Written by rjs, MarketWatch 666
Here are some more selected news articles about the oil and gas industry from the week ended 28 April 2019. Go here for Part 1.
This is a feature at Global Economic Intersection every Monday evening.
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Canada Extends Deadline for Trans Mountain Pipeline Decision to June 18 — Canada has extended the deadline for a decision on whether to push forward with the expansion of the Trans Mountain oil pipeline to June 18 from mid-May, the government said on Thursday. The Trans Mountain expansion (TMX) project would nearly triple the amount of crude flowing from Alberta’s oil sands to British Columbia’s coast, but has been beset by regulatory delays and opposition from indigenous groups, environmentalists and the government of British Columbia. Amarjeet Sohi, Canada’s minister of natural resources, said the delay would give the federal Liberal government more time to consult with indigenous groups impacted by the pipeline. “The Government has consistently said that a decision would only be made on the project once we are satisfied that the duty to consult has been met,” he said. However, Conservative shadow minister for natural resource Shannon Stubbs said the delay meant another summer construction season would likely be missed. “There is also still a very real risk that the Liberals will cancel this project for political reasons,” she said in a statement. Last August, the Canadian government bought the pipeline from Kinder Morgan Canada for C$4.5 billion ($3.37 billion) to ensure it gets built. That came after Canada’s Federal Court of Appeal overturned the Liberal government’s 2016 approval to expand the pipeline. The court ruled Canada’s National Energy Board (NEB) regulator had not considered marine impacts and the government had not adequately consulted indigenous groups. Prime Minister Justin Trudeau’s government ordered a new NEB review of Trans Mountain last September, and in February the regulator recommended the government approve it a second time.
Mapping The Countries With The Most Oil Reserves – There’s little doubt that renewable energy sources will play a strategic role in powering the global economy of the future. But, as Visual Capitalist’s Jeff Desjardins notes, for now, crude oil is still the undisputed heavyweight champion of the energy world. In 2018, we consumed more oil than any prior year in history – about 99.3 million barrels per day on a global basis. This number is projected to rise again in 2019 to 100.8 million barrels per day. Given that oil will continue to be dominant in the energy mix for the short and medium term, which countries hold the most oil reserves? Today’s map comes from HowMuch.net and it uses data from the CIA World Factbook to resize countries based on the amount of oil reserves they hold. Here’s the data for the top 15 countries below: Venezuela tops the list with 300.9 billion barrels of oil in reserve – but even this vast wealth in natural resources has not been enough to save the country from its recent economic and humanitarian crisis. Saudi Arabia, a country known for its oil dominance, takes the #2 spot with 266.5 billion barrels of oil. Meanwhile, Canada and the U.S. are found at the #3 (169.7 billion bbls) and the #11 (36.5 billion bbls) spots respectively.
Venezuela Imports Crude for the First Time in Five Years – Oil production in Venezuela has dipped so low that the owner of the world’s largest reserves is importing crude for the first time in five years. The nation’s output fell below 1 million barrels a day to a 16-year low in March, amid rolling blackouts and U.S. sanctions. As the power disruption shut oil fields, pipelines and ports, bringing oil infrastructure to a halt, state-owned Petroleos de Venezuela SA bought a cargo of crude from fellow OPEC member Nigeria, marking the first oil import since 2014. Nosedive Venezuela oil production hits 16-year low in March Source: Bloomberg survey (2002-2009), OPEC secondary data (2010-2019) Almost 1 million barrels of light, sweet Agbami crude is discharging Tuesday, after loading in early April, and may help to offset falling domestic production. PDVSA can also use the lighter oil as a diluent to thin Venezuela’s sludgy crude so it can be more easily extracted from underground reservoirs. The streams that are blended with light oil are marketed as Merey 16, the country’s top exported oil and a grade used to calculate the OPEC oil basket price. The cargo of Agbami will likely be used to make Merey as the production of domestic of light oils has been falling over the years. According to the latest official data available, production fell by half between 2006 and 2016 to 313,000 barrels daily. The last time Venezuela imported crude, in 2014, it purchased Algerian crude to mix with extra-heavy oil for a grade that became known as Blend 16. PDVSA discontinued the blend amid disagreements with Algeria’s state oil company Sonatrach and complaints from U.S. refiners, then the company’s biggest buyers.
Brazils Petrobras reports oil spill from Albacora field offshore pipeline – Brazil’s Petrobras oil company reported an oil spill from its offshore oil pipeline in the Albacora field Monday, according to Reuters report. According to the company’s statement, the leak has been identified around dawn Monday. Oil production at platform P-25, located some in the Campos Basin some 110 km away from the coast, has been halted shortly after the discovery of the leak, the company’s statement says. “The company has promptly sent ships to the location, tasked with removal of the oil spill,” Petrobras said in the statement, adding that the regulatory bodies have been notified of the incident. The spill is estimated at 941 liters.
One week to clean up Tanjung Balau oil spill, says Marine Dept – Johor Marine Department today said it will need about one week to clean up the oil spill off Tanjung Balau waters, near Kota Tinggi. That, according to its director Dickson Dollah, would also depend on the weather. “Looking at the current situation, we can estimate that the clean up job will take about one week. “If the weather permits, and the currents do not spread the spill landwards, I believe it is doable.” he said when contacted. Dickson said an Oil Spill Response Team has been deployed to the site to monitor and control the spread using absorbent booms. “We are hoping that the monitoring and measures taken since yesterday will prevent the spill from spreading to the shores.” he added. It was reported that foreign tankers were believed to have dumped marine fuel oil that resulted in the spill. Authorities said it was estimated that 300 tonnes of marine fuel oil had been discharged and the spill covered an area four nautical miles from the coast.
Fresh oil spills in Ogoni kill 2, as Army invades community – AT least two persons have been killed in Kegbara-Dere Community, Gokana Local Government Area of Rivers State, following two fresh oil spills in the area. It was gathered that there was a spill from an oil facility owned by the Shell Petroleum Development Company, SPDC, in B-Dere and Kpor communities of the same LGA. It was also gathered that Shell had tried to access the site and repair the damage before the incident occurred. However, the Chairman of Kegbara-Dere Town Council, Dornu Godswill, disclosed that one Nen-Elkpege Legbara and one other person lost their lives, while, Mr. Friday Komene and two others who sustained bullet injuries are receiving treatment. Speaking, Godswill expressed worries that their community is under siege by military men, who allegedly invaded the area. He said: “On April 18, 2019, I was returning from the hospital and I saw Shell vehicles parked at Kpor trunk line. I had to find out what the problem was. I was informed that there was an oil spill. “I was worried that they did not inform the community. Immediately, I called on the president to stay with them. “I later heard that some people obstructed their activities. They invited us to give them access to the spill site.” Godswill noted that oil thieves had set the spill at Kpor ablaze, adding that three of the thieves died at the spot. He, however, said the military that escorted Shell to the area attacked their community when the spills were not in their community. “On the 18th of April, around 10 pm, we heard a sound and we later got information that the oil spill at Kpor was on fire. It was not our boys that did it. We only heard that some oil bunkerers that were cooking products around that area caused it.” When contacted the spokesman of Shell, Mr. Michael Adande, said the firm would respond to the allegations raised against it at the appropriate time.
Oil spill: Group urges NOSDRA to visit affected communities – A Niger Delta-based Non- Governmental Organisation, the Center for Peace and Environmental Justice (CEPEJ), has called on the Director General of National Oil Spill Detection and Response Agency (NOSDRA), Mr.Idris Musa, to visit communities and creeks in the Niger-Delta region affected by oil spill. CEPEJ, in a statement signed by its National Coordinator, Sheriff Mulade and made available to newsmen in Warri recently, noted that oil spill related environmental damages need urgent attention, adding that NOSDRA needed to be abreast with numerous oil spill in the region to enable it discharge the agency’s statutory obligations to the people. “We see reasons to redirect the attention of NOSDRA to several explosions of oil and gas facilities, pipelines resulting to severe environmental and ecological damages. “There are numerous sub-standard oil and gas transportation facilities that are often prone to leakage, spill and explosion and if NOSDRA makes it a priority to know the locations of such facilities they could give better response operations which includes detection, prevention and result oriented response,” it added. The NGO drew the attention of NOSDRA to the preventable incident of 11 persons that allegedly died in 2016 from pipeline explosion at Agip’s oilfield in Southern Ijaw Local Government Area of Bayelsa State, noting that it was necessary to call on NOSDRA to plan for a familiarisation visit to oil spills affected sites particularly in the creeks and interact with host communities across Niger Delta.
Germany, Poland suspend oil imports via Russian pipeline amid contamination worries – Several European nations have suspended oil imports from Russia after contaminated supplies were found in a major pipeline from the world’s second-largest crude exporter. The sudden suspension of imports from the Soviet-built Druzhba pipeline has disrupted supplies to European refineries. Germany, Poland and Belarus have all suspended shipments through the Druzhba line, and trading sources say the Czech Republic has also halted imports, according to S&P Global Platts. The firm estimates that 700,000 barrels per day of Russian oil that usually transits through the Druzhba line has been suspended. At least five tankers containing the contaminated oil also sailed from the Baltic port of Ust Luga. The incident will cause short-term disruptions to supply, potentially resulting in reduced activity at affected refineries, according to Chris Midgley, global head of analytics at S&P Global Platts. That should boost product prices and refinery margins in northwest Europe, but it’s not likely to significantly tighten global oil supplies or disrupt production. Russia currently plans to start pumping clean fuel through Druzhba on April 29. The Druzhba pipeline can ship up to 1 million bpd, according to data sourced by Reuters – approximately 1% of global demand. The line supplies branches north to supply Poland and Germany and forks south to deliver Russian crude to the Czech Republic, Hungary and Slovakia. German plants belonging to Total, Shell, Eni and Rosneft as well as refineries belonging to Poland’s PKN Orlen and Grupa Lotos were all reportedly at risk. PKN Orlen is receiving seaborne shipments from Gdansk port, but capacity from Gdansk may be limited and cannot completely compensate for the disruption, according to S&P Global Platts. “The first thing to note is that this incident involving contaminated Russian oil is rare occurrence,” In fact, Brennock said it is the “first time I have seen anything like it.”
ExxonMobil Signs 20-year China LNG Supply Deal – China-based Zhejiang Provincial Energy Group has signed a liquefied natural gas (LNG) sales and purchase agreement with Exxon Mobil Corp. According to a written statement Monday from ExxonMobil, Zhejiang Energy should receive 1 million metric tons per annum (mtpa) of LNG over a 20-year period. “This sales and purchase agreement represents an important milestone and provides a solid foundation for our strategic partnership with Zhejiang Provincial Energy Group,” Peter Clarke, ExxonMobil’s LNG senior vice president, stated. As an Aug. 22, 2018, Reuters article posted to Rigzone notes, Zhejiang Energy is partnering with Sinopec Corp. to build a 3-mtpa LNG receiving terminal at Wenzhou in China’s eastern Zhejiang province. The initial phase of the facility reportedly is targeted to begin operations in late 2021. “ExxonMobil shares Zhejiang Energy’s vision in developing a major LNG gateway in the Ningbo-Zhoushan region,” said Clarke. “We look forward to continuing our support for Zhejiang Energy during the construction, commissioning and operation of its Wenzhou LNG receiving terminal.”
Saudi Arabia is set to lead a trillion-dollar regional energy splurge – The energy sector in the Middle East and North Africa will amass almost $1 trillion in investment over the next five years, as countries build out energy capabilities and pivot to renewables, according to new research. The Arab Petroleum Investments Corporation (Apicorp), a multilateral development bank with around $7 billion in total assets, provides an annual estimate for both planned and committed investments for 2019 to 2023. “We are seeing growth in the total amount of investments going into the energy sector,” Apicorp CEO Ahmed Attiga told CNBC’s “Capital Connection” on Wednesday. The group says planned investments account for the majority of the spending at $613 billion while committed investments cover the remainder. Oil remains key, but gas is rising The power sector accounts for the largest share of total investments at $348 billion. Of that, there are $90 billion worth of projects currently under execution. “The power sector is really showing tremendous growth, and this is a direct outcome of the countries of the region diversifying their energy mix and also trying to rely on renewables as a major source of energy,” Attiga said. “Most of the countries of the region are determined now to implement an energy transition regardless of the volatility of oil prices,” he added. The report said the case for switching from oil to gas and renewables remains strong in countries with sizeable gas reserves, such as Saudi Arabia and Iraq, or where the share of liquids in power generation remains significant. Total investments in the gas sector will amount to $186 billion over the five years, it said, which includes $87 billion of committed investment. Despite that, the oil sector (upstream, midstream and refining) is still a key investment driver at $304 billion, of which committed investments account for a little under 50% or $138 billion.
U.S. to announce end to Iran sanctions waivers, oil prices spike (Reuters) – The United States on Monday demanded that buyers of Iranian oil stop purchases by May 1 or face sanctions, a move to choke off Tehran’s oil revenues which sent crude prices to six-month highs on fears of a potential supply crunch. The Trump administration on Monday said it will not renew exemptions granted last year to buyers of Iranian oil, a more stringent than expected decision that caught several key importers who have been pleading with Washington to continue buying Iranian oil sanctions-free. The United States reimposed sanctions in November on exports of Iranian oil after U.S. President Donald Trump last spring unilaterally pulled out of a 2015 accord between Iran and six world powers to curb Tehran’s nuclear program. Eight economies, including China and India, were granted waivers for six months, and several had expected those exemptions to be renewed. Japan expects limited impact from U.S. move to scrap Iran oil sanctions waivers Tehran remained defiant, saying it was prepared for the end of waivers, while the Revolutionary Guards repeated a threat to close the Strait of Hormuz, a major oil shipment channel in the Gulf, Iranian media reported. The White House said it was working with top oil exporters Saudi Arabia and the United Arab Emirates to ensure the market was “adequately supplied.” Traders, already fretting about tight supplies, raised skepticism about whether this more stringent approach, along with ongoing sanctions on Venezuela’s oil industry, could backfire in the form of a major spike in prices. “It is a surprise that the requirement to cease importing Iranian oil should come at this next May deadline,” said Elizabeth Rosenberg, director of the energy, economics and security program at Washington-based Center for a New American Security. “Having only several weeks’ notice before the deadline means there are lots of cargoes booked for May delivery. This means that it will now be harder to get it out by the deadline.”
US Cancels Iran Oil Waivers for Turkey, China, India, Japan, South Korea, Taiwan, Italy, Greece – The United States announced on Monday it would no longer grant sanctions exemptions to eight countries, including Turkey, the Hürriyet Daily News reported.The White House said Saudi Arabia and the United Arab Emirates – close US allies that back President Donald Trump’s hawkish stance against regional rival Iran – would work to make up the difference in oil to ensure that global markets are not rocked.“This decision is intended to bring Iran’s oil exports to zero, denying the regime its principal source of revenue,” the White House said in a statement.“The Trump administration and our allies are determined to sustain and expand the maximum economic pressure campaign against Iran to end the regime’s destabilizing activity threatening the United States, our partners and allies and security in the Middle East,” it said.Secretary of State Mike Pompeo said there would be no grace period for those economies to comply.“We’re going to zero. We’re going to zero across the board,” Pompeo told reporters after the White House announced the end to waivers in order to pressure Iran over its nuclear program. “There are no [oil] waivers that extend beyond that period, full stop.”Eight governments were initially given six-month reprieves from the unilateral US sanctions on Iran. They were China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece.Trump last year withdrew the United States from an accord negotiated by his predecessor, Barack Obama, under which Iran drastically scaled back its nuclear program in return for promises of sanctions relief. The Trump administration, backed by Saudi Arabia and Israel, has instead unilaterally imposed sanctions and demanded that other countries follow suit.
Trump’s Latest Oil Market Gamble – Global oil prices started the week by spiking around 3 percent on reports that Washington was preparing to announce that all buyers of Iranian oil will have to end those imports soon or face U.S. sanctions. Reuters cited a Washington Post article and sources stating that the U.S. will announce the termination of Iranian oil import sanctions waivers on Monday.The waivers move, granted by Trump in November, shocked global oil markets and created a supply overhang that the OPEC+ group of producers is now working to eliminate. The sanctions waivers put in place by Trump particularly caught U.S-ally, OPEC de facto leader and the world’s largest oil exporter Saudi Arabia by surprise as well. As discussed in my April 20 post, since Trump didn’t consult with Riyadh before granting Iranian oil waivers, it resulted in an uptick in global oil supply and downward pressure on prices, costing the Saudis and other major producers lost revenue. Since that time, Saudi Arabia has largely been immune to Trump’s tweets calling for the Kingdom and OPEC to pump more oil to reduce oil prices which are at five-month highs. The Reuters report added that Secretary of State Mike Pompeo will announce today “that as of May 2, the State Department will no longer grant sanctions waivers to any country that is currently importing Iranian crude or condensate.” Other media outlets on Monday morning, Asia time, were also verifying the reports. The London-based Financial Times said that a U.S. official had told them that Pompeo would announce on Monday, U.S. time, and an end to the waivers which expire in early May. Earlier this month, the U.S., took the unprecedented step of branding Iran’s Revolutionary Guard a foreign terrorist organization, the first time formally labeling part of a foreign government as terrorists. These developments underscore Trump’s apparent push to bring the Iranian economy to its knees an in-effect force regime change, a stance not lost on leaders in Tehran who claim that such a scenario is impossible. If Pompeo does carry through with the announcement, it will put considerable upward pressure on global oil prices, even as Trump has recently called on the Saudis and OPEC, via Twitter again, to increase production to bring prices down. It will also likely cause global oil inventory levels to revert to a shortage of the commodity – in effect creating the opposite market scenario that Trump has asked for and needs as the 2020 presidential election cycle kicks in. Trump could be hedging that he is just calling in a favor again from Riyadh. However, it’s a dangerous gambit since the Saudis don’t’ always follow the same logic as Western leaders, particularly in global oil markets.
Statement from the Press Secretary on Cooperation between the United States, Saudi Arabia, and the United Arab Emirates on Energy and Iran Policies — President Donald J. Trump has decided not to reissue Significant Reduction Exceptions (SREs) when they expire in early May. This decision is intended to bring Iran’s oil exports to zero, denying the regime its principal source of revenue. The United States, Saudi Arabia, and the United Arab Emirates, three of the world’s great energy producers, along with our friends and allies, are committed to ensuring that global oil markets remain adequately supplied. We have agreed to take timely action to assure that global demand is met as all Iranian oil is removed from the market. The Trump Administration and our allies are determined to sustain and expand the maximum economic pressure campaign against Iran to end the regime’s destabilizing activity threatening the United States, our partners and allies, and security in the Middle East. The President’s decision to eliminate all SREs follows the designation of the Islamic Revolutionary Guard Corps as a Foreign Terrorist Organization, demonstrating the United States commitment to disrupting Iran’s terror network and changing the regime’s malign behavior. We welcome the support of our friends and allies for this effort.
Oil prices spike more than 3% on reports that US will end waivers for Iran sanctions – Oil prices spiked by more than 3 percent on Monday – past highs not seen since November 2018 – after reports that Washington is set to announce that all buyers of Iranian oil will have to end imports, or be subject to U.S. sanctions. Brent crude futures surged more than 3 percent to over $74 per barrel on Monday morning during Asia hours, while U.S. crude futures rose around 2.67 percent to $65.71 per barrel. That price spike followed a report by the Washington Post, citing two unnamed State Department officials, that U.S. Secretary of State Mike Pompeo will announce that “as of May 2, the State Department will no longer grant sanctions waivers to any country that is currently importing Iranian crude or condensate.” Condensate is an ultra-light form of crude oil. Following that report, Reuters confirmed the news, citing a source familiar with the matter. Brent prices have risen by more than a third this year, while U.S. crude has soared more than 40 percent. The U.S. reimposed sanctions in November on exports of Iranian oil after U.S. President Donald Trump unilaterally pulled out of a 2015 nuclear accord between Iran and six world powers. Washington, however, granted Iran’s eight main buyers of oil, mostly in Asia, waivers to the sanctions which allowed them limited purchases for an additional six months. The eight buyers are China and India – Iran’s biggest customers – as well as Japan, South Korea, Italy, Greece, Turkey and Taiwan. “The sanctions (are) obviously one of the major movers, I think, which is influencing prices,” said Daryl Liew, head of portfolio management at financial services company Reyl Singapore. He also pointed to stronger-than-expected economic growth data from China last week, which could be driving demand expectations. Of the buyers of Iranian oil, he said India could suffer the most from Washington’s move. “I think India is probably one of the key potential countries that might suffer from a higher oil price, in terms of their current account deficit, for example. And that’s going to be basically putting pressures on inflationary pressures as well,” Liew said, speaking on CNBC’s “Street Signs” on Monday. “No doubt the Indian central bank has … turned to a more dovish stance in recent meetings. But if oil prices continue to hit higher, and inflationary pressures come back into the picture again for India especially, then the central bank probably has to reverse the dovish moves,” he concluded.
Oil hits a 2019 high on the US plan to tighten squeeze on Iran – Oil topped $74 a barrel on Monday, the highest since November, with the United States set to announce a further clampdown on Iranian oil exports, tightening global supplies. The United States is expected to say later on Monday that buyers of Iranian oil need to end imports soon or face sanctions, a source familiar with the situation said, confirming an earlier Washington Post report. “This does bring a lot more uncertainty in terms of global supplies,” said Olivier Jakob, analyst at Petromatrix. “It is a bullish surprise for the market.” Brent crude, the global benchmark, rose as much as 3.3 percent to $74.31 a barrel, the highest since Nov. 1. It was up $1.94 at $73.91 at 0847 GMT. U.S. West Texas Intermediate climbed by as much as 2.9 percent to $65.87, the highest since Oct. 31, and was last up $1.51 at $65.51. In November, the U.S. reimposed sanctions on exports of Iranian oil after President Donald Trump unilaterally pulled out of a 2015 nuclear accord between Iran and six world powers. Washington, however, granted waivers to Iran’s eight main buyers – China, India, Japan, South Korea, Taiwan, Turkey, Italy and Greece – that allowed them to continue making limited purchases for six months. U.S. Secretary of State Mike Pompeo is due make an announcement on Monday, the Washington Post said. Another drop in Iranian exports would further squeeze supply in a market already tightened through the U.S. sanctions against Iran and fellow OPEC member Venezuela, plus voluntary cuts led by the Organization of the Petroleum Exporting Countries. An end to the exemptions would hit Asian buyers hardest. Iran’s biggest oil customers are China and India, both of which have been lobbying for an extension to the sanction waivers. The prospect of reduced Iranian supply brought a cautious reaction from top OPEC exporter Saudi Arabia, a key U.S. ally and also a driving force behind the OPEC-led supply-cut deal. A source familiar with Saudi thinking told Reuters on Monday Saudi Arabia is willing to compensate for any potential loss of crude supply but the kingdom will assess the impact on the market before raising its output.
Iran sanctions decision rewards hedge fund oil bulls: Kemp (Reuters) – Hedge fund managers added even more bullish long positions in crude oil and gasoline last week as traders bet prices will continue rising despite a sluggish economy and political sensitivity around escalating motoring costs. The Trump administration’s decision to toughen sanctions on Iran’s oil exports has rewarded fund managers who have been increasingly confident that the oil market will tighten significantly this year, lifting prices. Even before the latest sanctions announcement, hedge funds and other money managers increased their net long position in the six most important petroleum futures and options contracts by another 61 million barrels in the week to April 16 (https://tmsnrt.rs/2W9zLZG ). Fund managers have purchased a total of 564 million barrels of crude and refined products over the last 14 weeks in one of the longest and certainly smoothest and most consistent bull markets on record. Funds were net buyers last week of Brent (+22 million barrels), NYMEX and ICE WTI (+21 million), U.S. gasoline (+10 million), U.S. heating oil (+3 million) and European gasoil (+5 million). Portfolio managers now hold a net bullish position in the six contracts equivalent to 865 million barrels, nearly three times higher than in early January, although still below the recent high of 1.099 billion in late September. Long positions outnumber short ones by a margin of 7:1 across the petroleum complex but 13:1 in Brent and a record 39:1 in U.S. gasoline. From a pure positioning perspective, the crude and especially gasoline markets appear very stretched, with lopsided positioning pointing to a future reversal in the upward price trend. But the Trump administration’s decision to eliminate all sanctions waivers for purchasers of Iranian oil is expected to tighten the market and could validate hedge fund bets on higher prices.
Iranian Sanctions 2.0: Oil Market Risks and Price Stakes – Oxford Institute for Energy – Before the recent announcement on Iran sanction waivers, the base case for most analysts was that the US would renew the waivers allowing a few buyers to continue importing limited quantities of Iranian oil. The logic behind this thinking was very simple: the Trump administration would not risk an oil price spike that could endanger US growth prospects and hurt motorists by tightening sanctions on Iran and disrupting oil exports further. Thus, President Trump’s latest decision not to reissue waivers caught the market off guard and caused a mini rally in the oil price with Brent prices reaching a six month high of near $75/b. Trump has been keen to emphasize that the US secured offset commitments from Saudi Arabia and the UAE, and that these countries ‘along with other friends and allies, have committed to ensure that global oil markets remain adequately supplied … and that global demand is met as all Iranian oil is removed from the market’. This latest decision comes on the back of a quarter which saw market fundamentals tighten due to deep output cuts from Saudi Arabia, which exceeded the pledged target, the sharp deterioration of Venezuelan output, and demand remaining relatively healthy despite widespread pessimism about global growth prospects. As the Brent price consolidated at above $70/b in early-April, market focus quickly shifted to whether OPEC+ will relax its output cuts or even exit the deal altogether in June. The US campaign of ‘maximum pressure’ on Iran has added another layer of uncertainty to an already complex web of events; Saudi Arabia’s response, the future of the OPEC+ agreement, the success of the US in driving Iran exports to ‘zero’, as well as demand prospects on both the upside and the downside. This comment assesses these risks and discusses the market outcomes under the different choices facing OPEC and Saudi Arabia.
Trump tightens sanctions on Iran’s oil exports – How India will respond – Brookings – The Trump administration’s decision not to extend waivers from Iran sanctions will not be welcome in New Delhi. India imports over three-quarters of the oil it consumes, and Iran has long featured in the list of its top sources. Washington had previously issued it a waiver, and, since sanctions had gone into effect, India had decreased its imports from Iran. As a U.S. strategic partner, whose cooperation the Trump administration has sought for its Free and Open Indo-Pacific strategy, India had hoped to get another waiver – even if that required further import reductions on its part. The administration’s decision will therefore irk Delhi, particularly since Washington has also imposed sanctions on another of India’s top suppliers, Venezuela. Indian public- and private-sector refiners will likely find other sources – the Indian government has indicated that it has been planning for this eventuality. But this step comes at an inopportune time for the Modi government, which is seeking re-election and will likely face opposition accusations that it has caved to American pressure. For that reason, and to maintain relations with Iran, it will likely seek to continue to import some quantity of oil from Iran using the rupee payment mechanism it had developed (even though it might upset the United States). Moreover, New Delhi has other concerns about this U.S. step: the potential impact on oil prices, and on India’s development and use of the Iranian port of Chabahar to facilitate alternate connectivity with/for Afghanistan. Three broader concerns should also be kept in mind.
- First, the Iran and Venezuela sanctions problems have come at a time when other irritants in the U.S.-India relationship have come to the fore. There are trade frictions, with the administration’s announcement that it intends to withdraw India’s benefits under the Generalized System of Preferences because of continuing concerns about Indian trade and investment policies. The 60-day deadline for a final decision on this step falls in early May, though it can be deferred until after the Indian election results are due on May 23. Moreover, Washington is unhappy with India’s defense deals with Russia, despite U.S. sanctions – not just for the S-400 system, but also a number of others. Defense deals with the United States, meanwhile, are still being negotiated or have stalled. India, in turn, is concerned about the Afghan peace talks and what Washington might cede to the Taliban – and to Pakistan for bringing them to the table.
- Second, this step is counterproductive to the goals outlined in the administration’s National Security Strategy, giving India common cause with China and Russia.
- Third, these developments will reinforce the very Indian instinct that American policymakers dislike: the quest for strategic autonomy, which is in no small part based on a sense that the Unites States is not a reliable partner and will not be mindful of Indian interests. Two competing instincts are constantly at play in Indian foreign policymaking: the need for alignment and the desire for autonomy. This step on Iran sanctions waivers will fuel the latter. A frustrated Delhi will see it as one more unilateral U.S. decision that hinders or harms its interests, and constrains its choices. Even though India is not their primary target, it has become collateral damage to certain U.S. actions. These include the administration’s steel and aluminum tariffs, its withdrawal from the Paris climate change agreement, its intended drawdown or withdrawal from Afghanistan, as well as the sanctions on Iran, Russia and Venezuela. These steps furthermore strengthen the voices – and hands – of those in the Indian establishment who urge caution in furthering the partnership with the United States.
What Does The End Of The Iran Sanction Waivers Mean To Asian Crude And Condensate Buyers? (Platts podcast) The US announced the end of all waivers from Iran oil sanctions when they expire on May 2. Ada Taib, Eesha Muneeb andAndrew Toh, S&P Global Platts editors in Asia, examine what this announcement means to crude oil buyers in the region, with China, India, and South Korea being among the biggest buyers of Iranian supply.
Here’s why China and India will remain defiant amid threat of US sanctions for Iranian oil imports – China and India are both unlikely to completely cut off Iranian crude imports, energy analysts have said, despite the imminent threat of U.S. sanctions. President Donald Trump’s administration announced Monday that buyers of Iranian oil must stop purchases by May 1 or face sanctions. The move, which took many market participants by surprise, ends six months of waivers which had allowed Iran’s eight biggest buyers of crude to continue to import limited volumes. International benchmark Brent crude traded at $74.26 Tuesday afternoon, up around 0.3%, while U.S. West Texas Intermediate (WTI) stood at $65.93, almost 0.6% higher. “Iranian exports will not actually reach zero,” analysts at Eurasia Group said in a research note published Monday. “China, which imports approximately 500,000 bpd (barrels per day), will make considerable cuts in the near term. For Beijing, securing the trade agreement with the U.S. is the top priority, and China will not link Iran oil imports to the trade talks.” China is Iran’s largest crude oil customer, with total imports last year of approximately 29.3 million tons or about 585,400 bpd, according to customs data sourced by Reuters. That’s roughly 6% of China’s total oil imports. On Tuesday, China’s Foreign Ministry reportedly said it had formally complained to the U.S. over its decision to end waivers on sanctions of Iranian oil imports. Beijing said it was resolutely opposed to the move, adding its energy cooperation with Tehran is lawful and reasonable. Alongside India and six others, China was one of the eight global buyers of Iranian crude that won exemptions from the U.S. last November.
Goldman Sachs is not expecting oil to rally despite the US tightening sanctions on Iran – Goldman Sachs expects the United States’ decision to end exemptions from sanctions for countries still buying oil from Iran to have a limited impact on crude prices, even though the timing is likely to have caught energy market participants by surprise.“While we acknowledge the near-term upside price risks, we reiterate our fundamentally derived Brent price trading range of $70-75 per barrel for the second quarter of 2019,” the U.S. investment bank said in a research note published Monday, Reuters reported.The world’s largest economy said Monday that from May 1, it would eliminate all waivers allowing eight economies to buy Iranian oil without facing U.S. sanctions.These eight economies that were initially allowed to continue buying Iranian crude without facing penalties include: China, India, Japan, Turkey, Italy, Greece, South Korea and Taiwan.Oil prices jumped more than 2% in the previous session, hitting their highest level this year amid intensifying concern about global supplies after the U.S. announced a further clampdown on Iran’s oil exports. International benchmark Brent crude traded at $74.40 Tuesday morning, up around 0.5%, while U.S. West Texas Intermediate (WTI) stood at $65.93, almost 0.6% higher.
Oil surges as US ends Iran sanction waivers – four experts forecast what’s next – The Trump administration announced Monday that it would end exemptions to its sanctions on Iran, a move meant to significantly curb Iran’s oil output. Crude prices surged after the announcement, with the U.S. benchmark, West Texas Intermediate crude, gaining nearly 3 percent. Here’s what experts say higher oil prices could mean for the broader market: Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America Merrill Lynch, said a significant uptick in the price of crude would likely be a double-edged sword: “[Higher] oil is actually good for corporate profits because the S&P [500] is levered to oil, so I think this could be a source of positive earnings surprise[s] for the year where analysts are penciling in super low expectations. So I think that’s one potential silver lining of higher oil. And then … consumers are making more money, so we might not feel that energy pinch until we get to higher levels. But $5 a gallon in California is not a good environment to be in, so we’re getting to a point where this could turn ugly. “Aperture Investors CEO Peter Kraus didn’t anticipate major changes to the status quo:“I think the oil prices are going to continue to reflect this sort of restriction in supply. And we’re not going to see a lot of new drilling based on these prices. We’re not going to see more holes being punched into the world to create more oil at these current prices. And so my guess is that economic activity stays where it is [and] oil prices will remain relatively constant. […] People predicted oil was going to go to $100, $120 a barrel, which I don’t see happening.”Alex Dryden, global market strategist at J.P. Morgan, said macroeconomic global risks could catch up to the oil market itself:“I think what you’re looking at is incoming restrictions on supply. That’s going to couple with what we’ve been seeing in Venezuela, this likely forcing the oil price up [like] we’ve seen this morning. Now, again, it’s about how sustainable that oil price is. You look at … the futures market. Go three years out – you typically go out that far when you want to take out political risk and look at how much geopolitical risk premium [is] priced into oil..” RBC Capital Markets’ head of U.S. equity strategy, Lori Calvasina, was fairly bullish on the prospect of higher oil prices for the broader market:“ I would say energy [is] this sector [that] looks super cheap to us. You’re in the middle of an earnings revision rebound in that space; 2020 earnings expectations actually look pretty good. I think, as long as that can hold up, I actually think this can help generate excitement in the space.”
Oil Prices Start Week Strong – Crude oil futures posted strong gains Monday amid a development on the US-Iran oil sanctions front. Crude oil futures posted strong gains Monday after the Trump administration announced that the U.S. will no longer grant sanctions waivers to any importer of Iranian oil effective May 1, 2019. West Texas Intermediate (WTI) crude for May delivery added $1.70 to end the day at $65.70 per barrel. The WTI peaked at $65.92 and bottomed out at an even $64 during the early week session. June Brent crude oil futures gained $2.07 during Monday’s trading to settle at $74.04 per barrel. “Today it’s all about Iran, and the U.S. decision to eliminate waivers for China, India, Japan, South Korea and Turkey,” said Tom McNulty, Houston-based managing director with Great American Group. “The most critical thing to analyze is where the barrels will be replaced from. Those five users will not cut back much, if at all. They simply cannot.” McNulty also noted that Saudi Arabia and the United Arab Emirates are expected to be able to replace much of the Iranian barrels. Where lighter crudes can be refined, the U.S. will boost exports, he added. “I also think the Russians will increase production as a result, killing off the so-called agreement to manage production,” said McNulty, referring to the “OPEC+” deal in which OPEC member countries, Russia and others agreed to limit output to stabilize the oil market. In a written statement emailed to Rigzone, Michael Roomberg, portfolio manager with Miller/Howard Investments, remarked that the White House has “raised the stakes” with its decision on Iran waivers. He added, however, that the move is “a calculated risk” that will not by itself lead to Brent prices at $90 or even $100 anytime soon. “We expect oil prices to remain range-bound near current levels, though upside geopolitical risk continues to rise,” Roomberg stated. “Venezuela continues to teeter, and Libya fighting intensified over the weekend. Brent crude is now roughly $74 per barrel this morning.” Roomberg added that Saudi Arabia and Russia have spare production capacity to offset lost Iranian barrels but not enough to make up for a simultaneous output collapses in Libya, Venezuela and Iran.
Trump’s crackdown on Iran leaves the oil market vulnerable to price spikes – In the Trump administration’s telling, its decision to cut off Iran’s oil exports in just over a week will have little impact on crude prices. There’s enough supply to meet global demand, officials say, and the administration’s Middle East allies will ride to the rescue if the world finds itself short of fuel. But outside the Oval Office, the outlook is not so rosy. Analysts say President Donald Trump’s hardline approach injects new risks into a fragile market besieged by instability in key oil-producing nations. They say global crude supplies are already getting tight, and Trump’s surprise crackdown will leave the market with little cushion to address future disruptions. “Oil production is being curtailed at a time when Venezuelan output is rapidly falling, conflict in Libya is reviving, and OPEC spare capacity remains tight. This could nudge the oil market dangerously close to a negative supply shock,” Montreal-based macro research firm BCA Research said Monday. Oil prices surged to nearly six-month highs after the Trump administration said it will not extend sanctions waivers for several of Iran’s biggest oil customers. The exemptions allowed a handful of countries – including China and India – to import limited shipments of Iranian crude without triggering U.S. sanctions on Iran. The move aims to shrink Iran’s oil shipments from roughly 1 million barrels per day to zero, though analysts expect some countries to defy the ultimatum. Still, investment banks now expect Iranian shipments to fall by another several hundred thousand barrels per day, further tightening the market. This comes as Venezuela’s output craters under the weight of economic crisis and U.S. sanctions and a fresh round of deadly civil conflict rocks Libya. The Trump administration says Saudi Arabia and the United Arab Emirates have agreed to fill the gap left by the Iranian barrels.
Iran Raises Stakes in U.S. Showdown With Threat to Close Hormuz – Iran will close the Strait of Hormuz, a waterway vital for global oil shipments, if the country is prevented from using it, a senior military official said on Monday in what appears to be a response to the U.S. plan to end waivers on Iranian oil exports. “If we are prevented from using it, we will close it,” the state-run Fars news agency reported, citing Alireza Tangsiri, head of the Revolutionary Guard Corps navy force. “In the event of any threats, we will not have the slightest hesitation to protect and defend Iran’s waterway.” Iranian officials have threatened to close the waterway in the past amid rising tension with the U.S. and Tangsiri’s remarks could be an attempt to deter the U.S. from its plan to slash the nation’s oil exports. The price of Brent crude, already at a six-month high, was little changed after the statement. But the commander’s response comes as President Donald Trump prepares to deal a severe blow to the Islamic Republic’s economy. On Monday, Secretary of State Mike Pompeo will deliver the decision that no waivers from sanctions will be renewed to importers of Iranian oil, according to four people familiar with the matter. The U.S. will also announce offsets through commitments from other suppliers such as Saudi Arabia and the United Arab Emirates. The Strait of Hormuz is a narrow waterway carrying a fifth of the world’s traded oil that Iranian officials have threatened to block in retaliation for sanctions targeting the country’s nuclear program. The U.S. has said it would move to stop any Iranian attempt to block the waterway.
Could Iran close the Strait of Hormuz? Energy analysts are skeptical of Tehran’s latest threat – Iran has reportedly renewed its threat to close the Strait of Hormuz, the world’s busiest transit lane for seaborne oil shipments, prompting fears about the potential ramifications for oil prices and broader financial markets. President Donald Trump’s administration announced Monday that buyers of Iranian oil must stop purchases by May 1 or face sanctions. The move, which took many market participants by surprise, ends six months of waivers which had allowed Iran’s eight biggest buyers of crude to continue to import limited volumes. In response, Iran’s semi-official Fars News Agency quoted Revolutionary Guards General Alireza Tengseiri as saying that if Tehran was barred from using the Strait of Hormuz, they would “shut it down.” Analysts at Barclays said in a research note published Monday that approximately 20% of all the sea-borne crude and condensates passes through the Strait of Hormuz. “The short-term upside risk to prices is based on a) our view that Saudi Arabia’s response will likely be lower and slower compared to late last year and b) heightened risks of the closure of the Strait of Hormuz as a result of this action,” analysts at Barclays said. The bank added that the Trump administration’s decision not to reissue waivers in May did not materially impact its view on longer-term prices. International benchmark Brent crude traded at $74.17 Tuesday afternoon, up around 0.2%, while U.S. West Texas Intermediate (WTI) stood at $65.90, almost 0.6% higher.
IEA: OPEC’s Spare Production Capacity Reaches 3.3 Million Bpd – OPEC’s spare capacity has reached 3.3 million barrels per day, according to an International Energy Agency (IEA) statement on the global oil markets released on Tuesday. “As a result of OPEC’s high compliance rate with the agreed supply cuts in the OPEC+ group, global spare production capacity has risen to 3.3 mb/d, with 2.2 mb/d held by Saudi Arabia and around 1 mb/d by the United Arab Emirates, Iraq and Kuwait,” the IEA said in its release as oil prices reached new 2019 highs. The Brent and WTI benchmarks were both trading up on Tuesday following the news that the United States would not extend Iran sanction waivers to purchasers of Iranian crude oil, leaving the original May 1 cutoff date firm. The global oil markets are now adequately supplied, the IEA said, with plenty of spare capacity to make up for any gaps in oil supplies. Iran’s April oil exports of 1.1 million barrels per day were already lower than in March. With spare capacity of 2.2 million barrels per day in Saudi Arabia, OPEC should theoretically be able to comfortably lift production to compensate for lost Iranian barrels, with Saudi Arabia currently pumping about a million less than in November 2018. The IEA cautioned, however, that global economic growth is still fragile, and urged oil consumers and producers to “take steps to avoid higher oil prices that will prove painful to all alike.” Global OECD oil inventories, too, are above the five-year average at 2,871 million barrels, according to the IEA. The API is due to release US crude oil inventory figures today at 4:30pm EST – a highly watched metric that traders use to assess the condition of the oil markets.
Saudis Pledge to Ensure Oil Supply — Saudi Arabia will coordinate with other crude producers to ensure that adequate supplies are available and the market “does not go out of balance,” Energy Minister Khalid Al-Falih said, after the U.S. ended waivers for buyers of Iranian oil. The Saudis are closely monitoring oil-market developments after the U.S. announcement regarding export sanctions on Iran, Al-Falih said in a statement. “In the next few weeks, the Kingdom will be consulting closely with other producing countries and key oil consuming nations to ensure a well-balanced and stable oil market, for the benefits of producers and consumers as well as the stability of the world economy.” Any nation continuing to buy Iranian oil will face U.S. sanctions, Secretary of State Michael Pompeo said Monday after announcing that temporary waivers granted to some nations late last year won’t be renewed when they expire next month. The current set of waivers — issued to China, Greece, India, Italy, Japan, South Korea, Taiwan and Turkey — are to expire on May 2. Saudi Arabia and the United Arab Emirates will ensure an “appropriate supply” of oil along with the U.S., Pompeo told reporters in Washington. “Saudi Arabia and others in OPEC will more than make up the Oil Flow difference in our now Full Sanctions on Iranian Oil,” President Donald Trump said on Twitter. The Saudis and the U.A.E. can increase their combined production by about 1.5 million barrels a day within a short period, according to people with knowledge of the situation, asking not to be identified because the matter is confidential. Iran shipped about 1.1 million barrels a day of crude and condensate in the first two weeks of April, tanker-tracking data compiled by Bloomberg show. ‘Fill the Gap’The Organization of Petroleum Exporting Countries and allied producers such as Russia “could easily come in and fill the gap caused by any reduction in Iran exports,” Ashley Petersen, senior oil market analyst at Houston-based Stratas Advisors LLC, said in an interview with Bloomberg television. The elimination of waivers will probably remove about 700,000 to 800,000 barrels a day from the oil market in the near term, according to RBC Capital Markets. Analysts at Goldman Sachs Group Inc. estimate that it could cause Iran’s production to decline by 900,000 barrels from current levels. Saudi Arabia will assess the impact of the U.S. decision on the oil market before raising output, according to one of the people. The biggest producer in OPEC can pump an additional 1 million barrels a day within a short period, the person said. Saudi Arabia produced 9.82 million barrels a day in March, according to data compiled by Bloomberg.
Oil traders to Saudi Arabia: “show us the barrels” – Kemp – (Reuters) – “The United States, Saudi Arabia and the United Arab Emirates … are committed to ensuring that global oil markets remain adequately supplied,” the White House said in a press statement issued on Monday. “Oil markets are well-supplied and oil inventory levels are seasonally strong,” the U.S. State Department wrote in an accompanying briefing note explaining the rationale for eliminating sanctions waivers for buyers of Iranian oil. “We have commitments from oil-producing countries, including the kingdom of Saudi Arabia and the United Arab Emirates, to increase oil production to offset reductions in Iranian oil exports,” the department announced. The department observed that oil stocks in OECD countries remain above the five-year average while U.S. oil production and exports are increasing. “Other major producers have signalled to markets a willingness and ability to increase production to compensate for additional Iranian reductions,” the department added. The decision to eliminate all remaining sanctions waivers for Iran’s oil buyers follows a round of top-level diplomatic contacts between the White House and leaders of Saudi Arabia and the United Arab Emirates. Tougher sanctions are likely contingent on a U.S. understanding that Saudi Arabia and the United Arab Emirates will make up lost Iranian barrels at least one-for-one to keep prices steady. Senior U.S. policymakers have been anxious to stress tougher sanctions will not reduce the availability of crude or lead to higher crude costs and increased fuel prices for motorists. Oil traders, however, think differently. Tougher sanctions are seen reducing oil supplies during the second half of the year, leaving the market under-supplied, inventories falling, and prices likely rising. Brent’s six-month calendar spread has jumped to a backwardation of more than $3 per barrel, up from less than $2.50 before the announcement and just $1.20 a month ago (https://tmsnrt.rs/2ID8R9J). Brent’s calendar spread has been the best signal for changes in the production-balance since the late 1990s, alternating between backwardation and contango as the market cycles between under- and over-supply. Brent’s backwardation is now at the highest level since March-April 2018 (when Iran sanctions were also high on the agenda) and before that June 2014 (when Libya’s production was interrupted by civil war and Islamist fighters were racing across northern Iraq).
Oil Hits 2019 High On Iran Sanctions – Oil prices shot up to new highs for the year on this week after the U.S. announced that it would let waivers on Iran sanctions fully expire. In early trading on Tuesday, WTI topped $66 per barrel and Brent moved above $74. Trump surprised the oil market on Monday, announcing that he would let U.S. sanctions waivers expire at the end of the month. The eight countries granted six-month waivers last year had hoped to obtain extensions, but the Trump administration has opted for “maximum pressure” on Iran. However, it may also mean maximum pressure on the oil market if Iran loses a significant portion of its oil exports. Oil surged by roughly 3 percent on Monday. The Trump administration says that it has secured assurances from Saudi Arabia and the UAE that they would cover the gap leftover by lost Iranian crude. However, the Saudi oil minister was more measured, saying on Monday that Riyadh would respond after it assesses the impact to ensure the oil market “does not go out of balance.” That likely means it will wait and see before actually increasing output rather than acting preemptively. The two top buyers of Iranian oil may not obey U.S. sanctions. “Iranian exports will not actually reach zero,” analysts at Eurasia Groupsaid in a research note published Monday. “China, which imports approximately 500,000 bpd (barrels per day), will make considerable cuts in the near term. For Beijing, securing the trade agreement with the U.S. is the top priority, and China will not link Iran oil imports to the trade talks.” Goldman Sachs acknowledged the upside risk to oil prices from Iran sanctions, but nonetheless stuck with its second quarter forecast for Brent to trade within a $70-$75 per barrel range. “Given our confidence in better supplied markets next year and the still high uncertainties around the aggregate OPEC+ production path in coming months, we are, however, not changing this forecast for now,” the investment bank said in a note. An estimated 8.5 percent of U.S. refining capacity is set to go offline in the second quarter as facilities enter a period of maintenance. While late winter and early spring are typical times for maintenance, the volumes going offline this year are unusually high because refiners are preparing for the IMO 2020 rules on low sulfur fuels, according to Reuters.
Oil rises 1.1% to nearly 6-month high, settling at $66.30, on Trump’s Iran crackdown – Oil prices hit nearly six month highs on Tuesday, continuing to rally after U.S. President Donald Trump surprised the market with strict new measures aimed at driving Iran’s crude exports to zero. The Trump administration announced on Monday that it will not extend sanctions waivers to a handful of countries that import Iranian oil. The decision means any entity caught purchasing Iran’s barrels after May 1 risks triggering U.S. sanctions, which are designed to deprive the Iranian leadership of oil revenue. U.S. West Texas Intermediate crude settled 75 cents higher at $66.30 a barrel, rising 1.1% and setting a new closing high going back to Oct. 29. WTI earlier rose as high as $66.60 on Tuesday, its best intraday price since Oct. 31. Brent crude futures were up 53 cents at $74.57 per barrel around 2:30 p.m. ET. The international benchmark for oil prices earlier rose to $74.73, its highest since Nov. 1. Brent surged 3 percent and WTI popped 2.7 percent during the previous session, driven by the change in U.S. policy towards Iran. “The decision to completely eliminate waivers was a surprise, as the market expectation was for a more gradual reduction,” Credit Suisse said in a research note. The administration issued waivers to eight countries when it restored sanctions on Iran’s energy industry in November, allowing them to purchase limited quantities of Iranian crude. Five of the countries – China, India, Turkey, South Korea and Japan – took advantage of the exemptions. The waivers allowed 1.4 million barrels per day of Iranian crude to flow to the market, down from about 2.5 million bpd last year. The new U.S. policy threatens to wipe out much of that supply at a time when the oil market is already tightening, though analysts expect some countries to defy Trump’s ultimatum. Credit Suisse thinks Iran’s exports will not fall to zero, but could drop by another 600,000 bpd. The investment bank estimates the global oil market is already undersupplied by about 300,000 barrels per day. The Trump administration says Saudi Arabia, the United Arab Emirates and other allies have agreed to fill any gap left by the loss of Iranian exports. Saudi Arabia will “coordinate with fellow oil producers to ensure adequate supplies are available to consumers while ensuring the global oil market does not go out of balance,” said Khalid al-Falih, the kingdom’s influential energy minister.
Gulf OPEC members ready to raise output if there is demand: sources (Reuters) – Gulf OPEC producers can step in to meet any oil supply shortage following a U.S. decision to end waivers on buyers of Iranian crude, but will first wait to see whether there is actual demand, OPEC and industry sources said. The United States has decided not to renew exemptions from sanctions against Iran granted last year to buyers of Iranian oil, taking a tougher line than expected. Eight countries, including China and India, were granted waivers for six months, and several had expected those exemptions to be renewed. A senior U.S. administration official said Trump was confident Saudi Arabia and the United Arab Emirates would fulfill their pledges to compensate for the shortfall in the oil market.
WTI Slides After Bigger Than Expected Crude Build – WTI surged once again to its highest settlement price in over six months (even as the dollar spiked) as Saudi Arabia was said to be tentative about raising output to mute the impacts of American sanctions against Iran. “It’s been made clear that Trump is very serious about enforcement of the sanctions,” said said Tyler Richey, co-editor at Sevens Report Research in Palm Beach Gardens, Florida. “The question is how much will their exports fall versus how much and how quickly can Saudi Arabia and other producers increase?” American pressure on Iran’s exports won’t work, Iranian Oil Minister Bijan Namdar Zanganeh told his parliament. “We will act wholeheartedly to break the U.S. sanctions,” he said. But for now, all eyes are on inventories… API:
- Crude +6.86mm (+500k exp)
- Cushing -389k
- Gasoline +2.163mm (-1.82mm exp) – first build in 10 weeks
- Distillates -865k (-712k exp)
After last week’s surprise crude draw, expectations were for a modest build in the last week but API reported a much bigger than expected rise in inventories of 6.86mm… Gasoline also surprised with a sizable build – the first in 10 weeks
Saudi Arabia plans to keep oil output within levels of OPEC cuts, energy minister says – Saudi Arabia’s energy minister said on Wednesday he saw no need to raise oil output immediately after the United States ends waivers granted to buyers of Iranian crude, but added that the kingdom would respond to customers’ needs if asked for more oil. Khalid al-Falih said he was guided by oil market fundamentals not prices, and that the world’s top oil exporter remained focused on balancing the global oil market. “Inventories are actually continuing to rise despite what is happening in Venezuela and despite the tightening of sanctions on Iran. I don’t see the need to do anything immediately,” Falih said in Riyadh. The United States has decided not to renew exemptions from sanctions against Iran granted last year to buyers of Iranian oil, taking a tougher line than expected. “Our intent is to remain within our voluntary (OPEC) production limit,” Falih said, adding that Riyadh would “be responsive to our customers, especially those who have been under waivers and those whose waivers have been withdrawn.” “We think there will be an uptick in real demand but certainly we are not going to be pre-emptive and increase production,” the minister said. He said Saudi Arabia’s oil production in May was pretty much set with very little variation from the last couple of months. June crude allocations would be decided early next month, he said. The kingdom’s exports in April will be below 7 million barrels per day (bpd), while production is around 9.8 million bpd, Saudi officials have said. Under the OPEC-led deal on supply cuts, Saudi Arabia can pump up to 10.3 million bpd. Falih said there would most likely be “some level of production management beyond June” by OPEC and its allies, but it was too early to predict the output targets now.
Oil Algos Confused By Big Crude Build, Gasoline Draw – WTI is hovering unchanged from last night’s surprise crude and gasoline builds reported by API as Saudi Arabia’s energy minister said the world’s biggest oil exporter sees no need to take immediate action in the crude market, signaling a cautious response to the U.S. decision to tighten sanctions on Iran.“We will see what the customers want,” Al-Falih told reporters. “I think our intent is to remain within our voluntary production limit, but at the same time to be responsive to our customers, especially those who have been under waivers, and those waivers have been withdrawn.”“We will not leave our customers scrambling,” Al-Falih said.But for now, all eyes are on DOE’s official inventory data for any signs of demand growth (not just supply curtailment):“The fundamental dynamic has been one of gasoline supplies being under pressure,” says Tyler Richey, co-editor and commodities analyst at Sevens Report Research. “That’s going to be supportive for prices until it stops.” DOE:
- Crude +5.48mm (+500k exp)
- Cushing +463k
- Gasoline -2.13mm (-1.82mm exp)
- Distillates -662k (-712k exp)
WTI Crude stocks were expected to rise for the 4th week in the last 5 (rebounding from last week’s surprise draw) and did so, blowing out expectations with a 5.48mm build. Gasoline inventories fell for the 10th week in a row (ignoring API’s build)…
Oil falls as supply still adequate despite Iran sanctions, but market tightening (Reuters) – Oil prices steadied on Wednesday near six-month highs after data that showed U.S. stockpiles rose to their highest levels since October 2017, countering fears of tight supply resulting from OPEC output cuts and U.S. sanctions on Venezuela and Iran. Brent crude futures lost 9 cents to $74.42 a barrel by 1:06 p.m. EDT (1706 GMT). The international benchmark reached $74.73 a barrel on Tuesday, highest since Nov. 1. U.S. West Texas Intermediate crude futures fell 49 cents to $65.81 a barrel. The contract hit $66.60 a barrel on Tuesday, the highest since Oct. 31. U.S. crude inventories rose 5.5 million barrels last week, the Energy Information Administration said, far more than analysts’ forecast of an increase of 1.3 million barrels. However, gasoline stocks fell by 2.1 million barrels, a larger-than-anticipated drop. “What we’re looking at is a headline number bearish on crude but supported somewhat by the gasoline number,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “Because of the sanctions that are coming down on Iran and the fact that there’s going to be no waivers, it makes this number look more bullish.” Crude futures and prices for spot delivery rallied after the United States said on Monday it would end all exemptions for sanctions against Iran, demanding countries halt oil imports from Tehran from May or face punitive action. The move raised worries about tighter global oil supplies. The United States must be prepared for consequences if it tries to stop Iran from selling oil and using the Strait of Hormuz, Iran’s foreign minister, Mohammad Javad Zarif, warned on Wednesday.
Oil dips on well supplied markets despite tighter Iran sanctions – Oil prices slipped below six-month highs on Wednesday after signs that cushioned a rally based on fears of tight supply resulting from OPEC output cuts and U.S. sanctions on Venezuela and Iran. U.S. crude stocks rose by 6.9 million barrels last week, more than expected, data from the industry group American Petroleum Institute showed on Tuesday. Official stocks figures are due at 1430 GMT on Wednesday. “The focus will return today to the micro-picture of the U.S. data,” Petromatrix’s Olivier Jakob said in a note. Also bearish, the International Energy Agency, a watchdog for oil-consuming countries, said on Tuesday markets are “adequately supplied” and that “global spare production capacity remains at comfortable levels.” Brent crude futures were at $74.37 per barrel at 1047 GMT, down 14 cents from their last close. The benchmark is still set for its fifth consecutive weekly gain. U.S. West Texas Intermediate (WTI) crude future were at $65.97 per barrel, down 33 cents – not enough to steer them away from what is set to be their eighth week of gains. Crude oil prices for spot delivery rallied after the United States said on Monday it would end all exemptions for sanctions against Iran, demanding countries halt oil imports from Tehran from May or face punitive action. China, Iran’s biggest oil customer, has formally complained about the move. The spot price surge has put the Brent forward curve into steep backwardation, in which prices for later delivery are cheaper than for prompt dispatch. The United States has said it saw Saudi Arabia as a partner to balance oil markets.
Iran Vows To Bust US Crude Sanctions – Tehran officials have vowed that White House plans for taking Iran’s oil exports down to zero will never materialize, as the Islamic Republic, along with its regional allies and crude customers – most notably China – plan to bust US sanctions. Iranian Oil Minister Bijan Namdar Zanganeh told parliament on Tuesday: the “U.S. dream to cut Iran’s crude exports to zero won’t be fulfilled,” according to Bloomberg. The minister also said, “We will act wholeheartedly to break the U.S. sanctions,” and cited export deals with Armenia, Azerbaijan, Iraq and Turkey. He described the US gamble to end the waiver program by bringing the full force of the “oil weapon” as a “big mistake” – referencing the fragility of the market and inflated claims of regional countries to have more reserves than what they actually do. Meanwhile, oil prices hit nearly six month highs on Tuesday following Monday’s announcement by Trump that the US will end sanctions waivers to a handful of countries that import Iranian oil. U.S. West Texas Intermediate crude rose 88 cents, or 1.3%, to $66.43 a barrel around 11:15 a.m. ET (1515 GMT), continuing to ride momentum from Monday’s White House announcement, trading near their highest level since Oct. 31. Brent crude futures are also near the highest level since Nov. 1, up nearly 1%. “The decision to completely eliminate waivers was a surprise, as the market expectation was for a more gradual reduction,” Credit Suisse said in a research note, after Monday’s statement that the waiver program to allow eight countries to purchase limited supplies of Iranian crude would not be extended. The dramatic policy shift saw Brent surge 3 percent on the news, and WTI popped 2.7% during the previous session. Currently China, India, Turkey, South Korea and Japan – Iran’s biggest oil clients – have been taking advantage of the exemptions, and Iraq is on its own 90-day waiver program granted last month by the State Department.
Brent hits 6-month high as buyers suspend Russian oil imports – Oil prices turned lower heading into Thursday’s settlement, after Brent crude earlier touched $75 per barrel for the first time in nearly six months. Crude futures earlier drew support as quality concerns halted some Russian crude exports to Europe and the United States prepared to tighten sanctions on Iran. Wednesday’s report of a bigger-than-expected build in U.S. crude inventories last week to their highest since October 2017 was weighing on the U.S. benchmark, analysts said. U.S. West Texas Intermediate crude settled 68 cents lower at $65.21 per barrel, down 1% and slipping further from this week’s 2019 high at $66.60. Brent crude futures were down 17 cents at $74.40 around 2:30 p.m. ET (1830 GMT). They earlier hit a session high of $75.60, their strongest since Oct. 31. Poland and Germany suspended imports of Russian crude via the Druzhba pipeline due to contamination. The pipeline can ship up to 1 million barrels per day, or 1 percent of global crude demand. About 700,000 bpd of flow was suspended, according to trading sources and Reuters calculations. “We consider the quality issues with Russian crude oil as a supply disruption that is happening at the same time sanctions on Iran and Venezuela are impacting supply,” said Andy Lipow, president of Lipow Oil Associates in Houston. U.S. attempts to drive Iranian oil exports down to zero also boosted prices. The United States this week said it would end all exemptions for sanctions against Iran. Iran has been under U.S. sanctions for more than six months, but several major buyers, including China and India, were given temporary exemptions until this week. Beginning in May, those countries have to halt oil imports from Tehran or face sanctions. The U.S. decision comes amid supply cuts led by OPEC since the start of the year aimed at propping up prices.
Trump says he called OPEC and told producer group to bring fuel prices down – President Donald Trump on Friday said he “called up” OPEC and told the producer group to take action to bring down fuel costs, making a dubious claim that gasoline prices are already falling. Crude futures extended earlier losses after Trump’s statement. U.S. West Texas Intermediate crude was down 3.4% at $63.01 per barrel, while international benchmark Brent crude fell 3.2% to $71.98. “The gasoline prices are coming down. I called up OPEC. I said, ‘You’ve got to bring them down. You’ve got to bring them down,’ and gasoline’s coming down,” Trump told reporters en route to a National Rifle Association event in Indianapolis. In fact, the national average for a gallon of regular gasoline is $2.883 per gallon, up from $2.877 a day ago and $2.839 a week ago, according to AAA. Wholesale U.S. gasoline prices have ticked lower in recent days, but are still up about 10% from a week ago and nearly 7% from a month ago. It was not immediately clear whether Trump meant that he had contacted the OPEC Secretariat in Vienna, or whether he was referring to OPEC members and close U.S. allies like Saudi Arabia and the United Arab Emirates. OPEC could not immediately be reached for comment. The Wall Street Journal reported that OPEC’s Secretary General Mohammed Barkindo has not spoken to Trump, citing a source. Saudi officials also told the Journal that Trump has not discussed lowering prices with them. Earlier this week, the administration said it will not extend waivers that allow several countries to continue buying Iranian crude despite U.S. sanctions on the Islamic Republic. Oil prices surged more than 3% in the two days after the announcement.The administration said it has secured commitments from Saudi Arabia, the UAE and other allies to fill any gap left by the anticipated drop in Iranian supplies. However, influential Saudi Energy Minister Khalid al-Falih said earlier this week that there is no need to immediately start pumping more oil, and the kingdom will hike output only after customers ask for more supplies.Bill Farren-Price, a geopolitical analyst at RS Energy Group, said there is subtle but considerable dissonance between the U.S. and Saudi statements following the sanctions waiver announcement. “I think when you actually analyze what the Saudis have said, it’s actually just a broad restatement of their existing supply policy, which is that they will always seek to work to keep markets balanced and make up the shortfall,” he said.
Oil prices plunge 3% after Trump says he told OPEC to tame fuel costs — Oil prices fell on Friday on expectations that some OPEC members will raise output to counter shrinking exports from Iran after sanctions imposed by the United States. The pullback on Friday threatened to derail the longest run of weekly gains in years. Oil markets have tightened amid an OPEC output cut deal, sanctions on Venezuela and Iran and unsteady production in Libya. Brent crude futures were down $1.36, or 1.8%, at $72.99 per barrel around. Brent was still up about 1.6% for the week, set for a fifth weekly price gain, the longest stretch in a year. U.S. West Texas Intermediate crude futures fell $1.14, or 1.8%, to $64.07 per barrel and were roughly flat for the week. WTI had been on track for its eighth successive weekly gain, the longest weekly run since the first half of 2015. The drop followed Brent’s rise above $75 per barrel for the first time this year on Thursday after Germany, Poland and Slovakia suspended imports of Russian oil via a major pipeline, citing poor quality. The move cut parts of Europe off from a major supply route. Russia has said it planned to start supplying clean oil via a pipeline on April 29. Crude futures are up around 40 percent so far this year. Washington said on Monday it would end all exemptions for sanctions against Iran. “The end of the U.S. waivers on Iran exports will be offset by higher core-OPEC and Russia and as a result we do not expect further price upside, even if volatility is likely to increase in coming months,” U.S. bank Goldman Sachs said. Despite U.S. efforts to drive Iranian oil exports down to zero, many analysts expect some oil to still seep out of the country.
Top OPEC, Saudi officials didn’t discuss lowering oil prices with Trump: report – Neither Saudi Arabia’s energy minister nor OPEC’s secretary general discussed lowering oil prices with President Donald Trump, sources told the Wall Street Journal, denying the U.S. leader’s earlier claim. Moments after the Journal reported the denials, Trump took to Twitter to double down on his earlier remark. “Spoke to Saudi Arabia and others about increasing oil flow. All are in agreement,” the president tweeted. Earlier on Friday, Trump told reporters he had “called up” OPEC and urged the producer group to take action to bring down fuel costs. “I called up OPEC. I said, ‘You’ve got to bring them down. You’ve got to bring them down,’ and gasoline’s coming down,” Trump said, inaccurately stating that gasoline prices are falling. Oil prices tumbled more than 4% following Trump’s comment. When the president made the remarks, it was not clear whether Trump meant that he had contacted the OPEC Secretariat in Vienna, or whether he was referring to OPEC members like Saudi Arabia and the United Arab Emirates, which are close U.S. allies. But as the day wore on, it remained unclear who was on the other line with Trump. The White House did not return requests for clarification. OPEC Secretary General Mohammed Barkindo did not discuss the matter with Trump, and neither did Saudi Energy Minister Khalid al-Falih, sources familiar with the situation told the Journal. Saudi officials told the Journal Trump did not speak with Crown Prince Mohammed bin Salman. The discussion did not involve Venezuelan Oil Minister Manuel Quevedo, who currently holds OPEC’s rotating presidency, one of the country’s oil officials told the paper. OPEC could not immediately be reached by CNBC for comment. The Saudi Embassy did not immediately return a request for comment.
Oil drops but finishes off session lows as traders weigh impact on Trump’s OPEC plea – Oil futures declined Friday, with prices taking a hit after U.S. President Donald Trump reportedly said he told OPEC to lower oil prices. OPEC’s Secretary General Mohammed Barkindo, however, said he hasn’t spoken with Trump, according to news reports. That denial, along with data showing a hefty weekly decline in active U.S. oil drilling rigs, prompted prices to end off their session lows. June West Texas Intermediate oil fell $1.91, or 2.9%, to settle at $63.30 a barrel on the New York Mercantile Exchange after earlier trading as low as $62.28. Prices fell 1.2% for the week.
Trump’s Gulf Backups for Iranian Oil Will Not be Good Enough for Turkey – Turkey is loath to buy more oil from Saudi Arabia and the United Arab Emirates (UAE) as the United States looks to squeeze exports from Iran, currently the third-largest supplier of crude to the Middle East’s biggest economy, Bloomberg reported on Wednesday.“Iranian oil isn’t cheap, but there is a big difference” between it and the price of Saudi and UAE crude, Turkish Foreign Minister Mevlüt ÇavuÅŸoÄŸlu said at a reception in Ankara, according to state-run TRT television. “The US is taking a decision and wants all countries to comply with it. Why should we pay the price?”The Trump administration is ending waivers that allowed a handful of countries including Turkey to continue importing oil from sanctioned Iran a year after the US withdrew from the 2015 nuclear deal. Secretary of State Mike Pompeo has said he’s confident the market will remain stable as Saudi Arabia and the UAE would ensure an “appropriate supply” of oil along with the US. Turkey is resisting the idea of buying oil from America’s two anti-Iran allies, whose relations with Ankara are fraught after the murder of Saudi critic Jamal Khashoggi in the kingdom’s consulate in Ä°stanbul last October. Turkey has also long opposed the US curbs on Iran, with President Recep Tayyip ErdoÄŸan saying last year that “such sanctions are aimed at tipping the balance in the world” and violate international law and diplomacy. Iran and Turkey plan to set up a financial mechanism to circumvent US sanctions on the Islamic Republic, Iranian Foreign Minister Mohammad Javad Zarif said after visiting Ankara last week. Turkey has long defended the trade with its eastern neighbor as a strategic necessity, but taking on the US can be risky as Ankara struggles to secure the release of a senior banking executive convicted in New York of helping Iran evade US financial sanctions.
If US Refuses to Supply F-35s, Turkey Will Satisfy Need Elsewhere – FM – Turkish Foreign Minister Mevlut Cavusoglu has reportedly said that if the US won’t supply Turkey with F-35 fighter jets, Ankara would satisfy its need for them in “another place”. Turkish media earlier carried reports about possible purchase by Turkey of Russian Su-57 fighters in the event the United States refuses to supply Turkey with F-35 fighters.”Why do we buy S-400 [air defense systems]? Because we have an urgent need for an air defense system. We are already partners in the F-35 manufacturing program, we participate in this project, we have paid the necessary amount. There are currently no problems with this. But in the worst case scenario, we will have to satisfy our need in another place, where the best technologies will be offered,” Cavusoglu said. Mevlut Cavusoglu has also noted that Ankara had no intention to hand over S-400 air defense missile systems bought from Russia to Qatar and Azerbaijan. “There is no talk about plans to place the S-400 in Qatar or Azerbaijan. We have never discussed such an issue,” Cavusoglu said. Turkish media earlier reported on the possible handover by Ankara of S-400 systems to Qatar and Azerbaijan. Earlier in April, Cavusoglu argued that Ankara would find a substitute for the F-35 if the United States refused to deliver the aircraft to Turkey to penalize the country for its purchase of Russia’s S-400 air defence systems. Earlier in the month, the Pentagon announced that Washington halted deliveries and activities with Turkey on F-35 fighter jet program over Ankara’s decision to buy the Russian S-400 air defence systems.
Saudi Arabia carries out ‘chilling’ mass execution of 37 people for ‘terrorism offences’ — Saudi Arabia executed 37 people for terror offences on Tuesday, the country’s interior minister said, in one of the largest mass executions in recent years. Human Rights Watch described the punishment as “grotesque,” and said the news represented a “day we have feared.” The country’s state news agency said the Saudi nationals were guilty of “adopting extremist terrorist ideologies and forming terrorist cells to corrupt and disrupt security as well as spread chaos and provoke sectarian strife.” The individuals were found guilty of attacking security installations with explosives and killing a number of security officers, the Interior Ministry said. It added that the executions were carried out by beheading, and that authorities pinned two of the bodies to a pole as a warning to others. The killings were quickly condemned by Human Rights Watch, which said that most of the convicted were members of the country’s persecuted Shia minority. “Today’s mass execution of mostly Shia citizens is a day we have feared for several years. The punishments are especially grotesque when they result from a flawed justice system that ignores torture allegations,” said Adam Coogle, Middle East researcher at HRW.
Crimea Vows To Ship Oil To Syria Amid Ongoing Fuel Crisis, Thwarting US Sanctions – The President of Crimea, Sergey Aksyonov, vowed to help the Syrian Arab Republic amid their ongoing fuel crisis that is a result of the sanctions imposed on the country by western nations. Aksyonov told Russia’s Sputnik News that there are plans to export wheat, petroleum derivatives and power tools to Syria as well as rebuilding railways there. He pointed out that whether it is Crimea or Russia, they are willing to export products to Syria in order to help the war-torn nation.The Crimean President noted that a shipment of wheat and other industrial products is being prepared and will be heading to Syria soon.He also pointed out that a joint shipment company is being founded, adding that Syria will export citrus fruits, olive and olive oil to Russia.The fuel crisis in Syria has forced the Syrian government to issue rations on gas in order to deal with the ongoing sanctions that are greatly effecting the country. Over the last two weeks, thousands of cars in cities like Damascus, Latakia, and Aleppo are forced to wait several hours to fill up gas as the lines often stretch 3-5km long.With Iran under strict sanctions by the U.S., Syria has run into a serious fuel problem that has harmed almost the entire country. The fuel crisis is not only effecting travel, but also providing electricity to homes in several large cities, including Aleppo, Damascus, and Homs.
US-Led Bombing Campaign in Syria Killed 1,600 Civilians and Left Raqqa Destroyed – – An “unprecedented” new study released on Thursday revealed that the U.S.-led bombing campaign on Raqqa, Syria in 2017 – which one military commander at the time claimed was the “most precise air campaign in history” – killed an estimated 1,600 innocent civilians while leveling the city on a scale unparalleled in recent decades.The research collated almost two years of investigations into the assault on Raqqa, the groups said in a statement, and “gives a brutally vivid account” of the enormous number of civilian lives lost as “a direct result” of thousands of coalition air strikes and tens of thousands of US artillery strikes in Raqqa from June to October 2017.The report – “Rhetoric vs. Reality: How the ‘Most Precise Air Campaign in History’ Left Raqqa the Most Destroyed City in Modern Times“ – is detailed on the interactive website created by investigative news organization Airwars and the human rights group Amnesty International-USA which carried out what they call the “most comprehensive investigation into civilian deaths in a modern conflict.” The findings confirm that the U.S.-led coalition has admitted to just a fraction of the civilian carnage it has caused in Syria, even as it has boasted of the care it’s taken in avoiding such casualties and the precision of the Raqqa offensive.
US Navy SEALs Were Warned by Commanders Not to Report War Crimes – US war crimes in Iraq in general are a well-substantiated fact. Navy SEALs say they saw some “shocking” things, which other SEALs kill children with sniper rifles, spraying civilian neighborhoods with machine gun fire, etc.Seeing such things was par for the course, in Iraq, but talking about it was another thing entirely. Several platoon members took the matter of war crimes by their platoon chief to troop commanders. They were immediately rebuked.Not only did the commander tell them not to report the crimes to him, he warned them that talking about the war crimes at all would jeopardize their careers. War crimes are meant to be seen, but not heard about. It was expected this would be the end of it, but the SEALs went around the commander, and to higher ups in the Navy that were not directly tied to the SEALs. This quickly led to a court-martial for the platoon chief. It’s broader than just the one platoon chief. The court-martial is quickly delving deeply into the underlying culture of the SEALs. That culture encouraged both the war crimes and silence about them.
State of Pakistan’s Relations With Iran and India – What does Pakistan Prime Minister Imran Khan hope to accomplish during his Iran visit? What are the key issues bedeviling Iran-Pakistan relations? Cross-border terrorism alleged by both? Pakistan’s relations with the Gulf Arabs? CPEC? Afghanistan? Gwadar? Chabahar? Indian RAW’s use of Iran to launch terror attacks in Pakistani Balochistan? Who calls the shots in Iran? President Rouhani or the hardline Iranian Revolutionary Guard leaders? Why is Indian Prime Minister Narendra Modi continuing to threaten Pakistan with use of force, including use of nuclear weapons? Is this part of his election campaign to appeal to his base? Or will this intimidation go beyond elections if he wins a second term? Is Pakistan Prime Minister’s hope of better ties with India under BJP just a mirage? Are analysts like Moeed Yusuf right about India waiting it out to achieve overwhelming superiority to eventually dictate term to Pakistan? Viewpoint From Overseas host Faraz Darvesh discusses these questions with Misbah Azam and Riaz Haq (www.riazhaq.com): State of Pakistan’s Relations With Iran and India – YouTube
US Gave Rogue General Haftar Green Light To Attack Tripoli – European officials as well as UN-backed leadership in Tripoli have both confirmed and angrily denounced President Trump’s recent sharp reversal of longstanding US policy which recognized only the UN-backed Government of National Accord (GNA) as the legitimate authority over Libya, with Fayez al-Sarraj as prime minister. The UN, UK and others have long backed Sarraj, while the UAE, Egypt, and France have been vocal supporters of Haftar.Late last week the White House had shocked European allies in announcing that President Trump had spoken by phone to offer support to Benghazi based commander Kalifa Haftar, at a moment his Libyan National Army (LNA) lays siege to the capital. The White House statement at the time said Trump “recognized Field Marshal Haftar’s significant role in fighting terrorism and securing Libya’s oil resources, and the two discussed a shared vision for Libya’s transition to a stable, democratic political system.”A prior personal call to Haftar by US National Security Adviser John Bolton had also left Haftar with the impression that he’d had a “green light” for his ongoing offensive to secure the capital, which began April 4, and has involved shelling and air power used over civilian areas. EU officials have this week urged President Trump to reverse his surprise declaration of US support for Haftar’s LNA. European officials have further demanded greater clarity of the United States’ position on Libya, saying Washington’s policy confusion will only add fuel to the chaos, similar to recent contradictory US statements on Syria. According to The Guardian: EU officials greeted Trump’s remarks with disbelief and a fear that the White House had accepted a joint interpretation of the war by the United Arab Emirates and Saudi Arabia that underplayed its complexity.As Bloomberg reports further this week, the revelation of official US support to the renegade General Haftar came soon after a meeting between Trump and Egyptian President Abdel Fattah El-Sisi on April 9. Sisi has long been known as a backer of Haftar, alongside the UAE and France.
Trump’s Call to Libyan National Army Leader Increases Risk of ‘Protracted Urban Conflict,’ Experts Say – A phone call from President Donald Trump to Libyan National Army leader Khalifa Haftar helped to escalate deadly violence in the Libyan capital of Tripoli this weekend, as well as undercutting the United Nations’ hope for a ceasefire in the country. A number of airstrikes, allegedly including strikes by armed drones, hit Tripoli in Sunday’s early morning hours, escalating Haftar’s assault on the city as he attempts to oust the U.N.-backed Government of National Accord (GNA) and take control of Libya. The Libyan National Army’s (LNA) attacks on Tripoli have now killed an estimated 227 people, injuring more than 1,000 and leaving at least 16,000 displaced. The airstrikes followed a conversation Trump had with Haftar last week, which the White House revealed several days later on Friday. A number of sources reported Sunday that Trump appeared to give approval to the leader, who legal experts have accused of ordering his troops to commit war crimes, to move ahead with the air campaign – going against a U.N. Security Council resolution calling for a ceasefire last Thursday. According to the White House’s statement on Friday, Trump told the LNA leader he “recognized Field Marshal Haftar’s significant role in fighting terrorism and securing Libya’s oil resources, and the two discussed a shared vision for Libya’s transition to a stable, democratic political system.” As Patrick Wintour reported in the Guardian: The airstrikes on Tripoli, first launched last week, appear to reflect the approval given to Haftar by Donald Trump in a phone call on Monday….The U.S. appears to have accepted the view from its chief Middle Eastern allies that Haftar’s assault can be seen as the act of a strong leader fighting jihadist militias in Tripoli. But many independent Libyan experts claim Haftar has no commitment to democracy. Haftar ordered his troops into Tripoli on April 4, after three years of fighting to secure control of southern and eastern Libya. The strikes in Tripoli have been backed by the United Arab Emirates, reportedly with funding from Saudi Arabia. In addition to undermining the U.N.’s hope for a ceasefire, Trump’s call to Haftar also indicated a reversal in U.S. policy regarding Libya. On Friday, Acting Defense Secretary Patrick Shanahan told reporters, “A military solution is not what Libya needs,” while Secretary of State Mike Pompeo said on April 7 that the U.S. “oppose[s] the military offensive by Khalifa Haftar’s forces.”
Slide Into Chaos – 30,000 Displaced, 300 Dead And 1,200 Wounded In Libya Fighting – African leaders met in Egypt on Tuesday in a summit addressing continuing violence and dramatic political upheavals in neighboring Libya and Sudan, with Egypt’s President Sisi calling for a unified regional response in order avoid “a slide into chaos”. This as since early April fighting around Tripoli between Gen. Khalifa Haftar’s advancing Libyan National Army (LNA) and the UN-backed Government of National Accord (GNA) has resulted in 264+ deaths, according to the World Health Organization (WHO), and some 1,266 people wounded, with 21 among the deceased civilians. Some media reports have cited as many as 300 killed in the violence. The United Nations has put the number of displaced due to Haftar’s offensive on the capital at more than 30,000 civilians. Meanwhile in Sudan fierce protests have continue in Khartoum despite the toppling of longtime strongman Omar al-Bashir, resulting in unpopular rule by military council with emergency powers. “The principle of African solutions to African problems is the only way to deal with common challenges facing us,” Sisi said in opening remarks to the summit. Concerning Libya, Sisi’s fear’s of a “slide into chaos” – which has actually long been a reality all the way back to the 2011 NATO-led toppling of Muammar Gaddafi – will be viewed as largely hypocritical considering Sisi is among Gen. Haftar’s main backers.This week intense fighting has continued in the southern suburbs of Tripoli, with shelling disrupting daily life in the city’s center. Reuters reports: Forces supporting Libya’s internationally recognized government pushed back troops loyal to eastern commander Khalifa Haftar to more than 60 km southwest of the capital Tripoli on Tuesday, Reuters reporters said. The town of Aziziya was fully under the control of the Tripoli forces, with shops reopening after days of fighting, a Reuters team at the scene said.
Israel’s Elite Undercover Units Are Increasing Activities Against Palestinians – In recent weeks and months, Israel’s elite undercover Special Forces units, known as the Musta’ribeen (Mista’arvim), have increased their activities against the Palestinians in the occupied West Bank. The units are responsible for the arrest and assassination of Palestinian resistance members wanted by the Israeli occupation authorities. For example, the Israel Defence Forces (IDF) revealed that the murder of Omar Abu Laila, who carried out an operation in Salfit, in Ramallah in late March, was a result of a Special Forces unit infiltrating the city. The soldiers posed as vegetable vendors before making the hit. In December, the Musta’ribeen killed resistance member Asem Barghouti in the same manner. In March, Special Forces disguised as journalists killed the former head of the Birzeit University Student Council Omer Al-Kiswani, within the university campus in Ramallah. Palestinian activists have been carrying out an awareness campaign among demonstrators to protect them from the undercover units. Tips include wearing light-coloured clothing, as the Musta’ribeen usually wear dark and loose clothing to hide their weapons. This helps them to identify the infiltrators. Another tip is for protestors to tuck in their shirts because Musta’ribeen keep their shirts untucked, again in order to hide their guns. Palestinian protestors are also advised to engage in confrontations with the Israeli army in small groups in order that everyone knows each other and strangers are easier to identify. The IDF’s repeated use of the Musta’ribeen Special Forces is considered a war crime and a crime against humanity that is punishable by law, because they carry out assassinations in cold blood and in front of cameras. This requires us to document their crimes on film, to add to the International Criminal Court’s case files on the Israeli military occupation and its crimes and violations of Palestinian rights.
Ethnic Cleansing of Palestinians Supported by American administration – In the Jordan Valley, the Israeli occupation authorities issued orders to seize some 51,000 dunams to the east of the Tayasir area, to the Ras Ahmar area, and the Makhol and Samra areas, in order to expand the Itammar settlement, knowing full well that 5 residential communities are living there. The residents were prevented from accessing those areas and given 14 days to reject the decision. Moreover, Israeli forces erected signs in Khirbet Yanon, a village belonging to the land of Aqraba, south of Nablus, stating that hundreds of dunams have been turned into “nature reserves”. And, entry is not allowed. A report issued by the Madar Strategic Center, for the year 2019, warned that the next step will witness a shift towards annexing the settlements over to Israeli sovereignty and accelerating their expansion, thus preventing any possibility to establish a Palestinian state. The report added that the policies accelerate the establishment of the Jewish national identity of Israel, which will negatively affect the reality of Palestinians in the territories taken in1948. The report, which was announced at the annual Madar conference, in Ramallah, said that the recent election results provided international momentum to the Israeli right, which is represented by the Trump administration, in the US, and reflected Arab failure. Within this context, the US Secretary of State Mike Pompeo said, in an interview with CNN, that he doesn’t see Israeli sovereignty over West Bank settlements as damaging to the Trump’s “Deal of the Century” for the Middle East. PM Netanyahu said he intends to impose Israeli law on all settlements, and hopes to do so with the consent of America. He pledged to maintain Israeli control over the West Bank, and to solidify Israeli rule among more than 400,000 settlers in the West Bank, adding that this will not only apply to the larger settlement blocs, but also to remote settlements. Furthermore, both right-wing and Haredi parties that won the Knesset elections are betting on the support of the administration of US President Donald Trump, for the Israeli annexation policy, which make up about 60% of the West Bank.
More civilians now killed by US, Afghan forces than by insurgents: UN – Afghan civilians are for the first time being killed in greater numbers by US and pro-government forces than by the Taliban and other insurgent groups, a UN report released Wednesday revealed. The bloody milestone comes as the US steps up its air campaign in Afghanistan while pushing for a peace deal with the Taliban, who now control or influence more parts of the country than at any time since they were ousted in 2001. During the first three months of 2019, international and pro-government forces were responsible for the deaths of 305 civilians, whereas insurgent groups killed 227 people, the United Nations Assistance Mission in Afghanistan (UNAMA) said in a quarterly report. The majority of the deaths resulted from US air strikes or from search operations on the ground, primarily conducted by US-backed Afghan forces, some of which UNAMA said “appear to act with impunity”. “UNAMA urges both the Afghan national security forces and international military forces to conduct investigations into allegations of civilian casualties, to publish the results of their findings, and to provide compensation to victims as appropriate,” the report states. UNAMA started compiling civilian casualty data in 2009 amid deteriorating security conditions in Afghanistan. It is the first tally since records began that shows pro-government forces have killed more civilians than insurgents have, though insurgents were responsible for more than twice as many injuries as were pro-government forces.
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