Oil, Gas, And Fracking News Reads 21July, 2019 – Part 2

Written by rjs, MarketWatch 666

Here are some more selected news articles about the oil and gas industry from the week ended 21 July 2019. Go here for Part 1.

This is a feature at Global Economic Intersection every Monday evening.

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The ‘biggest change in oil market history’ is less than six months away -Tens of thousands of ships sailing the world’s oceans burn more than 3 million barrels of sludge-like high-sulfur fuel every single day. But, starting next year, the shipping industry will have to comply with rules that should dramatically reduce sulfur emissions.“It is the biggest change in oil market history,” Steve Sawyer, senior analyst at energy consultant Facts Global Energy, told CNBC.“It is going to affect crude oil producers, traders, ship owners, refiners, equity investors, insurance companies, logistical businesses, banks… Who’s left? I’m struggling to think of anyone it might not affect. That’s why it is a huge transition,” Sawyer said.With less than six months to go before the new rules on marine fuels come into force, CNBC takes a look at the far-reaching consequences of the coming changes. On January 1, 2020, the International Maritime Organization (IMO) will enforce new emissions standards designed to significantly curb pollution produced by the world’s ships.Amid a broader push towards cleaner energy markets, the IMO is set to ban shipping vessels using fuel with a sulfur content higher than 0.5%, compared to levels of 3.5% at present.The most commonly used marine fuel is thought to have a sulfur content of around 2.7%.There is a brick wall coming at the end of December which has been built for over two years. I think you can either run into it head first and say: ‘that hurts,’ or you can find a way around it. ” The new regulations are the result of a recommendation that came from a subcommittee at the United Nations (UN) more than a decade ago and was adopted in 2016 by the UN’s IMO, which sets rules for shipping safety, security and pollution.More than 170 countries, including the U.S., have signed on to the fuel change. Starting in 2020, ships found in violation of the new laws risk being impounded and ports in cooperating countries are expected to police visiting vessels.

China June crude oil throughput rises to record on new plants (Reuters) – China’s crude oil throughput rose to a record in June, up 7.7% from a year earlier, following the start-up of two new, large refineries, official data showed on Monday. Crude processing volumes last month reached 53.7 million tonnes, or about 13.07 million barrels per day (bpd), beating the previous record in April of 12.68 million bpd, according to figures from the National Bureau of Statistics (NBS). The hefty processing rates were supported by the start up of two major new refineries. Private firm Hengli Petrochemical ramped up its 400,000-bpd refinery in Dalian to full capacity in late May and Zhejiang Petrochemical began trial runs at a similar-sized facility on the east coast. “The high output data was mainly due to the two new plants, but still the figure exceeds our estimates as many refineries were shut for maintenance,” said Wang Zhao, an analyst with Sublime Information Co, a local consultancy, based in Zibo in eastern China’s Shandong province. “We expect throughput to be lower in the coming months on extended plant shutdowns, because inventories of gasoline and diesel were at the high end and domestic fuel demand remained weak,” said Wang.

Iran drives unplanned OPEC crude oil production outage to highest levels since late 2015 –Unplanned crude oil production outages for the Organization of the Petroleum Exporting Countries (OPEC) averaged 2.5 million barrels per day (b/d) in the first half of 2019, the highest six-month average since the end of 2015. EIA estimates that in June, Iran alone accounted for more than 60% (1.7 million b/d) of all OPEC unplanned outages.EIA differentiates among declines in production resulting from unplanned production outages, permanent losses of production capacity, and voluntary production cutbacks for OPEC members. Only the first of those categories is included in the historical unplanned production outage estimates that EIA publishes in its monthly Short-Term Energy Outlook (STEO). Unplanned production outages include, but are not limited to, sanctions, armed conflicts, political disputes, labor actions, natural disasters, and unplanned maintenance. Unplanned outages can be short-lived or last for a number of years, but as long as the production capacity is not lost, EIA tracks these disruptions as outages rather than lost capacity. Voluntary cutbacks count toward the country’s spare capacity but are not counted as unplanned production outages. EIA defines spare crude oil production capacity – which only applies to OPEC members adhering to OPEC production agreements – as potential oil production that could be brought online within 30 days and sustained for at least 90 days, consistent with sound business practices. During the fourth quarter of 2015, before the Joint Comprehensive Plan of Action became effective in January 2016, EIA estimated that an average 800,000 b/d of Iranian production was disrupted. In the first quarter of 2019, the first full quarter since U.S. sanctions on Iran were re-imposed in November 2018, Iranian disruptions averaged 1.2 million b/d. Another long-term contributor to EIA’s estimate of OPEC unplanned crude oil production outages is the Partitioned Neutral Zone (PNZ) between Kuwait and Saudi Arabia. Production halted there in 2014 because of a political dispute between the two countries. EIA attributes half of the PNZ’s estimated 500,000 b/d production capacity to each country.

Column- Hedge funds stick to the sidelines in oil – (Reuters) – Hedge funds and other money managers left their petroleum positions essentially unchanged last week as the poor outlook for consumption offset production concerns stemming from tensions in the Middle East. The net long position in petroleum futures and options remained unaltered at 563 million barrels in the week to July 9, according to records published by regulators and exchanges. Portfolio managers made only major changes to their net position in Brent (-4 million barrels), NYMEX and ICE WTI (-5 million), U.S. gasoline (+2 million), U.S. heating oil (+3 million) and European gasoil (+4 million). Summer holidays across much of North America and Europe generally produce lighter trading volumes and smaller position changes during July and August, which likely accounts for the very small adjustments. But the short-covering rally that had lifted hedge funds’ total petroleum positions by 41 million barrels over the previous two weeks ran out of steam (https://tmsnrt.rs/2NSJXGv). Positions and prices are delicately poised between worries over the global economic slowdown and concerns about future supply disruptions stemming from conflict around the Gulf and shortages of middle distillates caused by the introduction of new marine fuel regulations from the start of 2020.

Oil prices edge higher on Chinese economic data – Oil prices rose slightly on Monday as Chinese industrial output and retail data topped expectations but gains were capped by overall figures showing the country’s slowest quarterly economic growth in decades. The positive Chinese data may indicate early success in the government’s stimulus efforts and potentially more oil demand in the world’s second biggest economy. Brent crude futures rose 33 cents, or 0.5%, to $67.05 a barrel, while U.S. crude was up 20 cents, or 0.3%, at $60.41 a barrel. Both contracts last week made their biggest weekly gains in three weeks on cuts in U.S. oil production and diplomatic tensions in the Middle East. Analysts at ANZ bank said China’s crude oil imports year-to-date still looked impressive, even as imports fell in June for a second straight month. China’s crude oil throughput rose to a record of 13.07 million barrels per day in June, up 7.7% from a year earlier, following the start-up of two new, large refineries, official data showed on Monday. Still, economic growth of just 6.2% in the second quarter of 2019 — the worst in 27 years — highlighted the impact of trade tensions with Washington and raised the possibility that more incentives might be needed to jump start the economy. Despite a truce agreed between the Chinese and U.S. presidents last month, the trade war remains unresolved. The Paris-based International Energy Agency’s monthly report on Friday said that abundant output and sluggish growth would leave oil markets increasingly over-supplied going into 2020. “The basic message is that the second half of this year will see some depletion in global oil inventories but this will be followed by a dismal 2020, especially the first six months of next year,” PVM analyst Tamas Varga said. Refineries in the path of Tropical Storm Barry continued to operate,

Oil prices end lower after last week’s gains as Gulf storm threat passes – Oil futures settled lower Monday, giving back a portion of last week’s sizable gains, as production in the Gulf of Mexico began a post-storm recovery. “Near-term, the trend is still higher, but the combination of formidable technical resistance in the mid $60s [for WTI] and persistent demand concerns due to the trade war will likely prevent prices from making new highs for the year,” said Tyler Richey, co-editor at Sevens Report Research. “That could change if the pace of [U.S.] stockpile draws, which have averaged 6.6 [million barrels] per week over the last month, holds near current levels,” he said in daily report. August West Texas Intermediate crude fell by 63 cents, or 1.1%, to settle $59.58 a barrel on the New York Mercantile Exchange, pulling back after finishing last week with a 4.7% gain. WTI’s recent trade above $60 had been seen by technical commodity analysts as a bullish sign for the asset, which has recently been in an upward trend, on the back of a pause in tensions between the U.S. and China on tariffs and an agreement to keep production capped until March of 2020 by the Organization of the Petroleum Exporting Countries and other major producers, including Russia. Meanwhile, international benchmark September Brent lost 24 cents, or 0.4%, to $66.48 a barrel on ICE Futures Europe. Brent gained 3.9% last week. The WTI and Brent contracts had reached “key resistance levels” with Brent at $67 and WTI at the $60/61 range – “levels which were formerly support and now resistance,”

Oil down as US Gulf of Mexico output returns –Oil prices fell for a second day on Tuesday as more production facilities returned to operation in the U.S. Gulf after Hurricane Barry swept through over the weekend, while Chinese economic data dimmed the outlook for crude demand. Brent crude futures were down 10 cents, or 0.2%, at $66.38 a barrel by 0028 GMT. They fell 0.4% overnight. U.S. crude fell by 10 cents, or 0.2% to $59.48 a barrel. The U.S. benchmark fell about 1% in the previous session. Both contracts last week made their biggest weekly gains in three weeks as U.S. oil inventories fell and diplomatic tensions rose in the Middle East. But as producers on Monday began restoring some of the nearly 74% of output that was shut at U.S. Gulf of Mexico platforms ahead of Hurricane Barry, concerns about oversupply returned to the fore. And while Chinese data on Monday showed industrial output and retail data beat expectations, overall figures showed the country’s slowest quarterly economic growth in decades. China’s oil throughput rose to a record 13.07 million barrels per day in June, up 7.7% from a year earlier, following the start-up of two new large refineries, official data showed. Still, economic growth of just 6.2% in the second quarter of 2019 – the weakest in 27 years – highlighted the impact of trade tensions with Washington and raised the possibility that more incentives might be needed to jump-start the economy. “The more significant drag on oil markets is China’s weaker consumption data,” said Stephen Innes, managing partner, at Vanguard Markets. In the U.S. there was 1.3 million barrels per day (bpd) of oil production offline in the U.S.-regulated areas of the Gulf of Mexico on Monday, about 80,000 barrels fewer than on Sunday. Workers also were returning to the more than 280 production platforms that had been evacuated. It can take several days for full production to be resumed after a storm leaves the Gulf of Mexico.

Oil Falls Back As Iran Risk Factor Fades – Oil prices started off the week on a quiet note, but retreated on Tuesday afternoon after Secretary of State Mike Pompeo said that Iran is ready to negotiate its missile program. . New data shows that China’s GDP growth fell to just 6.2 percent in the second quarter, the worst performance in nearly three decades. In the first quarter, growth stood at 6.4 percent.. The European Union’s Court of Justice ruled that a natural gas processing facility owned by ExxonMobil should be classified as an electricity generator, subjecting it to the carbon market. If that decision applies to some 3,000 factories that transfer heat or electricity to the public grid, it could bring in a lot more polluters, which could drive up the cost of carbon. Carbon prices are already at an 11-year high. “It’s backfiring not just on Exxon, but on many companies receiving free allowances for power stations located at factories,” Mark Lewis, global head of sustainability research at BNP Paribas SA’s asset management unit, told Bloomberg. The EIA expects U.S. energy-related carbon emissions to fall this year by 2.2 percent, largely due to the decline of coal-fired power plants. Last year emissions rose 2.7 percent compared to 2017 levels. Meanwhile, NASA said that the world just saw the hottest June on record. Power plant owners do not expect to alter their plans to shut coal plants in the years ahead, despite the Trump administration’s efforts to prop up the industry, according to S&P Global Platts. Top U.S. shale basins may only add 49,000 bpd in August over a month earlier, according to the EIA, a slower-than-usual pace. In an effort to slash costs, drillers are drawing down their inventory of drilled but uncompleted wells (DUCs). The so-called “fracklog” had steadily climbed for the better part of two years, but now, with investor scrutiny putting pressure on shale companies, the fracklog is declining. “They have already sunk their cash into the drilling portion,” Elisabeth Murphy, an analyst at ESAI Energy LLC, told Bloomberg. “Now it’s just a matter of completing rather than drilling new wells.” Roughly 1.3 mb/d of oil production in the Gulf of Mexico, or 69 percent, was still offline as of Monday. Also, 1.7 Bcf/d of natural gas, or 61 percent, was not operating. But companies were beginning theprocess of restarting on Sunday. The energy return on investment (EROI) of oil and gas may be lower than was previously thought. The general consensus has been that the EROI for oil, gas and coal was 25:1, but a new study found that when including refining, the EROI drops to just 6:1. Because of its high energy content, fossil fuels are often considered to be superior to renewable energy, but the lower EROI puts them on level footing.

Oil Plunges As Iran Conflict Cools – Oil prices sank on Tuesday after President Trump and U.S. Secretary of State Mike Pompeo struck a softer tone on Iran. The market acted swiftly, selling off crude oil. The comments come a day after Iran’s foreign minister Javad Zarif spoke with NBC News, where he seemed to crack open the door to negotiations of some sort. When asked what it would take to get Iran to the bargaining table, Zarif took issue with the premise of the question. “No, we are at the bargaining table. It is the United States that left the bargaining table,” he said. “And they are always welcome to return.” He then framed Iran’s recent moves to withdraw from parts of the 2015 nuclear deal as a response to the U.S. not holding up its end of the deal. The Trump administration unilaterally left the agreement in 2018. But again, Zarif seemed to open the door. When NBC News’ Lester Holt asked whether or not Iran’s latest decisions to begin stockpiling low-enriched uranium, among other maneuvers, could be reversed, Zarif was quick to respond. “Of course. It can be reversed within hours.” So, that prompted NBC’s Holt to ask if Iran would negotiate if sanctions were lifted. “The United States is addicted, unfortunately, to sanctions,” Zarif said, noting longstanding restrictions placed on Iran. However, he took particular issue with the sanctions that were implemented since last year under the Trump administration. Those are the sticking point. “Once those sanctions are lifted, then room for negotiation is wide open,” Zarif said. Perhaps even more notable was how Zarif responded when asked about Iran’s ballistic missile program. The U.S. has issued a series of demands regarding Iranian missiles, an issue that was not part of the 2015 nuclear deal. That seemed to be a non-starter, but Zarif didn’t necessarily dismiss it as out of hand. He said that Iran would be willing to talk about anything after the U.S. recommits the deal they already have, referring to the nuclear agreement. He also said that the U.S. needed to stop sending weapons to Saudi Arabia and the UAE. It all seems highly unlikely, but the tone was more open than it had been in the past.Following those comments, Sec. Pompeo said that “for the first time” Iran was “ready to negotiate on their missile program.” Oil prices plunged by 4 percent on Tuesday after Trump and Pompeo seemed to lay the groundwork for de-escalation. There are no formal next steps that the two countries might take, but the positive back-and-forth is long way from where they were a few weeks ago, on the eve of a U.S. military strike. WTI was down to $57 on Tuesday and Brent fell by 3 percent, dipping below $65.

Oil Dives As Trump Says No Iran Regime Change; Pompeo Says They’re Ready To Negotiate — Oil dove sharply on Tuesday after back-to-back comments from President Trump and Secretary of State Mike Pompeo signaling a potential de-escalation of tensions in the region. Earlier in the day President Trump reiterated during a Cabinet meeting, “We’re not looking for regime change,” adding “We want them out of Yemen.” Pompeo, seated next to Trump, said that Tehran is ready to negotiate over its missile program for the first time.”For the first time … the Iranians said they are ready to negotiate on their missile program,” said Pompeo. Trump added “They’d like to talk, and we’ll see what happens,” adding that Iran “can’t have a nuclear weapon.” The comments sent oil tumbling. Earlier this week Iranian Foreign Minister Mohammad Javad Zarif said that negotiations between Washington and Tehran would be possible if the Trump administration eases sanctions on the Islamic Republic. Zarif told NBC Nightly News in an interview that aired Monday that they’re “wide open” to talks if the sanctions are removed. Mr. Zarif offered an initially high price for such negotiations – the halt of U.S. arms sales to both Saudi Arabia and the United Arab Emirates, two key U.S. allies in the Persian Gulf. But the fact that he mentioned it at all potentially represents a change in policy. The country’s ballistic missile program remains under control of the Iranian paramilitary Revolutionary Guard, which answers only to Supreme Leader Ayatollah Ali Khamenei. –Washington Times

Analysts believe US, Iran remain far apart despite Trump’s comments on talks – Analysts doubt much headway has been made between the U.S. and Iran, despite President Donald Trump’s comments that Iran would like to engage in talks.Crude oil futures fell sharply, and were down more than 4% in afternoon trading after Trump and Secretary of State Mike Pompeo said Iran was willing to negotiate. But oil erased about 2% of its losses after an Iranian official at the United Nations said Iran’s missile program is not negotiable.“The question is now that the Iranians are disputing this, do they potentially harden their resolve to try to get sanctions relief through escalation?” said Helima Croft, RBC head of global commodities strategy.Croft had said oil’s initial dive was an overreaction, since Iran has said previously it would not negotiate if it remained under sanctions. West Texas Intermediate crude futures settled down 3.3%, at $57.62 per barrel, but was higher in late trading, at about $58.04.On Monday, Iranian Foreign Minister Mohammad Javad Zarif told NBC Newsthat Iran does not want a war, and that the door to negotiations would be wide open if Trump lifts his sanctions. The Trump administration put sanctions on Iranian oil and other parts of its economy, after the U.S. pulled out of the Joint Comprehensive Plan of Action, or the nuclear agreement made between Iran, the U.S. and five other countries.“I think the door is open a crack, and I think all sides have been trying to look for an off-ramp, but there remains a chasm between the U.S. and Iranian position,” said John Kilduff of Again Capital. “I think the sell off was steeped on false hopes of some kind of breakthrough.” Iran has been attempting to get relief from the sanctions from the remaining parties in the nuclear deal but has been expanding activities that wold violate the agreement, including enriching higher levels of uranium.

WTI Extends Losses After Smaller Than Expected Crude Draw -Oil prices plunged today as Trump and Pompeo defused some tensions with Iran and geopolitical risk premiums were squeezed out suddenly.“Bullish catalysts are in short supply,” analysts at London-based broker PVM Oil Associates Ltd. said in a note to clients.“The Gulf Coast of Mexico hurricane premium is fading as offshore operations in the region resume. At the same time, the U.S. shale engine continues to give oil bulls a sleepless night.” API:

• Crude -1.401mm (-3mm exp)
• Cushing -1.115mm
• Gasoline -476k
• Distillates +6.226mm – biggest build since Jan 2019

After last week’s big crude draw (the 4th week in a row), expectations were for another sizable draw but API reported a smaller than expected 1.4mm draw. Also a major distillates build weighed on sentiment. WTI bounced back up to around $58 ahead of the API print but slipped lower after the smaller than expected draw…

Oil pares gains after EIA releases weekly inventory data – Oil prices on Wednesday regained little ground lost in the previous session, weighed down by industry data suggesting U.S. crude inventories fell less than expected. Brent crude futures gained 65 cents to $65.00 a barrel. Both benchmarks had shed more than 3% on Tuesday. West Texas Intermediate crude futures were up 34 cents at $57.96 a barrel. Crude prices gave back some of their gains after the Energy Information Administration said gasoline inventories increased by 3.6 million barrels last week, offsetting a 3.1 million barrel drop in U.S. crude. Crude inventories fell by 1.4 million barrels in the week to July 12 to 460 million barrels, the American Petroleum Institute (API) said on Tuesday. That compared with analyst expectations for a drop of 2.7 million. The smaller-than-expected decline suggested production shut-ins caused by Hurricane Barry late last week had little impact on inventories. Gasoline stocks also fell, the API data showed, but less than expected, and distillate inventories rose more than forecast. Official data from the U.S. government’s Energy Information Administration (EIA) is due at 10:30 EST. If confirmed, it would be the fifth consecutive weekly decline, the longest stretch since the beginning of 2018. More than half of daily crude production in the Gulf of Mexico remained offline on Tuesday in the wake of Hurricane Barry, the U.S. drilling regulator said, as most oil companies were re-staffing facilities to resume production. The Bureau of Safety and Environmental Enforcement said 1.1 million barrels per day of oil, or 58% of the region’s total, and 1.4 billion cubic feet per day of natural gas output remained shut. Oil prices slumped on Tuesday on increased hopes for a return of Iranian crude to the global oil market after U.S. President Donald Trump said progress had been made with Tehran, signalling tensions could ease in the Middle East. However, Iran later denied it was willing to negotiate over its ballistic missile programme, contradicting a claim by U.S. Secretary of State Mike Pompeo, and appearing to undercut Trump’s statement.

Oil Algos Confused After Massive Product Inventory Build, Crude Draw, Production Drop – Oil prices reversed some of the losses from yesterday (geopolitical risk reduction and a surprisingly small crude draw from API), pushing WTI back above $58 briefly ahead of this morning’s official inventory data. “Crude oil has clawed back a small part of what was lost yesterday when the White House created uncertainty on both the supply and demand side,” said Ole Hansen, head of commodities strategy at Saxo Bank. “The API number from yesterday points towards a limited amount of fireworks later with focus turning to product stocks with a big jump in distillate stocks expected.” DOE

• Crude -3.12mm (-3mm exp)
• Cushing -1.351mm
• Gasoline +3.57mm
• Distillates +5.686mm – biggest build since Jan 2019

Crude inventories fell for the 5th week in a row but investors were surprised by massive product builds (biggest Distillates build since January)… US Crude Production slowed to its lowest since March (the surge has stalled) as oil rig counts have tumbled… WTI was fading below $58 ahead of the official inventory data and pushed lower after the big product builds…

Oil Prices Plunge After Trump Sends Rand Paul To Ease Tensions With Iran – A huge development that could roll back fast escalating tensions between Washington and Tehran in the Persian Gulf: Politico reports that Sen. Rand Paul – the outspoken anti-interventionist Libertarian Republican from Kentucky – has been handpicked by President Trump as his emissary to mediate with Iran after the Kentucky senator proposed the idea. Trump has now reportedly signed off on the plan, first pitched over the past weekend by Paul at a golf outing as a way to avoid escalating toward military conflict with Iran, according to multiple US officials. It’s as yet unclear just how far along the plan is, or if a potential meeting with Iranian Foreign Minister Javad Zarif has actually been agreed to, but Sen. Paul would seek to ease tensions while providing a White House exit away from the two bad options of direct conflict or continued “tanker wars” which could sink global oil markets. Politico reported the following details on Wednesday: Over a round of golf this past weekend, Sen. Rand Paul asked President Donald Trump’s blessing for a sensitive diplomatic mission.Paul proposed sitting down with Iranian Foreign Minister Javad Zarif to extend a fresh olive branch on the president’s behalf, according to four U.S. officials. The aim: to reduce tensions between the two countries. Trump signed off on the idea.Like his father Ron Paul, the junior Paul has over the past years been outspoken in favor of drawing down US troops world-wide and ending “regime change wars”. He’s been a consistent critic since the start of his political career on everything from Afghan policy to the 2003 invasion of Iraq, to US covert efforts to overthrow Assad. For now, it seems the market is viewing this positively as oil prices are re-plunging on the apparent de-escalation (though this will likely frustrate OPEC).

Oil prices at two-week lows as U.S. crude supplies fall less than expected and product stocks climb – Oil futures marked their lowest finish in roughly two weeks on Wednesday, as U.S. government data revealed that domestic crude supplies fell for a fifth straight week, but the stocks were down by less than the market expected and product inventories climbed. August West Texas Intermediate crude shed 84 cents, or 1.5%, to settle at $56.78 a barrel on the New York Mercantile Exchange, after a 3.3% tumble on Tuesday. Prices settled at their lowest since July 3.International benchmark September Brent had spent part of the session moving higher, before following WTI lower. It fell 69 cents, or 1.1%, to end at $63.66 a barrel on ICE Futures Europe, the lowest since July 4.Potential progress toward negotiations between the U.S. and Iran over Tehran’s missile program also put pressure on oil prices Wednesday. “Oil traders know that if there is a chance that oil sanctions get lifted, then that will be bearish” for prices, said Phil Flynn, senior market analyst at Price Futures Group. Senator Rand Paul asked President Donald Trump if he could sit down with Iranian Foreign Minister Javad Zarif in an effort to reduce tensions between the nations, according to Politico. “Paul has been on record against getting involved in foreign entanglements. That’s a sign that Trump is serious about getting a deal” done with Iran, and adding Iranian oil “in a market that is concerned about demand is bearish,” said Flynn. On Tuesday, crude oil prices were under pressure after reports that U.S. Secretary of State Mike Pompeo said Iran is ready to enter negotiations over its missile program, easing concerns about tensions between Washington and Tehran that had put the flow of oil in the Middle East at risk. Iran, however, rejected suggestions that its willing to hold talks with the U.S. over Tehran’s missile program, according to BBC News. Meanwhile, the Energy Information Administration early Wednesday reported that U.S. crude supplies fell for a fifth consecutive week, but by less than the market expected – and petroleum products posted sizable gains. Crude stockpiles were down 3.1 million barrels for the week ended July 12. They were forecast to fall by 4.2 million barrels, according to analysts polled by S&P Global Platts. The American Petroleum Institute on Tuesday reported a decline of 1.4 million barrels, according to sources.

Exclusive: IEA revising oil demand growth forecast down on slowing economy (Reuters) – The International Energy Agency (IEA) is reducing its 2019 oil demand forecast due to a slowing global economy amid a U.S.-China trade spat, its executive director said on Thursday. The IEA is revising its 2019 global oil demand growth forecast to 1.1 million barrels per day (bpd) and may cut it again if the global economy and especially China shows further weakness, Fatih Birol said. Last year, the IEA predicted that 2019 oil demand would grow by 1.5 million bpd but had cut the growth forecast to 1.2 million bpd in June this year. “China is experiencing its slowest economic growth in the last three decades, so are some of the advanced economies … if the global economy performs even poorer than we assume, then we may even look at our numbers once again in the next months to come,” Birol told Reuters in an interview. He said oil demand was hit by a trade war between the United States and China at a time when markets are awash with oil, due to rising U.S. shale production. U.S. oil output was expected to grow by 1.8 million bpd in 2019, which would be slower than the 2.2 million bpd increase recorded in 2018, Birol said, adding “these volumes will come into a market where demand growth is coming down”. He said the IEA was concerned by rising Middle East tensions, particularly around the Strait of Hormuz, a vital shipping route linking Gulf oil producers to markets in Asia, Europe, North America and elsewhere. Washington has said Iran was behind attacks on tankers near the Strait in May and June, a charge Tehran denies. “We are keeping a close eye on what is happening there. And if something happens we are ready to act quickly and decisively,” he said, after reports that Iran had seized a foreign tanker smuggling fuel in the Gulf.

IEA- Huge Oil Glut Coming In 2020 – The oil market saw a rather significant surplus in the first half of 2019, much larger than previously expected. Looking forward, supplies are set to tighten in the second half of the year, but that may only be a hiatus before the glut returns.Global oil supply exceeded demand by about 0.9 million barrels per day (mb/d) in the first six months of this year, according to the International Energy Agency’s latest Oil Market Report. This retrospective look upends the prevailing sentiment that occurred just a few weeks ago. For instance, the IEA said that the oil market saw a surplus of about 0.5 mb/d in the second quarter, while the agency previously thought there was going to be a 0.5 mb/d deficit.“This surplus adds to the huge stock builds seen in the second half of 2018 when oil production surged just as demand growth started to falter,” the IEA said. “Clearly, market tightness is not an issue for the time being and any re-balancing seems to have moved further into the future.”The extension of the OPEC+ cuts through the first quarter of 2020 removes a major uncertainty, but the IEA said it “does not change the fundamental outlook of an oversupplied market.”The conclusions echo those of OPEC itself, which said in its own report published a day earlier that the “call on OPEC” will be significantly lower next year. Rising U.S. shale production will exceed additional demand both this year and next, which means that the market could see a significant surplus in 2020. In other words, OPEC+ faces a conundrum: Keep its current production cut deal intact and face a worsening glut, or cut further. “On our balances, assuming constant OPEC output at the current level of around 30 mb/d, by the end of 1Q20 stocks could increase by a net 136 mb. The call on OPEC crude in early 2020 could fall to only 28 mb/d,” the IEA said. OPEC produced 29.83 mb/d in June. OPEC put demand for its oil at a higher 29.3 mb/d next year, which, to be sure, is a rather significant discrepancy from the IEA figure. However, the conclusion is the same – OPEC may be forced to slash production further if it wants to head off a price slide. OPEC’s figures imply that it may need to cut output by 560,000 bpd; the IEA implies a deeper 1.8 mb/d reduction might be needed. The IEA was diplomatic, saying that the threat of a renewed surplus “presents a major challenge to those who have taken on the task of market management.” Notably the IEA did not downgrade its demand forecast, sticking with growth of 1.2 mb/d for this year. Days earlier, the U.S. EIA downgraded its demand estimate to 1.1 mb/d. The Paris-based IEA was more optimistic about a rebound in economic growth, even as it downgraded its second quarter demand growth figure by a whopping 450,000 bpd to just 800,000 bpd year-on-year. All three of the major forecasters – OPEC, IEA and EIA – see robust supply growth from U.S. shale. The specific figures vary, but they generally see non-OPEC production (with U.S. shale accounting for most of the total) growing by around 2 mb/d this year, and by even more next year. In other words, non-OPEC supply growth for both 2019 and 2020 exceed demand.

Oil falls despite Iran’s claim that it seized foreign tanker in Gulf – Oil edged lower Thursday despite Iran’s claim that it seized a foreign oil tanker in the Gulf amid rising tensions between Tehran and the West over the safety of shipping in the Strait of Hormuz, a vital gateway for energy exports. Brent crude futures were down $1.85 at $61.81 a barrel by 1:12 pa.m. ET. They fell 1% on Wednesday, and 3% on Tuesday. U.S West Texas Intermediate crude futures were down $1.67 at $55.11. The U.S. benchmark dropped 1.5% in the previous session, and 3% on Tuesday. Iran said the vessel, which it did not identify, was smuggling fuel and had been carrying 1 million liters, or around 6,200 barrels. The price of oil initially rose following Iran’s announcement, but later returned to around flatline. The initial oil price “reaction on Thursday shows once again that the conflict in the Middle East is far from solved and tensions could flare up at any time again. As oil keeps flowing, prices are likely to rise only temporarily,” Iran said the vessel impounded was the same one it towed on Sunday after the ship had sent a distress call. U.S. officials said on Wednesday they were unsure whether an oil tanker towed into Iranian waters had been seized or rescued. Britain urged Iran to ease tensions in the Gulf, while pledging to defend its shipping interests in the region. Oil had fallen on Wednesday in response to a sharp rise in U.S. stockpiles of products such as gasoline that pointed to weak demand during the U.S. driving season. Data from the U.S. Energy Information Administration (EIA) showed a larger-than-expected drawdown in crude stockpiles last week, but traders focused instead on large builds in refined product inventories. U.S. crude inventories fell by 3.1 million barrels, the EIA said, more than analysts’ forecasts for a decrease of 2.7 million barrels. But gasoline stocks rose by 3.6 million barrels, compared with analysts’ expectations in a Reuters poll for a 925,000-barrel drop. Distillate stockpiles grew by 5.7 million barrels, much more than expectations for a 613,000-barrel increase, the EIA data showed.

Oil prices could retest their 2019 lows if they fall below this level: RBC’s Helima Croft — Oil prices have shed 13% since May 1 and nearly 8% in the last week despite spiking tensions in the Middle East, proving out a theory that RBC Capital Markets’ Helima Croft posited in April: that the Trump administration’s sanctions on Iran could lead to a “cruel summer” for the commodity. But, now, with Iran claiming it seized a foreign oil tanker in the hotly contested Gulf of Oman, oil prices haven’t responded as commodity watchers may have expected, and Croft says that’s a sign of more pain to come.“I think that signals that this standoff over Iran is going to continue over the summer,” Croft, RBC’s global head of commodity strategy, said Thursday on CNBC’s “Futures Now.” “The problem for the oil market is there’s still these big concerns about demand.”President Donald Trump said later on Thursday that the U.S. Navy shot downan Iranian drone in a defensive move. Oil prices shed 2% by the end of the day.To Croft, that “underscores the fact that the situation is far from over,” she told CNBC in a phone call Thursday. “The oil price in no way reflects the risk entailed in this crisis.”It also makes things more complicated for investors, who are likely “taking a cautious approach” due to the fact that “they don’t know how this thing could escalate” and pricing in political risk is a difficult task, she said. From these tensions to rising U.S. stockpiles to the U.S.-China trade war to West African crude cargoes “not finding a home” due to weakening demand, there are numerous drivers for worries around demand, Croft said – and, perhaps, not enough to calm them.

Oil rises after US Navy destroys Iranian drone – Oil prices rose more than 1% on Friday after the U.S. Navy destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows, again raising tensions in the Middle East. Brent crude futures were up 82 cents, or 1.3%, at $62.75 by 0100 GMT. They closed down 2.7% on Thursday, falling for a fourth day. West Texas Intermediate crude futures firmed 61 cents, or 1.1%, at 55.91. They fell 2.6% in the previous session. The United States said on Thursday that a U.S. Navy ship had “destroyed” an Iranian drone in the Strait of Hormuz after the aircraft threatened the vessel, but Iran said it had no information about losing a drone. The move comes after Britain pledged to defend its shipping interests in the region, while U.S. Central Command chief General Kenneth McKenzie said the United States would work “aggressively” to enable free passage after recent attacks on oil tankers in the Gulf. Still, the longer-term outlook for oil has grown increasingly bearish. The International Energy Agency (IEA) is reducing its 2019 oil demand forecast due to a slowing global economy amid a U.S.-China trade spat, its executive director said on Thursday. The IEA is revising its 2019 global oil demand growth forecast to 1.1 million barrels per day (bpd) and may cut it again if the global economy and especially China shows further weakness, Fatih Birol said. “China is experiencing its slowest economic growth in the last three decades, so are some of the advanced economies … if the global economy performs even poorer than we assume, then we may even look at our numbers once again in the next months to come,” Birol told Reuters in an interview. Last year, the IEA predicted that 2019 oil demand would grow by 1.5 million bpd but had already cut the growth forecast to 1.2 million bpd in June this year.

Oil Prices Push Higher After Iran Seizes Tanker – – Oil prices moved higher Friday on reports that Iran had seized a British-flagged oil tanker in the Strait of Hormuz. The August contract West Texas intermediate crude briefly crossed above $56 a barrel before falling back by the settlement in New York. WTI settled at $55.63, up 33 cents. Brent crude . the global benchmark, settled up 54 cents to $62.46 in London after hitting a high of $63.32. It was not clear why the Iranians seized the tanker; the state-run media said it was for violations of international regulations. But the move injected more uncertainty into global oil markets already struggling for direction in the face of near-constant Middle East tensions and fears of global supply gluts. Despite the reports from the Strait of Hormuz, which connects the Persian Gulf to the Indian Ocean, oil prices fell more than 7% on the week, their worst performance in seven weeks. The tanker seizure is just one more element in the tension-fraught relationship between the Trump Administration and authorities in Tehran. Almost any event can result in “swift policy changes,” New York-based Energy Intelligence said in its Petroleum Intelligence Weekly. “Phases of escalation followed by renewed peacemaking efforts would appear a likely pattern.” Both Washington and Tehran had indicated in recent weeks that despite the grandstanding and hostilities aimed at each other the past year, they want to resolve their more-than-year-long standoff. In a Thursday news conference at the Iranian mission to the United Nations, Foreign Minister Mohammad Javad Zarif suggested that President Donald Trump’s sanctions on Tehran’s oil and leaders be removed so that the two sides could talk.

Oil climbs as Middle East tensions offset demand worries – (Reuters) – Oil prices rose about 1 percent on Friday after steep losses a day earlier, supported by rising tensions between the United States and Iran, even as concerns that slowing economic growth could dent global oil demand cast a cloud.For the week, benchmark crude prices declined, having fallen sharply earlier in the week on demand worries.Brent crude futures settled 54 cents higher at $62.47 a barrel. West Texas Intermediate crude futures rose 33 cents to end the session at $55.63 a barrel. Still, WTI dropped 7% for the week and Brent lost about 5.5% for the week, the steepest losses for both benchmarks since late May.Prices gained late in the session after Iran’s Revolutionary Guards said they had captured a British-flagged oil tanker in the Gulf after Britain seized an Iranian vessel earlier this month, further raising tensions along a vital international oil shipping route. A second oil tanker, the British-operated, Liberian-flagged Mesdar, turned sharply north toward Iran’s coast on Friday afternoon after passing westward through the Strait of Hormuz into the Gulf, according to Refinitiv tracking data. “Our opinion of the complex still favors some wide swinging trade in both directions as pricing continues to be buffeted by an array of cross currents that include a heightening of tensions between the U.S. and Iran on the bullish side and mounting global oil demand concerns on the bearish side,” Jim Ritterbusch of Ritterbusch and Associates said in a note.The episode has injected further geopolitical risk into the oil market. A senior Trump administration official said on Friday the United States will destroy any Iranian drones that fly too close to its ships. A day earlier, the United States said a U.S. Navy ship had “destroyed” an Iranian drone in the Strait of Hormuz after the aircraft threatened the vessel, but Iran said it had no information about losing a drone. Prices were also buoyed Friday by indications the U.S. Federal Reserve will interest cut rates aggressively to support the economy.

Iran grain ships stuck in Brazil without fuel due to U.S. sanctions (Reuters) – Two Iranian vessels have been stranded for weeks at Brazilian ports, unable to head back to Iran due to lack of fuel, which state-run oil firm Petrobras refuses to sell them due to sanctions imposed by the United States. The vessels Bavand and Termeh came to Brazil a couple months ago carrying urea, a petrochemical product used as fertilizer. They were expected to load corn and return to Iran, but lacked enough fuel for the trip, the port operator in Paranagufl told Reuters. Food is not covered by U.S. sanctions, and Iran is one of the largest buyers of Brazil’s agricultural commodities, importing more than 2.5 million tonnes of Brazilian corn so far this year – more than any other country. However, that trade is not usually carried by ships flying the Iranian flag. When the vessels are Iranian, they usually come with enough fuel to return without refueling.

Strait of Hormuz: The Most Dangerous Place on Earth American Conservative. Scott Ritter. – For the next 60 days, the 90-mile length of waterway known as the Strait of Hormuz will be the most dangerous place on Earth, with the prospects for an incident occurring which will trigger a regional conflict possessing global ramifications high. Following this 60-day period, the risks will only grow higher. On July 1, Iran announced that it was exceeding some of the uranium enrichment restrictions put in place by the Joint Comprehensive Program of Action, or JCPOA (better known as the Iran nuclear agreement), which the U.S. withdrew from a year ago. The decision to blow through the restriction were a response to Washington’s “maximum pressure” campaign to to negotiate a new deal. Iran and the other parties to the JCPOA have sought to keep the agreement alive by finding workarounds so Iran can continue to sell oil, the lifeblood of its economy. These efforts have failed, putting Iran in the difficult position of committing economic suicide by continuing to comply with the nuclear agreement. So backed into the corner, Iran has now exceeded the limits placed on the amount of low-enriched uranium it can stockpile, as well as the level to which it is enriching uranium. While the International Atomic Energy Agency (IAEA) has confirmed that Iran has increased its enrichment level to 4.5 percent, Iran is far removed from the 80 percent or more needed for a nuclear weapon. Tehran, meanwhile, has given the EU 60 days to come up with a solution to the issue of restoration of trade. Otherwise, at the end of that period, Iran will continue to peel away JCPOA restrictions until none remain. The U.S. and Israel have condemned Iran’s actions, and have threatened military action if Iran were to embark on a path that led to the creation of a nuclear weapons. But the more immediate danger, today, it is the continued economic squeeze applied by the U.S. that threatens to ignite the tinderbox that is the Persian Gulf.

US Naval Coalition In Gulf – A Provocation Too Far – America’s top General Joseph Dunford this week announced plans for a US-led naval coalition to patrol the Persian Gulf in order to “protect shipping” from alleged Iranian sabotage. The move is but the latest in a series of efforts by the Trump administration to mobilize Arab allies into a more aggressive military stance towards Iran. It follows recent visits to the region by Secretary of State Mike Pompeo and National Security Adviser John Bolton, both of whom have been urging a more organized military front led by the US to confront Iran.The latest naval coalition proposed by General Dunford will be charged with escorting oil tankers as they pass through the Strait of Hormuz exiting the Persian Gulf to the Indian Ocean, and also through the Bab al Mandab entrance to the Red Sea on the Western side of the Arabian Peninsula. The former conduit serves oil supply to Asia, while the latter position between Yemen and Eritrea leads shipping to the Suez Canal on the way to the Mediterranean and Europe.Both narrow sea passages are strategic chokepoints in global oil trade, with some 20-30 per cent of all daily shipped crude passing through them. The apparently chivalrous motives of the US to “guarantee freedom of navigation” sounds suspiciously like a pretext for Washington to assert crucial military control over international oil trade. That is one paramount reason for objecting to this American proposal. Secondly, the very idea of sending more military vessels to the Persian Gulf under Pentagon command at this time of incendiary tensions between the US and Iran is a reckless provocation too far. One can easily foresee in this already supercharged geopolitical context in the Persian Gulf and the wider region how any additional military forces would be potentially disastrous, either from miscalculation, misunderstanding or more malign motive.

Tankers Urged Against Hiring Mercenaries On Fears Of ‘Accidental Escalation’ With Iran – Could a private, Blackwater-type private security firm fire the first shot in the gulf which sees Iran and the United States stumble toward a WWIII scenario? That’s what has maritime industry analysts which advise shipping companies operating in the Middle East region concerned amid the latest soaring tensions, per a new Reuters report: Shipping companies sailing through the Middle East Gulf are being urged to avoid having private armed security guards onboard as the risk of escalation in the region rises, industry associations say.Following the significant rise in Somali piracy in the Indian Ocean and Gulf of Aden over the past two decades off Africa’s east coast – which hit its peak about ten years ago – shipping companies have increasingly relied on private security firms to keep their cargo and personnel safe. However, amid the currently escalating “tanker wars” in the gulf, which has recently included accusations that Iran’s elite IRGC attempted to intercept and seize a UK oil tanker, the ‘British Heritage,’ as it was sailing through the Strait of Hormuz to the Persian Gulf, there’s growing concern that mercenaries hired by private companies could inadvertently trigger a crisis should they engage with Iran’s navy. “An advisory issued in recent days by leading shipping associations warned against using private armed guards in the critical areas,” the Reuters report continued. “The use of force against threats recently encountered in the Gulf of Oman carries significant risk and has the potential to escalate security situations to the detriment of the safety of ship and crew,” the advisory said.The advisory recommended unarmed security personnel and advisers: “The use of unarmed maritime advisors to assist with onboard security and watch-keeping is sensible,” it said. However, we wonder what good unarmed guards would do if rapidly boarded by pirates off African coastal waters. But the chief concern remains focused on security policies while ships operate specifically in the Persian Gulf. Guy Platten, secretary general of the International Chamber of Shipping, noted industry guidelines are more stringent for tankers traversing gulf waters: “The message is do not use private armed guards in these waters – it is not advised,” he told Reuters on Friday.

UK Sends 3rd Warship To Gulf As Iran’s Khamenei Vows To Answer British Piracy – Escalation appears back on in the Persian Gulf as the question of the “disappeared” UAE tanker remains unanswered, and as US intelligence officials point the finger at Iran’s IRGC for “forcing” the tanker into Iranian waters just before its tracking transponder mysteriously switched off over two days ago. And now Britain has announced it will send a third warship and a navy tanker to the gulf, even though the Ministry of Defence is downplaying tensions with Iran. “These long-planned movements do not reflect an escalation in the UK posture in the region and are routine,” the MoD said as it announced that the HMS Duncan, a type 45 frigate, is transiting to the region for general maritime security, also as the currently deployed HMS Montrose undergoes maintenance. The HMS Kent is also said to have been freshly deployed, though it will take much longer to reach the Middle East. Prime Minister Theresa May’s office said Tuesday that Britain wanted to avoid escalation. “Escalation in the Gulf is not in anyone’s interests and we have repeatedly stressed that to the Iranians,” May’s spokesman, James Slack, told reporters in London. However, Iranian officials had just days ago warned Britain to avoid sending more warships, saying it’s playing a “dangerous game” in following the US lead of military build-up.

What Right Has Britain to Seize an Iranian Tanker Off Spain? What gives the UK the right to seize on July 4 an Iranian oil tanker in Spanish territorial waters, force it to Gibraltar, interrogate its four-man (non-Iranian) crew, and arrest its captain and chief officer? Why, the request of the U.S. of course. The Spanish government has stated that the British marines and Gibraltar port authority operated at the behest of Washington, after Trump threatened then called off airstrikes against the Islamic Republic. (Gibraltar authorities deny this.) The piratical act was naturally denounced by Iran, which threatens to seize a British tanker if London does not return its vessel. The Brits respond that they might return the ship if given assurances it was not headed to Syria; indeed, Foreign Minister Hunt had a “constructive” phone call with his Iranian counterpart Javad Zarif. Iran for its part denies that the ship was heading to Syria, but what if it was? What is wrong with any country selling oil to Syria, whose government is recognized by many large powerful countries and needs oil to recover from its horrific civil conflict? The EU has slapped sanctions on Syria since the Arab Spring protests and outbreak of war in Syria in 2011, in compliance with the U.S. decision to effect regime change through aid to armed rebels, and a concerted U.S.-Israeli campaign to isolate Damascus. The premise is that the U.S. determines a government’s legitimacy; when it withdraws it, Europe must go along. And when Europe tells Iran it must not sell oil to Syria, Iran must go along. Despite Iran’s extraordinary patience in the face of Trump’s provocations, its determination to stick to the JCPOA, its willingness to discuss with France some changes to the deal, it remains a pariah in Washington’s eyes. Despite the fact that Trump himself is deplored by world leaders generally and the U.S. has lost prestige in the world since his election, Britain still does its bidding. The British ambassador to Washington has been obliged to quit his post after the leaking of diplomatic cables accusing Trump of ineptness and incompetence, but still, London marches almost lock-step with Washington in foreign policy. Britain might have told Washington: “We don’t have any right to seize a commercial vessel in foreign waters engaging in legal activities. And why would we want to cooperate with you in exacerbating tensions with Iran?” Instead the British Marines act as Trump’s buccaneers.

UK: Seized Iranian tanker could be released after ‘guarantees’ – British Foreign Secretary Jeremy Hunt has moved to ease tensions with Tehran, saying the Iranian oil tanker being held by authorities in Gibraltar would be released if there was a guarantee it was not heading to Syria. The Grace 1 oil tanker was seized earlier this month by British Royal Marines off the coast of the British Mediterranean territory on suspicion of violating European Union sanctions on Syrian President Bashar al-Assad’s government. Iran has since demanded the ship be released and denied it was taking oil to Syria. In a series of Twitter posts on Saturday, Hunt said he had a “constructive call” with his Iranian counterpart, Mohammad Javad Zarif, over the issue. Two more crew members of seized Iran oil tanker arrested (2:01) “I reassured him [Zarif] our concern was destination not origin of the oil on Grace One & that UK would facilitate release if we received guarantees that it would not be going to Syria, following due process in Gib courts,” Hunt tweeted. “Was told by FM Zarif that Iran wants to resolve issue and is not seeking to escalate,” he added.

Iran nuclear deal: ‘Small window’ to save deal, says Jeremy Hunt – Foreign Secretary Jeremy Hunt said there was a “small window” to save the Iran nuclear deal, as he launched a fresh bid to ease tensions in the Gulf. Mr Hunt has been meeting EU foreign ministers to raise concerns about Iran breaching some of its commitments. The deal, which involves Iran limiting nuclear activities in return for the easing of economic sanctions, is under pressure after the US withdrew in 2018. The summit comes amid heightened tensions between the UK and Iran. The UK seized an Iranian oil tanker earlier this month and, in response, Iran threatened to detain a British oil tanker. However, Mr Hunt said on Saturday the tanker, Grace 1, could be released if the UK is guaranteed the oil it was carrying is not bound for Syria. Speaking on his way into the meeting in Brussels, Mr Hunt said the Iran nuclear deal was not dead “yet”, but he warned that if Iran acquired nuclear weapons it would become “a very, very toxic and dangerous situation”. He added: “Iran is still a good year away from developing a nuclear weapon. We think there is still a closing, but small, window to keep the deal alive.”

How Europe Can Save What’s Left of the Iran Nuclear Deal – Once the United States withdrew from the 2015 Iran nuclear deal, the remaining parties have made a worthwhile effort to salvage it. Iran’s continued patience was met with more U.S. sanctions. Meanwhile, Iran has been unable to get an economic package from its counterparts in the deal that would offset U.S. sanctions. Tehran has responded in recent weeks by reducing its compliance with the deal by increasing the levels to which it is enriching uranium and has announced plans to lessen its commitments every 60 days. All eyes are now on Europe. The question for officials in European capitals is how to calibrate their reactions in order to minimize the damage. Europe should work toward preventing the deal’s collapse, for as long as feasible. If Europe cannot deliver tangible measures to reverse Iran’s road map, it should attempt to freeze the nuclear escalation through an arrangement that locks in the current status quo, a “nuclear deal-lite,” for an extended period.If Europe cannot deliver tangible measures to reverse Iran’s road map, it should attempt to freeze the nuclear escalation through an arrangement that locks in the current status quo, a “nuclear deal-lite,” for an extended period. In grappling with these new realities, Europe has three main options. First, as French President Emmanuel Macron seems eager to advance, the remaining parties to the deal could enter a phase of shuttle diplomacy in advance of the U.N. General Assembly opening in September. The hope is that diplomats can come up with some creative solutions to persuade Tehran to reverse its noncompliance. A second option is for France, Britain, and Germany to unilaterally or collectively trigger the deal’s dispute resolution process in response to Iranian noncompliance. This would most likely be considered if Iran continues to renege on its commitments at the end of the current 60-day deadline. No party to the agreement has attempted this, but the process is expected to take a couple of months. Once the three European countries begin the formal dispute resolution path, the ultimate result is likely to be the reimposition of U.N. and EU sanctions, which would most likely lead to the deal’s complete collapse. The third option is for Europe to work with China and Russia to formalize an interim arrangement before the deal falls apart. The goal would be to reach a political understanding that freezes Iranian noncompliance in return for realistic economic incentives. Such talks can take place under the existing umbrella of the Joint Commission established by the nuclear deal, with the objective that Iran eventually returns to full compliance.

What a failed Iran deal would mean for oil prices and military tensions – The Iranian nuclear deal looks all but dead just one year after the President Donald Trump administration walked away from it and reimposed crippling sanctions on the Islamic Republic.As Iran’s government starts breaking its agreed uranium enrichment limits, European leaders are floundering to keep it alive. British Foreign Secretary Jeremy Hunt claimed Monday that the Obama-era deal – signed by the U.S., U.K., Iran, Russia, China, France and Germany in 2015 and intended to provide Iran economic relief in exchange for limits on its nuclear program – “isn’t dead yet.” Other European lawmakers frantically stress the dangers of killing the deal, while Tehran says it can always reverse its deal breaches if the EU defies American sanctions and resumes trade with Iran – something it appears largely unable or unwilling to do.For many Iran watchers, the deal has already collapsed. But what will happen if it officially ends, and what are the consequences for the world?The direction of oil prices will depend on what Iran does with its nuclear program in the event of the deal’s termination, and whether Tehran’s strategy triggers a military response.“If the deal dies and Iran starts enriching uranium again at 20% levels and spinning the higher speed centrifuges, we will be closer to a military confrontation involving the U.S. and Iran or potentially Israel and Iran,” Helima Croft, global head of commodity strategy at RBC Capital Markets, told CNBC Thursday. “An actual military confrontation or even limited military strikes could cause prices to temporarily spike.” Iranian leaders have repeatedly claimed they are not after acquiring nuclear weapons, rather civilian nuclear energy. But before the 2015 deal went into action the country was enriching uranium – the fissile material required for a bomb – at 20%, far above the 3.67% level required for an energy program and roughly three months away from reaching 90% enrichment, or weapons-grade uranium.

In Major Threat To Dollar’s Reserve Status, Russia Offers To Join European SWIFT-Bypass –Three weeks after a meeting between the countries who singed the Iran nuclear deal, also known as the Joint Comprehensive Plan of Action (JCPOA), which was ditched by US, French, British and German officials said the trade mechanism which was proposed last summer – designed to circumvent both SWIFT as well as US sanctions banning trade with Iran – called Instex, is now operational.And while we await for the White House to threaten Europe with even greater tariffs unless it ends this special purpose vehicle – it already did once back in May when it warned that anyone associated with the SPV could be barred from the U.S. financial system if it goes into effect – a response from the US is now assured, because in the biggest attack on the dollar as a reserve currency to date, on Thursday, Russia signaled its willingness to join the controversial payments channel, and has called on Brussels to expand the new mechanism to cover oil exports, the FT reported.Moscow’s involvement in the Instex channel would mark a significant step forward in attempts by the EU and Russia to rescue a 2015 Iran nuclear deal that has been unravelling since the Trump administration abandoned it last year.“Russia is interested in close co-ordination with the European Union on Instex,” the Russian foreign ministry told the Financial Times. “The more countries and continents involved, the more effective will the mechanism be as a whole.”… and the more isolated the US will be as a currency union meant to evade SWIFT and bypass the dollar’s reserve currency status will soon include virtually all relevant and important countries. Only China would be left outstanding; after the rest of the world’s would promptly join.On Thursday, the Kremlin confirmed the foreign ministry’s take:“We are tracking the information regarding this. If I’m not mistaken, there have already been statements from our side that, taking into account the first experience of using this system, when it is activated, we cannot rule out interaction in this regard,” Dmitry Peskov, Vladimir Putin’s spokesman, told reporters.

Iran Claims It Rescued Missing UAE Tanker After US Said IRGC Forced It Toward Iran – The saga of the UAE “mystery” tanker which seems to have disappeared after its transponder went dark late Saturday night, and which no one has heard from since it drifted toward Iranian waters in the Strait of Hormuz over the weekend, has deepened after Iran contradicted US media reports of IRGC involvement. The semi-official news agency ISNA said hours after initial reports on Tuesday suggested Iran’s military “forced” the vessel into Iranian waters that Iranian navy vessels actually came to the assistance of the disabled foreign oil tanker. The statement indicated the vessel was partially disabled and in desperate need of repairs. “(Spokesman) Abbas Mousavi said… that an international oil tanker was in trouble due to a technical fault in the Persian Gulf… After receiving a request for assistance, Iranian forces approached it and used a tugboat to pull it toward Iranian waters for the necessary repairs to be carried out,” ISNA said, as cited by Reuters. The AP reported how it all started over the weekend:Tracking data shows an oil tanker based in the United Arab Emirates traveling through the Strait of Hormuz drifted off into Iranian waters and stopped transmitting its location over two days ago, raising concerns Tuesday about its status amid heightened tensions between Iran and the U.S.The report detailed that the Riah, a 58-meter oil tanker which operates frequently in the region, switched off its transponder for the first time in three months after 11pm on Saturday, based on tracking data. As of Monday “red flags” were raised as US officials began inquiring of the Riah’s status. CNN’s Pentagon correspondent Barbarra Starr had this to say based on intelligence sources: “US intel increasingly believes UAE tanker MT RIAH forced into Iranian waters over the weekend by #IRGC naval forces. UAE isn’t talking.”

Tehran: Oil tanker broke down in Persian Gulf, towed by Iran forces for repairs – Iranian forces came to the aid of an oil tanker stranded in the Persian Gulf, a foreign ministry spokesman has said. The tanker is presumed to be the same Panama-registered vessel missing from radar screens since Saturday. The tanker, Iran’s Ministry of Foreign Affairs spokesman Seyyed Abbas Mousavi said on Tuesday, “was in trouble due to technical defects in the Persian Gulf,” the state ISNA agency reported. Mousavi said that Iranian forces towed the ship into Iranian waters, adding that “the necessary repairs will be done.” While Mousavi did not name the tanker, his statement appears to be the first public acknowledgment from an Iranian official of the missing Emirati-based tanker ‘Riah.’ The vessel departed either Dubai or Sharjah ports last week and sailed through the Strait of Hormuz, before deviating from its course and pointing towards Iran. Shortly before midnight on Saturday, its tracking signal abruptly turned off. The disappearance of the ‘Riah’ fueled media speculation earlier on Tuesday. A spokesman for the shipping company that owns the tanker – Sharjah-based Mouj-al-Bahar General Trading – allegedly told TradeWinds that the ship had been “hijacked” by Iranian authorities, while CNN reported that unnamed US sources believed she’d been seized by the naval wing of Iran’s elite Islamic Revolutionary Guard Corps. Attention turned to Tehran, especially as the ‘Riah’ vanished on the same day that Iranian Supreme Leader Ayatollah Ali Khamenei vowed to respond to the UK’s seizure of an Iranian tanker off the coast of Gibraltar earlier this month. The incident also took place after several international tankers were attacked in the region in recent months, with Western leaders blaming Iran.

Trump Claims US Navy Shot Down Iranian Drone in Defensive Action; Iran Denies -President Trump announced on Thursday that the amphibious assault ship, the USS Boxer, shot down an Iranian drone in the Strait of Hormuz in a defensive action. Operators of the drone refused calls to stand down, after which it was “immediately destroyed,” when it came within 1,000 yards of the ship according to the president, “threatening the safety of the ship and the ship’s crew.” In response to President Trump’s announcement earlier in the day that a U.S. Navy ship had “destroyed” an Iranian drone in the Strait of Hormuz on Thursday, Iran’s Foreign Minister Mohammad Javad Zarif said he was not aware of any downing, according to Reuters:“We have no information about losing a drone today,” Zarif told reporters at the United Nations before a meeting with Secretary-General Antonio Guterres. Of course, we wouldn’t expect Iran to admit it just lost a drone, but has anyone asked Israel if it is missing one just in case?

Iran Seizes Foreign Tanker Smuggling Fuel In The Gulf – Iran’s Islamic Revolutionary Guard Corps (IRGC) says it has seized a foreign vessel with 12-crew members carrying one million barrels of oil. In an official Iranian media statement early on Thursday, the country’s military asserted the tanker was caught “smuggling” the fuel through the Strait of Hormuz. While details to the breaking story remain confused, with some early reports speculating it could be reference to the Riah tanker which since the past weekend disappeared as it drifted toward Iranian waters in the Strait of Hormuz, what is clear is that Tehran is ramping up the pressure, perhaps now making good on its longtime threat to cut off global shipping through the vital oil passageway. “A foreign vessel smuggling one million liters of fuel in the Lark Island of the Persian Gulf has been seized,” state run ISNA said, adding that the ship was seized on Sunday. This was the same day Iran had claimed to have “rescued” the UAE-owned, Panamanian-flagged Riah as it was in need of repairs due to technical problems, however, neither Iran’s military nor media identified the seized vessel or its country in initial statements. Iran’s Press TV has issued the following details in a breaking statement: The incident took place to the south of the Iranian Lark Island on Sunday.IRGC naval forces, which were patrolling the waters on an anti-smuggling mission, acted against the vessel in a “surprise” operation upon ascertaining the nature of its cargo and securing the required legal approval from Iranian authorities.The ship had loaded the fuel from Iranian dhows and was about to hand it over to other foreign vessels in farther waters. The vessel, which had 12 foreign crewmembers aboard at the time of the mission, is capable of carrying two million liters of fuel. The statement hailed the naval forces’ “perceptiveness” in frustrating the smuggling effort. It added that the crime had invoked due legal proceedings.

British say Iran seizes 2 vessels in Strait of Hormuz today – Britain’s foreign secretary said Iranian authorities seized two vessels Friday in the Strait of Hormuz, actions signaling an escalation in the strategic waterway that has become a flashpoint in tensions between Tehran and the West. Foreign Secretary Jeremy Hunt said one of the seized ships was British-flagged and the other sailed under Liberia’s flag. The crews members comprise a range of nationalities but are not believed to include British citizens, he said.”These seizures are unacceptable,” Hunt said entering an emergency government meeting to discuss securing the release of the two vessels and their crews. “It is essential that freedom of navigation is maintained and that all ships can move safely and freely in the region.” Details of what took place remained sketchy. Iran said earlier Friday that it had seized a British oil tanker in the Strait of Hormuz. The tanker Stena Impero was taken to an Iranian port because it was not complying with “international maritime laws and regulations,” Iran’s Revolutionary Guard declared.A statement from Stena Bulk, which owns the tanker, said it was unable to contact the ship after it was approached by unidentified vessels and a helicopter in the Strait of Hormuz. The company said the tanker, with 23 crew members aboard, was in international waters when it was approached but subsequently appeared to be heading toward Iran. President Trump addressed the incident from the South Lawn of the White House on Friday. “Well, as you know, we have a very close alliance with the U.K. and we always have. The U.S. has very few tankers going in because we’re using our own energy now. We’ve made a lot of progress over the last two and a half years,” Mr. Trump said. “So, we don’t have very many tankers going in, but we have a lot of ships there that are warships and we’ll talk to the U.K. We have no written agreement but we have an agreement they’ve been a very great ally of ours. So we heard about it.” U.K. Chamber of Shipping chief executive Bob Sanguinetti said the seizure represented an escalation in tensions in the Persian Gulf and made it clear more protection for merchant vessels was urgently needed. He claimed the action is “in violation of international regulations which protect ships and their crews as they go about their legitimate business in international waters.”

Iran seizes two UK tankers in Strait of Hormuz – BBC -Foreign Secretary Jeremy Hunt has said he is “extremely concerned” by the seizure of two tankers by Iran. The Stena Impero is British-flagged and the Mesdar is Liberian-flagged but British owned. The Mesdar’s operator said the vessel was now free to continue its journey after it was boarded by armed guards at around 17:30 BST on Friday. The Stena Impero’s owners say they have been unable to contact their vessel, which was “heading north towards Iran”. They say there are 23 personnel on board the British-flagged oil tanker and it was approached by “unidentified small crafts and a helicopter”. The Mesdar’s Glasgow-based Norbulk Shipping UK said communication had been re-established with the vessel and its crew was “safe and well”. The government’s emergency committee, Cobra, is meeting in Whitehall for the second time on Friday to discuss the incident. Mr Hunt said the seizures were “unacceptable” and the emergency meeting would review what the UK could do to “swiftly secure the release of the two vessels”. “It is essential that freedom of navigation is maintained and that all ships can move safely and freely in the region,” he added. He said the tankers’ crews were made up of a range of nationalities but no British citizens were understood to be on board either vessel. “Our ambassador in Tehran is in contact with the Iranian Ministry of Foreign Affairs to resolve the situation and we are working closely with international partners,” he said. These latest developments come amid heightened tensions between the UK, the US, and Iran.

‘Extraordinarily brazen’ : Iran seizes tanker in Strait of Hormuz, raising tensions with Britain – Iran seized a British tanker in the Strait of Hormuz for alleged marine violations and allowed a second one to proceed after issuing a warning, according to Iran state TV and news reports. The actions were seen as a dramatic intensification of already fraught relations between the U.S. and Iran, and now Britain, which seized an Iranian tanker suspected of carrying oil to Syria several weeks ago. “This is an extraordinarily brazen step here. This is taking tankers under way, then forcing them into Iranian waters, and I think it’s a highly provocative step. It’s something the Iranians tried to do before, when they tried to nab another British ship on the 10th of July but British war ships stopped them,” said Henry Rome, Iran analyst with Eurasia Group. “This is an intentional escalation from what we’ve seen by the Iranians.” The Iranian Revolutionary Guard earlier said it seized the British-flagged tanker Stena Impero, after it failed to follow international maritime regulations. The Guard took the ship to a coastal area to be turned over to maritime authorities, according to Iran state media. The Tasnim news service quoted regional military sources saying the Guard also stopped but released British-operated tanker Mesdar in the Strait of Hormuz. The Mesdar’s owner, Norbulk Shipping UK, also said the ship was released after it was boarded by armed personnel at about 5:30 p.m. BST Friday. It said armed guards had left the vessel, and the crew was unharmed. The ship, which sails under a Liberian flag, was reportedly warned about safety and environmental issues. British Foreign Secretary Jeremy Hunt earlier said he was concerned by the seizure of the two ships by Iranian authorities in the Strait of Hormuz. He said the U.K. is attempting to resolve the situation in Tehran and with international partners. Just after Hunt spoke, reports emerged that the Mesdar was released. “I’m extremely concerned by the seizure of two naval vessels by Iranian authorities in the Strait of Hormuz,” said Hunt. “I will shortly attend a COBR meeting to review what we know and what we can do to swiftly secure the release of the two vessels – a British-flagged vessel and a Liberian-flagged vessel.” COBR is an emergency response committee.

Iran says its seizure of British ship a ‘reciprocal’ move – (AP) – Iran’s seizure of a British oil tanker near the Persian Gulf was in response to Britain’s role in impounding an Iranian supertanker first, senior figures in Iran said Saturday, prompting condemnation from the U.K. and its European allies as they continue to call for a de-escalation of tensions in the critical waterway. U.K. Foreign Secretary Jeremy Hunt said Britain’s response to Iran’s seizure of a British-flagged ship in the Strait of Hormuz “will be considered but robust.” In comments on Twitter on Saturday, he said he spoke with Iran’s foreign minister and expressed extreme disappointment that the Iranian diplomat had assured him Iran wanted to de-escalate the situation but “they have behaved in the opposite way.” The free flow of traffic through the Strait of Hormuz is of international importance because one-fifth of all global crude exports passes through the waterway from Mideast exporters to countries around the world. The narrow waterway sits between Iran and Oman. The British-flagged Stena Impero was intercepted late Friday by Iran’s powerful Revolutionary Guard forces. The ship’s owner, Stena Bulk, said the vessel was stopped by “unidentified small crafts and a helicopter” during its transit through the Strait of Hormuz. The vessel was seized with a crew of 23 crew aboard, although none are British nationals. A video released by the Revolutionary Guard shows several small Guard boats surrounding the larger tanker. Several men dressed in military fatigues and black masks rappel onto the ship from a hovering helicopter.Hunt said the ship’s seizure shows worrying signs Iran may be choosing a dangerous and destabilizing path. He also defended the British-assisted seizure of Iran’s supertanker two weeks ago as a “legal” move because the vessel was suspected of breaching European Union sanctions on oil shipments to Syria.The view from Iran was different. In comments on Twitter on Saturday, Iran’s Foreign Minister Mohammad Javad Zarif characterized the seizure of Iran’s tanker July 4 as “piracy.” Politician and former Guard commander, Maj. Gen. Mohsen Rezai, wrote that Iran was not seeking conflict, “but we are not going to come up short in reciprocating.”

Live updates: Iran tensions soar after tanker seized – CNN

• A British-flagged oil tanker, the Stena Impero, is in Iranian custody Saturday after the country’s Revolutionary Guard Corps (IRGC) said they had seized it in the Strait of Hormuz for “violating international regulations.”
• A second tanker was stopped Friday, but has since been allowed to continue its course.
• UK Foreign Secretary Jeremy Hunt says the UK is “not looking at military options” at this time.
• Iran’s actions come amid increasing hostility between Tehran and Washington in recent weeks, and have raised tensions in the already volatile region.

A Senior Russian lawmaker has claimed that the United States is “taking advantage” of tensions in the Persian Gulf in order to deploy more troops to the region. “It is already clear who will be the first to take advantage of the escalated situation in the Strait of Hormuz and in the Middle East in general: The Pentagon has just approved the transfer of troops to Saudi Arabia,” Russian senator Konstantin Kosachev said in a post on Facebook. The Trump administration is reinforcing its controversial military relationship with Saudi Arabia by preparing to send hundreds of troops to the country amid increasing tensions with Iran, CNN learned Wednesday. Five hundred troops are expected to go to the Prince Sultan Air Base, located in a desert area east of the Saudi capital of Riyadh, according to US two defense officials. A small number of troops and support personnel are already on site with initial preparations being made for a Patriot missile defense battery as well as runway and airfield improvements, the officials said. The UK government is convening its second emergency meeting of national security officials in less than 24 hours to discuss the seizure of a British-flagged tanker in the Persian Gulf, a Downing Street spokeswoman has told CNN. It has warned ships connected to the country’s shipping industry to “stay out of the area” in the interim.

Tension in the Gulf: Not Just Maritime Powder Kegs — A recent interview in which Baloch National Movement chairman Khalil Baloch legitimized recent militant attacks on Iranian, Chinese and Pakistani targets is remarkable less for what he said and more for the fact that his remarks were published by a Saudi newspaper. Speaking to Riyadh Daily, the English language sister of one of Saudi Arabia’s foremost newspapers, Al Riyadh, Mr. Baloch’s legitimization in the kingdom’s tightly controlled media constituted one more suggestion that Saudi Arabia may be tacitly supporting militants in Balochistan, a troubled Pakistani province that borders on Iran and is a crown jewel of China’s infrastructure and energy-driven Belt and Road initiative. The interview followed publication in 2017 by a Riyadh-based think tank with ties to Saudi crown prince Mohammed bin Salman of a call by a Baloch nationalist for support for an insurgency in the Baloch-populated Iranian province that borders Pakistan and is home to the crucial Indian-backed port of Chabahar on the Arabian Sea. It also juxtaposes with Pakistani anti-Shiite, anti-Iranian militants who operate madrassahs along the Iranian-Pakistani border reporting stepped up Saudi funding. The monies are believed to come in part from Saudi nationals of Baloch descent, but the militants suggest the funding has at least tacit government approval.Balochistan has witnessed multiple attacks on its Hazara Shiite minority as well as in May on a highly secured luxury hotel frequented by Chinese nationals in the Chinese-backed Baloch port city of Gwadar and a convoy of Chinese engineers as well as the Chinese consulate in Karachi. Militants killed 14 people in April in an assault on an Iranian revolutionary guards convoy and exploded in December a car bomb in Chabahar.Saudi Arabia is also suspected of supporting the Mujahedeen-e-Khalq, a controversial Iranian exile group that seeks the fall of the Iranian regime and enjoys support of senior Western politicians and former officials as well as US national security advisor John Bolton prior to his appointment and ex-Saudi intelligence chief Prince Turki al-Faisal. For now, tacit Saudi support for Baloch militants is likely to be more about putting potential building blocks in place rather than the result of a firm decision to wage a low-intensity proxy war.

Fox News Is Calling The Persian Gulf “The Arabian Gulf” – For centuries throughout the entire world that crucial body of water has been called “the Persian Gulf,” even though in 1935 the nation of Persia changed its named to “Iran.” I became aware several decades ago when I was in Saudi Arabia that they have a really big fuss that it should be called “the Arabian Gulf.” I think maybe their fellow Arab GCC members have been supporting this nonsense as well, but nobody else did, certainly not the US.But now here it is, and I had noticed in some other US media outlets recently. Is this yet another payoff to the murderous Saudi Crown Prince Mohammed bin Salman (MbS) for funneling piles of money to Jared Kushner and the Trump Organization? I mean, Fox News does what Trump and his flunkies want. So, not only are we not punishing MbS for his awful war in Yemen, which even the UAE is now getting out of, not only are we not punishing him for ordering the assassination of a US-based journalist, Jamal Khashoggi, but, heck, Trump through Fox News and I am not sure who is trying to change the name of this body of water from its historical origin to kiss the ass of this disgusting murderer. Oh, there is also the matter that Trump has gotten himself off into a totally anti-Iran schtick, with his withdrawal from the JCPOA and his imposition of massive sanctions on Iran. But this looks like an attempted permanent punishment. Frankly, I hope the rest of the world does not go along with this bs, but in the US, I fear he may have succeeded, so many people are so ignorant.

They were convicted of minor crimes as teens and now face beheading and ‘crucifixion’ in Saudi Arabia – When Ali al-Nimr was 17, he says he was suddenly rammed by a Saudi Arabian government vehicle while riding his motorcycle through the eastern district of Qatif. Al-Nimr was taken to a local police station, where he was beaten so badly he had to be transferred to a hospital, his lawyer said. Initially, al-Nimr was hit with relatively minor charges related to his participation in the widespread 2011 to 2012 Arab Spring demonstrations against Shia repression in the eastern part of the country, where most of the population resides.But when his uncle, the reformist Shia cleric and protest leader Sheikh Nimr al-Nimr, was arrested, prosecutors ramped up their case. Instead of minor infractions related to the protests, al-Nimr now stood accused of joining a terrorist organization, throwing Molotov cocktails and arson.After being moved to an adult prison at the age of 18, he confessed to a string of crimes under extreme torture, according to his lawyer, Taha al-Hajji. At trial, al-Nimr rescinded his confession, but this was ignored by the presiding judge, according to al-Hajji.Then, in May 2014, al-Nimr was sentenced to death by “crucifixion,” contrary to Article 37 of the U.N. Convention on the Rights of the Child, which states that no individual should be sentenced to death for crimes committed under the age of 18. Saudi Arabia is one of the 196 countries that has ratified the CRC.Al-Nimr, now 24, is not alone. In fact, he is one of three Saudi Arabian men known to be on death row who were arrested and charged with crimes allegedly committed when they were minors. The cases of al-Nimr, Abdullah al-Zaher, 23, and Dawood al-Marhoon, 24, follow the brutally familiar pattern of arrest, torture and then, once they could be tried as adults, being sentenced to death for crimes against the state committed before they turned 18, according to Reprieve, the human rights advocates campaigning for their release.

US preparing to send hundreds of troops to Saudi Arabia amid Iran tensions – The Trump administration is reinforcing its controversial military relationship with Saudi Arabia by preparing to send hundreds of troops to the country amid increasing tensions with Iran. Five-hundred troops are expected to go to the Prince Sultan Air Base, located in a desert area east of the Saudi capital of Riyadh, according to US two defense officials. A small number of troops and support personnel are already on site with initial preparations being made for a Patriot missile defense battery as well as runway and airfield improvements, the officials said. The US has wanted to base troops there for some time because security assessments have shown Iranian missiles would have a difficult time targeting the remote area. The decision comes as US and Saudi relations remain extremely sensitive amid bipartisan congressional anger how the administration has handled the murder of Jamal Khashoggi. But the Trump administration has said it is committed to trying to help protect Saudi Arabia against Iranian aggression. Last month the administration announced it was sending 1,000 additional troops to the Middle East as Iran tensions flared but did not specify which countries they were going to. The forces going to Saudi Arabia are part of this deployment. Congress has not been formally notified of the deployment, although one official told CNN that they had been given an informal heads up and an announcement is expected next week.

Pentagon Fears Turkey To Retaliate Against US Troops In Syria Over New Sanctions – As expected, Turkey blasted the White House’s prior day announcement that it has killed Turkey’s involvement in the F-35 joint strike fighter program after Ankara received a first batch of S-400 Russian-made air defense components starting last week. Turkey’s foreign ministry called on the US to rectify its “mistake”. “This unilateral step is incompatible with the spirit of alliance and does not rely on any legitimate justification,” the Turkish Foreign Ministry said in a strong-worded statement immediately following the White House press release. “We call on the United States to come back from this mistake that will cause irreparable wounds in our strategic relations,” it said.The White House had stated while confirming it would indefinitely block transfer of the F-35: “Turkey’s decision to purchase Russian S-400 air defense systems renders its continued involvement with the F-35 impossible,” and added, “The F-35 cannot coexist with a Russian intelligence collection platform that will be used to learn about its advanced capabilities.”Turkey has responded to Trump’s firm stance by staying it’s “unfair”. According to state-run TRT World: “Excluding Turkey, one of the main partners from the F35 program is unfair, and the claim that S-400 system will weaken the F-35s is invalid,” the foreign ministry said.Meanwhile, at a moment that looming military conflict between Turkey, the Syrian Army and Damascus’ ally Russia is heating up near Idlib, the Pentagon issued a separate statement Wednesday demanding that the Turkish army avoid striking US troops in the region amid a Turkish build-up of forces along the border. The statement warned the US would consider any “unilateral actions into northeastern Syria,” particularly targeting US troops, as “unacceptable”.

Major Gas Pipeline In Syria Knocked Offline In Mysterious ‘Sabotage Attack’ – Sunday Syrian state media reported that a major gas pipeline running across the country’s center has been knocked offline due to a terror attack. The pipeline carries about 2.5 million cubic meters of gas to a processing plant and onward to other power stations. The pipeline specifically links al-Shaer gas field with Ebla Gas Factory in eastern Homs countryside, according to reports. Syria’s official SANA reported that “Terrorists vandalized the gas pipeline which extends from al-Shaer field to Ebla Gas Factory as the pipeline went out of service.” The report indicated further that “technical workshops affiliated to the Petroleum Ministry started to work on fixing the gas pipeline in order to pump gas through it again over the coming hours,” and strongly suggested that “remnants of ISIS terrorists” conducted the attack. In 2014 and 2016 ISIS militants briefly seized the Shaer fields, after which pro-government forces returned them to Damascus control in heavy fighting. The AP noted: The SANA news agency didn’t name the attackers. The area in the central Homs province is close to where remnants of the Islamic State group are still holed up after losing all the territory they once held in the country. Syria’s remnant and heavily weakened oil and gas infrastructure is vital especially considering aggressive oil import sanctions currently imposed on Damascus by the United States, as well as the fact that the country’s largest and most valuable oil and gas fields are still under the control of the US-backed Syrian Democratic Forces in Syria’s east.

How Russia Uses Israeli-Designed Drones in the Syria War – LAST SUMMER, ISRAEL shot down yet another military drone near the line that separates the Israeli-occupied Golan Heights from the rest of Syria. The confrontation would have been business as usual, if not for a twist: Images of the destroyed drone showed Cyrillic tail markings and other identifiable components of a Forpost belonging to Russia. The findings presented an awkward geopolitical moment: Syria and Russia are allies, and Syria and Israel are bitter enemies – but the Russian Forpost shot down by Israel was designed in Israel itself. How Israeli-designed drones ended up supporting Syrian President Bashar al-Assad is a case study in the complicated relationship between Israel and Russia. Though Russia has been instrumental in protecting the Assad government, which appeared to be on the brink of collapse four years ago, it has also carefully cultivated a military relationship with Israel over the past decade. After more than seven years of war, the skies over Syria are saturated with aircraft from multiple militaries and armed groups, each pursuing their own goals, including using the country as a weapons-testing ground. American airpower and Kurdish ground forces helped grind the Islamic State’s caliphate down to a tiny pocket before it dramatically collapsed this past spring. Meanwhile, Turkish occupation forces and their proxies are conducting a brutal campaign of repression in the Syrian-Kurdish canton of Afrin. In the last five years, Israel has taken full advantage of the Syrian conflict to tighten its grip on the Golan Heights, a part of Syria that Israel has occupied since the Six-Day War in 1967, in violation of international law. Periodically, Israel has shot down unmanned aerial vehicles like the Russian Forpost. The Forpost incident sheds light on one of the worst-kept secrets in the Middle East: that Russia is largely willing to ignore Israel’s air war against Iran and Hezbollah – both of which are Russian allies. The appearance of Israeli-licensed drones in Russia’s arsenal has its roots in an entirely different conflict: the 2008 Russo-Georgian war. When the Georgian military shot down Russian jets, the loss of equipment prompted Russia to invest in the sort of sophisticated UAV program that other nations, like the United States and Israel, already had. In an attempt to close this technological gap and reduce the risk to its pilots, Russia found an unlikely partner in Israel.

UAE scales down military presence in Yemen The United Arab Emirates, a key member of the Saudi-led coalition fighting in Yemen, is scaling back its military presence there as worsening US-Iran tensions threaten security closer to home, Reuters reported four western diplomatic sources saying. The UAE has pulled some troops from the southern port of Aden and Yemen’s western coast, two of the diplomats said, areas where the Gulf state has built up and armed local forces who are leading the battle against the Iran-aligned Houthi group along the Red Sea coast. Three of the diplomats said Abu Dhabi preferred to have its forces and equipment on hand should tension between the United States and Iran escalate further after attacks on oil tankers in the Gulf and Tehran’s downing of a US unmanned drone. “It is true that there have been some troop movements … but it is not a redeployment from Yemen,” a senior Emirati official told Reuters, adding that the UAE remains fully committed to the military coalition and “will not leave a vacuum” in Yemen. The official would not provide details on the movements, the numbers involved or specify whether it was happening inside or outside Yemen, where the alliance intervened in 2015 to try to restore the government ousted from power by the Houthis.

Trump’s Iran Strategy Is Helping China – The Trump administration tends to view Iran in isolation or as a Middle Eastern problem – a regional nemesis with nuclear ambitions that threatens Israel and America’s Arab allies. This is a mistake. Iran sits at the critical cross section of the Middle East, Central and South Asia, and the vital trade routes cutting across the Asian continent. Trump withdrew from the 2015 nuclear deal among Iran, the U.S., and five other world powers, and now wants Iran to come to the table for fresh negotiations in pursuit of a stricter agreement. Trump’s advisers may also be aiming for more: regime change in Tehran. Their instrument of choice is maximum economic pressure – ever-tightening sanctions that will cut Iran off from the world economy. But Iran has so far refused to budge; it has responded by escalating tensions in the Persian Gulf and threatening to resume full-scale nuclear activity. Containing China is another foreign-policy priority. Trump has launched a frontal assault on Chinese trade. But to realize his loftier goal of denying China superpower status, Trump will have to look beyond tariffs to contending with China’s expanding influence across Asia and Africa. The Trump administration’s Iran strategy is getting in the way of its plans for China. China has always viewed Iran as an economic prize; America has now made it easier for Beijing to lay claim to it. Chinese trade and investment in energy and infrastructure are poised to fill the void left by European withdrawal. Slowly, Chinese economic influence will grow, perhaps enough to buoy Iran’s economy as it struggles under Trump’s pressure. Benefits of this burgeoning relationship will run both ways.

22 countries signed an ‘unprecedented’ letter condemning China’s oppression of Muslims. But none of them come from the Islamic world. — 22 countries have banded together to condemn China’s oppression of its Muslim minority, in what activists called an “ unprecedented move.” But Muslim countries were conspicuously absent from the statement as the Islamic world continues to turn a blind eye. In the Wednesday letter, written by UN Human Rights Council member states, the signatories called on China to “refrain from the arbitrary detention and restrictions on freedom of movement of Uighurs, and other Muslim and minority communities in Xinjiang.”Those 22 signatories are: Australia, Austria, Belgium, Canada, Denmark, Estonia, Finland, France, Germany, Iceland, Ireland, Japan, Latvia, Lithuania, Luxembourg, the Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland, and the UK.The US did not sign the letter, having quit the Human Rights Council last year, calling it “hypocritical and self-serving.” The Uighurs are a mostly-Muslim ethnic minority group living inXinjiang, western China. Beijing claims the entire group is a threat to national security, and has detained up to 1.5 million of them in prison-like camps where people are reportedly physically and psychologically tortured. Xinjiang residents are frequently arrested or detained for so-called “infractions” including communicating with people outside the region and exhibiting Muslim markers, like a beard or long skirts.

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