data shows, meaning the Islamic Republic will still be allowed to export some oil for now. Industry estimates suggest Iran’s oil exports have fallen 40 to 60 percent since Trump said in May he would reimpose sanctions. However, exemptions could allow exports to rise again after November. Turkish President Tayyip Erdogan said the country, a top importer of Iranian oil, would not abide by the sanctions, which he said were aimed at “unbalancing the world.” “While the Iranian sanctions should still be viewed as a latent bullish consideration capable of limiting much additional price slippage, it would appear that the Iranian factor alone will not be capable of spurring higher prices without major assistance from a renewed strengthening in the equities, sustainable weakening in the U.S. dollar or a significant cut back in OPEC production,”
WTI Extends Losses After Big Surprise Crude Build – WTI plunged to a $61 handle, and 7-month lows, ahead of tonight’s API inventory data as trade war anxiety raised global demand fears and Iran sanctions exemptions lifted supply concerns.“Oil prices don’t have any real reason to rally significantly,” said Phil Streible, senior market strategist at R.J. O’Brien & Associates LLC in Chicago. And things got worse as WTI extended its losses after API reported. API:
- Crude +7.831mm (+2mm exp)
- Cushing +3.073mm (+2.1mm exp)
- Gasoline -1.195mm
- Distillates -3.638mm
The seventh weekly build in Crude and Cushing inventory levels (both considerably higher than expected)…WTI was hovering around $62.20 ahead of the API print but kneejerked lower “The U.S. has for now given a lifeline to Iran,” . “The end result of the sanctions is softer than expected. The final outcome of the sanctions also confirms the political fear of high gasoline prices.”And finally, Bloomberg’s Javier Blas highlights perfectly why oil prices are sliding… #Oil Watch: @EIAgov is painting a quite difficult year for #OPEC+ group, with crude stock-builds in every quarter until 4Q 2019 | #OOTT pic.twitter.com/GnXfR7P3Ce
Oil prices rise on report of Russia, Saudi output cut talks – Oil rebounded towards $73 a barrel on Wednesday after falling to its lowest since August, supported by a report that Russia and Saudi Arabia are discussing oil output cuts in 2019. Russia’s TASS news agency, citing an unnamed source, reported that the two countries, the biggest producers in an OPEC-led alliance that has been limiting supply since 2017, have started bilateral talks on the issue. “I think this is a little bit of verbal intervention, trying to get some speculative length back into the market,” said analyst Olivier Jakob of Petromatrix. “The global supply and demand balance does not look very tight next year.” Brent crude, the global benchmark, rose 80 cents, or 1.1 percent, to $72.93 a barrel by 8:41 a.m. ET (1341 GMT). The contract hit $71.18 on Tuesday, its lowest since Aug. 16. U.S. West Texas Intermediate crude rose 54 cents to $62.75. WTI touched a nearly eight-month low at $61.31 on Tuesday, falling more than 20-percent from its recent high and briefly trading in bear market territory. While Iranian oil exports are expected to fall because of U.S. sanctions that took effect on Monday, reports from OPEC and other forecasters have indicated that the global market could see a 2019 supply surplus as demand slows. A ministerial committee of some Organization of the Petroleum Exporting Countries members and allies, including Russia and Saudi Arabia, is due to meet on Sunday in Abu Dhabi to discuss the market and outlook for 2019. Any return to limiting supply would follow a June decision by the OPEC-led group to relax output curbs in place since 2017, after pressure from U.S. President Donald Trump to cool prices and make up for losses from Iran.
Oil Could Hit $100 If Supply Crunch Worsens — Oil prices are likely to be “biased to the upside” for the rest of the year as demand from refineries rises in November and December, according to Citigroup Inc. An average price of $80 a barrel for this quarter is “realistic,” with spikes to $90 or even $100 possible if further disruptions worsen a supply crunch amid rising consumption, Citi’s Global Head of Commodities Research Ed Morse said Tuesday. Benchmark Brent crude topped $85 early last month on concern U.S. sanctions on Iran would create a shortage. Prices have since dropped back. The outlook comes as the Organization of Petroleum Exporting Countries and its allies send mixed supply signals to the market, with Russia suggesting it could push output to a record and an OPEC committee signaling the group could cap supply again in 2019. Central to the uncertainty is Iran, where the U.S. imposed sanctions this week while granting waivers to eight buyers of its crude. Iran is likely to continue sales of about 1 million barrels a day, Morse said in a Bloomberg Television interview, adding that the waivers don’t allow unlimited purchases. “How much oil is being granted from Iran to each of those eight countries? We can only surmise until we get a tweet from somebody in the government.” Supply disruptions can also be expected elsewhere, including in OPEC nations Nigeria, Libya and Venezuela, according to Morse. In Nigeria, where elections are coming up, “there are always disruptions and they average about half a million barrels a day,” he said.
Oil Poised for Longest Losing Run Since 2014— Crude’s poised for the longest losing streak since 2014 as concerns of a supply crunch eased on a forecast for rising U.S. production and waivers for eight countries allowing temporary import of Iranian oil. Futures in New York fell as much as 0.9 percent and headed for an 8.5 percent drop in eight straight sessions. The U.S. government forecast the nation’s oil output will increase at a record pace this year, while industry data signaled American crude inventories rose last week. Meanwhile, the waivers will allow Iran to continue some exports to its top customers for another six months. Supply concerns that drove crude to a four-year high last month faded on speculation the U.S. would soften the blow of its sanctions on Iran to lower pump prices at home. The Organization of Petroleum Exporting Countries also pledged to offset any supply gaps. The group led by Saudi Arabia will gather in Abu Dhabi this weekend as they face a fresh surge of U.S. shale oil threatening to unleash a new surplus in 2019. “The focus for now remains on the waivers issued to eight countries, allowing them to continue the purchase of Iranian barrels temporarily,” said Stephen Innes, Singapore-based head of trading for Asia Pacific at Oanda Corp. “There were more bearish overtones in terms of supply with the American crude output seen rising this year by the most ever, coupled with the call on OPEC to ramp up even higher.” West Texas Intermediate crude for December delivery dropped as much 54 cents to $61.67 a barrel on the New York Mercantile Exchange and traded at $61.82 on the New York Mercantile Exchange at 3:34 p.m. in Singapore. Total volume traded was almost double the 100-day average. Biggest Yearly GainBrent futures for January settlement slid 30 cents to $71.83 on the London-based ICE Futures Europe exchange. The contract fell 1.4 percent to close at $72.13 on Tuesday. The global benchmark crude traded at a $9.85 premium to WTI for the same month. In the U.S., the government is estimating the biggest yearly increase in domestic crude production. The output will average 10.9 million barrels a day this year, up from 9.35 million in 2017, the biggest gain on record, according to the Energy Information Administration. At the same time, industry data was said to show that nationwide oil inventories rose by 7.83 million barrels last week, while a median estimate in a Bloomberg survey of analysts expected a 2-million-barrel increase ahead of government data Wednesday.
WTI Tumbles After US Production Spikes To Record High – Despite sliding after last night’s API-reported big Crude and Cushing build, WTI has rebounded overnight amid a post-midterms tumbling dollar, but a larger crude build than expected from DOE, combined with a smaller gasoline draw, could lead to WTI “set to test $60 easily,” Tariq Zahir, a commodity fund manager at Tyche Capital Advisors, says Additionally, Oil rose on the back of headlines that OPEC and its allies were said to plan talks on fresh production cuts next year, responding to recent increases in crude inventories amid surging U.S. supply. “The Saudis want to stop the price decay,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. “There are many moving variables until the OPEC meeting in December, like Iran and U.S. production growth. But as the Saudis say they aim for market stability, if the data suggests an oversupplied market next year the probability of a cut is high.”However, as Bloomberg notes, if OPEC, led by Saudi Arabia, does ultimately decide fresh cutbacks are necessary, it will confront a number of challenges. It will need to once again secure the support of rival-turned-partner Russia, which has less need for high oil prices. There’s also the risk of antagonizing the kingdom’s key geopolitical ally, President Trump. DOE
- Crude +5.78mm (+2mm exp)
- Cushing +2.419mm (+2.1mm exp)
- Gasoline +1.85mm (-1.7mm exp)
- Distillates -3.465mm
Crude and Cushing inventories rose for the seventh straight week (considerably more than expected) and a surprise gasoline build, sent WTI prices back below pre-API levels from last night and back to a $61 handle… And as inventories rose, production surged a huge 400k b/d to a new record high… WTI’s overnight gains sagged back to pre-API levels ahead of the DOE print and dropped below it as the data confirmed the builds… And finally, Bloomberg’s Javier Blas highlights perfectly why oil prices are sliding… #Oil Watch: @EIAgov is painting a quite difficult year for #OPEC+ group, with crude stock-builds in every quarter until 4Q 2019 | #OOTT pic.twitter.com/GnXfR7P3Ce – Javier Blas (@JavierBlas) November 6, 2018
Oil slips after U.S. output hits record, crude stocks rise (Reuters) – Oil prices slipped on Wednesday, continuing a recent slide after surging U.S. crude output hit another record and domestic inventories rose more than expected. The U.S. Energy Information Administration (EIA) said domestic crude inventories rose 5.8 million barrels in the latest week, more than double analysts’ expectations. Crude output hit 11.6 million bpd, a weekly record, though weekly figures can be volatile. Most recent monthly data for August showed overall production at more than 11.3 million bpd. U.S. crude futures fell 54 cents to settle at $61.67 a barrel, nearly 20 percent below a peak close of $76.41 a barrel in early October. “The market has yet to prove that it can hold onto a rally, so the short-term mood is still very negative,” said Phil Flynn, analyst at Price Futures Group in Chicago. Brent crude, the global benchmark, settled down 6 cents to $72.07 a barrel, bouncing off its post-EIA session low on support from earlier reports that Russia and Saudi Arabia are discussing whether to cut crude output next year. While Iranian oil exports are expected to fall after U.S. sanctions took effect on Monday, reports from OPEC and other forecasters have indicated the global oil market could have a surplus in 2019 as demand slows. Also, the United States granted waivers on Iranian sanctions to eight countries who import that country’s crude. “The market is now going to look to OPEC and non-OPEC producers to rein in production as the U.S. has granted eight countries waivers from sanction, which in essence adds to supply,” said Andrew Lipow, president of Lipow Oil Associates in Houston. Russia and Saudi Arabia, top producers in an OPEC-led alliance, started bilateral talks on a return to production cuts next year, Russia’s TASS news agency reported, citing an unnamed source. In June, the producer group decided to relax output curbs in place since 2017, after pressure from U.S. President Donald Trump. Analysts said those countries may be more willing to cut output now that the U.S. midterm elections are over. Trump, whose Republican party was fighting to retain control of congress, had complained of higher gasoline prices.
Oil Hits 8-Month Low on U.S. Crude Build, Output – The OPEC vs. U.S. shale oil battle is back, injecting fresh uncertainty into crude markets amid 8-month lows in crude prices and sanctions on Iranian exports. Barely a day after the U.S. midterm elections, where President Donald Trump had counted on major oil-producing allies of the United States keeping crude prices low to appeal to his conservative base of voters, OPEC suggested it was ready to cut output in a bid to shore up a market that had lost 20% of its value in the past five weeks. The producers’ cartel is scheduled to meet next on Dec. 6. U.S. shale production, meanwhile, reached new record highs, with the Energy Information Administration announcing on Wednesday a weekly crude output of 11.6 million barrels per day. The EIA also cited a seventh-straight weekly rise in U.S. crude inventories, with stockpiles growing by 5.8 million barrels last week vs forecasts for a 2.4 million increase. Six of the past seven weeks have seen outsize builds. The conflicting picture of OPEC wanting to cut production vs U.S. output bursting at the seams pitched crude oil markets into new uncertain ground. U.S. WTI settled down 54 cents, or 1%, at $61.67 per barrel, after hitting a March low of $61.20. Earlier in the session, the U.S. crude market had risen nearly $1 earlier. Since early October, WTI has lost about 20%, falling into bear market territory, after hitting four-year highs of nearly $77. U.K. Brent crude, the international benchmark for oil, was off 2 cents, or 0.03%, to $72.11 per barrel. That was about 17% off Brent’s four-year highs above $86 hit last month. Earlier on Wednesday, Brent was down as much as 76 cents. Oil prices jumped 20% over a five-month period after Trump canceled in May an Obama-era deal with Iran that let Tehran export oil in exchange for curbs on its nuclear program. But after hitting four-year highs, the market tanked over the past five weeks on OPEC kingpin Saudi Arabia’s initial assurance that it will pump as much crude as necessary to make up for the lost Iranian exports, estimated at anywhere between 1.5 million and 2.5 million bpd. This week, as the sanctions on Tehran officially began, the Trump administration issued waivers to eight countries to continue importing from the Islamic Republic over the next six months. That depressed crude prices further. But OPEC sources told Reuters Wednesday the cartel could return to production cuts by next year, which seemed to suggest a change in the Saudi stance.
Trump on falling oil prices: ‘That’s because of me’ –President Donald Trump on Wednesday claimed credit for falling oil prices, glossing over market forces that knocked crude futures from four-year highs last month.Trump also appeared to hint that his administration may not tighten sanctions on Iran’s oil exports if crude prices start rallying again, saying the measures will “maybe” get tougher.The president did not clearly elaborate on why he deserves credit for the pullback in oil markets, but he linked falling prices to his disdain for the 15-nation OPEC cartel and his administration’s Iran policy.The Trump administration on Friday announced it would grant sanctions waivers to eight countries, which allow them to continue importing Iranian crude for 180 days without fear of reprisal from the United States. The Trump administration restored sanctions on Iran, OPEC’s third-biggest oil producer, on Monday.”I gave some countries a break on the oil,” Trump said during a lengthy, wide-ranging press conference the day after Republicans lost control of the House of Representatives in the midterm elections. “I did it a little bit because they really asked for some help, but I really did it because I don’t want to drive oil prices up to $100 a barrel or $150 a barrel, because I’m driving them down.””If you look at oil prices they’ve come down very substantially over the last couple of months,” Trump said. “That’s because of me. Because you have a monopoly called OPEC, and I don’t like that monopoly.”Oil prices have tumbled as much as 20 percent from four-year highs on Oct. 3. However, the decline since Trump officials first announced the waivers on Friday has been significantly smaller – about 1 percent for international benchmark Brent crude and 3 percent for U.S. crude.
Why Oil Prices Will Fall In 2019 And Beyond The decision by the U.S. to grant waivers to eight countries, allowing them to continue to import oil from Iran, has helped ease the tension in the oil market. No longer are oil traders talking about $100 oil. Iran’s oil exports stood at 1.7 million barrels per day in October and won’t fall to zero anytime soon. But that may not be the end of the story. “While consistent with our expectations, the granting of waivers does not imply that Iran exports will stabilize near current levels,” Goldman Sachs said in a research note on November 1. As more Iranian supply goes offline, the market will continue to tighten. Iran could lose nearly 600,000 bpd of exports by the end of the year, relative to October levels, the bank predicts.“As a result, we still expect that the global oil market will be in deficit in 4Q18, leading to a strengthening in Brent timespreads,”Goldman said.In fact, while everyone focuses on the short-term movements in oil prices, Goldman says it’s important to look at the futures curve.“In our view, the most interesting takeaway from today’s oil price sell-off is the parallel shift in the crude forward curve. This is consistent with a move down on the oil cost curve as recent supply news (less Iran losses, more US and Saudi production) point to fewer high-cost marginal barrels needed in 2019,” the bank said.That’s a bit of financial jargon, but the gist is that traders are suddenly less concerned that high-cost producers will be needed to supply the marginal barrel. Earlier this year, when Iran sanctions were announced and fears about Permian bottlenecks permeated into the market, oil futures prices rose sharply, with Brent five-year prices rising from $57 per barrel in May to $68 per barrel in September. This can be boiled down to investors believing that the oil market will need high-cost production in the years ahead to supply the marginal barrel, as low-cost producers are at their maximum levels.However, over the last few weeks, the five-year Brent price fell back.“The retracing of this last move higher reflects the realization that such high cost marginal barrels may no longer be needed,” Goldman Sachs analysts wrote.
Oil Market Faces Precarious Few Months – The oil market faces a precarious few months. That’s according to Wood Mackenzie’s (WoodMac) latest edition of the Edge, a regular column penned by the company’s chairman and chief analyst Simon Flowers. “The biggest risk is this winter. Losing another 1 million barrels per day or more from Iran comes on top of a similar loss in supply from Venezuela over the last couple of years,” Flowers stated in the column. “Saudi Arabia, UAE and Kuwait have stepped up production since July to minimize the increase in price as the market tightens. We think there’s just enough growth in supply from elsewhere to muddle through the next few months, meet winter demand and avert a price spike. Brent should hold around U.S.$78 a barrel, but it’s a very fine line,” he added. “OPEC spare capacity was an ample four million to five million barrels per day two years ago. There’s only 700,000 barrels per day of additional available within 30 days right now. That means the market is vulnerable to strong demand in a cold winter or any new supply outage,” Flowers continued. The WoodMac representative said the situation “may look better” once the northern winter is over, “but only up to a point”. “We forecast that Brent will ease and average U.S.$74 a barrel in 2019. We expect supply to grow 1.6 million barrels per day in 2019, with U.S. tight oil driving this. That’s well ahead of 1.2 million barrels per day of demand growth and should lead to a healthy inventory build during the year,” Flowers stated. “But with Iran in the full grip of sanctions and Venezuela continuing to decline, that limited OPEC spare capacity will cast a shadow over the market for some time,” he added. Earlier this month, the November OPEC Bulletin commentary piece stated that “there will no doubt be hard times to come in the oil industry,” listing geopolitical storms, disruptive weather events, speculation and transportation issues as examples of drivers. The commentary piece added, however, that the platform for dialogue created through the group’s Declaration of Cooperation “can help calm stormy waters and provide the ship that is our industry safe passage”.
OPEC is now talking about moves to support oil prices – OPEC is enduring one of the most head-spinning years in its history, swerving from cutting oil production to boosting it as quickly as possible. Now it’s talking about reversing course again. Ministers from the group gathering in Abu Dhabi this weekend will discuss the possibility of cutting production again next year, according to delegates, a move that would mark an abrupt end to six months of supply increases. The group is responding to a worrying prospect: Even though US sanctions on Iran are removing significant amounts of crude from world markets, a fresh surge of American shale oil threatens to unleash a new surplus in 2019. Some members are concerned that inventories are rising, said the delegates, who asked not to be named as the discussions are private. Crude prices already reflect this. Brent for January delivery has retreated about 15 per cent from a four-year high reached in early October. The Organisation of Petroleum Exporting Countries and its allies are showing they’re worried, signalling last month that they might need to dial back near-record output levels. .
Saudi Arabia, Russia should cut ‘at least 1 mil b/d instantly’ – Saudi Arabia and Russia, both of whom have boosted their crude output in recent months, were responsible for a $15/b drop in the price of oil and “should cut at least 1 million b/d instantly”, an OPEC delegate told S&P Global Platts. The two countries, the largest producers in the OPEC/non-OPEC coalition, needed to “get back [to] OPEC the $15/b loss that they caused”, the delegate said on condition of anonymity. The comments come as Saudi Arabia and Russia were reportedly discussing a production cut in 2019, Russian news agency Tass reported earlier Wednesday. Saudi officials could not be reached for comment. ICE Brent futures were trading at $73.03/b at 1307 GMT Wednesday, after hitting a four-year high October 3 at $86.29/b. A six-country OPEC/non-OPEC Joint Ministerial Monitoring Committee co-chaired by Saudi Arabia and Russia meets Sunday in Abu Dhabi to assess market conditions. The next full OPEC meeting is December 6 in Vienna. The coalition on June 23 agreed to raise production by a combined 1 million b/d from May levels by reducing overcompliance with production cuts, in order to offset expected losses by sanctions-hit Iran and Venezuela. Saudi energy minister Khalid al-Falih said last month the kingdom was producing about 10.7 million b/d, near its record high and almost 700,000 b/d more than it was producing in May. Russia, meanwhile, reported Friday that it hit an all-time high of 11.41 million b/d, up about 440,000 b/d from May.
US crude falls into bear market as growing oil output points to oversupply – U.S. crude prices dropped for a ninth consecutive session on Thursday, falling into a bear market, on further signs of growing supply and data showing record Chinese oil imports. U.S. West Texas Intermediate crude futures fell 68 cents, or 1.1 percent, to $60.99 by 9:58 a.m. ET. That is down 20.7 percent from last month’s four-year high at $76.90, putting WTI in bear market territory. Brent crude futures was down 74 cents, or 1 percent, at $71.33 a barrel. The international benchmark is down nearly 18 percent since Oct. 3, when Brent hit $86.74, its highest level since late 2014.The U.S. Energy Information Administration forecast this week that U.S. oil production will average 12.1 million barrels per day in 2019, marking an upward revision from its last projection. U.S. crude production hit an all-time high at 11.6 million barrels per day last week, according to preliminary figures released by EIA on Wednesday. If confirmed during revisions, it would more firmly establish the United States as the world’s top oil producer.The other producers in the top three, Saudi Arabia and Russia, have been dialing up production since June.”All three of them are continuing to pump at record levels, that’s been … part of what’s causing oil to move into a bear market,” Tamar Essner, director of energy and utilities at Nasdaq Corporate Solutions, told CNBC’s “Worldwide Exchange.”China’s crude imports rose 32 percent in October compared with a year earlier to 9.61 million barrels per day (bpd), customs data showed on Thursday. “Crude oil imports rose … as uncertainty around tariffs on U.S. imports and sanctions on Iran eased,” ANZ bank said.
Oil Ends Down for 9th-Straight Day; $60 Support Looks Fragile – Is $60 oil on its last legs before OPEC comes to save the day for the bulls? The front-month contract in U.S. West Texas Intermediate came less than $1 to breaking the $60 per barrel support in Thursday’s session as the tumble in crude futures continued a ninth-straight day for the market’s worst losing streak in more than four years. Brent, the international benchmark for oil, was similarly at risk with losing its $70 per barrel support. Technically in a bear market after losing more than 20% from the highs of early October, the selloff in oil seems unstoppable despite OPEC’s rumblings on Wednesday that it might join Russia to cut output as early as next month to put a floor beneath the market. Instead, traders seemed fixated on the new weekly record high of 11.6 million barrels per day in U.S. crude production cited by the Energy Information Administration. The EIA, which delivered that data on Wednesday, also announced a seventh-straight weekly rise in U.S. crude stockpiles, of which six have been outsize builds. Compounding the bearish mood, market intelligence firm Genscape reported on Thursday a 2.2-million-barrel weekly build at the Cushing, Okla. delivery base for WTI, traders who saw the data said. Any weekly Cushing build above 1 million barrels is typically bearish for oil prices. “The market is almost daring OPEC to do something now,” said John Kilduff, oil trader and partner at New York energy hedge fund Again Capital. “We have an OPEC meeting this weekend and I find it hard to believe they are not going to get together and try and talk this market back up.” The Joint OPEC-Non-OPEC Ministerial Monitoring Committee, which includes Saudi Arabia and other major Middle Eastern oil producers along with Russia, will be meeting this weekend in Abu Dhabi. That will be followed by OPEC’s monthly meeting in Vienna on Dec. 6, where production quotas are usually finalized. Russia will be meeting with OPEC a day after that, in line with the cooperation that has existed since 2015 between the cartel and Moscow to intervene in any collapse in global oil prices. U.S. WTI settled $1 down, or 1.8%, at $60.67 per barrel, after hitting an 8-month low at $60.56. WTI is down 21% since hitting four-year highs of nearly $77 in early October. With Thursday’s slide, WTI has settled down without a pause since Oct 29. The last time it experienced such a losing streak was between June 26 and July 9 2014, when it fell 10 sessions in a row. Brent crude was down $1.37, or almost 2%, to $70.70 per barrel by 2:55 PM ET (19:55 GMT). That was almost 20% off Brent’s four-year highs of nearly $87 hit last month.
Cramer predicts oil prices as low as $40 a barrel as US crude falls into bear market —U.S. oil prices are in a “ferocious” bear market, and crude could fall to as low as $40 per barrel, CNBC’s Jim Cramer said Thursday.”Oil is collapsing guys. It’s collapsing,” Cramer said on “Squawk on the Street.”Asked if prices could fall to $50 per barrel, Cramer said, “I could make a case for the $40s here. I’m not kidding.”The “Mad Money” host did not provide a timeline for his case.Oil was lingering near multimonth lows on Thursday morning, with the American benchmark West Texas Intermediate crude dropping to around $61 per barrel.Record U.S. crude production and signals from Iraq, the United Arab Emiratesand Indonesia that output will grow more quickly than expected in 2019 were pressuring oil prices.”Demand is slowing for oil and we’re pumping like mad,” Cramer said Thursday.Oil demand is still expected to rise next year, but forecasters now expect less robust growth in global crude consumption due to economic concerns fueled by trade tensions and currency weakness in emerging markets. Cramer said Monday that rosy outlooks from major oil companies Exxon Mobil, Chevron and BP do not reflect the economic reality. He said investors betting on those companies may be making a “bad call.”
Crude oil futures contango grows as market eyes supply glut; NYMEX WTI down to $61.19/b, ICE Brent $71.63/b – Contango in WTI and Brent crude futures widened in midmorning trading Thursday as the market eyed a growing global supply glut. Prompt-month NYMEX WTI futures were trading a around 18 cents/b below second-month levels Thursday morning, but at a steep 2.12/b discount compared to month 12 prices. Prompt ICE Brent contracts were also holding around 18 cents/b below second-month levels and 19 cents/b under 12-month prices. US inventory builds, especially at the delivery point of the NYMEX crude contract in Cushing, Oklahoma, has pushed the forward curve into contango since mid October. But the collapse in the one-year spread has been acute. The prompt-month/12-month WTI spread settled at a 22 cent/b backwardation as recently as October 26. This backwardation was as wide as $1.90/b this time last month. “Simply put, abundant supplies of crude, both foreign and domestic, are now bidding for storage space. This is a complete and total reversal of what was happening and there seems to be, at this point, nothing that shall reverse this trend,” NYMEX December WTI was down 48 cents at $61.19/b and ICE January Brent was 44 cents lower at $71.63/b. US commercial crude supply expanded for a seventh consecutive week, growing 5.78 million barrels to 431.79 million barrels during the week ended November 2, US Energy Information Administration reported. This week EIA revised its US production forecasts higher to 10.9 million b/d in 2018 and 12.06 million b/d for 2019. Last week US production rose to a fresh all-time high of 11.6 million b/d, EIA data showed. Saudi Arabia production tested all-time highs at 10.7 million b/d in October, a 700,000 b/d increase from May levels, and Russia reported Friday that it hit an all-time high of 11.41 million b/d, up about 440,000 b/d from May. Concurrently with the build out in global supply, this week Washington issued sanctions waivers to eight importers of Iranian crude, further mitigating the impact of the re-imposed sanctions on oil prices. Products futures were mixed as the market pulled back from yesterday’s reactionary positions in the wake of the EIA data release. NYMEX December RBOB was up 1.32 cents at $1.6606/gal. RBOB settled 4.66 cents lower on Wednesday following a surprise 1.85 million barrel EIA-reported build in inventories last week. But NYMEX December ULSD gave back most of yesterday’s gains and was 4.66 cents lower at $2.1905/gal.
Crude Oil Has Another Down Day – West Texas Intermediate (WTI) crude oil for December delivery lost nearly 2 percent Thursday, falling $1.00 to settle at $60.67 a barrel (bbl). The WTI did manage to clear the $62 mark, reaching an intraday high of $62.42, but Thursday’s settlement price was much closer to the $60.42 intraday low. The January Brent contract price settled at $70.65 a barrel, translating into a $1.42 decline for the day. Traders on Thursday digested the weekly U.S. crude oil inventories report from the Energy Information Administration (EIA). On Wednesday, EIA stated that crude stocks rose to 431.8 million barrels (bbl) for the week ending November 2, translating into a 5.8 million-bbl build for the week. On Wednesday, EIA also revealed that it has lowered its predictions for the average WTI and Brent prices for next year by 7 percent and 4 percent, respectively. EIA stated that it expects the WTI to average $65 per bbl in 2019; previously, it had projected a $70 average for the benchmark. For the Brent, EIA anticipates a $72-per-bbl average, down $3 from its earlier forecast. EIA reported that it attributes the price forecast adjustments in part to higher-than-expected U.S. crude oil production during the second half of 2018 and in 2019. It now anticipates that domestic crude output for 2018 will average 10.9 million bpd – up 160,000 bpd from its earlier projection. Moreover, EIA increased its 2019 average daily production forecast by 300,000 bpd to 12.1 million bpd. “The increased U.S. crude oil production is expected to contribute to global crude oil inventory growth and put downward pressure on crude oil prices,” EIA stated. December reformulated gasoline (RBOB) posted a slight loss Thursday, declining less than a penny to settle at $1.64 a gallon. Front-month Henry Hub natural gas futures also ended the day lower, falling approximately one cent to $3.54.
Oil Teeters Near Record Losing Streak — Oil’s set for its longest stretch of declines on record after entering a bear market, with investors awaiting a weekend meeting of OPEC and its allies to discuss output strategy. Futures in New York are slipping for a 10th day, extending a dramatic plunge that’s dragged prices down over 20 percent from a 2014-high just five weeks ago. The slump has rattled producers, and the Organization of Petroleum Exporting Countries has signaled it may cut output next year — an option that’ll be part of talks when the group meets with partners in Abu Dhabi on Sunday. Oil’s slump has been exacerbated by a U.S. decision to allow eight countries to continue importing from Iran even after it hits the OPEC member with sanctions. That revived concerns of a supply glut, in contrast to earlier fears over a crude crunch due to shrinking exports from the Persian Gulf state. Pledges by other producers such as Saudi Arabia to pump more and record American supply as well as rising stockpiles also weighed on prices. West Texas Intermediate for December delivery traded 6 cents lower at $60.61 a barrel on the New York Mercantile Exchange at 3:20 p.m. in Singapore. The contract fell 1.6 percent to $60.67 on Thursday, and is headed for a 4 percent decline on the week — its fifth consecutive decrease. Total volume traded was 35 percent above the 100-day average. Brent futures for January settlement edged up 9 cents to $70.74 a barrel on the London-based ICE Futures Europe exchange. Prices are also on course for a fifth weekly drop, down 2.9 percent. The global benchmark crude traded at a $9.93 premium to WTI for the same month. A potential decision to return to output cuts by OPEC would mark the second production U-turn this year for the group, some members of which are said to be concerned that inventories are rising. For Saudi Arabia — the world’s biggest crude exporter — a reduction would mark the third time in recent years the kingdom has delivered a supply surge only to quickly reverse it. In the U.S., crude production increased to 11.6 million barrels per day last week, the highest level on record, according to Energy Information Administration data. At the same time, nationwide stockpiles rose 5.8 million barrels last week, compared to a 2-million-barrel gain expected in a Bloomberg survey.
Baker Hughes data show biggest weekly rise in U.S. oil-rig count since May – Baker Hughes on Friday reported that the number of active U.S. rigs drilling for oil climbed by 12 to 886 this week. That was the biggest weekly oil-rig rise since the week ended May 25, when the number rose by 15. The total active U.S. rig count, which includes oil and natural-gas rigs, was up 14 at 1,081, according to Baker Hughes. December West Texas Intermediate was down 68 cents, or 1.1%, at $59.99 a barrel from Thursday’s finish, unchanged from before the rig data Friday.
Oil prices down 20 percent in a month as fundamentals weaken –U.S. crude prices fell for a 10th consecutive session on Friday, sinking U.S. crude futures deeper into bear market territory and wiping out the benchmark’s gains for the year. The 10-day decline is the longest losing streak on record for U.S. crude, according to FactSet data going back to November 1984. Crude futures are poised for their fifth straight week of losses as growing output from key producers and a deteriorating outlook for oil demand deepen a sell-off spurred by October’s broader market sell-off. The drop marks a stunning reversal from last month, when oil prices hit nearly four-year highs as the market braced for potential shortages once U.S. sanctions on Iran, OPEC’s third biggest oil producer, snapped back into place. “The reality is that we’re still in a world where we’re overproducing and we’ve got surplus.”U.S. West Texas Intermediate crude fell 82 cents, or 1.4 percent, to $59.85 by 9:03 a.m. ET (1403 GMT). The contract is now down nearly 1 percent since the start of the year. It fell as low $59.28 on Friday, its weakest level in nearly nine months. WTI fell into a bear market in the previous session, tumbling more than 20 percent from a nearly four-year high last month at $76.90.International benchmark Brent crude was trading 67 cents lower at $69.98, down 1 percent for the day and more than 19 percent from its recent high. The contract touched a seven-month low at $69.13 on Friday. Brent has fallen in nine of the last 10 sessions, but is still up more than 4 percent this year.
What’s Behind The Oil Price Crash? – Oil prices fell to multi-month lows at the end of the week, as a confluence of factors all point in a bearish direction. The EIA reported that U.S. oil production skyrocketed to 11.6 million barrels per day (mb/d) for the week ending on November 2. Despite fears that shale output would plateau because of pipeline constraints, the shale industry is firing on all cylinders. The figures also help explain the recent downturn in prices. . Russia’s oil production is at a post-Soviet record high, but a cut in output may actually work to the benefit of Russian producers. “Producing less at $80 per barrel is better than producing at current levels and at $70 per barrel,” Alexander Losev, chief executive officer of Sputnik Asset Management, told Bloomberg. “A certain output decline will also help the companies to reduce operating costs and further improve their financials, including free cash flow.” Saudi Arabia increased production in 2015, 2016 and again this year. The first two times, the kingdom backtracked as oil prices sank amid swelling inventories. The potential third production cut in four years suggests Saudi Arabia once again ramped up too quickly, Bloomberg argues. A technical committee for OPEC+ is set to meet this weekend to consider options for 2019, including a possible production cut. Chevron is one of a handful of oil majors that have stuck it out in Venezuela even as the country continues to fall apart. The oil major’s assets are no longer profitable, and the Wall Street Journal reports that the company is growing weary of the problems. In response to the article, Chevron denied the potential exit. “We’re committed to Venezuela and we plan to be there for many years to come,” Clay Neff, Chevron’s president for Africa and Latin America, said in an interview late Thursday with Bloomberg. The reporting that Chevron might pack up and leave “is not accurate.”
WTI drops for a 10th straight day, dipping below US$60 to a near nine-month low – – Crude oil prices dipped to near a nine-month low as they fell for a tenth consecutive day, potentially having an impact on the Bank of Canada interest rate decision next month. West Texas Intermediate dipped to a low of US$59.26 before closing off 83 cents or 1.4 per cent to US$59.84. Since its peak last month, WTI is down about 22 per cent as it experienced a fifth consecutive weekly drop. And the December crude contract was down 48 cents at US$60.19 per barrel to the lowest level since February. A glut of oil production is the main cause of the declines in prices of WTI and Brent crude. The United States has taken the crown as the world’s leading oil producer after output increased by two million barrels per day over the last year to reach 11.6 million bpd. At the same time, OPEC is over-producing and sanctions have been watered down against Iran as the U.S. granted waivers on the sanctions to eight countries over concerns that a complete end of Iranian imports would cause economic disruptions. “But sentiment has also driven down the prices with fears on global growth weakening and therefore slowing oil demand,” says Cavan Yie, a portfolio manager at Manulife Asset Management. The situation is compounded in Canada where the price differential with the Western Canadian Select has widened considerably because of the lack of pipelines to carry crude out of Alberta. And a Montana judge’s ruling that the Keystone XL project needs further work is another black mark for Canadian energy investors, he said. “It’s been a challenging year so far for the energy patch,” Yie said in an interview. Low Canadian oil prices are having a negative impact on government tax revenues and the Alberta economy, which will likely impact the Bank of Canada’s rate hike decision next month, he said. “I think for sure it should be incrementally negative for their stance on future interest rate hikes,” he said. “I think the probabilities are probably a little lower.”
Saudi Arabia considering breaking up OPEC – report – Saudi Arabia’s top government-funded think tank is researching, on behalf of the oil-rich kingdom, the possible effects an OPEC breakup would have on global oil markets. A report in The Wall Street Journal, which quotes an unnamed “senior Saudi adviser” at length, says that while the ongoing research does not reflect an active debate inside the government over whether the country should leave OPEC or not, it is part of a wider rethinking about Saudi Arabia’s near 60-year membership of the cartel. Founded in 1960, OPEC currently has 15 members – six in the Middle East, seven in Africa and two in South America. Saudi Arabia has long been the dominant force within the group, accounting for around one-third of the organization’s total oil production.However, with US oil production rising sharply over the last decade, and with increased political pressure on Saudi Arabia following the murder of journalist Jamal Khashoggi after he entered the Saudi Consulate in Istanbul, the Middle Eastern country is apparently reviewing the status quo in global oil production.For years, OPEC has regulated oil production in order to control global prices. OPEC members such as Saudi Arabia have long argued that the organization helps prevent oil prices from getting too high or too low, but critics say OPEC takes advantage of big oil-consuming nations, such as the United States. US President Donald Trump is a persistent critic.
Saudi Arabia Is Evaluating A Break Up Of OPEC – In potentially groundbreaking news – which failed to generate a market response as it hit at the same time as the FOMC statement – Saudi Arabia’s top government-funded think tank is said to be studying the possible effects on oil markets of a breakup of OPEC, a research effort which the WSJ called “remarkable” for a country that has dominated the oil cartel for nearly 60 years.The OPEC study aims to “assess the short/medium-term consequences of a dissolution of OPEC,” according to an overview reviewed by The Wall Street Journal. It is intended to determine how the global oil market, and Saudi finances, would look “if coordination between oil producing countries disappear,” according to the overview.The overview describes two scenarios to investigate, if OPEC isn’t in the picture:
- All big oil producers, including Saudi Arabia, act competitively – fighting each other for market share;
- Saudi Arabia, instead, attempts to leverage its massive oil output alone to help balance global supply and demand in an attempt to keep oil prices steady – similar to the role that members say OPEC plays today.
The timing of the report, which is hardly a arbitrary, coincides with rising pressures on the Saudi government, including from the U.S., where President Trump has accused the cartel of pushing up oil prices, and from investors who distanced themselves from the kingdom after the brutal killing of a U.S.-based Saudi journalist.Just as remarkably, while the think tank’s president, Adam Sieminski told the WSJ that the study “hadn’t been triggered by Mr. Trump’s statements”, a senior adviser familiar with the project said it provided an opportunity to take into account the criticism from Washington. Depending on the findings, the study could offer a defense of the cartel and the Saudi role in it; alternatively it could potentially advocate for a repeat of November 2014, when the cartel was effectively dissolved for a period of time.
Saudi Arabia Post the Khashoggi Tragedy | Arabia Foundation – The killing of Washington Post columnist Jamal Khashoggi has left the Kingdom of Saudi Arabia in its weakest diplomatic position since the horrific terror attacks of September 11. Khashoggi’s murder followed a series of Saudi missteps that had already left many questioning the country’s trajectory, including the arrests of women activists, the Saudi-German and Saudi-Canadian diplomatic crises, and the imbroglio surrounding Lebanese prime minister Saad Hariri. Additionally, the kingdom’s critical failure to clearly communicate the rationale behind and the objectives for both the Qatar boycott and the Yemen war – the latter of which has exacted a catastrophic humanitarian toll – has vastly compounded these errors in the eyes of the global community. Talk about diplomatically isolating Saudi Arabia, along with the presumptuous call to remove Crown Prince Mohammed bin Salman (MBS), however, is neither realistic nor prudent. As a member of the G20 and one of the world’s leading oil producers, the kingdom is a linchpin in the global economy and energy market. Washington’s ongoing efforts to maximize the economic pressure placed on Iran are contingent on Riyadh’s maximizing its oil output. And politically, the kingdom represents one of the last bastions of stability in an anarchic Middle East. Saudi Arabia is also, as CENTCOM commander General Joseph Votel reiterated earlier this week, “an extraordinarily important security partner.” It is also a vital intelligence asset in the wars against al-Qaeda and ISIS and a key buffer in the effort to contain the Islamic Republic’s policy of revolutionary expansionism. Revisiting the royal succession not only would upend an appointment that has finally put to rest years of political uncertainty over the generational transfer of power within the royal family but also may place at risk the essential reforms that MBS has successfully pushed through, because any successor would likely overturn many of these reforms to gain support from the clerical class and other disgruntled elements of society.
Saudi campaign to abduct and silence rivals abroad goes back decades – WaPo- The killing of journalist Jamal Khashoggi in Istanbul last month by a team of Saudi agents dispatched from Riyadh has prompted fresh scrutiny of the kingdom’s pursuit of Saudi nationals abroad, from ordinary dissidents to defectors from the tight ranks of the royal family. The effort to silence Saudi critics abroad stretches back decades and over the tenure of several monarchs. But Crown Prince Mohammed bin Salman, the kingdom’s de facto ruler, has pursued the practice with an especially ruthless zeal since gaining his position last year, analysts said, even making the return of dissenters abroad a formal policy of the state, according to a Saudi official, who insisted such returns were to be negotiated rather than coerced. To repatriate its critics, the Saudi government has tried to lure them back or enlisted friendly regional governments to arrest them or even carried out brazen kidnappings in Europe. Saudi nationals have vanished from hotel rooms, been snatched from cars or had planes they were flying on diverted. One Saudi dissident prince said in a court filing that he was injected in the neck and spirited away on a private jet from Geneva to Saudi Arabia. Years later, after he managed to leave the kingdom, he disappeared again and has not been heard from since. “We know they can kill you; they can destroy your family or use them against you,” said one Saudi women’s rights activist who applied for political asylum in the United States last year. “It’s always been like this,” she said, adding that Mohammed’s aggressive pursuit of critics had further rattled an already paranoid community of Saudi expatriates. A Saudi government media office did not immediately respond to an email requesting comment on the abductions. Jarba was not a dissident, but he may have been wanted because of his association with a branch of the royal family that had fallen out of favor with the Saudi leadership, according to the two people familiar with the circumstances of his capture. He was a longtime friend and confidant of Prince Turki bin Abdullah, a son of the late King Abdullah. Turki was arrested last November as Saudi authorities detained hundreds of people, including royal family members, business executives and government officials, in what was billed as an anti-corruption operation.
After Brother’s Sudden Release From Detention, Alwaleed Says MbS Will Be 100% Vindicated In Khashoggi’s Murder – Billionaire Saudi Prince Alwaleed bin Talal – who was reportedly strung up and beaten by US mercenaries during the Saudi Arabian “purge” exactly one year ago Sunday – said on Sunday that an official investigation into the death of journalist Jamal Khashoggi will exonerate the Crown Prince, Mohammed bin Salman (MbS) “100%”. Speaking with Fox News‘s Maria Bartiromo, Alwaleed said “I ask Saudi Arabia now publicly, through your program, to have the investigation made public as soon as possible,” adding “I believe the Saudi crown prince will be 100 percent vindicated and exonerated.” Regarding last year’s purge during which dozens of princes and senior Saudi figures were rounded up and detained at the Ritz Carlton in Riyadh in an “anti-corruption” crackdown – only to be freed after giving up a majority of their wealth, Alwaleed chalked his imprisonment up to a “misunderstanding,” which has been “forgiven and forgotten.” before touting MbS as “for real,” and that the Crown Prince is “changing Saudi Arabia in a very revolutionary manner.”
Saudi Journalist Tortured to Death in Prison – Saudi journalist and writer Turki Bin Abdul Aziz Al-Jasser has died after being tortured while in detention,the New Khaleej reported yesterday. Authorities believe that the writer Turki bin Abdul Aziz al-Jasser (TurkialjasserJ) is the Twitterati KASHKOOL (coluche_ar), private #Saudi security sources asserted to us. The source confirmed what ALQST tweeted about using personal information in Jasser’s PC to blackmail himpic.twitter.com/qkNmZe0e2w – Prisoners of Conscie (@m3takl_en) March 18, 2018
Saudi Arabia Grilled Over Human Rights Record at UN Meeting in Geneva – Saudi Arabia has insisted that its investigation into the killing of journalist Jamal Khashoggi will be “fair”, amid a barrage of criticism at a United Nations meeting on Monday.The half-day public debate at the UN Human Rights Council in Geneva came just over than a month after the Saudi insider-turned-critic was murdered in the Saudi consulate in Istanbul.Turkish officials said last week that Khashoggi was strangled as soon as he entered the consulate on 2 October in a planned hit, and his body was then dismembered and dissolved in acid.The head of the Saudi Human Rights Commission, Bandar Al Aiban, stressed that the “country is committed to carry out a fair investigation”.“All persons involved in that crime will be prosecuted,” he said.The so-called Universal Periodic Review – which all 193 UN-member countries must undergo approximately every four years – came as a Turkish official charged on Monday that Saudi Arabia sent experts to Turkey to cover up the journalist’s murder before allowing Turkish police to search the consulate.The murder has placed huge strains on Saudi Arabia’s relationship with the United States and other allies and has tarnished the image of powerful Crown Prince Mohammed bin Salman. During Monday’s review, several Western countries voiced outrage at the killing, with many calling for a “credible” and “transparent” investigation, and some, like Iceland and Costa Rica, went further and demanded an international probe. The British ambassador to the UN, Julian Braithwaite, told the council his country was “gravely concerned about the deteriorating human rights situation in Saudi Arabia”, pointing to women’s rights, mass arrests of rights defenders and the extensive use of the death penalty.
Why Benjamin Netanyahu Defends the Crown Prince of Saudi Arabia – For the past month, while governments and media outlet around the world sounded a drumbeat of shock and dismay over the murder of Saudi journalist Jamal Khashoggi, all that could be heard on the subject from Israel was the sound of crickets. Israeli columnist Ben Caspit said his country’s leadership was avoiding the subject “like the plague.” It appears no Israeli politician wants to say anything for fear of offending that country’s latest Arab bromantic partner, Crown Prince Mohammed bin Salman. Bin Salman, according to many analysts, would have had to have ordered the murder of a figure as prominent as Khashoggi. Then on Friday Israeli Prime Minister Benjamin Netanyahu finally gave his view on the Khashoggi case, saying it had to be “dealt with” but not at the cost of the stability of Saudi Arabia and the fight against Iran. “What happened in the Istanbul consulate was horrendous and it should be duly dealt with,” he said. “Yet at the same time it is very important, for the stability of the world and the region, that Saudi Arabia remain stable.” MBS, as he’s known, is the key Arab linchpin of the Trump-Netanyahu deal of the century, which is supposed to finally resolve the Israel-Palestine conflict. The details of the delayed proposal, which Trump and his Middle East appointees continue to promote, has been widely reported in various media outlets. Leaked parts of the deal, many analysts say, suggest it is highly favorable to Israeli interests and largely disregards Palestinian rights. Despite the one-sided nature of the plan, MBS has dutifully attempted to sell it to the Palestinian leadership. In a command performance, in which the Saudi crown prince summoned Palestinian Authority President Mahmoud Abbas to his royal palace, MBS told a reluctant Abbas that if he didn’t acquiesce, he should resign. The implication was that the Saudis would find another Palestinian leader who would agree to such a deal. So far, Abbas has resisted this Saudi offer and not lost his head – or his job. A peace agreement that is favorable to the Israelis is something that comes along once in a lifetime. So, Netanyahu realizes that stepping into the Khashoggi imbroglio is the last thing he wants to do. If there is even a slight chance the Saudi prince can come through, he doesn’t want to upset this apple cart.
The Unraveling of the Netanyahu Project for the Middle East – Alastair Crooke – Nahum Barnea, a leading Israeli commentator, writing in Yedioth Ahronoth in May (in Hebrew), set out, unambiguously, the ‘deal’ behind Trump’s Middle East policy: In the wake of the US exit from JCPOA [which occurred on 8 May], Trump, Barnea wrote, will threaten a rain of ‘fire and fury’ onto Tehran … whilst Putin is expected to restrain Iran from attacking Israel using Syrian territory, thus leaving Netanyahu free to set new ‘rules of the game’ by which the Israel may attack and destroy Iranian forces anywhere in Syria (and not just in the border area, as earlier agreed) when it wishes, without fear of retaliation.This represented one level to the Netanyahu strategy: Iranian restraint, plus Russian acquiescence to coordinated Israeli air operations over Syria. “There is only one thing that isn’t clear [concerning this deal]”, a senior Israeli Defence official closest to Netanyahu, told Ben Caspit, “that is, who works for whom? Does Netanyahu work for Trump, or is President Trump at the service of Netanyahu … From the outside … it looks like the two men are perfectly in sync. From the inside, this seems even more so: This kind of cooperation … sometimes makes it seem as if they are actually just one single, large office”.There has been, from the outset, a second level, too: This entire ‘inverted pyramid’ of Middle East engineering had, as its single point of departure, Mohammed bin Salman (MbS). It was Jared Kushner, the Washington Post reports, who “championed Mohammed as a reformer poised to usher the ultraconservative, oil-rich monarchy into modernity. Kushner privately argued for months, last year, that Mohammed would be key to crafting a Middle East peace plan, and that with the prince’s blessing, much of the Arab world would follow”. It was Kushner, the Post continued, “who pushed his father-in-law to make his first foreign trip as president to Riyadh, against objections from then-Secretary of State Rex Tillerson – and warnings from Defense Secretary Jim Mattis”. Well, now MbS has, in one form or another, been implicated in the Khashoggi murder. Bruce Riedel of Brookings, a longtime Saudi observer and former senior CIA & US defence official, notes, “for the first time in 50 years, the kingdom has become a force for instability” (rather than stability in the region), and suggests that there is an element of ‘buyer’s remorse’ now evident in parts of Washington.
‘Treasurer’ for 9/11 attackers returns to Morocco to ‘hero’s welcome’ after release from prison – The man known as the ‘treasurer’ for the 9/11 terrorists has returned to his home country to a ‘hero’s welcome’, it has been reported. Mounir el-Motassadeq is one of only two men jailed over the 9/11 terror attacks and has served less than 15 years in prison.He was deported from Germany back to his home country of Morocco after being released early. According to the Daily Mail, el-Motassadeq is now living in his family home in a suburb of Marrakech with his wife and children and has been greeted by well-wishers since his return.The newspaper said people had described the ‘jubilant’ reaction of friends, family and neighbours when the 44-year-old returned, with people coming from all over Morocco to see him. El-Motassadeq, who was described during his trial as the ‘treasurer’ for the 9/11 hijackers, served less than 15 years in prison for his part in the attacks on the World Trade Center and Pentagon in September 2001.According to the Mail, El-Motassadeq grinned and said he was too busy to speak when the newspaper tracked him down in Marrakech, while his sister reportedly said ‘praise be to God’ when asked if she was happy about his release.
Saudis Launch Nuclear Research Reactor Amid Competition With Iran – Saudi Crown Prince Muhammad bin Salman has launched the kingdom’s first nuclear research reactor as part of a plan to diversify the kingdom’s energy mix and acquire nuclear capabilities, state media reported. The reactor launched on November 5 is among 16 that Saudi officials, citing archrival Iran’s continued development of nuclear energy, have said they plan to build over the next two decades at a cost of $80 billion. While Riyadh insists its goal is to diversify away from oil and gas, the main drivers of the kingdom’s economy, the nuclear plans have raised concerns in the West about the possibility of a nuclear race between the two Middle Eastern rivals. Like Iran, Riyadh insists its only goal is the development of peaceful nuclear technologies. But Prince Muhammad warned in March that if Iran develops a nuclear weapon, Riyadh will do so as well. Since that time, the United States has pulled out of Iran’s 2015 nuclear agreement with world powers, while Iran has said it will continue to honor the accord as long as it continues to reap economic benefits from the lifting of international sanctions in exchange for curbs on its nuclear activities under the deal. But top Iranian officials also have threatened to quit the agreement if U.S. sanctions on Iran’s economy, which went fully into effect on November 5, squelch the benefit of its trade with the rest of the world. Riyadh expressed deep reservations about the Iranian nuclear deal and applauded U.S. President Donald Trump’s move to abandon it and reimpose sanctions on Iran. The U.S. sanctions are aimed at forcing Iran to renegotiate the nuclear deal and curb its involvement in the wars in Syria and Yemen, where Tehran and Riyadh support opposing sides in the conflict. The Saudi reactor project launched on November 5 was among seven projects officially started by the crown prince during a visit to Riyadh’s King Abdulaziz City for Science and Technology, the official Saudi Press Agency reported.
Civilians Trapped as Saudi Airstrikes and Warships Pound Yemeni City of Hodeidah – Saudi airstrikes and warships continue to pound the Yemeni port city of Hodeidah on Monday, with escalating strikes coinciding with Saudi-backed ground forces advancing closer to the city, just three miles from the port itself, according to officials.This further limits the movement of aid into and out of the vital port, which before the Saudi offensive was the lone source of food imports for 80% of Yemen. Saudi forces control the supply lines, and promises of an aid corridor haven’t panned out so far.Heavy fighting and Saudi-led encroachment into the area, has aid groups warning that thousands of civilians left in Hodeidah are effectively trapped now. Everyone who lives between the airport and university is effectively trapped inside, and the fighting has almost reached the city’s main hospital, increasing the humanitarian crisis. The UN reiterated calls for urgent peace talks to prevent the fall of the city, and the famine threatening millions of lives expected to follow. The US called for an immediate ceasefire last week, and there is no sign the Saudi offensive is slowing down.
Battle rages in Yemen’s vital port as showdown looms – Instead of bringing calm to the besieged Yemeni city, calls for a ceasefire in Hodeidah have brought some of the worst violence the vital port has yet faced in the three-year war. Baseem al-Janani, who lives in the city, said: “The clashes are absolutely crazy right now. I have a headache from the shelling and bombing in the east. People are trapped in their houses for hours at a time because of shrapnel and gunfire. But their houses are not safe either.” In the past few days, more than 100 airstrikes have hit civilian neighbourhoods – five times as many as in the whole of the first week of October, according to Save the Children staff in Hodeidah. One of their malnutrition clinics was attacked on Wednesday.Pro-government militias are trying to seize as much ground as possible before fighting is supposed to stop at the end of November, when it is hoped UN-sponsored peace talks will restart in Sweden. Saudi Arabia and United Arab Emirates coalition-backed troops are inching closer to the city’s Houthi rebel-held centre from their current stalemate positions in the southern suburbs and at the airport in a three-pronged attack. On Wednesday, an Emirati-trained group known as the Giants, with the help of Apache attack helicopters, secured a key road leading to Hodeidah’s port. The Houthis, too, have stepped up operations, resorting to burning tyres to obscure gunships’ view of the city and laying an estimated hundreds of thousands of landmines in anticipation of the coalition attack, codenamed Operation Golden Victory. On Tuesday, fighters raided the city’s May 22 hospital – named for Yemen’s national day – and set up sniper positions on the building’s roof, Janani said.“We don’t have enough hospitals anyway. The patients and staff are now terrified they will be an airstrike target,” he said. Hodeidah is Yemen’s lifeline. Before the war broke out in 2015, it handled most imports in a country where 90% of food had to be imported. The port has been blockaded by the Saudi-led coalition for the past three years, a decision aid organisations say has been the main contributing factor to the famine that threatens to engulf half of Yemen’s 28 million population.
Saudi Arabia Stealing Yemen’s Oil in Collaboration with Total – “63% of Yemen’s crude production is being stolen by Saudi Arabia in cooperation with Mansour Hadi, the fugitive Yemeni president, and his mercenaries,” Mohammad Abdolrahman Sharafeddin told FNA on Tuesday. “Saudi Arabia has set up an oil base in collaboration with the French Total company in the Southern parts of Kharkhir region near the Saudi border province of Najran and is exploiting oil from the wells in the region,” he added. Sharafeddin said that Riyadh is purchasing arms and weapons with the petro dollars stolen from the Yemeni people and supplies them to its mercenaries to kill the Yemenis. Late in last year, another economic expert said Washington and Riyadh had bribed the former Yemeni government to refrain from oil drilling and exploration activities, adding that Yemen has more oil reserves than the entire Persian Gulf region. “Saudi Arabia has signed a secret agreement with the US to prevent Yemen from utilizing its oil reserves over the past 30 years,” Hassan Ali al-Sanaeri told FNA.”The scientific research and assessments conducted by international drilling companies show that Yemen’s oil reserves are more than the combined reserves of all the Persian Gulf states,” he added. Al-Sanaeri added that Yemen has abundant oil reserves in Ma’rib, al-Jawf, Shabwah and Hadhramaut regions.
Iran’s Powerful Hardline Cleric Threatens To Instantly Create $400 Oil By Seizing Tankers – Just ahead of U.S. sanctions on Iran set to snap back on Monday targeting primarily the energy, shipbuilding, shipping, and banking sectors, Iran’s most prominent conservative cleric has announced that if oil exports are halted, Saudi tankers will be confiscated and Gulf countries attacked. Powerful Shia cleric Ayatollah Ahmad Alamolhoda is the Friday Prayer leader in Mashhad, considered Iran’s spiritual capital and among the holiest places in Shia Islam, and sits on the government’s “Assembly of Experts” but has no formal government role or decision-making ability. However, he’s a powerful leader and chief spiritual force behind Iran’s conservative faction who has long been at odds with President Hassan Rouhani. Iranian opposition sources report that Alamolhoda told his followers during his Friday prayer sermon: If we reach a point that our oil is not exported, the Strait of Hormuz will be mined. Saudi oil tankers will be seized and regional countries will be leveled with Iranian missiles. The cleric is further reported to have declared that Iran has the power to “instantly” create conditions for $400 a barrel oil prices if it decides to act in the Persian Gulf. He said as reported in regional opposition media: If Iran decides, a single drop of this region’s oil will not be exported and in 90 minutes all Persian Gulf countries will be destroyed. The UAE and Saudi Arabia will be destroyed in 60 minutes. After 90 minutes the U.S. will have nothing in this country. And we haven’t even started with Israel. Beware of the day we go after Israel, too. That’s why they want us to round up our missiles.
Iran starts mass-producing locally designed Kowsar fighter jet – Iran has started mass-producing its locally designed Kowsar fighter plane, state television reported. “Soon the needed number of this plane will be produced and put at the service of the Air Force,” Defence Minister Amir Hatami said on Saturday at a ceremony launching the plane’s production, which was shown on television. Iran unveiled the Kowsar domestic fighter jet in August with President Hassan Rouhani saying Tehran’s military strength was only designed to deter enemies and aimed at creating “lasting peace”. State media said the new jet had “advanced avionics” and multipurpose radar, and it was “100-percent indigenously made” for the first time. Footage of the Kowsar’s test flights was circulated by various official media. But live footage of the plane taxiing along a runway at the defence show was cut before it took off. Iran unveiled the jet at a defence show in the capital Tehran in August [Iranian Presidency/AFP] At its inauguration in August, Hatami said the aircraft programme was motivated by memories of air raids Iran suffered during its eight-year war with Iraq in the 1980s, and by repeated threats from Israel and the United States that “all options are on the table” in dealing with Iran. “We have learned in the [Iran-Iraq] war that we cannot rely on anyone but ourselves. Our resources are limited and we are committed to establishing security at a minimum cost,” he said in a televised interview. The US has sold hundreds of millions of dollars of weapons to Iran’s regional rivals, but has demanded that Tehran curb its defence programmes, and is in the process of reimposing crippling sanctions in a bid to force its capitulation.
Operation ‘Enduring Defeat’? DoD Admits US May Need To “Stay In Iraq For Decades” — Despite reports that the Islamic State terrorist group has lost 99 percent of its territory and shifted to insurgent tactics in Iraq and Syria, a recent report said an enduring defeatof the organization could take “years, if not decades.” This, according to Department of Defense information provided to investigators with the DoD Inspector General, is in large part due to what is still needed to make Iraqi security forces “self-reliant.”“Systemic weaknesses remain, many of which are the same deficiencies that enabled the rise of ISIS in 2014,” according to the quarterly IG report on Operation Inherent Resolve, the counter-ISIS operation that spans Iraq and Syria. Though top military officials recognized the gaps in capabilities among the Iraqi forces and that a “resurgence” of ISIS in the region is likely without sustained support and attention, congressional support for the fight against ISIS has decreased in the new fiscal year and an estimated $230 million in U.S. stabilization funds earmarked for Syria has been shifted to other countries. The quarterly report on OIR noted that while security in cities such as the capital Baghdad has improved to such a degree that security forces have removed about 300 police and security checkpoints and 1,000 barriers that divided and walled off the city. As violence in the cities has decreased, ISIS mass casualty attacks and killings have increased in the rural areas where ISF has less control. Ninety-two percent of the reported 285 violent attacks occurred in the crescent of provinces north of Baghdad, including Anbar, Ninewa, Salah ad Din, Kirkuk and Diyala. ISIS fighters have killed three to four tribal leaders and village elders per week over the past six months, according to reports. Iraqis still lack the ability to conduct basic intelligence gathering and have no qualified drone pilots, instead relying almost entirely on coalition forces to gather, analyze and disseminate intelligence. “In effect, this means that the Iraqi senior leadership is dependent on the Coalition for information about their own military’s operations,” according to the report. “This strategy risks an enduring coalition presence in Iraq for years to come.”
US ‘war on terror’ has killed over half a million people- study – Hundreds of thousands of people in Afghanistan, Iraq and Pakistan have been killed due to the so-called “war on terror” launched by the United States in the wake of the September 11, 2001 attack, according to a new study.The report, which was published on Saturday by the Brown University’s Watson Institute for International and Public Affairs, put the death toll between 480,000 and 507,000.The toll includes civilians, armed fighters, local police and security forces, as well as US and allied troops.The report states that between 182,272 and 204,575 civilians have been killed in Iraq; 38,480 in Afghanistan; and 23,372 in Pakistan. Nearly 7,000 US troops were killed in Iraq and Afghanistan in the same period. IThe paper, however, acknowledged that the number of people killed is an “undercount” due to limitations in reporting and “great uncertainty in any count of killing in war”. “We may never know the total direct death toll in these wars,” wrote Nera Crawford, the author of the report titled “Human Cost of the Post-9/11 Wars: Lethality and the Need for Transparency”. “For example, tens of thousands of civilians may have died in retaking Mosul and other cities from ISIS [also known as ISIL] but their bodies have likely not been recovered.”
In Shocking Interview, Top Commander Admits US Cannot Win War in Afghanistan – Historians of the now seventeen-year old U.S. war in Afghanistan will take note of this past week when the newly-appointed American general in charge of US and NATO operations in the country made a bombshell, historic admission. He conceded that the United States cannot win in Afghanistan.Speaking to NBC News last week, Gen. Austin Scott Miller made his first public statements after taking charge of American operations, and shocked with his frank assessment that that the Afghan war cannot be won militarily and peace will only be achieved through direct engagement and negotiations with the Taliban – the very ‘terror’ group which US forces sought to defeat when it first invaded in 2001.“This is not going to be won militarily,” Gen. Miller said. “This is going to a political solution.”Miller explained to NBC: My assessment is the Taliban also realizes they cannot win militarily. So if you realize you can’t win militarily at some point, fighting is just, people start asking why. So you do not necessarily wait us out, but I think now is the time to start working through the political piece of this conflict. He gave the interview from the Resolute Support headquarters building in Kabul. “We are more in an offensive mindset and don’t wait for the Taliban to come and hit [us],” he said. “So that was an adjustment that we made early on. We needed to because of the amount of casualties that were being absorbed.” Starting last summer it was revealed that US State Department officials began meeting with Taliban leaders in Qatar to discuss local and regional ceasefires and an end to the war. It was reported at the time that the request of the Taliban, the US-backed Afghan government was not invited; however, there doesn’t appear to have been any significant fruit out of the talks as the Taliban now controls more territory than ever before in recent years. Such controversial and shaky negotiations come as in total the United States has spent well over $840 billion fighting the Taliban insurgency while also paying for relief and reconstruction in a seventeen-year long war that has become more expensive, in current dollars, than the Marshall Plan, which was the reconstruction effort to rebuild Europe after World War II.
White Phosphorus – America’s Weapon of Choice? — Since the beginning of the Syrian civil war in 2011, Washington has made it its aim to vilify the Assad government by repeatedly informing the world that the pro-regime side in this conflict has used chemical weapons against its own civilian population. Recent news from Syria would suggest that the United States has behaved in a manner that flaunts international conventions with the use of certain banned weapons.According to the Syrian Arab News Agency or SANA, we find this recent news: While you might say or think that this is just pro-Assad propaganda, in fact, it is little different than the American allegations that the Assad government is using chemical weapons.This news was followed by this update in which Russia has requested an investigation into the use of internationally banned weapons: According to Protocol III of the Convention on the Prohibition or Restrictions on the Use of Certain Conventional Weapons Which May be Deemed to be Excessively Injurious or That Have Indiscriminate Effects better known as the Convention on Certain Weapons (CCW), the use of white phosphorus is banned as part of the ban on incendiary weapons against either permanent or temporary civilian population concentrations: Incendiary weapons are defined as any weapon or munition which is primarily designed to set fire to objects or to cause burn injuries to persons.There are 125 high contracting parties to the entire Convention on Certain Weapons with an additional four signatories. The aforementioned Protocol III has 115 high contracting parties with the following nations that are part of the 125 high contracting parties not contracting under Protocol III: Burundi, Cameroon, Cote D’Ivoire, Dominican Republic, Israel, Monaco, Morocco, the Republic of Korea, Turkey and Turkmenistan. According to the Federation of American Scientists Fact Sheet on white phosphorus, we find the following: Not only do U.S. forces use white phosphorus, according to research by several human rights organizations, Israel (a non-signatory to Protocol III) appears to have used white phosphorus in Operation Cast Lead against densely populated regions of Gaza between December 2008 and January 2009.
Israel to demolish Palestinian homes, school in West Bank – Israeli occupation authorities distributed demolition orders for Palestinian homes and a primary school in the village of Musafer Yatta to the south of the occupied West Bank city of Hebron, Quds Press reported yesterday.National Committee to Resist the Wall and Settlements in southern Hebron, Ratib Al-Jbour, told Quds Press that the Israeli occupation forces handed the demolition and stop-work orders to the Palestinians in the areas of Al-Mafqara, Saroura and Khelet Al-Dabee in Musafer Yatta.Al-Jbour said that the Israeli occupation authorities planned to demolish the Palestinian facilities under claims that they were built without the necessary licenses. He also said that the Israeli occupation also included Khelet Al-Dabee Primary School, which was inaugurated two weeks ago, in the demolitions.The Palestinian activist also noted that Israeli occupation forces fixed the school’s demolition order at a wall after the headmaster and teachers refused to accept it. Palestinians have one week to empty their properties, Al-Jbour said.However, this is only half of the story, as violent Jewish settlers are always on the lookout for Palestinian kids. These settlers, who “also set up their own checkpoints”, engage in regular violence as well, by “throwing stones” at children, or “physically pushing (Palestinian children) around.” “UNICEF’s protective presence teams have reported that their volunteers have been subjected to physical attacks, harassment, arrest and detention, and death threats,” according to the same UN report.
‘A cruel choice’- Why Israel targets Palestinian schools – Several Palestinian students, along with teachers and officials, were wounded in the Israeli army attack on a school south of Nablus in the West Bank on 15 October. The students of Al- Sawiya Al-Lebban Mixed School were challenging an Israeli military order to shut down their school based on the ever-versatile accusation of the school being a “site of popular terror and rioting”.“Popular terror” is an Israeli army code for protests. The students, of course, have every right to protest, not just the Israeli military occupation but also the encroaching colonisation of the settlements of Alie and Ma’ale Levona. These two illegal Jewish settlements have unlawfully confiscated thousands of dunams of land belonging to the villages of As-Sawiya and Al-Lebban.“The Israeli citizens” that the occupation army is set to protect by shutting down the school, are, in fact, the very armed Jewish settlers who have been terrorising this West Bank region for years. According to a 2016 study commissioned by the United Nations, at least 2,500 Palestinian students from 35 West Bank communities must cross through Israeli military checkpoints to reach their schools every day. About half of these students have reported army harassment and violence for merely attempting to get to their classes or back home.
Watch the Leaked Documentary the Israel Lobby Didn’t Want You to See – A leaked Al Jazeera documentary detailing the tactics of the Israeli lobby in the United States and elsewhere has revealed that pro-Israel groups regularly invented smears, including false accusations of sexual assault, to discredit professors and students on U.S. university campuses that support equal rights for Palestinians and the Boycott, Divest and Sanctions (BDS) movement. BDS is a non-violent movement that seeks to use economic pressure on Israel’s government so that it complies with international law, ends the military occupation of the West Bank, and halts the decades-long blockade of the Gaza Strip. In the third episode of the Al Jazeera documentary “The Lobby”, which was leaked online by the website Electronic Intifada, focus is given to the efforts of pro-Israel advocacy groups on U.S. universities, particularly the efforts of these groups to use aggressive information warfare tactics to discredit and smear activists. The documentary further reveals that these smear campaigns are incredibly well-funded – to the tune of millions of dollars – and involve coordination with the Israeli government’s Ministry of Strategic Affairs. In one instance, Bill Mullen – a professor of American Studies at Purdue University and a well-known supporter of Palestinian rights and BDS – was accused of sexual harassment, supporting terrorism and other misdeeds by nearly two dozen anonymous web pages purporting to have been created by Mullen’s former students in 2016. Mullen told Al Jazeera that within 48 hours of learning of the smear sites, he discovered that they had been created within moments of each other and appeared to be operated by the same individual or group. After the websites used the name of his daughter and were anonymously sent to his wife, Mullen told Al Jazeera that “these people will do anything, they’re capable of doing anything” to discredit pro-Palestinian solidarity activists. The documentary further revealed that this tactic is promoted by pro-Israel campus organizations including the Israel on Campus Coalition (ICC). For instance, ICC executive director Jacob Baime discussed how “the anti-Israel people” are targeted by groups like the ICC who put “up some anonymous websites” and targeted Facebook ads that make false sexual harassment claims and other personal attacks as part of an effort to discredit them and their activism.
US, Turkey risk direct military clash as they escalate war in Syria – As it pursues its war with US-backed Kurdish-nationalist organizations, the Turkish government is threatening an outright military occupation of large parts of Syria that could provoke war with Syria and a direct clash with US forces. On Tuesday, Turkish President Recep Tayyip Erdogan denounced joint patrols by US forces and Kurdish-led militias as “unacceptable.” Speaking to reporters in Ankara, he said: “Not only can we not accept (the joint patrols), such a development will cause serious problems at the border.” This came after Turkey shelled positions of the US-backed Syrian Democratic Forces (SDF) in the Zor Magar region east of the Euphrates River and the town of Tal Abyad starting on October 28, killing at least 10 Kurdish fighters. Two days earlier, Erdogan had delivered a “final warning” to Syrian Kurdish fighters to retreat. He also warned that Turkey’s next target would be positions of the People’s Protection Units (YPG, a Kurdish force that is the key component of the SDF) east of the Euphrates. On October 30, as shelling continued, Erdogan stepped up threats to invade Syria to attack the US-backed Kurdish forces: “We are going to destroy the terrorist organization… preparations and plans have been completed. We’ve made our plans and programs, and initiated it in the previous days. We will come down on the terrorist organization’s neck with more extensive, effective operations. We could arrive suddenly one night.” This provoked an angry warning from Washington on October 31. State Department deputy spokesman Robert Palladino said: “Unilateral military strikes into northwest Syria by any party, particularly as American personnel may be present or in the vicinity, are of great concern to us … Coordination and consultation between the United States and Turkey on issues of security concern is a better approach.” Ankara, however, is determined to crush the YPG, which it views as an affiliate of the Kurdistan Workers’ Party (PKK), the Turkish Kurdish separatist movement against which it has waged a bloody counter insurgency campaign for more than 30 years. Ankara also fears Kurdish autonomy in Syria, worried it will provoke demands for Kurdish autonomy in eastern Turkey.
Turkey Vows To Make Sea Bandits Drilling Gas Off Cyprus Pay Like Terrorists In Syria Did – Ankara will not allow any “sea bandits” to roam free and tap the disputed natural gas reserves off Cyprus, Turkey’s president has vowed, while commissioning a new warship to challenge competitors militarily, should the need arise.“We will not accept attempts to seize natural resources in the Eastern Mediterranean through the exclusion of Turkey and the Turkish Republic of Northern Cyprus (TRNC),” Erdogan said Sunday, according to Daily Sabah. While claiming that Turkey has no ambitions to annex any “territories,” Ankara promised to protect “the rights of our country and of our brothers.”Those who thought that they could take steps in the Eastern Mediterranean or the Aegean despite [this] have begun to understand the magnitude of their mistake. We will not allow bandits in the seas to roam free just like we made the terrorists in Syria pay,” Erdogan said at a ceremony transferring the TCG Burgazada corvette to the Turkish Navy.The exploration of hydrocarbon resources off the coast of the Republic of Cyprus has become a sensitive issue for the international community, ever since the first gas deposit discoveries were made off the coast in 2011. While the Republic of Cyprus belongs to the EU community and is recognized by the UN, TRNC, the northern third of the island, has been occupied by Turkey since 1974. As a result, Ankara continues to claim jurisdiction for offshore research in the East Mediterranean, an area thought to be rich with natural resources. The region has recently witnessed an escalation in tensions, after the Turkish Navy intercepted a Greek frigate which tried to interfere with a Turkish research vessel’s seabed exploration on October 18. The incident prompted a diplomatic row with Greece, which traditionally supports the ethnically Greek government of the Republic of Cyprus. While Greece denied interfering with the Turkish research vessel, Ankara has cautioned its neighbor and longtime opponent not to stir trouble in the region.
China October crude imports rise to all-time high on record teapot buying (Reuters) – China’s crude oil imports rose to all-time high on a daily basis in October, supported by record demand from private refiners and healthy margins, customs data showed Thursday. Imports in October surged 32 percent from a year earlier to 40.80 million tonnes, or 9.61 million barrels per day (bpd), data from the General Administration of Customs showed, climbing from 9.05 million bpd in September. The previous daily record of 9.60 million bpd was touched in April 2018. The imports rose 8.1 percent for the first 10 months of the year from the same period last year to 377.16 million tonnes, or 9.06 million bpd, on track for another record year of shipments. The record volumes were a result of strong imports from China’s private refiners, often known as “teapots”. These oil processors bought 8.22 million tonnes of crude during the month, the highest monthly amount ever since Beijing began issuing import quotas to them in 2015, according to Emma Li, an analyst with Refinitiv Oil Research and Forecasts. “Independents bought record amounts of crude in October as they ramped up utilization rates to meet pent-up demand for gasoline and diesel,” Li said. “Many teapots also started stockpiling for January and February next year in a rush to use up their quota this year.” China’s overall import volumes for October were in line with Refinitiv Oil Forecast’s expectations of 40.95 million tonnes. The imports might have been higher except CNOOC Ltd’s Huizhou oil plant started a two-month long turnaround in October, curbing purchases from one of China’s largest refineries. Total natural gas imports in October via both pipeline and as liquefied natural gas (LNG) were at 7.3 million tonnes, up 25.6 percent from the same month last year, but easing from 7.62 million tonnes in September.
The Clock Is Ticking For China’s Oil Independence – China is pulling out all stops in order to increase its oil and gas production, but at the end of the day it will likely not be enough to stop the world’s second largest economy from becoming over reliant on geopolitically charged crude oil and natural gas imports. On Monday, state-run Chinese oil majors CNPC and Sinopec, also Asia’s largest refinery, said they were speeding up drilling and exploration from major tight oil and shale gas formations in the country’s western regions. CNPC also said that new exploration in shale gas, tight oil and tight gas will lead to growth in production for the country’s largest oil and gas producer.The company added that the drilling cycle at the Mahu field in Xinjiang, one of CNPC’s largest findings in recent years, fell around 40 percent the previous year. A Reuters report said this implies that oil wells are being completed and produced at a faster rate. China’s ambitions to develop more of its own oil and gas reserves is a race against a ticking clock. The middle kingdom has already bypassed the U.S. to become the world’s top oil importer, with much of those oil imports having geopolitical strings attached. China is the largest importer of Iranian oil, and that resource is being jeopardized by fresh U.S. sanctions against Iran’s oil sector that went onto effect on November 5. China is also reliant on both Russia and Saudi Arabian crude and just recently pared back crude imports from the U.S. amid ongoing trade tensions between Washington and Beijing. China’s dilemma in its gas sector is just as perplexing. The country bypassed South Korea late last year to become the world’s second largest liquefied natural gas (LNG) importer, with projection that it will even pass Japan as the top LNG importer at the beginning to mid part of the next decade, a development unimaginable just two years ago. China’s insatiable gas demand comes as the government mandates that gas, amid record air pollution levels, particularly in its major urban centers, make up at least 10 percent of its energy mix needed for power generation by 2020, with more earmarks set for 2030. Yet, China’s growing oil dependency will create the most problems for Beijing as it is forced to continue to rely on the U.S. to safeguard global shipping lanes. What China needs to offset both its growing oil and gas dependency is more domestic production, but therein lies the problem. China’s oil fields are maturing and it’s unlikely that significant discoveries can be found to replace depletion reserves. Around five or six years ago, Beijing pegged its hope on emulating the US shale oil and gas success story, even cutting deals with American firms to help develop China’s shell formations. However, unlike most US shale formations, China’s are in difficult reach, rugged terrain, indicating that shale oil and gas will not offer the solution that Beijing energy planners needs, at least in the foreseeable future.
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