Written by rjs, MarketWatch 666
Here are some more selected news articles about the oil and gas industry from the week ended 28 July 2019. Go here for Part 1.
This is a feature at Global Economic Intersection every Monday evening.
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$7.6B Russia LNG Contract Goes to TechnipFMC – Novatek and its partners in the Arctic LNG 2 project have awarded TechnipFMC an engineering, procurement and construction (EPC) contract for the development on the Gydan peninsula in West Siberia, Russia, TechnipFMC reported Tuesday afternoon. According to a written statement TechnipFMC emailed to Rigzone, the development will comprise three liquefaction trains installed on three gravity-based structure platforms. Each train will be capable of producing 6.6 million tons per annum (mtpa) of LNG, added the company, which will execute the project on a lump sum and reimbursable basis. The consolidated Arctic LNG contract – valued at $7.6 billion – covers the EPC of the three LNG trains and associated topsides, which will be manufactured on a modular basis in Asian and Russian yards, TechnipFMC noted. Novatek owns a 60-percent stake in Arctic LNG 2. The other project parcticipants, each holding a 10-percent interest, include Total, China National Petroleum Corp. (CNPC), CNOOC Ltd. and the Mitsui and Co.-Japan Oil, Gas and Metals National Corp. consortium Japan Arctic LNG, according to Novatek’s website. The website also notes that Arctic LNG 2 will liquefy gas from the Utrenneye field, which under the Russian reserves classification system holds approximately 2 trillion cubic meters of natural gas and 105 million tons of liquids.
The Suez Canal and SUMED Pipeline are critical chokepoints for oil and natural gas trade – EIA – The Suez Canal and the SUMED Pipeline are strategic routes for Persian Gulf crude oil, petroleum products, and liquefied natural gas (LNG) shipments to Europe and North America. Located in Egypt, the Suez Canal connects the Red Sea with the Mediterranean Sea, and it is a critical chokepoint because of the large volumes of energy commodities that flow through it.Chokepoints are narrow channels along widely used global sea routes that are critical to global energy security. Total oil flows through the Suez Canal and the SUMED pipeline accounted for about 9% of total seaborne traded petroleum (crude oil and refined petroleum products) in 2017, and LNG flows through the Suez Canal and the SUMED pipeline accounted for about 8% of global LNG trade. Since 2016, growth in northbound total petroleum flows through the Suez Canal and the SUMED pipeline has slowed, and southbound flows through the canal have risen substantially. In particular, the Suez Canal is gaining importance as a southbound route for U.S. and Russian crude oil and petroleum products to destinations in Asia and the Middle East. Slightly more than half of total petroleum transiting the Suez Canal in 2018 was sent northbound to destinations in Europe and North America. Petroleum exports from Persian Gulf countries, such as Saudi Arabia, Iraq, and Iran, accounted for 85% of Suez Canal northbound traffic. Northbound flows of petroleum products have risen in recent years, particularly as more ultra-low sulfur diesel fuel has been shipped from Saudi Arabia to European countries. Northbound crude oil flows decreased in 2018 for several reasons:
- Higher U.S. crude oil exports displaced Persian Gulf crude oil that had been historically sent to Europe.
- Key Middle East producers, mainly Saudi Arabia and Iraq, have been increasing crude oil exports to China and other growing Asian oil markets using eastbound routes rather than the Suez Canal.
- Renewed U.S. oil sanctions on Iran, imposed in late 2018, contributed to a decrease in Iran’s crude oil exports to Europe.
Southbound crude oil shipments, mainly to Asian markets such as Singapore, China, and India, have more than doubled in the past two years. Petroleum exports from Russia accounted for the largest share (24%) of Suez southbound petroleum traffic. Increases in Libya’s crude oil production and exports in 2018 also contributed to a rise in southbound shipments. In the past two years, increased production and exports of U.S. crude oil and petroleum products – especially liquefied petroleum gas – have also increased southbound traffic through the canal.
Oil Glut Could Worsen As Libya’s Civil War Ends -While the Persian Gulf crisis continues to escalate, oil markets have put Libya’s ongoing civil war on the backburner. This weekend, the shutdown of OPEC producer Libya’s giant Sharara field however put it again in the spotlight. On Saturday July 20, Libya’s National Oil Corporation (NOC) stated that production at its El Sharara oilfield was halted. As a direct result of this, the NOC also has stopped the shipment of crude oil in the Port of Az Zawiyah. The closure on Saturday resulted in the loss of 290,000 bpd production, the oil company indicated. In a reaction to the press, NOC’s chairman Sanallah, said that criminal activities forced the NOC to declare the state of emergency. Production however is reported to have resumed on July 22, while the NOC lifted the force majeure on loadings of its crude oil from the Zawiya terminal. Officials have indicated that an unidentified group shut a valve on the pipeline linking it to Zawiya, 49 km (30.4 miles) west of Tripoli. Production at present is at more than half its peak production. The force-majeure brought official NOC production below the 1 million bpd mark, from a level of around 1.2-1.3 million bpd. Sharara is operated by a joint venture between the NOC and Total SA, Repsol SA, OMV AG and Equinor ASA, known formerly as Statoil ASA. Production at the nearby El Feel oilfield is unaffected, the NOC said. The situation in Libya’s oil and gas sector could however become precarious if rumors about an upcoming new military offensive of the Libyan National Army (LNA), led by strongman general Haftar, against Tripoli will take place. LNA commander Fawzi Al Mansouri stated on Sunday that a military offensive is being prepared. Al Mansouri indicated that LNA forces were preparing to launch a “decisive and lightening” operation to liberate Tripoli. When Haftar will give the orders, the offensive will start, which could be in the next day(s).
Indonesia scrambles to plug undersea oil spill in Java – Indonesia’s state energy firm Pertamina said it will take weeks to plug an oil spill at its Offshore North West Java (ONWJ) facility, which has reached the northern coast of Java island, a director said yesterday. The incident started on July 12, when natural gas was released during drilling at one of its wells in the ONWJ platform on the Java sea, Pertamina’s upstream director Dharmawan Samsu told a news conference. Three days later the company declared an emergency and on July 16, a layer of oil began to rise to the surface of the sea in addition to the gas bubbles, he said. The oil spill has reached villages on the coast of the Karawang area, West Java, 2km from the facility, he said. It will take an estimated 10 weeks from the declaration of emergency to stop the oil and gas leakage, or another eight weeks from yesterday, he said. “For Pertamina, the most important thing is the safety of our employees and residents (in the affected area) and the environment, to make sure there is as little environmental impact as possible from this,” Samsu said. Twenty-nine ships have been deployed to patrol the area, which are also on standby for firefighting, he said, adding that the firm has put up a 3.5km containment boom at sea and another 3km boom and 700m of fish nets along the shoreline. Boots & Coots, a well control company that handled a similar spill in the Gulf of Mexico, has been hired to help control the situation, Samsu said. Pertamina has set up an emergency centre in Karawang and promised to compensate fishermen, he said. “The cause is still being thoroughly and deeply investigated. Early indications showed pressure anomalies that resulted in gas bubbles, followed by oil spill,” Samsu said. The incident happened at a well that was yet to come into production, which had been expected to produce 3,000 barrels per day (bpd) of crude and over 30mn standard cubic feet per day of natural gas in September, Samsu said. There were two other wells in the field that Pertamina initially wanted to reactivate, but the company has now isolated them awaiting the result of the investigation, he said.
Saudi Arabia has been exporting more crude oil to China, less to the United States – Saudi Arabia’s crude oil production approached a four-year low in May 2019, averaging an estimated 9.9 million barrels per day (b/d), more than 1 million b/d lower than its all-time high in November 2018. Production in Saudi Arabia dropped following a December 2018 agreement by members of the Organization of the Petroleum Exporting Countries (OPEC) to cut crude oil production. Saudi Arabia’s crude oil exports, especially to the United States, have also fallen. However, some countries – in particular, China – have increased their imports of crude oil from Saudi Arabia.Four Asia-Pacific countries that publish crude oil imports by country of origin – China, Japan, South Korea, and Taiwan – collectively imported an average of 3.5 million b/d of crude oil from Saudi Arabia in 2018. China’s, Japan’s, and Taiwan’s 2019 year-to-date crude oil imports from Saudi Arabia are larger than their 2018 annual averages, but South Korea’s have declined slightly, based on data through May 2019.In contrast, U.S. crude oil imports from Saudi Arabia have declined year-to-date through April 2019 compared with the 2018 average by more than 0.2 million b/d, averaging 0.6 million b/d for the first four months of 2019. Weekly estimates through July 12 show continued declines, indicating that U.S. crude oil imports from Saudi Arabia averaged about 0.5 million b/d in May and in June. These recent changes in crude oil trade patterns are partially a result of long-term structural trends within China and the United States and partially a result of recent oil market dynamics. From 2010 through 2018, EIA estimates thattotal Chinese petroleum consumption increased from 9.3 million b/d to 13.9 million b/d and that Chinese domestic production increased from 4.6 million b/d to 4.8 million b/d. As a result, China’s need to meet incremental oil consumption has been met primarily by imports. China’s crude oil imports from Saudi Arabia have gradually increased in recent years, and in March 2019, reached 1.7 million b/d, the highest level for any month since at least 2004. Other countries, including Russia and Brazil, have been exporting more crude oil to China, however, and Russia surpassed Saudi Arabia as China’s largest source of crude oil on an annual average basis in 2016. U.S. crude oil imports, on the other hand, have steadily decreased as domestic crude oil production has increased. In addition, U.S. crude oil imports from OPEC members have declined following increases from other countries, especially Canada. Canadian crude oil can be a substitute for certain OPEC grades and can have lower transportation costs when shipped by available pipeline capacity.
Millions of Barrels of Iranian Oil Are Piled Up in China’s Ports – Tankers are offloading millions of barrels of Iranian oil into storage tanks at Chinese ports, creating a hoard of crude sitting on the doorstep of the world’s biggest buyer.Two and a half months after the White House banned the purchase of Iran’s oil, the nation’s crude is continuing to be sent to China where it’s being put into what’s known as “bonded storage,” say people familiar with operations at several Chinese ports. This supply doesn’t cross local customs or show up in the nation’s import data, and isn’t necessarily in breach of sanctions. While it remains out of circulation for now, its presence is looming over the market. The store of oil has the potential to push down global prices if Chinese refiners decide to draw on it, even as the Organization of Petroleum Exporting Countries and allies curb production as growth slows in major economies. It also allows Iran to keep pumping and move oil nearer to potential buyers.“Iranian oil shipments have been flowing into Chinese bonded storage for some months now, and continue to do so despite increased scrutiny,” said Rachel Yew, an analyst at industry consultant FGE in Singapore. “We can see why the producer would want to do so, as a build-up of supplies near key buyers is clearly beneficial for a seller, especially if sanctions are eased at some point.” There could be more of the Persian Gulf state’s oil headed for China’s bonded storage tanks, Bloomberg tanker-tracking data show. At least ten very large crude carriers and two smaller vessels owned by the state-run National Iranian Oil Co. and its shipping arm are currently sailing toward the Asian nation or idling off its coast. They have a combined carrying capacity of over 20 million barrels.The bulk of Iranian oil in China’s bonded tanks is still owned by Tehran and therefore not in breach of sanctions, according to the people. The oil hasn’t crossed Chinese customs so it’s theoretically in transit. Some of the crude, though, is owned by Chinese entities that may have received it as part of oil-for-investment schemes. For example, one of the Asian nation’s companies could have helped fund a production project in Iran under an agreement to be repaid in kind. Whether this sort of transaction is in breach of sanctions isn’t clear, and so the firms are keeping it in bonded storage to avoid the official scrutiny it would if it’s registered with customs, according to the people.
US Sanctions China State Oil Trader – The U.S. has sanctioned a Chinese state oil trader for violating restrictions on Iranian crude, an attempt to tighten restrictions on the Islamic Republic and cut off one of its biggest buyers. Zhuhai Zhenrong Co., the secretive company with links to the Chinese military, has a history of taking Iranian crude and fuel, at times as part of barter deals for goods or services, and then selling it on to refiners in China. The U.S. move comes at a delicate time for relations with Beijing as the two nations attempt to kick-start negotiations aimed at resolving their broader trade conflict. Secretary of State Michael Pompeo announced the decision in a speech Monday, adding that sanctions would also be imposed on the company’s chief executive officer, Li Youmin. “They violated U.S. law by accepting crude oil” from Iran, Pompeo said. “We’ve said all along that any sanction will indeed be enforced.” Specifically, the company “knowingly engaged in a significant transaction for the purchase or acquisition of crude oil from Iran” after restrictions were fully in place on May 2, the state department said in a separate statement. Li declined to comment when reached by Bloomberg News on Tuesday. The trading company merged in 2015 with Macau, China-based Nam Kwong Group, which said Tuesday that it separated from Zhuhai Zhenrong in September.
China Takes Iran Oil Despite Tougher US Sanctions – China’s still importing oil from Iran weeks after the U.S. imposed sanctions aimed at halting sales of crude from the Persian Gulf nation. Official customs data on Friday showed China imported 855,638 tons in June, the equivalent of about 209,000 barrels a day. While that’s less than in May and the lowest since mid-2010, the data adds to speculation that Beijing may risk running afoul of American sanctions to secure crude supplies from the Islamic Republic. All eyes are on China’s oil purchases as Donald Trump’s administration continues to clamp down on companies and individuals flouting its restrictions. The import-reliant Asian nation is one of the few remaining buyers of Iranian barrels, after other countries such as South Korea and Japan halted flows. The shipments that arrived at Chinese ports in June could nevertheless constitute the “incidental transactions” that U.S. officials had previously said may occur without breaching restrictions. With a three to four-week voyage from Iran to China, it’s possible that some of the oil loaded before May 2 and arrived in China in June. According to industry consultant FGE, about 450,000 barrels a day of Iranian oil were in transit as of early May when the U.S.-issued waivers expired. Still, tankers are hauling millions of barrels of oil from the Islamic Republic towards China, although this hoard of crude may be held in what’s known as “bonded storage” without crossing customs. China imported about 494,000 barrels a day of Iranian crude in the first five months of this year, compared with more than 660,000 barrels a day in the same period in 2018. In June, the Asian nation is expected to ramp up purchases from other major oil-producing countries in the Middle East, West Africa and Russia to make up for the loss of supplies from Iran.
China gas plant blast: death toll rises to 15 as three more bodies found – Authorities in central China said on Sunday that the death toll from an explosion at a gas plant has risen to 15 with another 15 seriously injured.Three people who were previously missing have been found dead, local authorities said.About 270 firefighters and rescuers have completed three rounds of search and rescue since the blast on Friday evening in the city of Yima in Henan province, China’s emergency management ministry said.The blast shattered windows 3km (1.9 miles) away and knocked off doors inside buildings, according to earlier state media reports. Xinhua said the explosion happened in the air separation unit at a factory owned by Henan Coal Gas Group. All production at the plant has been halted, it said.“Many windows and doors within a 3km radius were shattered, and some interior doors were also blown out by the blast,” state broadcaster CCTV said on Weibo, China’s Twitter-like social media platform. Local media showed amateur videos of a massive column of black smoke billowing from the factory and debris littering the roads.Other images showed the doors and windows of homes blown out and closed shops with dented metal fronts. A bloodied man was seen being helped out of a van in a video posted on social media.
Oil gains as Gulf tanker seizure raises tensions – Oil prices rose on Monday on concerns that Iran’s seizure of a British tanker last week may lead to supply disruptions in the energy-rich Gulf. Brent crude futures climbed 53 cents, or 0.9%, to $63 a barrel. West Texas Intermediate (WTI) crude futures were up 25 cents, or 0.5%, at $55.88 a barrel. Last week, WTI fell over 7% and Brent lost more than 6%. Iran’s Revolutionary Guards said on Friday they had captured a British-flagged oil tanker in the Gulf in response to Britain’s seizure of an Iranian tanker earlier this month. The move has increased the fear of potential supply disruptions in the Strait of Hormuz at the mouth of the Gulf, through which flows about one-fifth of the world’s oil supplies, but no major escalation with Britain or the United States appears imminent. “In the cat and mouse game that Iran is playing with the U.S., it is taking calculated risks,” “So far the U.S. is not taking the bait.” Capping gains, force majeure was lifted on loadings of crude on Monday at Libya’s Sharara oilfield, the country’s largest, whose closure since Friday had caused an output loss of about 290,000 barrels per day (bpd). Meanwhile, data late last week showed shipments of crude from Saudi Arabia, the world’s top oil exporter, fell to a 1-1/2-year low in May. Speculative money is flowing back into oil in response to the escalating dispute between Iran, the United States and other Western nations, along with signs of falling supply. The Iranian capture of the ship in the global oil trade’s most important waterway was the latest escalation in three months of confrontation with the West that began when new, tighter U.S. sanctions on Iran took effect at the start of May. Hedge funds and other money managers raised their combined futures and options positions on U.S. crude for a second week and increased their positions in Brent crude as well, according to data from the U.S. Commodity Futures Trading Commission and the Intercontinental Exchange. Goldman Sachs on Sunday lowered its forecast of growth in oil demand for 2019 to 1.275 million bpd, citing disappointing global economic activity.
Oil Advances Most in a Week — Oil rose the most in more than a week as Iran’s seizure of a British oil tanker fueled concerns about escalating tensions in the Middle East. Futures closed 1.1% higher in New York on Monday after easing some gains during the session. While the U.K. demanded the immediate release of the Stena Impero, taken by Iran’s Revolutionary Guard Corps in the Strait of Hormuz on Friday, British Defense Minister Tobias Ellwood said he wanted to de-escalate the situation. “It seems to be a situation where neither side is trying to force a military solution to these tensions,” said Bob Yawger, director of the futures division at Mizuho Securities USA. “So in situations like this, news of the conflict leads the market to rally strongly and then pull back.” The U.S. benchmark crude rose Friday after the tanker seizure highlighted the risk of flows through the world’s most critical crude choke-point. Nonetheless, prices fell 7.6% last week, the sharpest pullback since May, amid concerns that a slowing global economy will weigh on oil demand. West Texas Intermediate for August delivery, which expires Monday, added 59 cents to settle at $56.22 a barrel on the New York Mercantile Exchange, the largest gain since July 10. The more-active September WTI contract rose 46 cents to end the session at $56.22 a barrel. Brent for September settlement advanced 79 cents to settle at $63.26 a barrel on the ICE Futures Europe Exchange. The global benchmark crude traded at a premium of $7.04 for the same month, the widest since late June.
Oil Markets Ignore The Tanker War – Oil prices initially traded up on Monday on geopolitical tension in the Middle East, but gave up some of those gains on fears of an oil glut. At the start of Tuesday, oil prices dipped further, weighed down by demand fears. The tit-for-tat tanker seizures between the UK and Iran has heightened tension, but unlike last month, there appears little chance of and no appetite for a military confrontation. Tension in the Persian Gulf remains elevated, but oil prices have barely budged, not least because of ample global oil supplies. “The response of oil prices to the seizure of a British oil tanker by armed Iranian forces near the Strait of Hormuz has been amazingly muted so far,” Commerzbank said. “It appears that the majority of market participants are convinced that there will be no open conflict between the West and Iran.” WTI based in Houston fell to its weakest level in almost a year after new pipelines came online, according to Reuters. New lines owned by EPIC Crude Pipeline LLC and Plains All American Partners began filling up in recent days, Reuters reports. The new supply eases bottlenecks and pushed Houston prices lower. “Houston prices should weaken with more supply and limited new storage at refineries,” a trader told Reuters. Oil prices traded up on Monday, but gains were relatively minor in light of the seizure of a British oil tanker by Iran. The seizure comes as retaliation for the British seizure of an Iranian tanker earlier this month. Oil prices have not spiked, as they might have in the past, but the shipping industry is bearing the brunt of the fallout. “Shipping and insurance costs have already been on the rise and the latest event will only add to that,” Amrita Sen of Energy Aspects told the FT. “Asian refiners in particular will be even keener now to search for alternative oil supplies and ship owners will look for alternative routes where possible, further adding to costs.” On Monday, the Trump administration announcedsanctions on Chinese state-owned oil trader Zhuhai Zhenrong Co. for violating U.S. sanctions on Iran. China has continued to stockpile oil from Iran, despite the U.S. ending waivers in May. The move may also add yet another point of contention between the U.S. and China has they seek to negotiate a resolution to their trade war.
Oil rises 1% to $56.77 per barrel as Middle East tensions linger – Oil prices were up on Tuesday as expectations of lower U.S. crude supplies were offset by weaker demand forecasts and the full restart of Libya’s largest oil field. Libya’s Sharara oil field returned to normal production on Tuesday, pressuring prices that rallied a day earlier on fears the tanker capture could disrupt supplies in the heavily trafficked Strait of Hormuz. Brent crude rose 67 cents to $63.94 a barrel on Tuesday. West Texas Intermediate climbed 1% or 64 cents to $56.77. “The situation with Iran seems contained for now, and Libya’s full supply is coming back,” said Bill Baruch, president at Blue Line Futures LLC in Chicago. In the Middle East, “tensions are ever-present but it hasn’t moved the market much because everyone is waiting on U.S. supply data,” Baruch said. Oil may gain further support if forecasts are correct for another drop in U.S. crude inventories. Analysts expect a 3.4 million-barrel draw in the latest week. 1/8EIA/S 3/8 The American Petroleum Institute, an industry group, releases its inventory report Tuesday at 4:30 p.m. EDT (2030 GMT). The U.S. government’s official figures are due Wednesday morning. A weaker outlook for oil demand because of slowing economic growth also weighed. On Tuesday, the International Monetary Fund cut its forecast for global growth, warning that further U.S.-China tariffs or a disorderly exit for Britain from the European union could weaken investment and disrupt supply chains. 1/8L2N24O0O8 3/8 On Sunday, Goldman Sachs lowered its 2019 oil demand projection, joining other forecasters. 1/8IEA/M 3/8 “Although prices had been driven by supply developments in the first half of the year economic considerations are making oil bulls careful this month,”
Morgan Stanley: Why Tanker Wars Aren’t Causing An Oil Price Spike – The oil market has changed so much over the past five years that fast-growing non-OPEC oil production limits oil price gains from a spike in tensions in the Middle East, where Iran seized a British oil tanker last week, Morgan Stanley says.“There is a difference in the oil market this time around because non-OPEC is simply growing so fast. That is the real game changer and that’s why the price action is relatively benign,” Morgan Stanley’s global oil strategist Martijn Rats told CNBC on Monday, commenting on the muted price reaction to Iran seizing a British tanker in Middle Eastern waters on Friday.If such an incident in the most important oil shipping lane in the world, the Strait of Hormuz, happened just five years ago, oil prices wouldn’t have risen just 1-2 percent, the spike would have been “much, much more significant,” Rats told CNBC.Oil prices were up early on Monday at 08:00 a.m. EDT, with WTI Crude rising 1.11 percent at $56.38 and Brent Crude up 1.25 percent at $63.25. Prices had eased back somewhat by 10:00am.We are in a fundamentally well-supplied oil market, Morgan Stanley’s Rats said, adding that with non-OPEC oil production growing very fast and oil demand somewhat soft, it’s actually “quite remarkable that we’re only at $63 a barrel, despite these concerns.” At the beginning of this month, just after OPEC and its allies rolled over their production cuts into 2020, Morgan Stanley revised down its long-term Brent Crude forecast to $60 from $65 a barrel. Over the next three quarters, the bank sees Brent at around $65 per barrel, a downward revision from a previous forecast of $67.50 a barrel.
WTI Pops’n’Drops After Huge Crude Draw, Gasoline Build – Oil rallied today, surging back up towards $57, as plans for a meeting between the U.S. and China offered a hint of progress in the US-China trade war.“Some of the soft demand numbers we’ve had in the last few months have definitely been the impact of the trade war,” said Leo Mariani, a KeyBanc Capital Markets Inc. analyst. “There’s been reticence in doing much until there’s more clarity on how that will end.” API:
- Crude -10.961mm
- Cushing -448k
- Gasoline +4.436mm – biggest build since Jan
- Distillates +1.42mm
A major crude draw (the 6th weekly draw in a row) was offset by a big build in gasoline stocks (biggest rise since January)… WTI spiked above $57 on the big crude draw but quickly fell back as perhaps the ongoing gasoline build continues…
Oil Spikes After API Reports Largest Crude Inventory Draw Of The Year – The American Petroleum Institute (API) reported a huge crude oil inventory draw of 10.961 million barrels for the week ending July 18, compared to analyst expectations of a much smaller – but still significant–4.011-million barrel draw. The inventory draw this week compares to last week’s small draw of 1.401 million barrels, according to the API. A day later, the EIA had estimated an even bigger inventory drawdown of 3.1 million barrels. After today’s extra-large draw – the largest draw this year–the net build is now just 1.20 million barrels for the 30-week reporting period so far this year, using API data.Oil prices were trading up on Tuesday with continuing tensions between Iran and most of the Western world over a series of oil tanker attacks and oil tanker seizures in the eve- important Persian Gulf. Even Libya lifting its force majeure on its largest oilfield, Sharara lacked the teeth to push prices down. The market has grown increasingly tolerant of the tensions in the Middle East, with other metrics having more of an impact on oil prices such production reports out of the shale patch, and force majeures that actually decrease the amount of exportable oil rather than just the threat of decreased oil as is the case with Iran. At 3:24pm EST, WTI was trading up by $0.57 (+1.01%) at $56.79 – a dollar under last week’s price. Brent was trading up $0.56 (+0.89%) at $63.82 – also almost a dollar under last week’s level. The API this week reported a 4.436-barrel build in gasoline inventories for week ending July 18. Analysts estimated a draw in gasoline inventories of 730,000 barrels for the week. Distillate inventories grew by 1.420 million barrels for the week, while inventories at Cushing fell by 448,000 barrels. US crude oil production as estimated by the Energy Information Administration showed that production for the week ending July 12 slid back this week to 12.0 million bpd, 400,000 bpd off the all-time high hit earlier this year.
WTI Extends Gains On Big Crude Draw, Production Slump – Oil prices held on to gains overnight after the huge API-reported crude draw (but large ghasoline build) and more confidence in a possible US-China trade deal. A confirmation of the API report in official government figures scheduled to be released Wednesday would “help us confirm an oil-price bottom,” said Phil Flynn, senior market analyst at Price Futures Group Inc., in a note to clients. “If we hold the recent lows and build off of it, it is very possible that crude oil has set a low that won’t be tested for the rest of this year.”Bloomberg Intelligence’s Senior Energy Analyst Vince Piazza warns: “Energy investors seem to be paying attention to the wrong things. Escalating tensions in the Persian Gulf are supporting benchmarks, though the modest price boost relative to the risk of bottlenecks is surprising. Weaker petroleum demand should be the larger long-term concern, along with trade issues and resilient U.S. production. Modest aftereffects of storm system Barry still skew industry data.” DOE:
- Crude -10.835mm
- Cushing -429k
- Gasoline -226k
- Distillates +613k
Confirming API’s data, DOE reported a massive 10.8mm barrel inventory draw last week (and only marginal product inventory shifts). This is the 6th weekly crude draw in a row. US Crude production crashed down 700k last week but largely due to Gulf stoppages due to storm Barry…
Oil ends lower as support from storm-fueled, 11 million-barrel drop in U.S. crude supplies disappears – Oil futures settled lower on Wednesday, as support from a storm-induced, 11 million-barrel drop in U.S. crude supplies wore off and traders turned their attention back to concerns about weaker energy demand. U.S. crude inventories dropped by 10.8 million barrels for the week ended July 19, according to data from Energy Information Administration Wednesday, and production also edged lower, with analysts citing temporary disruptions caused by a Gulf of Mexico storm earlier this month. “Buyers won’t buy oil futures on the premise of [a] tight third quarter – they are looking longer term,” Tom Kloza, head of energy analysis at the Oil Price Information Service, told MarketWatch. He pointed out that the latest supply data were “heavily impacted” by Hurricane Barry. Also, “the worries about global slowdown thanks to [U.S.-China] trade tensions trump tightening supply,” said Kloza. West Texas Intermediate crude for September delivery fell 89 cents, or 1.6%, to settle at $55.88 a barrel on the New York Mercantile Exchange. Prices had climbed to as high as $57.64. September Brent crude declined by 65 cents, or 1%, to $63.18 a barrel on ICE Futures Europe – down from an intraday high of $64.66. X See
Oil falls 1.6% despite big draw in crude inventories, Mideast tensions – Oil prices fells on Wednesday, erasing earlier gains, despite the Energy Information Administration data showing a big draw in U.S. crude inventories.Brent crude futures fell 50 cents to $63.33 a barrel, while U.S. West Texas Intermediate crude fell 89 cents at $55.88 a barrel.U.S. crude failed to hold above $57.50 per barrel, a key technical level, before giving back its earlier gains, traders said.Earlier in the session, the front-month Brent contract flipped to trade at a discount to the second-month contract, a market structure known as contango, for the first time since March. Sentiment in the oil market has darkened as investors worry about slowing global economic growth weakening demand for oil.Yet the market was supported by a large drawdown in U.S. crude stockpiles earlier in the session. Crude inventories fell by 10.8 million barrels in the week to July 19, the Energy Information Administration said on Wednesday. Analysts expected a decrease of 4 million barrels.“Hurricane Barry has shaken up the data for a second week, with lower production and stymied imports leading to a near-11 million barrel draw,” said Matt Smith, director of commodity research at ClipperData.U.S. oil companies cut some production in the Gulf of Mexico ahead of Hurricane Barry, which came ashore in Louisiana earlier this month.Meanwhile, some geopolitical risk premium from tensions in the Middle East also helped buoy prices.A U.S. Navy ship took defensive action against a second Iranian drone in the Strait of Hormuz last week, but did not see the drone go into the water, the U.S. military said on Tuesday.Iran’s president, Hassan Rouhani, said on Wednesday his country was ready for “just” negotiations but not if they meant surrender, without saying what talks he had in mind. Also fueling tensions, Britain gained initial support from France, Italy and Denmark for its plan for a European-led naval mission to ensure safe shipping through the Strait of Hormuz following Iran’s capture of a British-flagged tanker.
Oil ends lower as support from storm-fueled, 11 million-barrel drop in U.S. crude supplies disappears – Oil futures settled lower on Wednesday, as support from a storm-induced, 11 million-barrel drop in U.S. crude supplies wore off and traders turned their attention back to concerns about weaker energy demand. U.S. crude inventories dropped by 10.8 million barrels for the week ended July 19, according to data from Energy Information Administration Wednesday, and production also edged lower, with analysts citing temporary disruptions caused by a Gulf of Mexico storm earlier this month. “Buyers won’t buy oil futures on the premise of [a] tight third quarter – they are looking longer term,” Tom Kloza, head of energy analysis at the Oil Price Information Service, told MarketWatch. He pointed out that the latest supply data were “heavily impacted” by Hurricane Barry. Also, “the worries about global slowdown thanks to [U.S.-China] trade tensions trump tightening supply,” said Kloza. West Texas Intermediate crude for September delivery CLU19, +0.46% fell 89 cents, or 1.6%, to settle at $55.88 a barrel on the New York Mercantile Exchange. Prices had climbed to as high as $57.64. September Brent crude BRNU19, +0.44% declined by 65 cents, or 1%, to $63.18 a barrel on ICE Futures Europe – down from an intraday high of $64.66.
Global oil consumption stagnates leaving prices under pressure – (Reuters) – Global oil consumption has stalled since the middle of 2018, making lower oil prices inevitable despite the best efforts of Saudi Arabia and its allies to reduce production. The world’s top 18 oil-consuming countries, each using more than 1 million barrels per day (bpd) of petroleum products, account for almost two-thirds of world consumption, so they make a useful proxy for global demand. Consumption in the top 18 rose by just 0.7% in the three months to March compared with the same period a year earlier, figures from the Joint Organisations Data Initiative show. Most of these countries report consumption figures with a delay of two months, with data now available through May, but China, India and Thailand report more slowly. (https://tmsnrt.rs/2Oh6mNO) If late reporters are excluded, consumption in the top 15, accounting for 45% of world consumption, fell 2.2% in the three months to May compared with 2018, the fastest decline since the recession of 2008/09. Since 2006, consumption growth in the top 15 has been a reliable leading indicator for the top 18 and demand more generally, which is not surprising given the interconnectedness of the global economy. Decelerating oil consumption growth since the second and third quarter of 2018 has corresponded closely with the slowdown in global manufacturing activity and freight movements. Given the slackening in oil consumption, a sharp fall in prices was inevitable, notwithstanding action by Saudi Arabia and its allies in the expanded OPEC+ group of oil exporters. Previous decelerations in 2006/07, 2008/09, 2011/12, and 2014/15 were all accompanied by sharp price falls to force consumption and production back to balance. In 2019, production restraint has averted an even sharper fall in prices but could not avert the need for lower prices to help buy back some of the lost consumption growth. Prices will start to rise sustainably if, and only if, the global economy avoids recession and consumption growth starts to accelerate again.
Oil rises 0.3% on US stock decline, but manufacturing slowdown caps gains – Oil prices rose on Thursday amid Middle East tensions and a big fall in U.S. crude stocks, but gains were capped as weak Western manufacturing data indicated slowing economic growth and in turn the potential for reduced fuel demand. Brent crude futures rose 28 cents or 0.4% to $63.46 a barrel, after dropping 1% on Wednesday – the first fall in four sessions. U.S. West Texas Intermediate crude settled up 14 cents, or 0.3%, at $56.02 a barrel, having dropped 1.6% in the previous session. U.S. crude stocks fell by nearly 11 million barrels last week, the Energy Information Administration reported on Wednesday, well above analysts’ expectations for a drop of 4 million barrels. “While that draw was influenced by temporary factors – Hurricane Barry – U.S. crude inventories have plunged by 40 million barrels over the last six weeks, suggesting the oil market is finally rebalancing,” UBS analyst Giovanni Staunovo said. Oil prices have also been under pressure from concerns about global economic growth amid growing signs of harm from the U.S.-China trade war that has rumbled on over the last year. However, the White House said on Wednesday top U.S. and Chinese negotiators would meet next week to continue talks, and global equities edged up on the news. “Despite the bullish supply-side fundamentals and geopolitics that support oil prices, it seems that the market needs a positive economic catalyst to move appreciably higher,” said Harry Tchilinguirian, global oil strategist at BNP. “If we get positive echoes next week from renewed U.S.-China trade talks, then oil can advance noticeably higher.” A series of purchasing manager index (PMI) readings in the United States and Europe were weaker than expected. The German PMI, tracking the manufacturing and services sectors, hit a seven-year low in July, suggesting a deteriorating growth outlook for Europe’s largest economy. The fall was driven by the auto sector on poor sales to China.
Crude Oil Settles Higher, but Fears Over Slowing Global Growth Keep Lid on Gains – – Crude oil prices rose Thursday as traders cheered data from a day earlier showing a fall in U.S. crude stockpiles. But concerns about global growth raised by European Central Bank President Mario Draghi kept a lid on gains. On the New York Mercantile Exchange West Texas intermediate crude futures for September delivery rose 14 cents to settle at $56.02 a barrel, while on London’s Intercontinental Exchange, Brent crude, the global benchmark, gained 21 cents to $63.39 a barrel. For the year, WTI is up 23.6%. Brent has risen 17.8%. U.S. gasoline prices were up slightly to an average $2.751 a gallon on Thursday, according to the American Automobile Association, and have climbed 21.4% this year. The threat of a slowing global economy on oil-demand growth was in the spotlight once again as Draghi hinted that the central bank would consider adopting more aggressive monetary policy easing measures, including rate cuts amid worries about slowing global growth. That knocked down some of the optimism on oil prices, which was led by bullish supply-side fundamentals, including data from a day earlier showing a draw in U.S. stockpiles for the sixth-consecutive week. U.S. crude stocks fell by 10.8 million barrels last week, the Energy Information Administration reported on Wednesday, well above Investing.com’s consensus expectations for a draw of 4 million barrels. That was the sixth-straight weekly decline in domestic crude stockpiles amid signs of tightening supplies globally, as OPEC and its allies continue to cut production and sanctions on Iran and Venezuela squeeze output. There was speculation on Wednesday, however, that the drawdown was also a byproduct of Hurricane Barry, which came ashore on the central Louisiana coast earlier this month and forced many oil platforms to shut in their production.
Oil prices nudge up as geopolitical tensions counter sluggish demand – Oil were on track for a weekly increase as geopolitical tensions over Iran remained unresolved, although flagging prospects for global economic growth amid the U.S.-China trade war capped gains. Brent crude futures were headed for a weekly gain of about 1%. They fell 6% last week. West Texas Intermediate crude was on pace to record a 0.2% gain. It fell 7.5% last week. Both Brent and WIT slipped slightly during Friday’s session, however. Tensions remained high around the Strait of Hormuz, the world’s most important oil passageway, as Iran refused to release a British-flagged tanker it seized last week in the Gulf. U.S. Secretary of State Mike Pompeo said Washington had asked Japan, France, Germany, South Korea, Australia and other nations to join a maritime security initiative in the Middle East so oil and other products can flow through the strait. However, oil prices’ reaction to the strains in the Gulf has been relatively muted. “It appears that the majority of market participants do not expect a military conflict that would hamper oil shipments,” Commerzbank analyst Carsten Fritsch said. Prices also drew support from a crude inventory draw in the United States, but gains were limited as the fall appeared to have been largely anticipated. U.S. production in the Gulf of Mexico was still feeling the effects of Hurricane Barry. “Several indicators pointing to a slowdown of global oil demand growth appear to have taken over market sentiment,” Jefferies analyst Jason Gammel said. Reuters polls taken July 1-24 showed the growth outlook for nearly 90% of the more than 45 economies surveyed was downgraded or left unchanged. That applied not just to this year but also 2020.
Oil gains on U.S. economic data, Gulf crude tanker dispute (Reuters) – Oil prices inched up on Friday, ending the week higher after stronger-than-expected U.S. economic data brightened the crude demand outlook and concerns over the safety of oil transport around the Strait of Hormuz threatened supply. Brent crude futures LCOc1 settled at $63.46 a barrel, up 7 cents. They clocked a weekly rise of about 1.7%. U.S. West Texas Intermediate crude CLc1 settled at $56.20 a barrel, rising 18 cents. It gained about 1.2% on the week. U.S. economic growth slowed less than expected in the second quarter with a boom in consumer spending, strengthening the outlook for oil consumption. “The data was net positive,” said John Kilduff, partner at Again Capital Management. “GDP beat expectations… consumer spending was just off the charts, but business spending was nearly as bad as consumer spending was good.” Broader economic slowing, particularly in Asia and Europe, could weaken crude demand outside of the United States and kept prices in check. “There’s a battle in the market right now between those who think we’re going to see slowing economic conditions that will hit demand… and others (focused on) what’s going on in the Persian Gulf as well as lowered output from the producers,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut. Next week, top U.S. and Chinese negotiators meet for the first time since trade discussions between the world’s two largest economies broke down in May after nearing agreement. Any positive outcome from the talks is expected to boost oil prices. Reuters polls taken July 1-24 showed the growth outlook for nearly 90% of the more than 45 economies surveyed was downgraded or left unchanged. That applied not just to this year but also 2020.
Oil Prices Up for the Week – WTI and Brent crude oil futures eked out gains for the day and the week. West Texas Intermediate (WTI) and Brent crude oil futures eked out gains for the day and the week. The September WTI contract gained 18 cents Friday, settling at $56.20 per barrel. The light crude marker traded within a range from $55.68 to $56.57. Compared to the July 19 close, the WTI is up one percent. Also edging upward Friday was the September Brent price, which picked up seven cents to settle at $63.46 per barrel. The Brent is up 1.6 percent week-on-week. Both grades of crudes managed to show slight gains for the week despite trading within a wide range Wednesday, said Tom Seng, Assistant Professor of Energy Business with the University of Tulsa’s Collins College of Business. “Monday’s higher prices were the result of last Friday’s seizure of a British-flagged oil tanker in the Persian Gulf,” said Seng. “Countering that move was a sense of adequate flowing oil supplies and building global inventories and sagging demand going forward.” Seng also noted the International Energy Agency (IEA), OPEC and the U.S. Energy Information Administration (EIA) all lowered their growth forecasts for the remainder of 2019. In addition, he pointed out the American Petroleum Institute (API) reported that U.S. crude exports have hit a record daily average of 3.3 million barrels – helping to offset global supply interruptions from places such as Iran and Venezuela. “It has also been reported that China is stockpiling millions of barrels of Iranian crude at its ports,” said Seng. “Since it is not officially being received as imported crude, so-called bonded crude is not currently being counted but could serve to dampen prices when the world’s largest importer of oil takes ownership.” The EIA’s latest Weekly Petroleum Status Report showed a fifth straight weekly decline in U.S. commercial crude inventories, said Seng. In addition, he pointed out the report revealed:
- A drop in commercial crude stocks of 10.8 million barrels (Bbl), far higher than the 4.1 million Bbl projected by Wall Street Journal analysts with close to API’s forecast of 11 million Bbl
- 445 million Bbl of total crude in storage – two percent higher than the five-year average for this time of year
- A 429,000-Bbl decline in oil stocks at the Cushing, Okla., hub, bringing the total down to 50.4 million Bbl – or 66 percent of capacity
- 93.1 percent refinery utilization, or 17 million Bbl per day (bpd) – a 1.3-percent decline from the previous week
- A 14-percent year-on-year drop in oil imports
- U.S. oil production at 11.3 million bpd, down from the preceding week
OPEC’s Fight To End The Oil Glut Is Far From Over – OPEC and its Russia-led non-OPEC allies are in their third year of managing supply to the market, hoping to draw down high inventories and push up oil prices. Early this month, the so-called OPEC+ coalition of partners rolled over their production cuts of a combined 1.8 million bpd into March 2020, as the resurging oil glut threatened to derail their continued efforts to manage the market. OPEC is now considering using several metrics to assess where global oil (over)supply stands, including taking the five-year average of oil stocks in 2010-2014 instead of the most recent five-year average 2014-2018, which it currently reports in its monthly oil market reports and which the International Energy Agency (IEA) also takes as a benchmark to measure oil inventories. Analysts warn that the 2010-2014 average metric will not give a correct comprehensive assessment of the oil market. Fatih Birol, the IEA’s executive director, warns that moving the goalposts doesn’t change the situation in the oil market. The glut is there, regardless of how OPEC wants to measure inventories. “The important thing is that you can change the methodology but you cannot change the realities of the market,” Birol told Reuters, noting that the 2010-2014 average is a new perspective OPEC proposes to use, while the IEA has its own perspective. On the sidelines of the OPEC+ meeting in Vienna earlier this month, Khalid al-Falih, the Energy Minister of OPEC’s largest producer and de facto leader Saudi Arabia, told Al Arabiya:“With demand rising over the next nine months and the commitments from all the countries, including the Kingdom of Saudi Arabia, we are approaching the normal levels of supplies of 2010-2014. It is one of the options in front of us as a goal.” “The rate of the last five years is another option, which we think is unsuitable. We will study the middle options between these two choices. In any case, we will make sure that the market is balanced with proportionate indicators,” al-Falih told the Arab broadcaster.
Kuwait Works with Saudis to Resume Oil Output in Neutral Zone — Kuwait said it’s working with Saudi Arabia to resume oil production in the neutral zone between them that has been shuttered for at least four years. Saudi Minister of State for Energy Prince Abdulaziz Bin Salman visited Kuwait Wednesday. The two sides will discuss a resumption after the “completion of all technical issues required,” Tareq Al-Mezrem, a Kuwaiti government spokesman, told Kuwait’s state-run KUNA news agency. The zone can produce as much as 500,000 barrels a day, equal to about 4% of the countries’ combined output last month. No timeline for a resumption was given, nor was it clear if the additional production would be offset by lower output elsewhere. Both countries are subject to quotas set by the Organization of Petroleum Exporting Countries. The two sides have resolved the major issues and those outstanding are technical in nature, according to a person familiar with the discussions, who asked not to be identified because the matter is private. The talks are the most advanced they’ve ever been, the person said. Years of negotiations have so far failed to bring about a resolution. The two Gulf nations have held a number of private meetings since 2015, at one point even coming close to signing an agreement before pulling back at the last minute over wording in the final documents regarding contentious sovereignty issues. The neutral zone hasn’t produced anything since fields there were shut down after spats between the two countries in 2014 and 2015. The barren strip of desert straddling the Saudi-Kuwaiti border — a relic of the time when European powers drew implausible ruler-straight borders across the Middle East — can pump about as much as OPEC member Ecuador.
Saudi Arabia releases Iranian oil tanker after two and a half months – Saudi Arabia has released an Iranian oil tanker after two and a half months, Iran’s semi-official Mehr news agency is reporting. Happyness 1, belonging to the Iranian National Tanker Company (NITC), which was carrying over 1 million barrels of fuel oil, suffered a malfunction in the Red Sea off the coast of Jeddah in Saudi Arabia on April 30. Mehr said Saudi officials had prevented the oil tanker from leaving the Jeddah port despite the fact that Iran had paid all the costs of maintenance and repair that the Saudi authorities had demanded. Saudi authorities released the tanker and all its crew, including 24 Iranians and two Bangladeshis. This comes amid heightened tensions in the region following the seizure of a British-flagged tanker by Iran’s Revolutionary Guard. The UK’s Foreign Secretary Jeremy Hunt said the seizing of the tanker “raises very serious questions about the security of British shipping and indeed international shipping” in the Strait of Hormuz. Hunt spoke to reporters Saturday evening after an emergency government meeting about the “totally and utterly unacceptable” interception of the Stena Impero and “measures that we are going to take” to guarantee British vessels safe passage. Hunt said that while speaking with Iranian Foreign Minister Javad Zarif on Saturday, he again rejected Iran’s assertion that Friday’s incident reciprocated for Royal Marines taking part in the July 4 seizure of an Iranian tanker. He said the Iranian tanker, seized off the coast of Gibraltar, violated European Union sanctions by carrying oil to Syria, making its detention in the waters of a British territory legal.
‘Floating bomb’: Decaying oil tanker near Yemen coast could soon explode, experts warn – An abandoned and decaying oil tanker near the coast of war-torn Yemen could soon rupture or explode, the United Nations (UN) has warned, potentially triggering one of the world’s largest oil spills. The deserted Safer FSO tanker, which is believed to contain approximately 1.14 million barrels of oil, has been anchored and left without maintenance off the Yemeni coast of Al Hudaydah since early 2015, according to the UN. The tanker, which was described in a recent op-ed from The Atlantic Councilas a “floating bomb,” is thought to be eroding fast.There are concerns that following years of inertia in a salty and corrosive maritime environment, volatile gases have built up in the storage tanks – increasing the risk of an explosion.However, UN officials’ plans to inspect the ship in order to assess the scale of the damage has repeatedly been blocked.Matt Lowcock, the UN undersecretary-general for humanitarian affairs, saidin a speech to the Security Council last week that Houthi authorities “continue to delay” any assessment of the tanker.Lowcock pointed out that this was “additionally frustrating” because Houthi authorities had actually contacted the UN in early 2018 requesting assistance with the tanker and promising to facilitate their work.“If the tanker ruptures or explodes, we could see the coastline polluted all along the Red Sea. Depending on the time of year and water currents, the spill could reach from Bab el Mandeb to the Suez Canal – and potentially as far as the Strait of Hormuz,” Lowcock said on July 17.“I leave it to you to imagine the effect of such a disaster on the environment, shipping lanes and the global economy.”
This crisis was entirely predictable, but was it avoidable? – At the start of this month the Gibraltarian authorities – aided by a detachment of Royal Marines – detained a tanker which was believed to be carrying Iranian oil destined for Syria.This would have been a breach of EU sanctions directed against various Syrian entities and individuals. Gibraltar and Britain insist they were acting entirely legally, but Tehran has described the episode as piracy. And ever since the vessel was detained, the Iranians have been threatening to seize a British-flagged ship in retaliation.Indeed, an earlier effort by Iran’s Revolutionary Guard Corps to divert a British tanker into Iranian waters was only averted by the muscular intervention of a Royal Navy warship, the Type 23 frigate HMS Montrose. But there is a limit to what one warship can do. This time it appears not to have arrived on the scene quickly enough and the Stena Impero and its crew are now in Iranian hands. A second ship that was detained by the Iranians was subsequently allowed to go, underlining the fact that this seems to be a direct retaliation for the arrest of the tanker off Gibraltar. So what happens now? Well the first thing to remember is that this specific row between Tehran and London is only one aspect of an already highly volatile situation in the Gulf. The Trump administration’s decision to walk away from the international nuclear deal with Iran and to re-apply sanctions is having a hugely damaging impact on the Iranian economy. Iran is pushing back. While it denies some of these actions, the US and its allies believe it was responsible for attacking several vessels with limpet mines. It has also shot-down a sophisticated US unmanned aircraft. And, as if to underline the risk of conflict, the US claims more recently to have shot down an Iranian UAV (drone) that approached one of its vessels. The Iranians deny the loss. So the first order of business is to try to calm tensions and avoid escalation.
Iran says British-flagged tanker was in accident with fishing boat (Reuters) – The British-flagged tanker Stena Impero was in an accident with a fishing boat before being detained on Friday, Iran’s Fars news agency reported on Saturday, quoting an official. Iran says all 23 crew seized on the tanker are now at Bandar Abbas port and will remain on the vessel until the end of an investigation, according to Fars. “It got involved in an accident with an Iranian fishing boat… When the boat sent a distress call, the British-flagged ship ignored it,” said the head of Ports and Maritime Organisation in southern Hormozgan province, Allahmorad Afifipour. “The tanker is now at Iran’s Bandar Abbas port and all of its 23 crew members will remain on the ship until the probe is over.” Britain said earlier it was urgently seeking information about the Stena Impero, which had been heading to a port in Saudi Arabia and suddenly changed course after passing through the strait at the mouth of the Gulf.
Iran Posts Dramatic Video Showing IRGC Troops Raiding Seized Oil Tanker Earlier Iran released footage of the detained British-flagged oil tanker Stena Impero, but hours after the first images were revealed, more video was aired on Iranian state TV, this time showing the dramatic IRGC military raid on the vessel. Iranian special forces troops fast-roped down to the deck via helicopter while IRGC boats circled near the vessel.#BREAKING:#IRGC released video of seizure of Stena Impero, the #UK‘s Oil Tanker in #HormuzStrait yesterday. A Mi-171 transport helicopter of #IRGC Navy Aviation base at #BandarAbbas was used for heliborne & fast-roping of #IRGC Navy Special Forces on the deck of the Oil tanker. pic.twitter.com/1XQPGg8bLt – Babak Taghvaee (@BabakTaghvaee) July 20, 2019 Iran’s Press TV described:The footage shows Iranian speedboats cruising near Stena Impero tanker as a military helicopter is flying over the vessel.An Iranian marine could be heard communicating with the command center in the southern port city of Bandar Abbas. Masked Iranian comm andos then rappelled on the deck of the tanker from the helicopter. The name of the ship can be seen in the video.
Eye-For-An-Eye- UK Caught As Trump’s Useful Idiot In Dangerous Iran Policy — The UK fell for a US trap when it seized an Iranian ship on July 4. Iran struck back last Friday. Eurointelligence provides interesting commentary of tit-for-tat ship seizures first by the UK, then by Iran in response. The extraordinary story behind the capture of the British-flagged oil tanker Stena Impero is a cautionary tale on many levels. It has the potential of turning into a major diplomatic calamity for both the UK and the EU. Simon Tisdall tells the story in the Observer that this confrontation was masterminded by none other than John Bolton, Donald Trump’s national security adviser. Several weeks ago, US intelligence services tracked an Iranian oil vessel headed for the Mediterranean, bound for a refinery in Syria. The Grace 1 sailed under a Panama flag. As it was too big for the Suez Canal, it undertook the longer journey from Iran around Cape Horn and up the Atlantic towards Spain. Washington alerted the Spanish government 48 hours before the tanker was due to enter the Strait of Gibraltar, but without giving any details that the ship might be in breach of US sanctions. The Spanish Navy escorted the ship but took no action at the time. Spain later said it would have intervened if it had been given information that the ship was in breach of US sanctions. Bolton instead tipped off the British, who felt compelled to intercept the Grace I as it entered the Strait of Gibraltar on July 4, dispatching a force of 30 marines who stormed the ship. The US managed to accomplish three things at the same time: escalating the conflict with Iran; dividing the Europeans by pitching the UK against Spain, which distanced itself from the UK manoeuvre off Gibraltar; and turning the UK once again into the useful idiot of US diplomacy. Not bad for a few days’ work. But it is also a clear indication of the EU’s total lack of preparedness to deal with a hostile Trump administration. Unsurprisingly, the EU’s response is divided. Spain is furious about the UK’s unilateral action in international waters off the Spanish coast. The EU’s external-action service, soon to be headed by Josep Borrell, Spain’s foreign minister, is silent. Germany and France are backing the UK – at least diplomatically – for now. Russia, Japan and China are with Iran. They do not want to risk oil supplies.
Britain weighs response to Iran Gulf crisis with few good options (Reuters) – Britain was weighing its next moves in the Gulf tanker crisis on Sunday, with few good options apparent as a recording emerged showing that the Iranian military defied a British warship when it boarded and seized a ship three days ago. Prime Minister Theresa May’s office said she would chair a meeting of Britain’s COBR emergency response committee on Monday morning to discuss the crisis. Little clue has been given by Britain on how it plans to respond after Iranian Revolutionary Guards rappelled from helicopters and seized the Stena Impero in the Strait of Hormuz on Friday in apparent retaliation for the British capture of an Iranian tanker two weeks earlier. Footage obtained by Reuters from an Iranian news agency on Sunday showed the tanker docked in an Iranian port – with Iran’s flag now hoisted atop. The British government is expected to announce its next steps in a speech to parliament on Monday. But experts on the region say there are few obvious steps London can take at a time when the United States has already imposed the maximum possible economic sanctions, banning all Iranian oil exports worldwide. “We rant and rave and we shout at the ambassador and we hope it all goes away,” said Tim Ripley, a British defense expert who writes about the Gulf for Jane’s Defence Weekly. “I don’t see at this point in time us being able to offer a concession that can resolve the crisis. Providing security and escort for future ships is a different matter.” A day after calling the Iranian action a “hostile act”, top British officials kept comparatively quiet on Sunday, making clear that they had yet to settle on a response.
Britain calls for European naval mission to counter Iran’s ‘piracy’ – Reuters– Britain called on Monday for a European-led naval mission to ensure safe shipping through the Strait of Hormuz, days after Iran seized a British-flagged tanker in what London described as an act of “state piracy” in the strategic waterway. Foreign Secretary Jeremy Hunt outlined the plans to parliament after a meeting of COBR, the government’s emergency committee, which discussed London’s response to Friday’s capture of the Stena Impero tanker by Iranian commandos at sea. “Under international law, Iran had no right to obstruct the ship’s passage – let alone board her. It was therefore an act of state piracy,” Foreign Secretary Jeremy Hunt told parliament. “We will now seek to put together a European-led maritime protection mission to support safe passage of both crew and cargo in this vital region,” Hunt said. The British announcement signals a potential shift from Washington’s major European allies who so far have been cool to U.S. requests that they beef up their military presence in the Gulf, for fear of feeding the confrontation there. It is unclear how much influence Britain may have in Europe given it is about to have a new prime minister, widely expected to be Boris Johnson, who takes over a country divided over Brexit, its planned departure from the European Union. Hunt made a point of saying that the maritime protection proposal would not involve contributing European military power to back Washington’s hardline stance against Iran. The proposed new maritime protection mission “will not be part of the U.S. maximum pressure policy on Iran because we remain committed to preserving the Iran nuclear agreement”, he said.
Allies Resist US Call For Anti-Iran Naval Force, Fearing It Would Worsen Tensions – As tensions have continued to rise between the US and Iran, American officials continue to try to court allies to join a naval force to safeguard key shipping lanes off the coast of Iran. So far, they don’t have any takers. The Trump Administration has been keen to have other nations pay for the defense of the Strait of Hormuz, and Trump has argued that the US shouldn’t have to cover the entire cost. The United States is struggling to win its allies’ support for an initiative to heighten surveillance of vital Middle East oil shipping lanes because of fears it will increase tension with Iran, six sources familiar with the matter said. – Reuters US officials, however, are clear they will be in total control of this foreign fleet of ships they’re trying to recruit. Some nations are okay with sending a few ships to escort their own tankers, but diplomats say that there is a lot of resistance to being seen as part of a US-formed fleet that would increase tensions even further. “Nobody wants to be on that confrontational course and part of a US push against Iran,” an official was quoted by Reuters as saying. Pentagon officials argue that the goal is not to encourage a confrontation, though everyone else seems to notice this is the end-result of US efforts in the area, and doesn’t want to be involved.
Gulf crisis uniquely difficult strategic moment for UK – BBC – The Gulf crisis catches the UK at a uniquely difficult strategic moment. Its military means are quite limited, Iran’s are greater than many might think, and the option of defaulting into its usual partnership with the US is not straightforward because of disagreements over the wisdom of breaching the nuclear deal. For this reason, on Monday, UK Foreign Secretary Jeremy Hunt suggested that the response to the crisis should include a “European-led maritime protection mission”, complimentary but separate to the US effort. The issue, he insisted, was one of freedom of navigation in the Straits of Hormuz rather than increasing pressure on Iran. The UK’s options for protecting its merchant shipping in the busy Gulf sea lanes are distinctly limited. The US has suggested opting into a joint system for convoying ships past the Iranian littoral, but British decision makers are reluctant to do so – because they disagree with President Trump’s decision to exit the Iran nuclear deal in May 2018 and believe this step prompted the current tensions. The other option for a rapid change to the dynamic would be releasing the tanker Grace I from custody in Gibraltar, where it was detained on suspicion of carrying Iranian oil to Syria. Last week British officials had been upbeat that a solution to that situation could be negotiated, and then the UK-flagged ship Stena Impero was seized by Iran in Omani waters. It may well be that the release of both vessels provides de-escalation. But the longer term questions about UK-US disagreement on Iran policy, and inability to protect shipping, will remain.
UK Oil Tankers Flee Persian Gulf Amid Iran Tensions— Two weeks ago there were six British-flagged oil tankers in the Persian Gulf going about their business. A week later there were none. Iran’s threat to seize a British ship in retaliation for the arrest of the Grace 1 off Gibraltar has effectively closed the world’s most prolific oil region to U.K. carriers. The tankers in the Persian Gulf on July 9 were all registered in the Isle of Man, a self-governing British crown dependency, but that wasn’t enough to spare them from Iranian harassment. One of them, the British Heritage, left the region without loading its intended cargo of Iraqi crude and needed the Royal Navy frigate HMS Montrose to chase off Iranian patrol boats as it entered Hormuz. At least two others were also escorted out of the Gulf. There are 243 oil tankers — either listed as crude oil tankers, oil products tankers, or chemical/oil products tankers — sailing under the flag of the United Kingdom, the Isle of Man, or Gibraltar, according to tanker tracking data compiled by Bloomberg. About half of them are registered in the Isle of Man, with the other half divided roughly equally between Gibraltar and the U.K. Ships usually enter the region, load their cargoes and depart again within a matter of days. What is abnormal, is that no British-flagged oil tankers have arrived in the region in the past two weeks. On any one day, there would normally be three or four of them somewhere in the Persian Gulf. Since July 15, none have been observed. The only British-flagged tanker to try entering the Persian Gulf in the past two weeks, the Stena Impero, was boarded and impounded by Iran’s Revolutionary Guard as it sailed through the Strait of Hormuz, the narrow waterway that connects the Middle East’s major oil and gas export facilities to the open seas, on July 19. Its capture shows just how easy it is for Iran to hinder traffic through Hormuz. Until tensions ease, British tankers are likely to keep away from the Persian Gulf.
Iran’s president warns foreign powers to keep naval ships out of the Persian Gulf — Iranian President Hassan Rouhani has told his cabinet that protecting security around the Persian Gulf is solely the responsibility of countries in the region and that other nations should stay away. The United Kingdom is attempting to form an alliance with other nations to protect ships passing through the Persian Gulf and Strait of Hormuz, a channel that sees 20% of the world’s oil supply pass through it. A U.K. ministry of defense spokesperson confirmed to CNBC Wednesday afternoon that negotiations were ongoing with a number of countries within Europe as well as others including India, the United States and Pakistan. Iranian Revolutionary Guards (IRGC) seized a British Ship traveling through the channel on Friday, an apparent tit-for-tat measure after the United Kingdom had previously impounded an Iranian tanker in the Mediterranean which was suspected of intending to deliver oil to Syria’s Assad regime. Such a move is banned by EU sanctions. Speaking to his cabinet Wednesday, and in a translation subsequently published on Rouhani’s official English language website, Iran’s president said foreign military might from other parts of the world should not send armed ships to the region. “The main responsibility for protecting the Strait of Hormuz and the Persian Gulf is mainly with Iran and neighbouring countries, and is not the others’ business, and the Iranian nation has always been the protector of the Persian Gulf,” Rouhani said. He then praised his military team for taking control of the Stena Impero on Friday, a British flagged tanker traveling through the Strait of Hormuz. “The IRGC courageously seized the British ship because it had refused all the orders and warnings. They did a very accurate, professional and right thing and I believe that the whole world must be grateful to the Revolutionary Guard for ensuring the security of the Persian Gulf,” said Rouhani.
Iran Announces Military Will Secure Contested Strait Of Hormuz – Hopefully it doesn’t lead to a let’s roll! moment at the White House, where super-hawk national security adviser John Bolton has no doubt been itching for escalation: moments ago Iran’s Deputy Foreign Minister announced military forces will “secure” the Strait of Hormuz. Iran will “not allow disturbance in shipping in this sensitive area” Deputy Foreign Minister Abbas Araghchi was quoted as saying in state media, while leading a delegation to Paris, Reuters reports. However, it’s unclear at this point how far Iran is willing to go in this escalating game of chicken with the US and UK – both of which have warships and other military assets in the gulf region. “Iran will use its best efforts to secure the region, particularly the Strait of Hormuz, and will not allow any disturbance in shipping in this sensitive area,” Araqchi told French Foreign Minister Jean-Yves Le Drian during a meeting.The announcement comes amidst threats and counter threats ongoing between London and Tehran, with each demanding the release of their tanker. Early this month the Royal Navy seized the Grace 1, carrying 2 million barrels of oil, off Gibraltar; and in turn Iran last Friday captured the British-flagged Stena Impero in the Strait of Hormuz. To be sure, this is not the first time Iran has made such a threat: back in April and before that in December Iran warned it would close the global oil chokepoint, when it said that “if someday, the United States decides to block Iran’s oil (exports), no oil will be exported from the Persian Gulf.” Meanwhile, Iranian vice-president, Eshaq Jahangiri, said that Iran rejects UK-led attempts to establish a “joint European task force” to monitor and patrol the Persian Gulf in order to protect international shipping, countering that it would only bring “insecurity”.
What It’s Like to Steer a Giant Tanker Through the Strait of Hormuz – John Smith is trying to get some rest, but he’s nervous. In a few hours, he’ll navigate his 1,100-foot tanker – a vessel and cargo that together are valued at well in excess of $100 million – through the world’s most important, and lately most dangerous, chokepoint for global energy flows. “There will be six of us on the bridge looking out for ‘fast boats’ approaching,” says Smith, whose name was changed to protect his security, writing by email from his ship. “Not sure six people on the bridge will have any deterrent effect on troops abseiling down onto the ship from a helicopter. All on board are nervous of the situation. Also of course the families at home.” At the time he emailed, Smith’s ship, one of the world’s largest, still had eight hours before it made it through the Strait of Hormuz, a waterway linking the oil-rich Persian Gulf with global markets. A third of the world’s seaborne petroleum, and a huge volume of liquefied gas, pass through the strait every day. On July 19, Iran seized a U.K.-flagged tanker there in an apparent retaliation for Britain’s Royal Marines helping to arrest a vessel transporting Iran’s crude in the Mediterranean earlier in the month in an alleged violation of Syria sanctions. Smith is responsible for 30 crewmen of various nationalities. His fears – perhaps the first time such anxieties have been expressed by a captain of a Gulf tanker since the crisis began – highlight the plight of merchant seafarers who’ve been caught up in tensions between Iran on one side and the U.S. and Britain on the other that have been turning increasingly confrontational in recent weeks. Since mid-May, a half-dozen ships have been attacked in the region, with Washington blaming Iran for the incidents. Iran, which denies the charges, is furious that the Royal Marines helped seize a cargo transporting Iranian crude oil near Gibraltar in the Mediterranean Sea and, before the July 19 seizure, had vowed to retaliate. U.S. and Iranian drones have been getting blown up. On July 22, Iran announced it had rounded up 17 alleged CIA-trained spies and planned to execute them. On Twitter, Trump described the Iranian claim as “totally false” and “just more lies and propaganda (like their shot down drone).”
Libya Seizes Italian Ship In The Gulf Of Sirte – Another vessel has been seized on the high seas…but the parties involved might be surprising to some. Sputnik reports that Libya has seized an Italian vessel in the Gulf of Sirte. The seizure comes as tensions between Iran and the UK climb as both countries have seized tankers. Iran captured two British-flagged oil tankers in retaliation for British Royal Marines seizing a Panamanian-flagged tankercarrying a shipment of Iranian crude. Though the motive for the seizure hasn’t yet been made clear, many suspect piracy or some kind of fisherman’s dispute (the ship was a fishing trawler). Rome told Italy’s ambassador to Libya to “work promptly with the utmost efficacy to ensure the correct treatment and rapid release of the crew and the vessel…which has been forced to head for Misrata,” the ministry told Sputnik. The waters where the Italian ship was seized are denoted as “high risk,” mostly because of the instability in Libya, which hasn’t had a functioning national government since the NATO-backed ouster of Muammar Gaddafi. However, in Misrata, the part of Libya closest to where the ship was seized, the Government of National Accord, the Italian and UN-recognised Libyan government, is believed to be in control.
The fake Twitter accounts influencing the Gulf crisis – On June 6, 2017, a group of four countries – Saudi Arabia, the United Arab Emirates (UAE),Bahrainand Egypt – cut all diplomatic ties with their Gulf neighbour, Qatar.They cited several reasons for breaking ties, but the main accusations the blockading countries laid out centred on allegations that Qatar supported “terrorism” and was working on “destabilising the region”, accusations Doha has consistently denied.What many did not know is that some of the groundwork for the blockade had already been laid on social media platforms like Twitter.An online propaganda battle, which started in the months before the GCC Crisis, continues to this day, Al Jazeera has found. Using a combination of data collection and language processing, Al Jazeera has analysed more than 2.3 million tweets from almost 2,400 accounts, sent between June 2017 and October 2018.The analysis found that bots – Twitter accounts that are either fully or partially automated to amplify certain messages, hashtags or opinions – play a significant role in the online conversation about the blockade. “In the two months before the Gulf Crisis started, a network of Twitter accounts was set up specifically to have anti-Qatar messages in their bios,” Marc Owen Jones, assistant professor of Middle East Studies at Hamad Bin Khalifa University in Doha and fellow of the Exeter Institute of Arab and Islamic Studies, told Al Jazeera.Jones has spent the last several years researching how Twitter in the Middle East, and in the Gulf region especially, is being manipulated to spread propaganda. “The methodology that I use to identify these bots is by looking at account creation dates,” Jones said. “If you see a huge amount of accounts created on the same day tweeting on the same topic and they don’t really interact with people, you can be almost certain they’re bots,” he said.
Hundreds Of US Troops Begin Deployment To Saudi Arabia To Counter Iran – The deployment of hundreds of US troops to Saudi Arabia as part of a build-up to counter Iran in the region amid soaring tensions and a dangerously ratcheting “tanker war” has begun, TheWall Street Journal reported Friday night. The Pentagon first revealed on Wednesday that 500 of the 1000 total troops announced by the White House last month to bolster US presence in the Middle East would be heading to the Prince Sultan Air Base, situated in the desert east of Riyadh. Crucially, Prince Sultan Air Base has been closed to American troops since the rapid fall of Baghdad and overthrow of Saddam at the start of the 2003 US invasion of Iraq. The WSJ report confirms the new deployment is en route within 24 hours after Iran’s elite IRGC seized two British tankers in the Strait of Hormuz. One tanker has already released, but the other – British-flagged Stena Impero and its crew – is still being detained. According to the report: The military already has begun to deploy more than 500 U.S. service members to Prince Sultan Air Base, about 150 kilometers southwest of Riyadh, officials said. Saudi officials didn’t respond to requests for comment. Officials from U.S. Central Command, which overseas the Middle East, declined to comment.It’s the latest sign that the Trump Administration is continuing its military buildup in the region, which has so far included fighter jets, B-52 bombers, an aircraft carrier strike force, Navy destroyers and – of course – more troops.Citing two senior defense officials, CNN had previously reported that a small number of troops were already in the area, and initial preparations were being made for a Patriot missile defense battery as well as improvements to a runway and airfield. US security assessments have determined that the area would be ideal for US troop deployment because it would be difficult for Iran to target with missiles. Satellite images obtained by CNN revealed the initial deployment to the air base in mid-June. Other images showed more preparations were made at the site earlier this month.
Iran’s Military Vows Attack On All Regional US Bases If War Starts – Iran has again rejected the prospect of new negotiations with the White House “under any circumstances,” according to an interview with Supreme Leader Ayotallah Ali Khamenei’s Military Adviser Hossein Dehghan, cited in Al Jazeera. The Islamic Republic’s top military adviser further warned Iran and its regional allies will target all American bases in the region should the US launch war plans, while reiterating Iran’s ability to block the vital Strait of Hormuz to global oil transit. Everyone must be able to freely transit the Persian Gulf waterway or no one at all, Dehghan warned. Yesterday, Iranian vice-president, Eshaq Jahangiri, said that Iran rejects UK-led attempts to establish a “joint European task force” to monitor and patrol the Persian Gulf in order to protect international shipping, countering that it would only bring “insecurity”.“There is no need to form a coalition because these kinds of coalitions and the presence of foreigners in the region by itself creates insecurity,” he said. And added, “And other than increasing insecurity it will not achieve anything else.” France, Italy, the Netherlands and Denmark indicated Tuesday they would support a European-led naval mission to ensure international vessels’ safe passage in the gulf. Iran’s Deputy Foreign Minister further informed France directly while in Paris meeting with top French officials including the president, that Iran’s own military forces will “secure” the Strait of Hormuz and will “not allow disturbance in shipping in this sensitive area,” Reuters reported earlier.Meanwhile, threats and counter threats have continued to fly between London and Tehran, with each demanding the release of their tanker while accusing the other of “piracy”. Early this month the Royal Navy seized the Grace 1, carrying 2 million barrels of oil, off Gibraltar; and in turn Iran last Friday captured the British-flagged Stena Impero in the Strait of Hormuz. On Wednesday Iran’s Hassan Rouhani appeared to offer a new deal that could break the stalemate, suggesting that should the UK release the Grace 1, Iran would reciprocate by releasing the Stena Impero. “If Britain steps away from the wrong actions in Gibraltar, they will receive an appropriate response from Iran,” Rouhani said Wednesday addressing a weekly cabinet meeting. The words came the same day Britain reportedly sent a mediator to Iran seeking the release of the Stena Impero.
The Next U.S.-Iran Flashpoint Could Be Iraq— Drones have been downed and tankers attacked in the Persian Gulf as U.S.-Iran tensions raise fears of war around a critical oil chokepoint. But any conflict between rivals might actually start in the one country where both sides have forces on the ground: Iraq. After two wars with America since 1990, a brutal civil conflict and the rise of Islamic State more recently, about 5,200 U.S. troops are stationed in Iraq — amid thousands of Iranian-backed Shiite militias, controlled by officials in Baghdad sympathetic to Tehran. That complicated reality leaves Iraqi officials in a difficult situation as they navigate security ties with the U.S. and their political and religious links to Iran, according to Ali Vaez, director of the Iran Project at the International Crisis Group. “The Iraqi government cannot afford to alienate either side,” Vaez said in a phone interview from Washington. “That is exactly why now it finds itself between a rock and hard place.” So far direct conflict has been avoided, and open warfare is unlikely given greater U.S. firepower, but it’s an uneasy lull. The U.S. pulled non-emergency staff from its embassy in Baghdad — its largest and most expensive mission in the world — and closed its consulate in Basra late last year as officials worried that Iran was undermining Iraq’s central authority, as well as Washington’s influence. The consulate remains closed. Exxon Mobil Corp. temporarily evacuated its foreign employees from a camp near the West Qurna-1 oil field in Basra in southern Iraq after a nearby rocket attack. In June, rockets hit an official compound in the northern Iraqi city of Mosul and the Taji Military camp near Baghdad, both of which house American military advisers, according to local press reports. Some “rogue” Iranian-backed militias “plot against U.S. interests and plan operations that could kill Americans, coalition partners and Iraqis,” Joan Polaschik, the acting principal deputy assistant secretary of state for Near Eastern affairs, said at a Senate hearing last week. These groups monitor U.S. diplomatic facilities and “continue to conduct indirect fire attacks,” she said. At the same hearing, Deputy Assistant Secretary of Defense for the Middle East Michael Mulroy said that Iran’s “cynical interference” undermines Iraqi interests and “jeopardizes” stability. ‘Loyal to Tehran’
A mysterious drone attacked ‘Iran-backed militia’ in Iraq – Israel News -A drone attacked Iraqi Security Forces on Friday that were deployed 180 km. north of Baghdad, near the city of Tuz Khurmatu. Initially reported as an attack on Iranian-allied forces, including the Islamic Revolutionary Guard Corps (IRGC), the mysterious drone incident is still being investigated, and it is not clear where it came from or who carried out the attack that left several wounded. What we know is that something happened. The US-led anti-ISIS coalition put out a statement on July 19 saying they were aware of reports “of an attack against the Iranians and a Popular Mobilization Force unit in Salah a-Din [governorate]. Coalition Forces were not involved, and we have no further information at this time.” The coalition responded because of rumors circulating on social media and in Iraq seeking to blame the US for the incident. The day of the drone incident was the same day that the US said it used electronic warfare to take down an Iranian drone that was harassing the USS Boxer near the Straits of Hormuz. In another incident on the same day, Iran raided a British-flagged oil tanker, so tensions were already high that day. Different media have reported the incident. Kurdistan 24 wrote that “unidentified drone bombs Iran-allied militia in Iraq.” It said the incident occurred near Amerli, which is south of Tuz Khurmatu, and that the victims were from the “al-Shohada military camp of the Turkmen Brigades, part of the Iraq’s Hashd al-Shaabi militias.” This was according to Iraq’s Security Media Cell, Kurdistan 24 reported. Reports said that the drone “dropped grenades” and injured two people, but also said an ammunition depot was struck and one killed. The Hashd al-Shaabi are called the Popular Mobilization Units (PMU) and are a group of mostly Shi’ite paramilitaries who were raised to fight ISIS, but who became part of the Iraqi security forces in 2018 and are now standardized military units.
Iran’s two armies – On 5 May the US announced it was deploying the USS Abraham Lincoln Carrier Strike Group and a bomber task force to the Gulf. National Security Advisor John Bolton said this was ‘in response to a number of troubling and escalatory indications and warnings’ and told Iran that ‘any attack on United States interests or on those of our allies will be met with unrelenting force.’ Tension in the Gulf and on the Arabian peninsula has continued to rise, and Washington’s allies Saudi Arabia and the United Arab Emirates have, with varying degrees of explicitness, blamed Iran for the sabotage of oil tankers near the Strait of Hormuz and the increase in Houthi rebel activity in Yemen. Bolton went on to say, ‘The United States is not seeking war with the Iranian regime, but we are fully prepared to respond to any attack, whether by proxy, the Islamic Revolutionary Guard Corps, or regular Iranian forces.’ This ominous statement makes it clear that the possibility of armed conflict between Iran and the US, its Gulf allies and Israel, while still only theoretical, cannot be discounted. It is also a reminder that any belligerent attacking the Islamic Republic of Iran will be met by two distinct military forces: the regular army and the Revolutionary Guards. To understand their origins and assess their capability to withstand a US military intervention, it’s necessary to go back 40 years to the days that followed the fall of the shah.
Israeli Minister Brags That His Country Has Been “Killing Iranians for Two Years” – An Israeli minister boasted on Sunday that his country was the only one that “has been killing Iranians,” after tensions between Britain and Iran rose in the Gulf. Regional Cooperation Minister Tzachi Hanegbi’s comments on public radio were a reference to Israeli strikes in neighbouring Syria against Iranian and Hezbollah military targets. But they came after Iran seized a British-flagged tanker on Friday, adding to tensions between Washington and Tehran linked to a 2015 nuclear deal. Hanegbi accused Iran, Israel’s main enemy, of seeking to create “chaos” and “harm freedom of navigation”. Asked if he feared that Israel would not receive the backing of the United States in the case of a conflict with Iran, Hanegbi suggested that Tehran would avoid such a scenario.“Israel is the only country in the world that has been killing Iranians for two years,” he said.“We strike the Iranians hundreds of times in Syria. Sometimes we acknowledge it and sometimes foreign reports reveal it.“You can see that the Iranians are very limited in their responses, and it’s not because they don’t have abilities – it’s because they understand that Israel means business.”Israel has carried out hundreds of strikes in Syria against what it says are Iranian and Hezbollah military targets.It has vowed to keep Iran from entrenching itself militarily there.Prime Minister Benjamin Netanyahu spoke in a similar vein last week with cadets at the National Security College.“At the moment, the only army in the world to fight Iran is the Israeli army,” he said.Earlier this month, Netanyahu warned that Israeli fighter jets “can reach anywhere in the Middle East, including Iran”. Iran’s seizure of a British-flagged tanker in the Strait of Hormuz for breaking “international maritime rules” came some two weeks after Britain seized an Iranian tanker at the mouth of the Mediterranean on allegations of breaching UN sanctions against Syria.
Iran Claims IAEA Chief Behind Nuclear Deal Eliminated By Israeli Intelligence -Iran state media has made bombshell sensational claims of a conspiracy assassination of the head of the International Atomic Energy Agency (IAEA), whose death was reported early this week, prompting a firm denial from the powerful UN nuclear watchdog body. On Wednesday semi-official Tasnim news agency claimed Israeli intelligence “eliminated” Yukiya Amano, who was the Director General of the IAEA and oversaw the singing of the landmark 2015 P5+1 nuclear deal (JCPOA). Iranian sources allege the covert assassination was carried out on the powerful staunch supporter of the JCPOA in order to gain leverage to force Tehran into dealing with the Trump White House’s “pressure-talks” scheme, as Tasnim put it. The 72-year old Amano, who was also a career Japanese diplomat, was considered a huge influence in seeing the Iranian nuclear deal through and ensuring its continued survival over and against recent Trump administration pressure. Trump had famously called the 2015 agreement brokered by the Obama administration “the worst deal ever negotiated” before ordering the unilateral US pullout. The UN nuclear watchdog chief died on July 18, with the family only disclosing his passing on late Sunday, but no details as to the cause of death were given; however, a UN statement said he was due to step down next March due to an unspecified illness. Meanwhile Iran provided zero evidence for its wild accusation, nor did the report suggest exactly how the alleged Israeli intelligence plot was carried out. The Iranian allegation made waves inside Israel and at the IAEA Wednesday, as the Times of Israel reports: The Tehran-based outlet, which defines its mission as “defending the Islamic Revolution against negative media propaganda campaign [sic],” cited unnamed “informed sources” who insisted that Amano, a Japanese diplomat who was extensively involved in negotiations over Iran’s controversial nuclear program, had been “eliminated” after refusing to buckle to “heavy pressure” from Jerusalem and Washington.
Trump’s Peace Plan and the Future of Palestine – Last month, Jared Kushner led a delegation of US envoys to Bahrain for an “economic workshop,” where he outlined his vision for a lasting settlement between Israel and Palestine. Titled “Peace to Prosperity”, the $50 billion plan was effectively a bribe, a one-time payment intended to persuade Palestinians to abandon their core national ambitions. Roundly scorned, Kushner’s deal was rejected before it even emerged. The central innovation of “Peace to Prosperity” is its attempt to resolve what is essentially a political problem through economic means. “Land for Peace”, the organising framework of the past three decades, has been traded for “Money for Peace”, a Trumpian formula designed to work in lockstep with the increasing neoliberalism of the Palestinian Authority (PA) economic policy. The language of the plan is appropriately corporate: it speaks vaguely of ‘empowerment’ and ‘opportunity’, and leans heavily on the influence of the private sector. ‘Modern’ is a key buzzword: everything stands to be modernised, from the dilapidated transportation network in Gaza, to the old-school inspection techniques that clog up West Bank checkpoints. Palestinians are envisioned as customers in a vast transnational business deal, rather than political subjects making a moral and historical claim to their land. There is no mention of an occupation, or of a Palestinian state. The plan’s appeal, such as it is, is directed squarely at Palestinian desperation, designed to exploit their powerlessness in a region increasingly dominated by Israel. Kushner’s deal is not distinguished by its newness – the PA has been trading resistance for economic incentives since at least the Oslo accords – but by its ineptitude. Its specifications are either suspiciously vague, or haphazard and incoherent. With the economic portion of the deal having been rejected, attention will soon turn to the next chapter of this long, doomed process: the release of Trump’s political plan, the centrepiece of the much-hyped ‘deal of the century’.
Trump Says He Could Kill 10 Million People, Wipe Afghanistan Off Face of the Earth – – Kabul reacted with outrage and demanded clarification Tuesday after U.S. President Donald Trump said he has military plans that could wipe Afghanistan “off the face of the Earth,” killing millions of people.Following Trump’s remarks, the office of Afghan President Ashraf Ghani said in a statement that Afghanistan “will never allow any foreign power to determine its fate.”“While the Afghan government supports the U.S. efforts for ensuring peace in Afghanistan,” the statement read, “the government underscores that foreign heads of state cannot determine Afghanistan’s fate in absence of the Afghan leadership.”Trump’s comments came during a meeting in the Oval Office Monday with Pakistani Prime Minister Imran Khan. “We’re not fighting a war,” Trump said of the U.S.-led conflict that has lasted nearly 18 years, the longest war in American history. “If we wanted to fight a war in Afghanistan and win it, I could win that war in a week. I just don’t want to kill 10 million people.”“I have plans on Afghanistan that, if I wanted to win that war, Afghanistan would be wiped off the face of the Earth. It would be gone,” the president added. “It would be over in, literally, in 10 days. And I don’t want to do that – I don’t want to go that route.”Watch:The Afghan public expressed revulsion at Trump’s remarks, which came as U.S. envoy to Afghanistan Zalmay Khalizad arrived in the Middle East for talks with the Taliban.Shakib Noori, an entrepreneur based in Kabul, told Reuters that Trump’s comments were “embarrassing and an insult to all Afghans.” Afghan-American author Khaled Hosseini expressed a similar sentiment, calling Trump’s statement “reckless” and “appalling.”
Ukraine Seizes Russian Oil Tanker, Moscow Threatens Consequences –Ukraine’s security services said on Thursday they had detained a Russian oil tanker that had blocked Ukrainian warships near Crimea in November, drawing reaction from Russia which vowed ‘consequences’ should Russians aboard the tanker be taken hostage. On Thursday, Ukraine’s security service seized Russian tanker Neyma, which Ukraine believes took part in the incident in the Kerch Strait near Crimea in November 2018. Russia seized at the end of November three Ukrainian ships near Crimea in an incident that risked spilling over into a wider conflict between the two countries, exacerbating the disputes between Moscow and Kiev over oil and gas resources and infrastructure.Russia – which annexed Crimea in 2014, for which the U.S. and the EU imposed sanctions on Moscow – said at the time that three Ukrainian vessels had violated its state border in waters near Crimea.Ukraine, for its part, said that it had informed Russia about the plans for the ship movements and said that the seizing of the vessels was “another act of armed aggression” by Russia. The November 2018 incident was the first open conflict between Russian and Ukrainian militaries in recent years. Tensions had been rising over the access to the Kerch Strait, where the incident took place, and the Sea of Azov.
Turkey Prepared To Reinvade Cyprus If Needed – Erdogan Says Following EU Sanctions – Turkey’s military is prepared to reinvade Cyprus “if needed for the lives and security of Turkish Cypriots,” Turkish President Recep Tayyip Erdogan said on Saturday. “The entire world is watching our determination. No one should doubt that the heroic Turkish army, which sees [Northern] Cyprus as its homeland, will not hesitate to take the same step it took 45 years ago if needed for the lives and security of the Turkish Cypriots,” state-run Anadolu News Agency quoted Erdogan as saying. Erdogan issued the statement as the nation marks the 45th anniversary of Turkey’s deeply controversial invasion of northern Cyprus in 1974, long condemned by the bulk of UN member countries. But the provocative remarks come amidst what EU-member Cyprus has dubbed a “second invasion” involving illegal Turkish oil and gas drilling, accompanied by Turkish warships, F-16s, and drones to ensure “protection” of its drilling vessels. The EU agreed on Monday to bring financial and political sanctions against Turkey after repeat warnings of the past weeks over Ankara deploying multiple offshore drilling vessels into international recognized Cypriot waters. The European Union announced Monday from Brussels:“Today, we will adopt a number of measures against Turkey – less money, fewer loans through the European Investment Bank, freeze of aviation agreement talks. Naturally, other sanctions are possible.”The most serious measure will involve a cut of 145.8 million euros ($164 million) in European funds allocated to Turkey for 2020, according to a prior AFP report.
British Airways, Lufthansa suspend flights to Cairo – British Airways and Lufthansa have suspended flights to Egypt’s capital, Cairo, over unspecified security concerns, giving no details about what may have prompted the move. “We constantly review our security arrangements at all our airports around the world, and have suspended flights to Cairo for seven days as a precaution to allow for further assessment,” British Airways said in a statement on Saturday. When asked for more details about why flights had been suspended and what security arrangements the airline was reviewing, a spokeswoman responded: “We never discuss matters of security.” Meanwhile, a spokesperson from Lufthansa, which operates flights to Cairo from Munich and Frankfurt, said: “As safety is the number one priority of Lufthansa, the airline has temporarily suspended its flights to Cairo today as a precaution, while further assessment is being made. The German airline said it plans to resume its flights on Sunday.
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