Written by rjs, MarketWatch 666
Here are some more selected news articles about the oil and gas industry from the week ended 12 May 2019. Go here for Part 1.
This is a feature at Global Economic Intersection every Monday evening.
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Russia Arrests 4 In Dirty Oil Sabotage Case Which Blocked Major Siberia-Europe Pipeline – For more than two weeks contaminated oil from Russia has clogged the giant Druzhba pipeline, the main delivery line for multiple EU countries, especially impacting Belarus, Poland and Germany. Russia is Germany’s largest energy supplier – and with no word on just how long the blockage will last – it is likely to prove financially disastrous as there’s an estimated 37 million barrels of contaminated crude accumulating in pipelines spanning from Belarus to Ukraine to Hungary. Far from being a mere technical disaster, Russian authorities had previously revealed the developing “dirty oil” crisis to be intentional – the result of organized crime and an attempt to cover up mass theft on the part of oil executives. Russia’s Investigative Committee announced Tuesday in a statement that four private oil firm executives have been arrested with two more being sought.They are alleged to have pumped low quality contaminated oil near the Volga River city of Samara “to conceal thefts,” according to the statement. Interfax reported the suspects names as Svetlana Balabay, Rustam Khusnutdinov, Vladimir Zhogolev and Sergei Balandin, all of which will remain in pre-trial detention through June. The charges range from damaging crude oil pipelines and theft, to engaging in organized crime. Russia’s Investigative Committee further said the group was attempting to hide oil theft worth over 1 million rubles (or $15,300). The suspects are associated with the little-known Nefteperevalka, Petroneft Aktiv and Magistral oil firms. It is Nefteperevalka firm which reportedly owns the section of the Druzhba pipeline where investigators think the contamination originated in April. The criminal nature of the crisis was first revealed when a high concentration of organic chloride – which is destructive to refining equipment and typically used by small producers – was discovered in the Russian crude transit, causing engineers to halt service.
Russia Close to Restoring Oil Flows to Europe– Russia is getting closer to restoring supplies of uncontaminated oil to Europe via both sections of the Druzhba pipeline and the Baltic port of Ust-Luga, the country’s energy minister said. “On May 6, shipments of compliant crude started in the direction of Brody point,” in Ukraine, from where they can reach European consumers, Energy Minister Alexander Novak said at a government meeting Tuesday. “In the near future, we expect an agreement to start shipments in the direction of Poland,” he said. Ust-Luga will receive the first batches of clean oil Wednesday morning, according to Novak. That’s a slower timetable than Russia previously indicated. Deputy Prime Minister Dmitry Kozak pledged on April 27 that the nation will fully restore normal supplies through the pipeline within two weeks, but Novak now says that should happen in the second half of May. Belarus has estimated it may take “months of hard work” to do so. The Russian authorities also have yet to offer a comprehensive solution for removing all contaminated oil from the system. Poland and Ukraine are transit countries for the northern and the southern link of the Druzhba pipeline, respectively, and the resumption of the flows would mark a gradual return to normal operation after the outage which has lasted more than a week. Ust-Luga is the key sea gateway for Russia oil supplies to Europe, and contamination issues at the port risked choking off exports to the continent. Refineries in some east European countries refused to accept oil from the Soviet-era pipeline after Belarus, another transit country for Druzhba, reported an extremely high level of organic chlorides in the shipped volumes. Russia later confirmed contamination of its batches with the organic compounds that can severely damage refinery equipment. Russia’s Deputy Prime Minister Dmitry Kozak pledged on April 27 the nation will restore the supplies within two weeks, while Belarus estimated it may take “months of hard work” to fully resume flows. Russia’s crude oil output and exports have not been affected by the Druzhba halt, Novak said. The nation produced 11.233 million barrels a day of crude in April, according to Bloomberg calculations based on data from the Energy Ministry’s CDU-TEK unit.
Cyprus gas discoveries spark US-Russian gamesmanship – In recent years, energy companies have discovered a number of significant gas reserves in the Eastern Mediterranean, and the rush to develop the offshore resources is reshaping the region’s political and economic dynamics. Earlier this year, ExxonMobil, together with Qatar Petroleum, found the third large gas reservoir off the coast of Cyprus. Known as the Glaucus-1 field, this latest discovery will add to the inventory of Eastern Mediterranean gas reservoirs coming online in neighboring Israeli and Egyptian territorial waters, which are expected to form a new energy hub for regional and, possibly, export markets.At the same time, officials in Washington are increasingly expressing support for cooperation between Israel, Cyprus and Greece in developing the reserves as a measure to counter both growing Russian influence in the Eastern Mediterranean, and also Turkish hostility towards gas development in Cyprus’ territorial waters, where both have claims to energy resources. The move signifies the return of direct US involvement in a region, where it has been largely absent in recent years as Russia strengthened its positions on the Syrian coast. Some officials in Washington and Europe also see the development of Eastern Mediterranean gas fields as a potential alternative energy source to Russian gas imports, through what is being called the East Med pipeline, which would run from Israel and Egypt through Cyprus, Greece and then onward to Italian and European markets. “The US is finding Greece, and by extension Cyprus and certainly Israel, as the allies it needs if it’s going to consolidate itself in the East Med,” Harry Tzimitras, director of the Peace Research Institute Oslo Cyprus Center, told DW. In a show of support, US Secretary of State Mike Pompeo met with Israeli, Greek and Cypriot leaders in March to discuss regional energy development and joint security initiatives. In April, US Senators Bob Menendez and Marco Rubio introduced the Eastern Mediterranean Security and Partnership Act, which would lift a decades-old arms embargo on Cyprus, as well as establish a “United States-Eastern Mediterranean Energy Center to facilitate energy cooperation between the US, Israel, Greece, and Cyprus.”The legislation is one of two bills introduced in the US Congress this year aiming to stop the transfer of the NATO coalition F-35 warplanes to Turkey, until officials in Ankara end negotiations to purchase the Russian S-400 missile defense system, which US officials say pose a threat to NATO defenses in Turkey, a NATO member.
U.S. and EU concerned by Turkey’s plans to drill off Cyprus (Reuters) – The United States and European Union have expressed deep concern over Turkey’s plans for offshore drilling operations in an area claimed by Cyprus as its exclusive economic zone, adding to tensions between Ankara and its Western allies. The statements at the weekend came after Turkish Foreign Minister Mevlut Cavusoglu said “we are starting drilling” in the region. Turkey and the internationally recognized Greek Cypriot government have overlapping claims of jurisdiction for offshore oil and gas research in the eastern Mediterranean, a region thought to be rich in natural gas. “The United States is deeply concerned by Turkey’s announced intentions to begin offshore drilling operations in an area claimed by the Republic of Cyprus as its Exclusive Economic Zone,” State Department spokesperson Morgan Ortagus said on Sunday. “This step is highly provocative and risks raising tensions in the region. We urge Turkish authorities to halt these operations and encourage all parties to act with restraint.” Cavusoglu said that Turkish seismic research vessel Barbaros Hayrettin Pasa was continuing work in the region. “We will conduct drilling in areas of Turkey’s continental shelf and we are starting our drilling work at points identified by Barbaros Hayrettin Pasa,” he said in northern Cyprus on Saturday. The Cyprus foreign ministry said it “strongly condemns” Turkey’s drilling operations within its exclusive economic zone. “This provocative action by Turkey constitutes a flagrant violation of the sovereign rights of the Republic of Cyprus,” it said on Saturday. Speaking at NATO’s North Atlantic Council Mediterranean Dialogue meeting in Ankara on Monday, President Tayyip Erdogan said he expected NATO to support Turkey’s rights in the Mediterranean. “The legitimate rights of Turkey and the Northern Cypriot Turks over energy resources in the eastern Mediterranean are not open for argument. Our country is determined to defend its rights and those of Cypriot Turks,” he said. “We expect NATO to respect Turkey’s rights in this process and support us in preventing tensions.” The U.S. statement followed similarly worded comments on Saturday by EU foreign policy chief Federica Mogherini, who expressed “grave concern” about Turkey’s intentions.
Agri SA launches court proceedings against granting of shale gas exploration rights – Agricultural organisation Agri SA has launched court proceedings in the Pretoria High Court against the granting of environmental authorisations and explorations rights for shale gas to Africa-focused oil and gas exploration and development company Rhino Oil and Gas. Although the authorized exploration activities by Rhino Oil and Gas will not entail actual drilling, the current legal dispensation in relation to oil and gas in South Africa affords holders of exploration rights the exclusive and automatic entitlement to apply for and be granted full-scale production rights, Agri SA said in a statement this week. In effect, the organisation explained that this means that entities such as Agri SA, must then resort to the courts from the outset to prevent hydraulic fracturing, or fracking, for shale gas from taking root in South Africa. “In the absence of satisfactory information about the availability and treatment of water to sustain a fracking and shale gas industry in South Africa, Agri SA cannot support government’s apparent appetite for a full-scale gas industry in this country,” Agri SA natural resources head Janse Rabie said. He lamented that, in the eyes of Agri SA, government is not cautious enough when it comes to shale gas, especially considering that South Africa is already a highly water-stressed country. Additionally, the statement noted that aerial and seismic survey techniques are not entirely non-invasive. Privacy issues and the effects of the surveys being conducted in areas used for traditional religious and customary purposes, stand to be materially affected and do not appear to have been considered in the granting of the authorisations in this instance, Agri SA noted. In 2018 Rhino Oil and Gas obtained environmental authorisation to conduct aerial exploration activities for petroleum over large parts of the North West, Free State, KwaZulu-Natal and Eastern Cape provinces. In January, the Petroleum Agency of South Africa granted exploration rights to Rhino Oil and Gas with respect to its North West, Free State and Eastern Cape exploration areas.
Solomon Islands to refloat ship after oil spill – Since early February, bulk carrier, Solomon Trader, has been wedged on a reef off Rennell Island, where it has spilled an estimated 100 tonnes of oil. The spill happened near a protected marine area and poisoned local water supplies and fishing grounds, sparking an international outcry. More than three months on, the Solomon Islands Disaster Management Office said the vessel will be refloated and towed from the reef. Its director, Loti Yates, said the process, which is being led by a salvager contracted by the shipowner’s insurer, will take around three days. “It is a huge and very, very difficult operation,” he said. Mr Yates added that cleanup efforts which began in March are ongoing, with oil still coating the shoreline of the nearby and once pristine Kangava Bay. He added that all oil onboard the ship had been removed but based on ship records there was an unknown amount missing. “Maybe they evaporated, maybe they just sailed away or sunk into the bottom of the ocean. Not sure yet.” Mr Yates said investigations by the Solomon Islands government into the disaster had been obstructed by a missing data drive taken from the ship by its owner. He said requests for the data – which is too big to transfer online – to be sent physically had gone unanswered for the past three weeks.
Majors Driving Rise in Global Discoveries – Oil and gas exploration is off to an explosive start in 2019, with such majors as BP, Eni and Exxon Mobil taking a bigger bite of the conventional resources discovered in the first quarter, according to a new report by Norwegian research firm Rystad Energy. At the end of the first quarter global discoveries of conventional resources reached 3.2 billion barrels of oil equivalent (boe). Most of the gains were recorded in February, announcing some 2.2 billion barrels of newly discovered resources – the best monthly total on record since August 2015. The six largest discoveries by the oil majors each exceeded 150 million boe, and the top three could even hold more than 300 million boe apiece. American major ExxonMobil was the most successful, with three significant offshore discoveries accounting for over 38 percent of total discovered volumes in the first quarter of 2019. With discoveries made offshore of Cyprus with 700 million barrels of oil equivalent in the Eastern Mediterranean and off of Guyana in South America with more than 5 billion oil-equivalent barrels. Apart from Exxon Mobil, the other top discoveries were made by Paris-based oil major Total, with its Brulpadda find estimated to have a potential 1 billion barrels of “wet” gas off the coast of South Africa. Spanish-based Repsol’s South Sumatran seas find has preliminary estimates of at least 2 trillian cubic feet of recoverable resources, making it the largest such find in Indonesia for 18 years. And in Britain’s North Sea China’s CNOOC, in a partnership with Total, made an offshore find equivalent to 250 million barrels of oil.
Saudi Aramco to Provide Extra Oil to Asian Buyers— Saudi Arabia is set to supply more crude to oil-starved Asian refiners, and extract a heavy price for it. State-run producer Saudi Aramco will sell additional cargoes to customers in the world’s biggest oil-consuming region for June loading, according to people with knowledge of the matter. The shipments will be on top of those scheduled under long-term crude contracts, they said, asking not to be identified because the information is confidential. While the extra supplies will alleviate a squeeze driven by U.S. sanctions on Iran and Venezuela as well as unexpected disruptions from Russia to Nigeria, the refiners face a costly bill. Aramco raised its official selling price for June cargoes of its flagship Arab Light crude to the biggest premium to Middle East benchmark prices in 11 months. The cost of the Arab Medium variety was set at highest since December 2013, while Arab Heavy was increased to the most in over six years. The higher costs aren’t expected to deter Asian buyers, who had earlier this month asked OPEC’s biggest producer for additional supplies even before the kingdom set its pricing for June cargoes. The scramble for shipments follows the May 2 expiry of U.S. sanctions waivers for buyers of Iranian oil, which the White House decided not to renew as part of its campaign to squeeze Tehran’s finances. Global benchmark Brent crude fell as much as 1.1 percent a barrel on the ICE Futures Europe exchange and traded down 67 cents at $70.57 at 11:10 a.m. in London. Prices slipped 1.8 percent last week, after gaining in the previous five weeks. Refiners in India, where oil demand is growing at the fastest pace in the world, are set to receive as much as 200,000 barrels a day of incremental supplies, the people said. Some refiners in China, the top crude importer, and Japan will also receive additional shipments, they said. Aramco was willing to supply more volumes to meet the requests of a major Chinese refiner, said a person familiar with the company’s procurement, although details on the type and quality of oil on offer remained unclear. The press office for Aramco, known officially as Saudi Arabian Oil Co., couldn’t immediately comment.
China Invests In Game-Changing Arctic LNG Project – Russia’s second largest natural gas producer, independent player Novatek, has signed up key participation from two state-owned Chinese oil majors in its massive Arctic LNG 2 project. The deals were inked last week at the Second Belt and Road Forum for International Co-operationheld in China. This cements Novatek’s position as Russia’s leading liquefied natural gas (LNG) developer, moving it a step ahead of the country’s two state-backed companies, Rosneft and Gazprom. China National Offshore Oil Corp. (CNOOC) and China National Oil and Gas Development Co. (CNODC), a unit of China National Petroleum Corp. (CNPC), signed up to acquire 10 percent each in the project. CNOOC is also China’s largest offshore oil and gas producer and developer. Novatek’s chairman, Leonid Mikhelson, welcomed CNOOC’s involvement, saying China was “one of the key consuming markets for our LNG sales.” He added that Arctic LNG 2 would be a “game-changer” in the global gas market and noted the company’s experience from its Yamal LNG project as a demonstration of its ability to carry out operations in the Arctic. The entry of the CNPC unit, meanwhile, was described by Mikhelson as an “important milestone” for Arctic LNG 2, while he noted the Chinese company’s participation in Yamal LNG. “The accumulated experience of working together is a solid basis for the successful implementation of our new LNG project,” he said. No details have been given yet for the price the Chinese companies paid. French oil major Total also invested in Arctic LNG 2 in March. Novatek, in its first-quarter results, said the sale of a 10 percent stake in the project had resulted in a net gain of $4.8 billion. China was instrumental in making the Yamal LNG work. In addition to the participation of CNPC, which acquired a 20 percent stake in 2013, the Silk Road Fund (SRF) purchased a 9.9 percent stake for $1.21 billion in March 2016. SRF also provided a 15-year loan worth some $813 million. Additionally, CNPC signed up to a 20-year off-take agreement, covering 3 million tons per annum (mtpa) of Yamal LNG’s production, indexed to the Japanese Crude Cocktail (JCC) price, the leading LNG pricing benchmark in Asia.
China Set To Defy U.S. Sanctions On Iran – Tensions between Washington and Beijing could soon peak if China positions itself to defy President Trump’s repeal of Iranian oil sanctions waivers. On Saturday,noted Chinese analysts said that China might not submit to U.S. sanctions pressure over its Iranian oil imports because Iran is a key investor in China’s Belt and Road Initiative as well as a key energy partner.Two weeks ago, the Trump Administration surprised both domestic and international energy markets players and watchers when it refused to extend 180-day waivers for Iranian oil first put in place in November. Washington also said it would place sanctions on any country that continues to buy Iranian oil after May 2. Japan, China, India, South Korea, Taiwan, Italy, Greece, and Turkey – all of Iran’s biggest oil clients – were initially granted 180-day waivers. As a result of the U.S. move, London-traded, global oil benchmark Brent crude breached the psychologically important $75 per barrel price point. Since then, Brent has pared those gains by nearly $5 per barrel amid a host of factors, including a jump in U.S. crude inventories to their highest level since September 2017 as well as U.S. production hitting a record 12.3 million barrels per day (bpd), cementing its top global oil producer slot ahead of Russia and Saudi Arabia. Brent ended the trading session on Friday at just under $71 per barrel, while U.S. oil benchmark, NYMEX-traded West Texas Intermediate crude (WTI) futures ended the session at $61.94 per barrel, up 13 cents, but losing nearly 3 percent for the week, its second consecutive week of declines. According to a report in the Beijing-based Global Times, experts in the country also said that China’s energy security wouldn’t be affected too much by the removal of oil sanctions waivers due to diversification of supply, while the issue could even offer Beijing a new bargaining chip in ongoing trade negotiations with Washington as both sides try to reach an agreement to end nearly a year of tit-for-tat trade tariffs. It should be noted that the Global Times is known for expressing hawkish views, sometimes in adherence with the official Chinese Communist Party (CCP) line and sometimes not.
Iran’s Master Plan To Beat U.S. Sanctions -One key foreign policy goal of the current U.S. government is to initiate regime change in Iran by crippling its economy to such a degree that popular unrest removes the current power structures in the country, particularly the near-omnipresent IRGC. To this end, the past few weeks have seen the U.S. end all waivers on importing oil from Iran, designate the Islamic Revolutionary Guard Corps (IRGC) as a foreign terrorist organisation, and sanction 14 individuals and 17 entities linked to Iran’s shadowy Organization of Defensive Innovation and Research. All of this followed the U.S.’s momentous withdrawal last May from the Iran nuclear deal. The IRGC believes that its only chance of avoiding this fate is to widen the existing divisions between the U.S. and the European Union (EU) so that it can generate export revenues from Europe, in addition to those it can rely on from the historically sanctions-busting states of Asia. Consequently, the IRGC has come up with a last-ditch strategy to do achieve this, a senior source who works closely with Iran’s Petroleum Ministry exclusively told OilPrice.com earlier this week. The EU has always been of the opinion that Iran has never broken the terms of the nuclear deal – a view also taken by the CIA, incidentally. At the time of U.S. President Donald Trump’s initial criticism of the nuclear deal last January, the EU’s foreign policy chief, Federica Mogherini, stated: “This is not a bilateral agreement,… so it is clearly not in the hands of any president of any country in the world to terminate [it],…The president of the United States has many powers, but not this one.” After the U.S. withdrew from the deal last May, the EU invoked the ‘Blocking Statute’ that effectively bans European companies from following the U.S.’s sanctions on Iran. Concomitant with this, Mogherini said that Brussels would not let the nuclear deal with Tehran die, adding that: “We are encouraging small and medium enterprises in particular to increase business with and in Iran as part of something that for us is a security priority.”
Europe Vows To Continue Buying Iranian Oil As US Revokes Export Waivers – As if to mark one year since President Trump formally withdrew from the JCPOA – better known as the “Iran Deal” – last May, the foreign ministers of the UK, France and Germany, as well as EU foreign policy head Federica Mogherini, on Saturday issued a statement condemning the White House’s decision, and vowing once again to abide by the terms of the deal. The statement is the latest sign that Trump’s decision to reimpose sanctions on Iranian oil exports could set up the US for a showdown with its allies in Europe that could accelerate the de-dollarization of the global financial system, as Europe continues to work on an alternative payments system to the Treasury-dominated SWIFT network. “We, the High Representative of the European Union and the Foreign Ministers of France, Germany and the United Kingdom, take note with regret and concern of the decision by the United States not to extend waivers with regards to trade in oil with Iran,” the European guarantors of the nuclear deal, called the Joint Comprehensive Plan of Action, Politico reports.The US turned the screws on Iran last week by cancelling all of the waivers on Iranian crude exports it had issued after reimposing sanctions back in November – effectively leaving $1 billion in Iranian crude stranded outside a Chinese port – while also cancelling two of the seven waivers granted to businesses working with Iran’s civilian nuclear program.Despite the US’s decision to brand Iran’s revolutionary guard as a “terrorist organization,” the Europeans continued to “encourage all countries” to make their “best efforts” to engage in legitimate trade with Iran.It’s also possible that the Europeans’ statement was intended to calm global oil markets, as the US’s decision to crack down on remaining Iranian oil exports, combined with the turmoil in Venezuela and Libya, could send oil prices higher (though the Trump administration has sought to offset this by recruiting Iran’s regional rivals to increase their output). The rising tensions between Iran and Saudi Arabia have prompted Iran to warn that the collapse of OPEC could be imminent (should that happen, it’s very likely that a new organization led by Saudi Arabia and Russia could emerge in its place). And in any case, Iran has vowed to continue exporting its oil in defiance of the Americans’ wishes.
Iranian Oil Shipments Slide Under US Sanctions – Iran’s oil shipments tumbled this month after the U.S. ended sanctions waivers that allowed eight governments to buy from the Persian Gulf country. So far, not a single ship has been seen leaving Iran’s oil terminals for foreign ports in tanker tracking data compiled by Bloomberg. China, India, South Korea and Japan were among those allowed to buy about 1 million barrels a day of Iranian crude and condensate, a light form of oil extracted from gas fields, until May 2. Hopes that those exemptions might be extended were dashed, leaving buyers at risk of U.S. penalties if they continued to take Iran’s oil. They seem not to have taken that chance. China, South Korea and Japan had already taken a cautious approach to the end of waivers, cutting their purchases of Iran’s oil in April. The long voyages from the Persian Gulf to northeast Asia, taking as much as a month, meant that oil lifted from Iranian terminals in April would not arrive until after the waivers had expired, leaving buyers at risk of reprisals. Iran’s oil ministry, National Iranian Oil Co. and National Iranian Tanker Co. declined to comment. The much shorter voyages to India meant that refiners there could keep buying Iranian oil until well into April and still see it arrive before May 2. As a result, the volume of crude seen leaving Iran for India in April was the most in seven months, at 400,000 barrels a day. While tanker tracking provides a valuable indication of shipments, it does have limitations. Ships’ captains can turn off the transponders that signal their vessel’s position, hiding them from view. While this tactic has been employed by Iran since November, ships have usually reappeared several days after leaving the Persian Gulf, or when passing choke points such as the Suez Canal or Singapore. As of May 9, there were four Iranian tankers anchored off China, capable of holding a combined 5 million barrels, with another supertanker on its way. Two more very large crude carriers, each able to haul two million barrels, were observed at Indian ports waiting to discharge the last cargoes loaded in April. Most of the rest of the Iranian tanker fleet is either heading back toward the Persian Gulf after discharging cargoes, or have been observed in or near the region in the past two days. There are some Iranian tankers that may still be hauling cargoes. No tracking signals have been received from 10 VLCCs for at least 16 days. It is also possible that non-Iranian vessels could be picking up cargoes with their transponders turned off.
Oil prices correct lower on hedge fund sales: Kemp – (Reuters) – Hedge fund managers have started to increase their bearish oil positions for the first time since the start of the year, amid signs the previous bull run had become overextended and prices were ripe for a correction. Hedge funds and other money managers were net sellers of the six major petroleum futures and options contracts in the week to April 30, bringing to an end a record-breaking 15-week run of net purchases. Portfolio managers cut their net long position by 17 million barrels last week, after having raised it by a total of 609 million since Jan. 8 (https://tmsnrt.rs/2LpJ0Ek ). Funds were net sellers last week of NYMEX and ICE WTI (-19 million barrels), U.S. heating oil (-2 million barrels) and European gasoil (-8 million barrels). Net sales were only partially offset by small purchases of Brent crude (+8 million barrels) and U.S. gasoline (+3 million), according to position records published by regulators and exchanges. Before the sales, positions in crude and especially gasoline had started to look very lopsided, increasing the probability fund managers would reduce some of their length and reverse the recent bullish price trend. Fund long positions outnumbered short ones by a margin of 35:1 in gasoline, 11:1 in crude and 3:1 in middle distillates on April 23. Following last week’s sales, the long-short ratios have been trimmed slightly to 28:1 in gasoline, 9:1 in crude and 2:1 in middle distillates. From a fundamental perspective, spot oil prices and calendar spreads appear poised to rise further, provided the global economy avoids a recession. Fund managers are betting U.S. sanctions on Iran and Venezuela combined with output restraint by Saudi Arabia will cause the crude market to tighten significantly in the second half of 2019. They are also anticipating that U.S. refineries will process record amounts of crude to stabilise gasoline inventories this summer and then build distillates stocks before new maritime fuel rules at the end of the year. Record crude processing should tighten the global oil market even further in the remainder of the year, which is showing up in a big backwardation in crude futures prices. Brent’s calendar spread for July to December has climbed to a backwardation of more than $2.80 per barrel, up from $1.80 a month ago, and a small contango at the start of the year. From a positioning perspective, however, hedge fund managers are already heavily committed to the bullish narrative. With so much speculative money riding on a further rise in prices, and few short positions left to squeeze, oil prices had become increasingly vulnerable to a correction.
Oil bounces up on Iran concern after touching one-month low on trade tensions (Reuters) – Oil futures edged higher in volatile trade on Monday as rising tensions between the United States and Iran buoyed prices after they touched a one-month low following U.S. President Donald Trump’s threat that he may raise tariffs on Chinese goods. Brent crude futures rose 39 cents to settle at $71.24 a barrel. The global benchmark earlier sank to $68.79 a barrel, its lowest since April 2. U.S. West Texas Intermediate (WTI) crude futures rose 31 cents to settle at $62.25 a barrel. WTI’s session low was $60.04 a barrel, the weakest since March 29. Additional buying was sparked after WTI broke through $62 a barrel in early afternoon trade, said Bob Yawger, director of energy futures at Mizuho in New York. The United States is deploying a carrier strike group and a bomber task force to the Middle East to send a clear message to Iran that any attack on U.S. interests or its allies will be met with “unrelenting force,” U.S. national security adviser John Bolton said on Sunday. The development injected a risk premium into the market. Acting U.S. Defense Secretary Patrick Shanahan said he had approved sending the carrier strike group and bombers to the Middle East because of a “credible threat by Iranian regime forces.” “You’re seeing those increasing geopolitical tensions,” Prices fell early after Trump said on Twitter on Sunday that tariffs on $200 billion of goods would increase on Friday to 25 percent, reversing his February decision to keep them at 10 percent due to progress in trade talks. Trump early on Monday appeared to defend his Sunday statement, citing the trade deficit between the United States and China. “Sorry, we’re not going to be doing that anymore!” he tweeted. The comments worried investors about trade talk progress between the world’s two largest economies and ignited concerns that ongoing tensions could hurt global oil demand. China’s Foreign Ministry spokesman Geng Shuang told a news briefing on Monday that a Chinese delegation was still preparing to go to the United States for trade talks. “We are also in the process of understanding the relevant situation,” he said.
Global Markets In Tailspin After Trump Reignites Trade War –Oil prices sank on Monday morning after President Trump decided to reignite the trade war with China just before it was supposed to be resolved.Trump took to twitter to announce a major escalation in the trade fight, apparently in a bid to make China buckle under the pressure. Seemingly out of nowhere, after weeks of encouraging press coverage that seemed to suggest the two sides were zeroing in on a deal, Trump said that he would hike tariffs by the end of the week, blaming China for dragging its feet. The tweet sent global financial markets into a tailspin, not least because it caught everyone off guard. The Shanghai Composite Index fell more than 5 percent on Monday while the Stoxx Europe 600 fell by 1.5 percent. Trump says that U.S. tariffs on $200 billion of Chinese goods will jump from 10 to 25 percent by the end of this week. He also said new tariffs would go up on an additional $325 billion worth of goods. That tranche of goods, to be hit with tariffs “shortly,” would see levies at a rate of 25 percent.The question now is how Beijing will respond. China’s vice premier Liu He was about to travel to the U.S. in what the world had widely thought would be the final sprint to a trade deal. As of Monday, a Chinese spokesman said that a trade delegation would still make the trip, although exactly who would show up was unclear. President Trump seems to be emboldened by a series of strong jobs reports in the U.S., while China’s economy has already begun to slow.Related: Nigeria Shuts In More Oil After Protests In Niger DeltaIt is unclear if Trump will follow through on the threat. In various fights over the last two years, one of his negotiating tactics is to issue over-the-top threats in an effort to browbeat his counterpart into making concessions. Often he secures a minor or even a cosmetic concession, he declares victory and scraps his threat (see: North Korea).
US crude rises 31 cents, settling at $62.25, after tumbling on Trump’s tariff threat – Oil futures edged higher in volatile trade on Monday as rising tensions between the United States and Iran buoyed prices, which earlier touched a one-month low after U.S. President Donald Trump said he may raise tariffs on Chinese goods. U.S. West Texas Intermediate crude futures settled 31 cents higher at $62.25 per barrel on Monday. WTI hit $60.04 earlier in the session, its lowest since March 29. Brent crude futures rose 39 cents to $71.24 per barrel, after earlier hitting its lowest since April 2 at $68.79. Additional buying was sparked after WTI broke through $62 a barrel in early afternoon trade, said Bob Yawger, director of energy futures at Mizuho in New York. Injecting risk premium into the market, the United States is deploying a carrier strike group and a bomber task force to the Middle East to send a clear message to Iran that any attack on U.S. interests or its allies will be met with “unrelenting force,” U.S. national security adviser John Bolton said on Sunday. “You’re seeing those increasing geopolitical tensions,” said Phil Flynn, an analyst at Price Futures Group in Chicago. The deployment comes after the Trump administration tightened energy sanctions on Iran last week in a bid to drive the Islamic Republic’s oil exports to zero. The U.S. stopped issuing sanctions waivers that allow some of Iran’s biggest customers to import limited amounts of Iranian crude oil. Elsewhere, top oil exporter Saudi Arabia raised its crude oil prices for June to its Asian and European customers, and cut prices to the United States, a signal that Riyadh is in no hurry to boost oil supply ahead of an OPEC meeting next month.
Saudi Exports Send Oil Prices Falling – Oil prices seesawed at the start of the week, falling initially on Monday after President Trump reignited the trade war, only to rebound on fears of rising U.S.-Iran tensions. Oil dropped sharply again in early trading on Tuesday, following news that Saudi Arabia would send more oil to Asia. The oil markets are on edge after Trumpissued a threat to hike tariffs at the end of this week. He blamed China for slow-walking trade talks, and said that the 10 percent tariffs on $250 billion worth of goods would rise to 25 percent, while a 25 percent tariff on a further $350 billion worth of goods would also go into effect. Iran will restart parts of its nuclear program in response to relentless pressure from the U.S. and the Trump administration’s own withdrawal from the 2015 nuclear accord. President Hassan Rouhani said that Iran would reduce some of its “minor and general” commitments. Iran also said it would take “reciprocal actions” to the U.S. withdrawal from the agreement. The development comes shortly after the U.S. sent warships to the region as a “message” to Iran. . Oil fell after Saudi Arabiasaid that it would increase shipments to Asia to offset declines from Iran. Sources told Bloomberg that India may see an additional 200,000 bpd from Saudi Arabia. . Oil facilities in Nigeria’s Nembe region have been temporarily shut down due to protests. Leaks along the Nembe Creek Trunkline, one of two major pipelines for Bonny light, had previously forced a shut down. The latest outage will keep Bonny light under force majeure. In an effort to beat out Chevron in its pursuit for Anadarko Petroleum, Occidental Petroleum sweetened its offer by offering more cash instead of stock. The revised offer of $76 per share will breakdown to $59-per-share in cash. That offer comes on top of the promise by Berkshire Hathaway to invest $10 billion into the combined company, as well as the agreementbetween Occidental and Total SA for the French oil company to buy up Anadarko’s African assets for $8.8 billion. On Monday, Anadarko said it was convinced, and announced that the Occidental offer was the “superior proposal.” It is unclear if Chevron will up the ante. The IEA said that investment in renewables stagnated last year. “After nearly two decades of strong annual growth, renewables around the world added as much net capacity in 2018 as they did in 2017, an unexpected flattening of growth trends that raises concerns about meeting long-term climate goals,” the IEA wrote. Last year, the world added 180 GW of renewable energy, the same increase as the year before and the first time since 2001 that net capacity additions did not expand year-on-year. The IEA said that level of growth is only about 60 percent of what is needed for the world to hit its climate targets in the long run.
Oil drops 1.4% to 5-week low, settling at $61.40, as US-China trade war intensifies -Oil prices tumbled on Tuesday as renewed doubts over U.S.-China trade talks stoked concerns over global growth, but U.S. sanctions on Iran and Venezuela tightened supply and helped to stem losses. U.S. President Donald Trump on Sunday said he would raise tariffs on $200 billion worth of Chinese goods from 10-25% by Friday. The comments dragged on both Asian and U.S. stock markets. U.S. West Texas Intermediate crude futures settled 85 cents lower at $61.40 per barrel, dropping 1.4% to the weakest closing price since March 29. Brent crude oil futures fell $1.31, or 1.8%, $69.93 per barrel around 2:30 p.m. ET (1830 GMT), on pace for the lowest settle since April 4.“An escalation in the U.S.-China trade war has brought oil prices under renewed pressure,” said Abhishek Kumar, head of Analytics at Interfax Energy in London. “The spat has reinvigorated demand-side concerns, given that the conflict has been adversely impacting prospects for global economic growth.” On the supply side, oil markets remain tense as the United States has tightened sanctions on Iranian oil exports and plans to bulk up its forces in the world’s top oil-exporting region. U.S. officials announced on Sunday that the movement of the Abraham Lincoln carrier strike group and a bomber task force towards the Middle East was meant to counter “credible threats,” but Tehran dismissed the move as “psychological warfare.” “The threat of military action with Iran appears to have heightened … This has allowed the oil complex to gain some footing after WTI has been beaten down during the past couple of weeks by some unexpectedly large crude supply increases,”
Oil Algos Confused By Bigger Than Expected Crude Build, Gasoline Draw – Oil prices tumbled today (after ripping higher yesterday along with everything else) as Trump’s tariff-threats appear to be taken more seriously by market participants.“There are concerns about the broad economic environment,” said Michael Tran, a commodity strategist at RBC Capital Markets LLC in New York. “Clearly, the biggest risk to the oil market right now is the Trump factor coupled with macro headwinds.” After last week’s surprisingly large crude build, all eyes are on API data tonight for hints at whether the extreme long positioning in the energy complex will be squeezed any further. API:
- Crude +2.81mm (+1.2mm exp)
- Cushing +618k
- Gasoline -2.833mm
- Distillates -834k
Another bigger than expected crude build last week but draws in gasoline and distillates (again) offset the bearish bias of the build… American drillers have boosted output to a record while pushing nationwide stockpiles to the highest since September 2017. WTI was testing down towards a $60 handle ahead of the data and kneejerked modestly higher after the print, despite the crude build…
Oil Falls After Third Consecutive Crude Build – The American Petroleum Institute (API) reported a build in crude oil inventory of 2.81 million barrels for the week ending May 3, coming in over analyst expectations of a 744,000-barrel buildup in inventories. Last week, the API reported a surprise buildup in crude oil of 6.81 million barrels. A day later, the EIA reported an even larger build of 9.9-million-barrels. Including this week’s data, the net build is now 20.92 million barrels for the 19-week reporting period so far this year, using API data. Oil prices fell sharply on Tuesday as the China-US trade war continues, sparking fears that global growth will be disappointing, despite a tightening of oil supplies in Venezuela and Iran in the wake of US sanctions. WTI was trading down on Tuesday before the data release at $60.74, down $1.51 (-2.43%) on the day at 12:42pm, but down week on week by more than $3 per barrel. The Brent benchmark was also trading down on the day at $69.47, down $1.77 (-2.48%) at that time. The Brent benchmark was also significantly down week on week. The API this week reported a draw in gasoline inventories for week ending May 3 in the amount of 2.833 million barrels. Analysts estimated a draw in gasoline inventories of 917,000 barrels for the week. Distillates fell by 834,000 barrels for the week, while inventories at Cushing gained 618,000 barrels. By 4:41pm EST, WTI was trading down at $60.74 and Brent was trading down at $69.47.
Oil Prices Extend Losses On Growth Worries – – Oil prices fell on Wednesday to extended losses from the previous session as renewed doubts over U.S.-China trade talks stoked concerns over global growth. Mixed trade data from China also added to economic uncertainty while surging China crude imports and U.S. sanctions on crude exporters Iran and Venezuela helped to limit the overall downside. Benchmark Brent crude dropped 0.6 percent to $69.47 per barrel, while U.S. West Texas Intermediate (WTI) crude futures were down 0.4 percent at $61.16 per barrel. After the U.S. confirmed that it planned to raise tariffs on $200 billion of Chinese goods, investors remained edgy ahead of trade talks on Thursday and Friday in Washington. Chinese trade data proved to be a mixed bag. While exports unexpectedly shrank 2.7 percent in April from a year earlier, imports surprised with their first increase in five months. China’s crude oil imports in April hit a record high of 10.68 million b/d, rebounding from 9.3 million b/d in March, preliminary data from the General Administration of Customs showed. The Organization of the Petroleum Exporting Countries, Russia and other producers will meet in June to decide their output policy for the rest of the year. Saudi Arabia, OPEC’s de-facto leader, would raise its crude oil production to meet market needs arising from U.S. sanctions on Iran, U.S. Energy Secretary Rick Perry said on Tuesday.
WTI Pops After Surprise Crude Draw – Oil rallied overnight from a five-week low as concern over supply losses from Iran to Russia overrode an API-reported rise in American stockpiles and trade-war fears.“There are concerns about the broad economic environment,” said Michael Tran, a commodity strategist at RBC Capital Markets LLC in New York. “Clearly, the biggest risk to the oil market right now is the Trump factor coupled with macro headwinds.”After last week’s surprisingly large crude build, all eyes are on this week’s data for hints at whether the extreme long positioning in the energy complex will be squeezed any further. DOE
- Crude -3.96mm (+1.9mm exp)
- Cushing +821k
- Gasoline -596k
- Distillates -159k
After the prior week’s huge build, crude stockpiles were expected to build modestly (as API reported) but instead crude saw a large drawdown (3.96mm) and gasoline and distillates also drewdown. However, Bloomberg’s Catherine Ngai notes that while we saw that big headline draw in crude, it’s important to note that inventories in the Midwest jumped by 1.66 million barrels. That might’ve been caused by some refinery hiccups in the region as well as the open arb from Permian and Midcon into Cushing.Saudi imports hit a record low…
Oil rises 1.2%, settling at $62.12, after surprise drop in US crude stockpiles – Oil futures rose on Wednesday, boosted by a surprise drawdown in U.S. crude stockpiles, but an escalating U.S.-Chinese trade fight limited oil’s gains as investors worried about the global outlook for energy demand. U.S. West Texas Intermediate crude futures settled 72 cents higher at $62.12 per barrel, posting a 1.2% gain. Brent crude oil futures rose 49 cents, or 0.7%, to $70.37 per barrel on Wednesday. U.S. crude inventories fell by 4 million barrels in the week to May 3, the Energy Information Administration said. Analysts had expected an increase of 1.2 million barrels. Gasoline stocks fell by 596,000 barrels, while distillate inventories fell by 159,000 barrels, the data showed. “The report was bullish … due to a sharp decline in imports,” said John Kilduff, a partner at Again Capital LLC in New York. “The fall in crude oil inventories also came despite lowered refinery operating rates.” Prices have gained more than 30% so far this year as the global supply outlook has tightened due to U.S. sanctions on crude exporters Iran and Venezuela, as well as supply cuts by OPEC, Russia and their allies. Still, prices were pressured by the trade war between the world’s two largest economies. The United States will raise tariffs to 25% from 10% on $200 billion worth of Chinese imports effective Friday, according to a notice posted to the Federal Register. President Donald Trump had threatened the duties after China backtracked on a trade deal. Chinese Vice Premier Liu He will travel to Washington for two days of trade talks this week, China said on Tuesday. “The market is fearful that the other shoe is going to drop on the global economy if we get into a trade war; it will hurt oil demand,”
Oil falls on trade dispute despite surprise drop in US crude inventories – Oil prices steadied on Thursday as an escalating trade battle between the United States and China counteracted upward pressure from a surprise decline in U.S. crude inventories. Heightened tensions between the world’s two biggest economies have clouded the outlook for global growth, which influences oil demand expectations. Global equity marketswere also hit. Brent crude oil futures were down 3 cents at $70.34 a barrel by 7:12 a.m. ET (1112 GMT), heading for their second consecutive weekly loss. Earlier in the session they fell as low as $69.57 a barrel. U.S. West Texas Intermediate crude futures were at $61.43 per barrel, down 69 cents and set for a third week of losses. “Supply-side issues are bigger that those due to demand growth worries.” U.S. President Donald Trump said on Wednesday that China “broke the deal” in trade talks with Washington and would face stiff tariffs if no agreement is reached. Higher tariffs are set to take effect on Friday, during Chinese Vice Premier Liu He’s two-day visit to Washington which starts Thursday. “The oil market has come under renewed pressure this morning, with the hope of a China/U.S. trade agreement fading,” ING said in a note. “However, fundamentally the oil market remains constructive, with the global balance tightening, and the potential for a number of supply-side risks (remaining).” Oil prices have had some support from signs of tighter global supply on the back of production cuts by OPEC and allies including Russia.
Oil Supply Shortages Countered By Trade War – Oil prices were flat in early trading on Friday, sandwiched between supply outages and the escalating U.S.-China trade war. The U.S. hiked tariffs on $200 billion of Chinese goods from 10 to 25 percent on Friday, while leaving open the possibility that trade talks could continue. Trump also began the process of new tariffs on another $325 billion in Chinese imports. China vowed to implement retaliatory measures. “The opportunity window for avoiding a trade war is closing fast,” Citigroup wrote in a note to clients. Global financial markets were largely stable on Friday, suggesting that major investors still think that a resolution can be reached. “Our base case remains that the U.S. and China will eventually reach some kind of accord,” said Mark Haefele, global chief investment officer for the Swiss bank UBS, in a note. As the sweet spots in the U.S. shale patch become crowded, it may be more costly and difficult to keep production elevated, according to a new report. While drilling techniques have succeeded in growing output, the industry may simply be front-loading production. Crude inventories fell and oil production also dipped in the most recent report from the EIA. That ended a string of inventory increases and offers some evidence that the market is not oversupplied. Brent crude futures have opened up a steep backwardation, evidence that the physical market for crude is tightening. Yet, spot prices have fallen in the last two weeks, and analysts are puzzled at the discrepancy. “There is no true sign of weakness in the physical market,” Olivier Jakob, managing director of consultant Petromatrix GmbH, told Bloomberg. “You have lower exports from Venezuela, you’ve got sanctions for Iran, Libya which is still a risk.” The U.S.-Iran conflict escalated this week, with rhetoric on both sides growing more heated. Iran said it would withdraw from parts of the nuclear deal, and top U.S. officials hinted at a military response. Washington also imposed sanctions on metals exports from Iran. Iran warned the EU to step up incentives or else it will fully withdraw from the 2015 accord. Meanwhile, Iran’s oil exports are plunging. Saudi Arabia is holding firm on oil exports despite the tightening market. Saudi oil exports are expected to remain below 7 mb/d in June, with production also below the OPEC+ ceiling.
Oil Inches Higher As Rig Count Continues To Decline – The number of active oil and gas rigs fell again in the United States this week according to Baker Hughes, after a string of losses in the weeks prior, keeping the overall rig count well below year-ago levels for a fourth week in a row. The total number of active oil and gas drilling rigs in the United States fell by 2 according to the report, with the number of active oil rigs falling 2 to reach 805 and the number of gas rigs holding steady at 183. The combined oil and gas rig count is 988, with oil seeing a 39-rig decrease year on year and gas rigs down 16 since this time last year. The combined oil and gas rig count is down 57 year on year. At 10:43am EST, WTI was trading up slightly $0.05 (+0.08%) at $61.75 – up on the day, but down on the week as traders struggle to accurately assess the state of the oil market with Iran sanction waivers ending and the China-US trade war taking a turn for the worse. The Brent benchmark was trading up $0.21 (+0.30%) at $70.60, down slightly week on week. While the United States has seen a significant drop in the number of active oil and gas rigs, US oil production continues to rise. US crude oil production fell slightly for week ending May 3, standing at 12.2 million barrels, easing off last week’s all-time high of 12.3 million barrels per day. Canada’s rig count increased by 2, with the number of active oil rigs up by 5, and the number of gas rigs holding falling by 3 to reach 41. Canada’s oil rigs are now down 10 year on year, with gas rigs down 6 year on year. WTI was trading up 0.50% on the day at 1:08pm EST, with Brent up 0.70%.
Oil prices steady as supply factors offset US-China trade tensions – Oil prices were little changed on Friday even as the start of U.S. President Donald Trump ‘s tariff hike on $200 billion of Chinese goods kept tensions high in the trade dispute between the world’s two biggest economies. Brent crude oil was up 14 cents at $70.53 a barrel around 10:30 a.m. ET (1430 GMT), having touched a peak of $71.23. U.S. West Texas Intermediate crude futures were down 4 cents at $61.66, having earlier hit $62.49. Both contracts were on track for small weekly losses. The United States escalated its tariff war with China on Friday by increasing levies to 25% for $200 billion worth of Chinese goods, but negotiations were set to continue on Friday. Trump issued orders for the tariff increase, saying China “broke the deal” by reneging on previous commitments. He also said he would start the “paperwork” on Friday for 25% duties on a further $325 billion of Chinese imports. Prices were supported by tighter supply amid continuing production cuts by OPEC and U.S. sanctions on Iran and Venezuela. Growing trade between the world’s two largest oil consumers could affect oil demand. The two countries together accounted for 34% of global oil consumption in the first quarter of 2019, data from the International Energy Agency shows. While trade war concerns have weighed on prices this week, “the spreads clearly point towards a tight market”, ING bank said. The July Brent crude contract was trading at nearly $1 a barrel above the August contract in a market structure known as backwardation. RBC’s Croft: Rising geopolitical tensions could push oil prices higher
Oil steady, ends week lower as trade tensions weigh (Reuters) – Oil prices were mostly steady on Friday, ending the week slightly lower as trade tensions stoked by a U.S. move to hike tariffs on Chinese goods overshadowed tightened global supplies and expectations of rising U.S. refining demand. Brent crude oil settled 23 cents, or 0.4%, higher at $70.62 a barrel, but posted a weekly loss of 0.3%. U.S. West Texas Intermediate (WTI) crude futures ended 4 cents lower at $61.66, with a weekly loss of 0.5%. After a volatile week, investors were worried over the possibility of a protracted and bitter U.S.-China trade war, despite last-minute efforts to salvage a deal. U.S. President Donald Trump on Friday said he was in no hurry to sign a trade deal with China as Washington imposed a new set of tariffs on Chinese goods and negotiators ended a second day of talks. Growing trade tensions between the world’s two largest oil consumers could affect oil demand. The United States and China together accounted for 34% of global oil consumption in the first quarter of 2019, data from the International Energy Agency showed. Prices gained some support on Friday as investors anticipated U.S. Gulf Coast and Midwestern refineries, which are coming out of seasonal maintenance, to boost oil demand ahead of the U.S. summer driving season. “Crude oil has more potential for upside,” said Tom Kloza, chief oil analyst at the Oil Price Information Service. “With Gulf refineries starting up, demand is going to be significantly above supply for the next 100 days or so.” Investors also focused on tightened supplies following OPEC-led production cuts since the start of the year. Investors believe the Organization of Petroleum Exporting Countries and its producer allies will extend the six-month output-cut agreement in coming weeks. “We’re waiting to see whether the Saudis signal their extension of the production cut,” in coming weeks, said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut. “The market is finding its next driver.” Markets have been buoyed further by Washington’s bid to cut Iran’s oil exports to zero. The United States reimposed sanctions on Iran in November after pulling out of a 2015 nuclear accord between Tehran and world powers last year. It initially allowed Iran’s biggest buyers to continue purchasing oil via waivers for another six months, but those exemptions ended at the beginning of May.
Saudi Arabia’s oil exports to stay below 7 mln bpd in June- Gulf source (Reuters) – Saudi Arabia is expected to keep its crude exports below 7 million barrels per day in June, while output would stay under its production quota under a global deal to cut oil supply, a Gulf source familiar with Saudi oil plans said on Wednesday. “Moderate requests have been received from customers for June liftings, which will all be met, most notably from countries which previously had waivers from sanctions against purchases of Iranian crudes that were recently discontinued by the U.S. administration,” the Gulf source said. “Based on such requests, Saudi oil production for the month of June is expected to remain below its OPEC+ commitment, while exports will also stay under 7 million barrels per day.” The Gulf oil source also said that based on market conditions so far, current oil production level by OPEC and its allies should be sufficient to bring global oil inventories back to balance by the end of the year.
Saudis To Meet All Ex-Iran Crude Orders As Possible OPEC Collapse Looms – Saudi officials have signaled the kingdom plans to meet all orders from former buyers of Iranian oil for the month of June. US Energy Secretary Rick Perry confirmed in statements made Tuesday that OPEC’s de facto leader Saudi Arabia would increase its oil production to make up for choked supply resulting from US sanctions efforts that aim to bring Iran’s crude exports “down to zero”. However, Azerbaijan’s oil minister said the Saudis informed him that no firm decisions would be made on production levels for the whole year in unilateral fashion; instead, Riyadh plans to seek backing for any extreme measures during OPEC’s June meeting at the oil cartel’s headquarters in Vienna, Austria – where future production policy will be hashed out. This has left many asking the obvious question: will Iran soon pull out of OPEC altogether? It appears we’ll soon find out after OPEC’s June meeting. Saudi Arabia plans to meet all the requests for oil purchases it has received for June, notably from countries that had to stop buying Iranian crude because of the recent U.S. sanctions. The world’s biggest oil exporter has received moderate requests from customers for shipments next month, including from former buyers of Iran’s oil, according to a Persian Gulf person familiar with Saudi plans, who asked not to be identified because the matter is confidential.
The Saudi Shia: Between an Iranian rock and a Saudi hard place –Last month, Saudi Arabia quietly beheaded 37 people, mostly Shia men from the country’s Eastern Province. They had all been sentenced in what international human rights organisations called “grossly unfair” trials – some for “spying” for Iran and others for “joining a terrorist” group. Many of them had alleged they were tortured into signing false confessions. None of the bodies was given back to the families, who were told not to hold funerals. Two of them were pinned to a post for the public to see – a measure clearly meant to stir fear within the Shia minority, which makes up between 10 and 15 percent of the Saudi population and is mostly based in the Eastern Province.Although the Saudi authorities have tried to present this case as a national security issue – trying the 37 men in a special court that deals with terrorism and portraying them as Iranian agents – it has little to do with either terror acts or Iranian influence. Shia disenfranchisement in Saudi Arabia has deep historical roots and only recently has been instrumentalised in the growing regional conflict between Riyadh and Tehran. The only “crime” of the Shia men who were executed in April and the many more who are still being held in Saudi jails was to demand the end of systemic discrimination and human rights abuses.
174 Yemeni Fishermen Kidnapped by Saudi Arabia – The Saudi-led Coalition kidnapped more than 170 Yemeni fishermen and seized their boats while they were fishing near the port city of Hodeida this past week. To demonstrate clearly that they posed no threat, the fishermen hung large white flags on the back of their boats and waved fish in the air as Coalition military vessels approached their boats. “A gunboat approached and forced us to get off the boat, then a Saudi soldier told us to follow them to the warship. I managed to escape but the others could not,” Salem Arud told MintPress. “We are not Houthis, just poor fishermen who went out to make a living in the sea.” “All told, 174 fishermen and 10 boats were abducted by Saudi-led forces,” Mohammed al-Hassani, head of the Forum of Tahamah Fishermen, told MintPress. “Despite Sweden’s truce, Coalition forces have continued to prevent Yemeni fishermen from fishing and if the fishermen dare to sail, they will be killed or detained.” After a ceasefire agreement for the port city of Hodeida was reached in Sweden late last year, thousands of fishermen decided to take their small boats into deeper waters off of Hodeida’s coast, but have faced arrest or even been the target of airstrikes by the Saudi-led Coalition. Meanwhile, the families of the kidnapped fishermen organized a protest asking the Coalition to release their loved ones. “Saudi forces kidnapped my sons. Their fate is still unknown,” a father of two fishermen told MintPress during the protest. According to the Legal Center for Rights and Development in Yemen, a non-governmental organization monitoring human-rights violations, the destruction of 433 fishing boats by the Saudi-led Coalition has robbed many of Hodeida’s residents of their sole source of income and ability to feed their families.
US deploys aircraft carrier and bombers after ‘troubling indications’ from Iran – The US is sending an aircraft carrier and a bomber task force to the Middle East in response to a “number of troubling and escalatory indications and warnings” from Iran, the national security advisor John Bolton has said. It was unclear on Sunday night what Iranian actions Bolton was referring to. There have been no recent incidents in the Persian Gulf where US and Iranian navies are routinely in close proximity and the Abraham Lincoln carrier strike group was already bound for the Gulf a month before Bolton made his announcement. However, the tone of Bolton’s declaration looked likely to escalate tensions in the region, and it comes days after the Iranian government expressed concern that Bolton and other hawks were seeking to draw the Trump administration into a new war. In a written statement, Bolton said the ships and planes were intended “to send a clear and unmistakable message to the Iranian regime that any attack on United States interests or on those of our allies will be met with unrelenting force.” “The United States is not seeking war with the Iranian regime, but we are fully prepared to respond to any attack, whether by proxy, the Islamic Revolutionary Guard Corps, or regular Iranian forces,” the statement said. Rotations of aircraft carrier “strike groups” and bomber fleets happen routinely. At present there are none in the US Central Command region, which encompasses the Middle East and Afghanistan. The Abraham Lincoln carrier strike group, left its base in Norfolk, Virginia, on 1 April and was due to sail to the Mediterranean for exercises and then on to the Gulf.
US threatens Iran with war – Will US bombs and missiles soon be raining down on Iran? The dispatch of US warplanes and an aircraft carrier strike group to the Persian Gulf region with the express aim of sending “a clear and unmistakable message” that Washington is ready to attack Iran, along with other bellicose US actions, indicates that preparations are far advanced for a provocation that could – and most likely would – trigger a catastrophic war.On Sunday evening, US National Security Adviser John Bolton announced that the aircraft carrier USS Abraham Lincoln and US Air Force bombers were being deployed to threaten Iran. Claiming that there were “troubling and escalatory indications and warnings,” Bolton vowed “that any attack on United States interests or those of our allies will be met with unrelenting force.” “We are fully prepared,” added Bolton, “to respond to any attack, whether by proxy, the Islamic Revolutionary Guard Corps, or regular Iranian forces.”Bolton’s threats were echoed by fellow anti-Iran war-hawk, US Secretary of State Mike Pompeo. He too advanced a sweeping justification for possible military action against Iran, including any “attack” on US “interests” and those of its allies by a long and diverse list of groups that Washington castigates Tehran for backing, from Shia militias in Iraq and Houthi fighters in Yemen to the Palestinian group Hamas and Lebanon’s Hezbollah.“We will hold the Iranians accountable for attacks on American interests,” Pompeo told reporters late Sunday, “The fact that those actions take place, if they do, by some third-party proxy, whether that’s a Shia militia group or the Houthis or Hezbollah, we will hold the Iranians – Iranian leadership – directly accountable for that. With these “warnings” Washington has effectively proclaimed license to manufacture, at a time of its choosing, a pretext for launching war on Iran. An “attack” on the “interests” of the US and its allies could include virtually anything, from a clash between one of the various Shia militias in Iraq and any of the 5,500 US troops that remain stationed there, to the death of an Israeli-American citizen by a crude rocket launched from the Gaza Strip.
White House Accuses Iran of Planning to Attack US Troops in Iraq – A US buildup of military forces in the Middle East and threats to use force against Iran are now being justified by US officials who claim to have “clear indications” that Iran was plotting to attack US forces in Iraq according to some reports. Exactly what these “clear indications” actually were is unclear. Israeli media, however, gave credit to Israeli intelligence, saying they’d passed on their own report of a “possible Iran plot,” and the White House went from there. This intelligence doesn’t seem great, as officials say that Mossad was unclear what Iran was actually planning to do, but that tensions are on the rise, and there were several scenarios that Mossad came up with that might happen. Israel is always keen to drum up tensions between the US and Iran at any rate, so they probably didn’t need a lot of confidence to pass it along to the US and hope something came of it. Iran, by contrast, accused the US of “talking up” the threat as a justification for a buildup that the US Navy had scheduled some time ago. The Navy has already scheduled the aircraft carrier deployment nearly a month ago.
U.S. targets Iran’s metals for sanctions, Tehran relaxes nuclear deal compliance (Reuters) – U.S. President Donald Trump on Wednesday imposed new sanctions on Iran, targeting revenue from its exports of industrial metals, the latest salvo in tensions between Washington and Tehran over a 2015 international accord curbing the Islamic Republic’s nuclear program. Iran had announced hours earlier that it was relaxing some restrictions on its nuclear program, steps that stopped short of violating the deal with world powers for now, but threatening more action if countries do not shield it from U.S. sanctions. An executive order issued by Trump covers Iran’s iron, steel, aluminum, and copper sectors, the government’s largest non-petroleum-related sources of export revenue and 10 percent of its export economy, a White House statement said. “Tehran can expect further actions unless it fundamentally alters its conduct,” Trump said. The administration says the nuclear deal, negotiated by Trump’s predecessor Barack Obama, was flawed as it is not permanent, does not address Iran’s ballistic missile program and does not punish it for waging proxy wars in the Middle East. Tensions between the two countries were already high when the Trump administration said last weekend that it was deploying a carrier strike group and bombers to the Middle East in response to what it said were “troubling indications and warnings” from Iran. On Wednesday, a senior administration official said the United States was “not escalating militarily against Iran” and accused Iran of being “provocative.” It was in Iran’s best interests to continue complying with the pact, the official said. The executive order effectively bans entities from the purchase, acquisition, sale, transport, or marketing of those minerals and their products from Iran or face sanctions.
Iran to resume parts of shuttered nuclear program after US pulls out of deal: report – Iran will resume certain parts of its shuttered nuclear program in the wake of U.S. withdrawal from the 2015 nuclear deal but will not pull out of the deal entirely, Reuters reported, citing state media.Iranian President Hassan Rouhani plans to announce the scaling back of some “minor and general” commitments under the deal on Wednesday, which marks the anniversary of President Trump’s announcement that the U.S. would exit the arrangement, according to the news service.“The Islamic Republic of Iran in reaction to the exit of America from the nuclear deal and the bad promises of European countries in carrying out their obligations will restart a part of the nuclear activities which were stopped under the framework of the nuclear deal,” a source told the state-run IRIB news agency Monday, according to Reuters. The details of what commitments the Iranian government plans to scale back are unclear, but a Wall Street Journal report quotes European diplomats who believe the nation may devote more research into centrifuges that could produce enriched uranium. The report comes amid increasing tensions between the U.S. and Iran. On Sunday evening, national security adviser John Bolton announced the U.S. would deploy the USS Abraham Lincoln carrier strike group and a bomber task force “in response to a number of troubling and escalatory indications and warnings.”
Iran Urges Diplomacy as US Ramps Up “Wildly Reckless” Threats of War – In the face of belligerent threats of war from the Trump administration, Iran on Wednesday took what some observers described as rational steps to reduce compliance with the nuclear accord to pressure European nations to live up to their end of the deal.“The path we have chosen today is not the path of war, it is the path of diplomacy,” Iranian President Hassan Rouhani said in a speech Wednesday, which marks the one-year anniversary of U.S. President Donald Trump’s violation of the nuclear agreement.“It is not us who has left the negotiation table,” Rouhani added. Rouhani’s announcement came just days after U.S. national security adviser John Bolton used the routine deployment of an American aircraft carrier and bomber task force to threaten Iran with “unrelenting force” – a move critics denounced as a dangerous step in the direction of all-out war. The Iranian president said European signatories of the nuclear accord have 60 days to negotiate new terms that would mitigate the impact of crippling sanctions imposed by the U.S. If the 60-day deadline is not met, Rouhani said, Iran will end limits on uranium enrichment. Matt Duss, foreign policy adviser for Sen. Bernie Sanders (I-Vt.), said that while American war hawks often characterize Iran as “a crazy irrational regime that can’t be negotiated with,” Iran “is responding pretty rationally to Trump’s wildly reckless and irrational Iran policy.”
Trump ratchets up pressure on Iran with sanctions on exports of steel, copper and other metals – President Donald Trump on Wednesday ordered new sanctions placed on Iranian metals, Tehran’s largest non-petroleum-related sources of export revenue.It is the administration’s latest effort to pressure the regime over its support for weapons proliferation and extremist groups in the Middle East.”Today’s action targets Iran’s revenue from the export of industrial metals – 10 percent of its export economy – and puts other nations on notice that allowing Iranian steel and other metals into your ports will no longer be tolerated,” Trump said in a statement about the sanctions. Trump added that Tehran “can expect further actions unless it fundamentally alters its conduct” and said that he looks forward to “meeting with the leaders of Iran in order to work out an agreement and, very importantly, taking steps to give Iran the future it deserves.” Wednesday’s executive order targets Iranian iron, steel, aluminum and copper sectors in hopes of denying the Iranian government the ability to “provide funding and support for the proliferation of weapons of mass destruction, terrorist groups and networks, campaigns of regional aggression, and military expansion,” according to Trump. “It remains the policy of the United States to deny Iran all paths to both a nuclear weapon and intercontinental ballistic missiles, and to counter the totality of Iran’s malign influence in the Middle East.”The Trump administration also took aim at Iranian oil by effectively ordering countries worldwide to stop buying Tehran’s oil or face sanctions of their own. Brian Hook, the State Department’s Iran special envoy, said Wednesday during a briefing that the U.S. would not grant sanction waivers to any countries buying Iranian oil. The latest revelation comes hours after Tehran announced it was relaxing some restrictions on its nuclear program but would not violate a 2015 accord with Russia, China, Britain, France, Germany and the United States.
‘We reject any ultimatums’: Europe responds firmly to Iran’s nuclear deal threat – The EU has responded firmly to Iran’s threat to roll back its 2015 nuclear deal commitments, saying in a statement Thursday that it rejects any ultimatums but remained committed to the multilateral pact.”We reject any ultimatums and will assess Iran’s compliance on the basis of Iran’s performance regarding its nuclear-related commitments under the JCPOA and the NPT,” the joint statement from the EU high representative and the foreign ministers of France, Germany and the U.K. read, referring to the deal itself – the Joint Comprehensive Plan of Action – and the Treaty on the Nonproliferation of Weapons, respectively.In essence, the EU is saying that inspectors, not declarations, will determine how it approaches Iran going forward. And that may take some time: Data on Iran’s nuclear activities will be unclear until the International Atomic Energy Agency publishes its quarterly report in August. Iranian President Hassan Rouhani announced Wednesday his country would end its compliance with two particular conditions of the nuclear deal if Europe did not step in to protect the country from U.S. sanctions, re-imposed after the President Donald Trump administration withdrew from the agreement one year ago.Rouhani essentially gave Europe an ultimatum: Choose Iran over the U.S. by resuming Iranian trade in violation of sanctions, or see Iran return to higher levels of uranium enrichment. Tehran said it would restart construction on its Arak nuclear reactor, which was capable of producing weapons-grade plutonium and had been shut down as part of the 2015 deal.”We remain fully committed to the preservation and full implementation of the JCPOA, a key achievement of the global nuclear non-proliferation architecture, which is in the security interest of all,” the EU statement read. “We strongly urge Iran to continue to implement its commitments under the JCPOA in full as it has done until now and to refrain from any escalatory steps.”
China and India May Be Europe’s Last Hope to Save the Iran Deal – – The European Union will defend the Iran nuclear accord despite Tehran’s decision to backtrack on its commitments in response to US sanctions, diplomats believe, but European powers expect it to collapse without a deal to sell Iranian oil to China or India, Reuters reported.Britain, France, and Germany, which signed the 2015 deal along with the United States, China and Russia, are determined to show they can compensate for last year’s U.S. withdrawal from the accord, protect trade and still prevent Tehran from developing a nuclear bomb.But with Iran’s economy dependent on crude exports that are traded in U.S. dollars, a promised European trade channel to bypass American sanctions has proved complicated, is not yet operational, and may never be able to handle oil sales. “This situation now risks deteriorating, but it will be step by step and not a collapse all in one go,” said a senior European diplomat. A French diplomat talked of a “negative spiral” in which trade in food and medicines was simply not enough, while another European envoy spoke of Iran’s “phased exit” from the deal.The Iran accord, one of the West’s biggest foreign policy achievements until U.S. President Donald Trump pulled out in May 2018, lifted punishing United Nations’ sanctions on Iran in return for Iranian compliance with the deal.Iran has met its terms but Trump withdrew because he believes the accord did not curtail Tehran’s ballistic missile programme or address Iranian involvement in Syria’s civil war, something Europeans argue the 2015 deal was not designed to do.By reimposing punitive sanctions, the United States says it aims to dramatically weaken Iran’s clerical rulers and force Tehran to renegotiate a broader arms control deal.The European Union says that can still be done without tearing up the nuclear accord, which put strict limits on Iranian enrichment.
Iran appears to be restarting oil shipments to Syria as Trump turns up pressure – Tanker-tracking firms believe Iran is once again shipping crude oil to Syria, resuming the illicit trade as tensions with Washington rise and the Islamic Republic faces increasing international isolation. An Iranian delivery of approximately one million barrels of crude was made into the Syrian port of Baniyas during the first week of May, according to TankerTrackers.com and ClipperData, two groups that follows oil vessels. This would be the first Iranian oil delivery to Syria since the end of 2018, according to Samir Madani, founder of TankerTrackers. The suspected delivery comes one year after the U.S. unilaterally pulled out of an international nuclear agreement with Iran and just one week after the Trump administration tightened energy sanctions in an effort to push Iranian crude exports to zero. It also follows the deployment of a U.S. carrier strike group and bomber task force to the Middle East earlier this week. US and Iran both made ‘deliberately provocative’ gestures The US is being ‘deliberately provocative’ to Iran: Expert 2:34 AM ET Thu, 9 May 2019 | 02:52 Iran’s leadership in Tehran responded on Wednesday by announcing it will stop complying with key parts of the nuclear accord. The same day, Washington slapped new sanctions on Iranian metal exports. Analysts have widely predicted that Iran will step up efforts to smuggle oil into Syria and neighboring Iraq as the U.S. makes it more difficult for Tehran to ship oil to its few remaining customers, including China, India and Turkey. Madani, the TankerTrackers founder, has tracked Iranian vessels for nearly three years, both through data collected by the U.S. Coast Guard and what he calls, “eyes in the sky,” essentially visual data collected by a network of satellites. This allows the group to track tankers that may turn off their transponders – a common move for those selling oil off the markets. The most recent moves by an Iranian tanker, previously known as True Ocean, caught the attention of both tracking companies when the vessel made a series of unusual moves. The Suezmax tanker in question, now traveling as the Masal, is on the U.S Treasury’s list of vessels that has been used to move oil to Syria in the past.
Billion-Dollar Fleet Destroyed With One Missile – Iran Cleric Threatens To Sink US Carrier – At a moment the US carrier strike group ordered deployed to the CENTOM Persian Gulf region area of command has traversed the Suez Canal, and as multiple B-52 bombers have also landed in Qatar in response to “troubling and escalatory” threats by Iran against US troops in the region, a top American military commander in the region has threatened he’s ready to send an aircraft carrier through the vital Strait of Hormuz “if needed”. But should the US send a carrier through the key narrow oil shipping Persian Gulf choke point which is routinely patrolled by IRGC boats, one senior cleric has vowed the US Navy’s…“Billion-dollar fleet can be destroyed with one missile” – according to Iran’s ISNA News Agency Vice Admiral Jim Malloy, commander of the US Navy’s Bahrain-based Fifth Fleet, made the statements to Reuters on Friday.He oversees all US naval forces in the Middle East, and at the very moment the USS Abraham Lincoln Nimitz-class carrier makes its way into the area, the commander said, “If I need to bring it inside the strait, I will do so.” He added, “I’m not restricted in any way, I’m not challenged in any way, to operate her anywhere in the Middle East.”He didn’t specifically name the USS Abraham Lincoln during the telephone interview, but certainly the remarks were intentionally timed as a part of the White House’s ongoing “maximum pressure” campaign against Iran. Iran, for its part, has dismissed the “deployment” and the underlying threat Bolton touted Sunday night as requiring a response as “fake intelligence” and part of a US “psychological warfare” campaign – further noting the carrier strike group’s embarkation was pre-scheduled and merely used as a pretext for escalating threats. Of the latest claims that credible intelligence indicates Iranian actions against Americans in the region could be imminent, Malloy said the intelligence was linked “with actual activity that we observed.”
Rockets fired from Gaza day after Israel kills four Palestinians =A Palestinian has been killed in an Israeli air raid on the northern Gaza Strip, according to Gaza’s health ministry, amid a fresh escalation between Israel’s military and Gaza fighters. Imad Nseir, 22, was killed in Beit Hanoun after Israeli warplanes targeted multiple areas in the besieged enclave on Saturday morning after dozens of rockets were fired from Gaza into southern Israel. The latest flare-up comes after Israeli forces killed four Palestinians in two separate incidents on Friday. Al Jazeera’s Harry Fawcett, reporting from Jerusalem, said the barrage of rockets fired from Gaza came after an Israeli drone attack in the north of the strip early on Saturday, which injured three people. “We are looking at another military escalation, the first since last month’s in which we saw another exchange of air raids and rocket fire out of Gaza, which seemed to end with some hopes towards some kind of longer-term resolution,” he said. “There was a good deal of reporting about talks between Israel and Hamas mediated by Egypt with further relaxing of the situation likely to happen from the Israeli side,” he continued. “Hamas says so far all they have seen is the relaxation in maritime controls, allowing fishing out to 15 nautical miles from six, which has now been reduced again.”
Gaza rocket fire kills Israeli man amid escalating violence – CBS News Palestinian militants in the Gaza Strip on Sunday intensified a wave of rocket fire into southern Israel, striking towns and cities across the region, killing at least one person and seriously wounding three others in one of the bloodiest rounds of fighting since the 2014 war. At least eight Palestinians, including a pregnant woman and her 14-month-old niece, have also been killed. Israeli forces struck dozens of targets throughout Gaza, including militant sites that it said were concealed in homes or residential areas. The army also moved armored units toward the Gaza perimeter as the sides headed closer to all-out war. Moshe Agadi, a 58-year-old Israeli father of four, was struck in the chest by shrapnel in a residential courtyard from one of the 450 rockets fired from Gaza in less than 24 hours. Then a midday barrage hit Ashkelon again, wounding three people, including two seriously who were suffering from “multisystem trauma.” The Magen David Adom rescue service said another person was critically wounded when a rocket landed on The Israeli military has retaliated with some 260 airstrikes against militant targets in Gaza.
Israel steps up strikes as Gaza rocket attacks intensify – (AP) – Gaza militants fired hundreds of rockets into southern Israel on Sunday, killing at least four Israelis and bringing life to a standstill across the region in the bloodiest fighting since a 2014 war. As Israel pounded Gaza with airstrikes, the Palestinian death toll rose to 23, including two pregnant women and two babies. The bloodshed marked the first Israeli fatalities from rocket fire since the 2014 war. With Palestinian militants threatening to send rockets deeper into Israel and Israeli reinforcements massing near the Gaza frontier, the fighting showed no signs of slowing down. Israeli Prime Minister Benjamin Netanyahu spent most of the day huddled with his Security Cabinet. Late Sunday, the Cabinet instructed the army to “continue its attacks and to stand by” for further orders. Israel also claimed to have killed a Hamas commander involved in transferring Iranian funds to the group. Israel and Hamas, an Islamic militant group that seeks Israel’s destruction, have fought three wars since Hamas violently seized control of Gaza from Western-backed Palestinian forces in 2007. They have fought numerous smaller battles, most recently two rounds in March. While lulls in fighting used to last for months or even years, these flare-ups have grown increasingly frequent as a desperate Hamas, weakened by a crippling Egyptian-Israeli blockade imposed 12 years ago, seeks to put pressure on Israel to ease the closure. The blockade has ravaged Gaza’s economy, and a year of Hamas-led protests along the Israeli frontier has yielded no tangible benefits.
Israel hits offices of Turkish state news agency in Gaza – An Israeli airstrike hit the office of Turkey’s state-run news agency in Gaza, Turkey’s foreign minister said Saturday, calling it a “new example of Israel’s unrestrained aggression.”Israeli warplanes carried out dozens of retaliatory airstrikes across the Hamas-controlled Gaza Strip in response to a barrage of rockets fired from Palestinian militants as hostilities flared into a second day.Turkey’s state-run media reported that the building in which Anadolu Agency is located in Gaza was hit by at least five Israeli rockets after warning shots were fired. No deaths or injuries were reported. Turkish officials condemned the attack, which is likely to add fuel to already tense relations with Israel. Turkish President Recep Tayyip Erdogan slammed Israel for the bombing. “We strongly condemn Israel’s attack against Anadolu Agency’s office in Gaza,” Erdogan wrote on Twitter.
Netanyahu pledges ‘massive strikes’ in Gaza as death toll rises – Israeli Prime Minister Benjamin Netanyahu has ordered “massive strikes” on the Gaza Strip after a two-day escalation that killed 24 Palestinians and four Israelis. Israeli warplanes and gunboats continued to target the Gaza Strip on Sunday as fighters in the besieged enclave fired a barrage of rockets into southern Israel. A 34-year-old Hamas commander was killed in what the Israeli military described as a targeted strike. An army statement accused Hamad al-Khodori of “transferring large sums of money” from Iran to armed factions in Gaza. He was the fifth Palestinian reported killed on Sunday. Other Palestinian victims included two pregnant women and three infants. In the Israeli city of Ashkelon, a 58-year-old Israeli man was killed after being struck by shrapnel from a rocket attack. Two other Israelis, critically wounded in a separate rocket attacks on a factory on Sunday afternoon, later died. “This morning I instructed the IDF [the Israeli Army] to continue with massive strikes against terrorists in the Gaza Strip,” Netanyahu, who doubles as Israeli defence minister, said in a statement after consulting with his security cabinet on Sunday. He said he had also ordered “tanks, artillery and infantry forces” to reinforce troops already deployed near Gaza, a move that raised fears of a ground invasion. “Hamas is responsible not only for its attacks against Israel, but also for the Islamic Jihad’s attacks, and it is paying a very heavy price for it,” Netanyahu added.
Israel and Gaza militants agree to cease-fire after a weekend of violence – – An uneasy cease-fire settled over the cities of southern Israel on Monday after a weekend that brought a rain of 600 rockets from the Gaza Strip, but not all residents thought the truce was a good thing. Near the explosion-scarred house of Moshe Agadi, 58, who became the first Israeli since 2014 to die in rocket fire from Gaza, mothers took their children to play in a park after 48 hours of sheltering indoors. “Israel needs to stop this once and for all,” said Inna Kraysberg, 34, as her two young children played on a nearby slide. Four Israelis died in the violence, the worst round of fighting between Israel and militant factions in Gaza since Israel’s 2014 war with Hamas. In Gaza, 25 people were killed as Israel responded with airstrikes, bringing multistory buildings thundering to the ground. However, efforts by Egypt and the United Nations to broker a cease-fire bore fruit by the early hours of Monday, as armed factions in Gaza said they had agreed to a truce. Hamas and Islamic Jihad, the two largest militant groups in Gaza, confirmed that a cease-fire was in place. A spokesman for the office of Israeli Prime Minister Benjamin Netanyahu declined to comment on the reports, but the Israeli military said that protective restrictions for civilians in southern Israel were being lifted.
Israeli Newspaper Publishes Terms of ‘Deal of the Century’ – The US has said it will reveal its deal after the Muslim month of fasting comes to an end in early June. The main points of the agreement put together by Trump’s son-in-law, Jared Kushner – who has extensive interests in Israel and its settlements – and proposed by the US administration are as follows: A tripartite agreement will be signed between Israel, the PLO and Hamas, and a Palestinian state will be established that will be called “New Palestine” and will be established in the occupied West Bank and Gaza, with the exception of the settlements. Israel would release Palestinian prisoners gradually over the course of three years under the deal. The settlement blocs in the occupied West Bank, which are illegal under international law, would form part of Israel.Jerusalem will not be divided but is to be shared by Israel and the “New Palestine” with Israel maintaining general control.Palestinians living in Jerusalem would be citizens of the Palestinian state but Israel would remain in charge of the municipality and therefore the land. The newly formed Palestinian state would pay taxes to the Israeli municipality in order to be in charge of education in the city for Palestinians. The status quo at the holy sites will remain and Jewish Israelis will not be allowed to buy Palestinian houses and vice versa. Egypt will offer the new Palestinian state land to build an airport, factories and for agriculture which will service the Gaza Strip. Palestinians will not be permitted to live on this land. A highway would be built to connect the Gaza Strip to the West Bank 30 metres above Israel. Funding for the project will mainly come from China, which will pay 50 per cent of the cost, with South Korea, Australia, Canada, the US and EU each paying a ten per cent each. The US, EU and Gulf states would fund and sponsor the deal for five years to establish the state of “New Palestine”, the leak claims. This would be at a cost of $6 billion a year; the majority of which -70 per cent – would be paid by Gulf states, with the US contributing 20 per cent and the EU ten per cent. “New Palestine” would not be allowed to form an army but could maintain a police force. Instead, a defence agreement will be signed between Israel and the “New Palestine” in which Israel would defend the new state from any foreign attacks. Upon signing the agreement, Hamas will hand over all its weapons to Egypt. The movement’s leaders would be compensated and paid salaries by Arab states while a government is established. If Hamas or any Palestinian bodies refuse this deal, the US will cancel all of its financial support to the Palestinians and pressure other countries to do the same. If, on the other hand, Palestinian Authority President Mahmoud Abbas signs the deal but Hamas and Islamic Jihad do not agree to it, a war would be waged on the Gaza Strip with the full backing of the US. However, if Israel refuses the deal the US would cease its financial support. The US currently pays $3.8 billion a year to support Israel.
Turkey says it will not bow to U.S. sanctions over S-400 deal (Reuters) – Turkey will never bow to U.S. sanctions over its agreement to purchase Russian S-400 surface-to-air missile defense systems, Vice President Fuat Oktay said on Sunday regarding a deal that has strained ties between the NATO allies. Washington says the systems are not compatible with NATO equipment and may compromise its Lockheed Martin F-35 fighter jets. It has warned of possible U.S. sanctions if Ankara pushes on with the Russian deal. Turkey, a prospective buyer and a partner in the production of the F-35s, has said the S-400s and jets would not impact each other and that it will not abandon its deal with Russia. It has proposed forming a working group with Washington to assess the impact of the S-400s, but says it has not received a response yet. Speaking to broadcaster Kanal 7, Oktay said the U.S. concerns are unreasonable and that the planned July delivery date for the S-400s remained unchanged. “When Turkey signs an agreement, Turkey keeps its promise. We signed this agreement and certain payments were made,” Oktay said. “I don’t think the arguments and concerns here have a lot to lean on,” he said. The United States has also offered to sell Turkey its rival Raytheon Co. Patriot defense systems, which Turkey’s Defence Minister Hulusi Akar said Ankara was still evaluating. NATO Secretary General Jens Stoltenberg, who will visit Turkey next week, told Turkey’s state-run Anadolu news agency on Sunday that decisions about defense procurement were up to individual countries. “The issue of procuring military materiel is a national decision for countries, but the ability of allied armies to work together is a fundamental issue for NATO to run its operations and missions,” Stoltenberg was quoted as saying.
Chinese authorities are reportedly using an app to monitor Muslims in Xinjiang and see if they match 36 ‘person types’ deemed as dangerous – Chinese authorities are using an app to monitor residents in the western Xinjiang region and flag them to officials as dangerous, according to a Human Rights Watch (HRW) report released Thursday.Researchers at HRW said they obtained a copy last year of a mass surveillance app used by police in Xinjiang, which is home to an estimated 13 million Uighur Muslims as well as a other Muslim minority groups that are subjected to unprecedented surveillance measures. Researchers said the app was publicly available when they downloaded it in early 2018, and the app’s source code indicated its first iteration was released in December 2016.According to the report, the app compiles data about Xinjiang inhabitants, including their blood type, height and information about their electricity use, and warns government officials and police officers when it detects a suspicious person. As part of the detection process, the app classifies suspects based on 36 “person types” that are marked as suspicious, HRW said. While the report doesn’t go into detail on all 36 personas, it explained on some occasions the code makes specific reference to figures or activities specific to Xinjiang. For example, the app references “followers of Six Lanes,” which is said to relate to followers of certain religious scholars in Xinjiang who are considered threatening. The app is also said to flag people who have gone on the Hajj, or religious pilgrimage to Mecca, without government permission. In the past, authorities have outfitted Muslims embarking on the Hajj with GPS trackers in order to keep tabs on their activities while abroad. Muslims have also been forced to pledge loyalty to the communist party before being allowed to leave Xinjiang for the Hajj.
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