Written by rjs, MarketWatch 666
Here are some more selected news articles about the oil and gas industry from the week ended 04 August 2019. Go here for Part 1.
This is a feature at Global Economic Intersection every Monday evening.
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The U.S. Might Sanction a Russian Pipeline to Germany. That’s a Terrible Idea. – Don’t just sit there, sanction someone” should be the motto for U.S. foreign policy these days. Let’s impose more sanctions on Iran for violating the agreement from which the Trump administration withdrew unilaterally. Let’s hit Russia with sanctions not only for its 2016 interference in U.S. elections, but for future interference it has yet to commit, instead of passing billsto enhance election security. Now the House and Senate are considering legislation to impose sanctions on companies involved in building the Nord Stream 2 gas pipeline from Russia to Germany. On Wednesday the Senate Foreign Relations Committee passed the sanctions bill 20-2. Ostensibly intended to protect Europe from Russia’s malign influence by halting pipeline construction, this legislation will do nothing of the sort. It is far more likely to undermine U.S. relations with Germany and push Russia even closer to China. In fact, if U.S. lawmakers really want to undercut Russia’s leverage against Europe, they should support the pipeline project. There is much to criticize about Nord Stream 2. It is yet another example of the cozyrelationship between Russian and German business elites. Gazprom, the Russian state-controlled natural gas monopoly and Nord Stream’s majority shareholder, is known for its business practices skewed to benefit Kremlin insiders, many of whom are under U.S. sanctions. The Kremlin has also used Gazprom as a foreign policy tool to bully its neighbors dependent on Russian gas. But the proposed legislation will not change Gazprom, its German and other European partners, or the Kremlin’s bullying habits. Nor will it stop the pipeline, which has the necessary financing and is more than two-thirds completed. Even if the proposed sanctions deter some companies from participating in the project, others will step in. The German government has rejected the Trump administration’s threat of unilateral extraterritorial sanctions against German companies involved in the pipeline project. True, as the pipeline’s critics charge, once it is built, Nord Stream 2 could – theoretically, if Russia develops new supply sources – deliver as much as 55 billion cubic meters more Russian gas annually to Europe. These critics fear that Europe is becoming too dependent on Russian gas, and a new pipeline would make the problem only worse. But in fact, Russia’s share of Europe’s gas imports has been decreasing. In 1980, during the Cold War, Russia supplied 80 percent of Europe’s natural gas imports; in 2018, that share was 40 percent.
Russian Gasoline Makes Long Trek to Venezuela — Russian oil products are making their way to sanction-stained Venezuela, affording a reprieve for the Latin American nation as it battles persistent fuel shortages. Venezuela received at least 616,000 barrels of gasoline and 500,000 of vacuum gas oil, a feedstock used to produce gasoline, in June and July. The cargoes sailed from the Black Sea port of Taman to Malta, where they were transferred to other vessels heading to Venezuela, according to people familiar with the cargoes and ship-tracking data compiled by Bloomberg. More Russian cargoes could be coming as the vessel Commander, which loaded VGO in Taman in late July, is also heading for Malta, one of the people said. Tanker-tracking data confirm the movement. The fuel shipments could help Venezuela ease its gasoline crisis. Once an exporter of gasoline to the Caribbean and the U.S. East Coast, the country now must import almost of all of its fuel amid breakdowns at its domestic refineries. Before sanctions imposed by U.S. president Donald Trump, Venezuela imported most of its gasoline from the U.S. and India, but recently switched to supplies from Turkey, Latvia, Greece and now Russia. It’s a long trip. Gasoline vessels from Russia take 30 days to Venezuelan shores, while supplies from the U.S. arrive in a little over than a week, according to data compiled by Bloomberg. “Russia is probably charging a premium for these cargoes because of sanctions,” said Andy Lipow, president of Lipow Oil Associates LLC. “It’s unusual that Black Sea gasoline is making its way over to this side of the Atlantic,” he said in a phone interview from Houston. Russia froze domestic gasoline prices in the first half of this year, making fuel exports a more attractive option. From July, the government removed the cap but reached an informal agreement with producers to keep retail and wholesale prices growing in line with inflation, according to Vedomosti.
10,000 Gallons of Oil Spills Into Chile’s Pristine Patagonia – Forty-thousand liters (approximately 10,600 gallons) of diesel oil have spilled into the waters of Chile’s Patagonia, a biodiversity hotspot at the tip of South America. The Chilean navy confirmed the oil spill Saturday after receiving a call from CAP, a mining company, informing it of a spill from its terminal on Guarello Island, The Guardian reported. The oil spilled from the island, where CAP mines limestone, and out into the South Pacific Ocean, Reuters reported. Oceana Chile tweeted a map showing the affected area, along with the hope that the spill would not be of unspeakable proportions. Greenpeace Chile also expressed concern over the potential damage, warning it could be “devastating.””It’s an extremely grave situation considering the pristine nature of the waters in which this environmental emergency has occurred,” Greenpeace Chile Director Mat’as Asun said in a statement reported by CNN. “It must be considered that the zone is extremely difficult to access and that it is an area of great richness of marine mammals, like whales and dolphins, which could see themselves seriously affected in their habitat given that when coming to the surface to breathe they could meet this layer of oil.”The navy sent ships to control the damage and launched an investigation into its cause.”The marine pollution control centre was activated,” Third Naval Zone commander Ronald Baasch told local media, according to The Associated Press.The navy announced that around 15,000 liters (approximately 4,000 gallons) had been contained as of Sunday, CNN reported.
Chile continues its mission to clean 40,000 liters of oil spilled at sea – The spill occurred near a remote island on the south coast of the country The Chilean Navy seeks to control the spill of 40,000 liters of diesel oil in Chilean Patagonia , in the south of the country. The accident occurred on Saturday on the island of Guarello, on the Chilean side of Patagonia, the southernmost region that constitutes the tip of Argentina and Chile. The spill would have devastating impacts on the environment in the area. “It is an extremely serious situation considering the pristine nature of the waters in which this environmental emergency has occurred,” said the national director of Greenpeace Chile, Mat’as Asun. “It should be considered that the area is extremely difficult to access and that it is an area of great wealth of marine mammals, such as whales and dolphins, that could be seriously affected in their habitat, since when they surface to breathe they could encounter this layer of oil, “added the expert. Several units of the Navy were sent to the site as part of the efforts to contain the contamination. The authorities also initiated an investigation to determine the cause of the spill. Mat’as Asun also asked the Chilean mining company CAP, which exploits natural resources on the island, to provide as much information as possible to clarify what happened.
Indonesian energy giants oil spill affects 10 villages, seven beaches – At least 10 villages and seven beaches in West Java have been affected by the oil spill from state energy giant Pertamina’s Offshore North West Java (ONWJ) block that has been polluting the sea for more than two weeks. The Energy and Mineral Resources Ministry’s acting director general for oil and gas Djoko Siswanto said in Jakarta on Monday that the affected villages were spread across Karawang and Bekasi regencies. “According to data [from Pertamina], the oil spill has now followed the wind to the west, about 84 kilometres [from the source of the spill]. There are eight effected villages in Karawang and the rest are in Bekasi,” he said. Djoko further said the US well control company Boots & Coots, which is affiliated to the US well service contractor Halliburton, had arrived and was expected to start the process of closing down the damaged well with a cement injection. Halliburton is Pertamina’s subcontractor for the operation of the YY project, one of its three wells or known as the YYA-1 well. It is the source of the oil and gas spill that began on July 12. Dwi Soetjipto, the Upstream Oil and Gas Regulatory Task Force (SKK Migas) chairman, said Monday that the government’s priorities were to minimise its environmental impact and close the damaged well soon.
Environmentalists call Pertamina out on Karawang oil spill, prepare lawsuit – State energy company Pertamina has come under fire for allegedly failing to take proper action to clean up a large oil spill off the coast of Karawang in West Java. The Indonesian Forum for the Environment (Walhi) said an estimated 3,000 barrels of oil have been seeping into the ocean each day since July 12, when a well-kick occurred at a freshly drilled well about 2 kilometers offshore. The oil spill had already spread over an area of more than 45 square kilometers by July 18, resulting in fishermen and shrimp farmers suffering major economic losses. Some of them are now preparing to file a lawsuit against Pertamina. “Our records from the ESA Sentinel 1 satellite can be accessed publicly. We are using a foreign-owned satellite and more data will become available on Aug. 2,” said Dwi Sawung, manager for energy and urban affairs at Walhi. The environmental group claims that Pertamina has so far made no attempts to clean up the spill, which is spreading fast due to strong winds in the area. “The last report we received from people was that it had reached Untung Island in the Thousand Islands,” Sawung said, referring to a group of islands off the coast of Jakarta. “Pertamina has not told the public about the management progress and the spread of the oil, which spilled from their drilling location,” he added. Sawung said the oil giant’s emergency procedures are inadequate, especially on informing the worst affected parties. The result is that people do not know how to deal with the situation, or how severe the impact is.
Oil spill across 150 meters of Ras Ghareb amid oil pollution – Oil stains covered a distance of 150 meters in the Dai al-Qamr area of Ras Ghareb in the Red Sea governorate on Tuesday amid warnings of the spots extending to other areas and impacting beaches and maritime life on the Red Sea. The Operations Room in the Ministry of Environment decided to form a committee of environmental researchers who will inspect the stains and dispatch samples to the laboratories of the Environmental Affairs Agency in Suez to determine the source and perpetrator of the spots before filing a lawsuit and determining the value of financial compensations expected for the affected marine environment. Red Sea Governor Ahmed Abdallah said that he met representatives of several oil companies to set a new mechanism for eliminating oil leakage and controlling leakages before they extend to the beaches of Hurghada. Abdallah noted that the government pays a lot of money to combat oil pollution, which damages health, economy, and the tourist environment in the governorate. He also stressed the importance of cooperation between the oil companies and the governorate in managing the crisis through a modern scientific method and contact with a company specialized in combating oil pollution. The Environment Ministry announced July 5 that it spotted a crude oil spill covering 1,500 meters off the coastal area of Ras Ghareb in the north of the Red Sea governorate and declared a state of emergency while cooperating with the Petroleum Ministry to determine the spill’s source. Crude oil spill pollution has covered the coastal area of Ras Ghareb five times, causing severe damage to the beaches and marine life of the Red Sea.
Increasing warnings of environmental disaster in the Red Sea – There are growing warnings of a potential environmental disaster as a result of an oil spill from a floating tank in the Red Sea. The Government of Yemen government and the Houthi group have been reciprocally accusing each other in this regard.Yemeni President Abdrabbuh Mansur Hadi has warned of a possible environmental disaster in the Red Sea because the Houthis have prevented a UN technical team from accessing the Tanker.“The “Safar” tanker is worn out, and its explosion or the leakage of its loads will result in one of the most significant oil leaks in history,” said the Information Minister of Hadi’s government, Muammar Mutaher Al-Eryani, in a series of tweets. He said that environmental disaster will affect marine life in the Red Sea and maritime traffic in the Strait of Bab-el-Mandeb and the Suez Canal, which are two of essential waterways in the world.The minister called on the world to stop the persistent intransigence of the Houthi group that prevents the United Nations team from maintaining the tanker.Al-Eryani revealed that the Houthis demand the tanker’s revenues – estimated at $80 million. He also warned of an environmental disaster that could spread to Saudi Arabia, Eritrea, Sudan, and Egypt.In contrast, the leader of the Houthi group, Mohammed Ali Al-Houthi, held Hadi’s government, the Arab Coalition, and the United Nations responsible for the environmental disaster that may be caused by the oil spill from the Safar oil tanker.The leader, who is a member of the Supreme Political Council of the Houthis authority in Sana’a, said via Twitter that his group “is not preventing the tanker’s maintenance” and is constantly asking the United Nations to intervene.
OPEC oil output hits lowest since 2011 on Saudi cut, sanctions: Reuters survey – (Reuters) – OPEC oil output hit an eight-year low in July as a further voluntary cut by top exporter Saudi Arabia deepened losses caused by U.S. sanctions on Iran and outages elsewhere in the group, a Reuters survey found. The 14-member Organization of the Petroleum Exporting Countries pumped 29.42 million barrels per day (bpd) this month, the survey showed, down 280,000 bpd from June’s revised figure and the lowest OPEC total since 2011. The survey suggests Saudi Arabia is sticking to its plan of voluntarily restraining output by more than called for by an OPEC-led supply deal to support the market. OPEC renewed the supply pact this month, shrugging off pressure from U.S. President Donald Trump to pump more. Despite lower OPEC supplies, crude oil has fallen from a 2019 high above $75 a barrel in April to $65 on Wednesday, weighed down by concern about slowing economic growth. OPEC, Russia and other non-members, known as OPEC+, agreed in December to reduce supply by 1.2 million bpd from Jan. 1 this year. OPEC’s share of the cut is 800,000 bpd, to be delivered by 11 members and exempting Iran, Libya and Venezuela. In July, the 11 OPEC members bound by the agreement, which now runs until March 2020, achieved 163% of pledged cuts, the survey found. All three exempt producers also pumped less oil.
Column: Iran’s crude exports are down, but estimates of how much vary wildly – (Reuters) – Iran’s crude oil exports last month were either less than two supertankers’ worth, or as much as one of the giant vessels every two days, depending on who has the most accurate data. The huge discrepancy between industry experts and analysts on the true volume of Iran’s exports shows just how difficult it has become to get accurate figures since the United States ended sanctions waivers for the country’s top eight buyers. Iran’s exports were down to as little as 100,000 barrels per day (bpd) in July, not even enough to fill two very large crude carriers (VLCCs), which carry around 2 million barrels each, according to an industry source who tracks oil flows. Refinitiv – which monitors shipments based on vessel-tracking, port and other data – also estimates Iran exported about 120,000 bpd in July, if shipments of condensate, a type of light crude are included. If these numbers are accurate, it would represent a major drop from at least 400,000 bpd exported in June, and an even more dramatic plunge from the 910,000 bpd Iran exported in April, the month before the U.S. waivers expired. Iran is capable of shipping far more, with the 2.6 million bpd it exported in April 2018, the month before U.S. President Donald Trump withdrew the United States from the multi-lateral deal with Tehran to limit its nuclear programme, indicative of the nation’s potential. The problem is that there are also numerous industry sources who believe Iran’s exports are substantially higher than what can be seen by ship-tracking data or confirmed by port officials. Vessels are supposed to keep their Automatic Identification System (AIS) tracking signals active at all times, but it is well known that many tankers used by Iran turn these systems off to mask their loadings and unloadings. Satellite tracking can help monitor activities like ship-to-ship transfers done on the open seas, but it’s also impossible to cover every square metre of ocean.
OPEC Sees Oil Surplus in 2020 Amid Shale Surge – OPEC forecasts that supplies from the cartel’s rivals will grow by more than twice as much as global oil demand. At the start of July 2019, OPEC plus Russia decided to continue the agreement struck last year for at least another nine months, and daily production will remain 1.2 m barrels below last October’s level. In response, Brent crude rose to $67 per barrel (bbl) but has since drifted to $63.46 /bbl, a level which is below what many OPEC members require to finance their budgets. For example, the Saudi economy needs oil prices of around $80 a barrel to balance its budget, reports Al Jazeera in July. OPEC’s July Oil Market Report sees global GDP growth of 3.2 percent continuing into 2020 and world demand rising by 1.4 (million barrels per day (mb/d) year-on-year to around 100 mb/d. At the same time the report sees non OPEC member producers’ output growing by 2.4 mb/d; more than twice as much as global oil demand. U.S. shale oil output reached a record 12 mb/d in April and OPEC‘s report notes that, “U.S. tight crude production is anticipated to continue to grow as new pipelines will allow more Permian crude to flow to U.S. Gulf coast export ports.” Consequently, the report forecasts a decline in demand for OPEC crude of 1.3 mb/d to 29.3 mb/d and a global glut of crude in 2020, implying a further cut of 560,000 barrels per day (bp/d) to maintain prices. What Next?The coming months could be marked by extreme turbulence and uncertainty in the oil market and within OPEC itself. America and Iran, an OPEC member, are flirting with war, as U.S. sanctions on Iran bite and Iran threatens the passage of tankers through the Straits of Hormuz. Venezuela’s oil exports have collapsed through a combination of domestic mismanagement and U.S. sanctions against Petróleos de Venezuela, S.A, its national oil company. Production in Libya is vulnerable from the escalating conflict and Nigeria’s output is uncertain. These threats could ensure a further decline in OPEC’s market share from 39.2 percent in March as distinct from OPEC’s self-imposed production cuts. There is also uncertainty as to how long the OPEC alliance will be willing to lose market share to America. In 2018 America became the world’s largest crude producer and this year America will pump 1.2 m more barrels of crude a day. At December’s next scheduled OPEC meeting, participants face a problem of what to do next, especially if the world economy begins to slow and in particular, demand from OPEC’s largest customers China and India, falters. If crude prices remain low OPEC and Russia will face a difficult choice: let prices dip or cut production more steeply than envisaged–sacrificing market share and supporting U.S. shale.
Iraq Uses Old Trick To Get US Involved In Major Gas Hub – Last week saw two apparently independent major events occur in Iraq centred on its gas sector but a senior oil and gas industry source who works closely with Iraq’s Oil Ministry told Oilprice.com they were a lot more connected than they seemed. The first was a statement by the Secretary General of the Iran-Iraq Joint Chamber, Seyed Hamid Hosseini, that Iran’s gas and electricity exports to Iraq are expected to reach US$5 billion by the end of the current Iranian calendar year, ending on 21 March 2020. The second was an announcement by Iraq’s Oil Minister, Thamir Ghadhban, that a U.S. consortium led by Honeywell has signed a memorandum of understanding for a huge deal that would reduce the country’s current level of gas flaring by nearly 20%. “Iraq under the auspices of Moqtada al-Sadr – the real power behind the [Adil] Abdul-Mahdi government is very good at playing the U.S. with the Iran card, so every time there is a hint that Iraq will continue with its historically close relationship with Iran, the U.S. comes in to offer the services of one of its companies at beneficial terms to Iraq,” the source said. The deal itself involves U.S. giant, Honeywell, partnering with another U.S. heavyweight, Bechtel, and Iraq’s state-owned South Gas to build the Ratawi gas hub In the first stage that is expected to last for three years this project will process up to 300 million standard cubic feet per day (scf/d) of ‘associated gas’ (generated as a by-product of crude production) at five southern Iraqi oil fields: Majnoon, Gharib al-Qurna, al-lhiss, al-Tubba, and al-Siba. It comes shortly after the granting of a new waiver from the U.S. for Iraq to import electricity from Iran, first awarded last November and subsequently renewed in December, March, and June, each time for 90 days. At the same time, Iraq has been steadily importing around one third of its total energy supplies from Iran, which equates to around 28 million cubic feet (mcf) of gas to feed its power stations. With peak summer power demand in Iraq perennially exceeding domestic generation, Iraq’s dependence on Iran is acute – a highly troubling situation for the U.S. in all circumstances, let alone the current impasse – and made worse still for its capacity to cause major civilian unrest in the country.
Tehran Urges China To Buy More Iranian Oil As It Feasts On Saudi Crude – Following China’s crude imports from Iran plunging this summer, sinking almost 60% in June compared to a year earlier – which corresponded to Washington shutting down the waiver program in May – leaders in Tehran are urging China to buy more Iranian oil. China’s crude shipments from Iran totaled 855,638 tons last month, which averages to 208,205 barrels per day (bpd), compared with 254,016 bpd in May, according figures from the General Administration of Customs, cited in a recent Reuters report.Iran’s Vice President Jahangiri made the appeal to Beijing and “friendly” countries to up their Iranian crude purchases in statements Monday. “Even though we are aware that friendly countries such as China are facing some restrictions, we expect them to be more active in buying Iranian oil,” Jahangiri reportedly told visiting senior Chinese diplomat Song Tao.He said this while also on Monday issuing a statement saying Iran stood ready to “confront” American aggression in the region and that multilateralism must be upheld. “The foreign policy of the Islamic Republic of Iran is to protect multilateralism and confront American hegemony,” Jahangiri said, according to the IRIB news agency.He added that Iran’s recent move to breach uranium enrichment caps could be reversed should other parties return to upholding their side of the nuclear agreement. Simultaneously, China’s oil purchases from Iran’s rival Saudi Arabia have soared to record volume, totaling 1.89 million barrels a day last month, according to numbers cited in Bloomberg. “Shipments from the OPEC producer made up almost a fifth of its total oil purchases in June and was 64% higher than the previous month,” while at the same time “Imports from Iran fell to the lowest since May 2010,” according to Bloomberg.
Millions of barrels of Iranian crude are sitting in Chinese ports – and could disrupt oil markets – Iranian oil tankers have been quietly offloading their supply into Chinese ports, according to ship tracking data, despite U.S. sanctions on crude from the Islamic Republic. These flows, which experts say show no sign of stopping, could seriously disrupt U.S.-China trade talks as well as oil markets if Beijing decides to actually use them. Estimates as to the volume of Iranian crude that’s made its way to China between last January and May vary from 12 million to 14 million barrels, an amount that market watchers say could dramatically impact the price of oil. “If China were to aggressively purchase Iranian crude oil and/or draw down on these stored volumes, oil prices would likely fall by $5.00 to $7.00 per barrel,” “It would be a meaningful outlet for Iranian supplies that have been severely crimped by the sanctions.”. “It would also likely trigger a harsh response from the (President Donald) Trump administration.” But there is at least one reason Washington hasn’t sounded the alarm over these Persian barrels. China keeps them in what’s called “bonded storage,” which means the oil has not been cleared through Chinese customs and is not being used, therefore not actually violating U.S. sanctions. Kilduff estimates that another 20 million barrels are “en route, likely headed for this bonded storage.” This benefits both Iran and China in a few ways. Iran’s onshore and floating storage is rising in inventory due to reduced exports – but it can’t just stop pumping oil because its export capacity has plummeted. That’s because leaving the oil underground could lead to permanent damage to its oil wells. Putting it in Chinese bonded storage offers Iran a convenient solution, and one that means it doesn’t have to use so many of its tankers as floating storage facilities. The setup also advantages Iran, “because it gets its oil pre-positioned in the key Asian market, ready for sale, if sanctions get eased, a financial work-around is struck, or via barter transactions, where the oil is traded for goods.” Meanwhile, the situation advantages China because it gets a major discount on the oil and it functions as payment for work that Chinese companies are doing in Iran, analysts say.
Oil prices slip after ‘constructive’ talks on Iran’s nuclear deal – Oil edges up on prospect of US interest rate cut – Oil prices edged higher on Monday as the prospect of an expected interest rate cut by the U.S. Federal Reserve overshadowed pessimism over U.S.-China trade talks and worries about slower global economic growth. Brent crude rose 16 cents to $63.62 a barrel, while U.S. West Texas Intermediate (WTI) crude futures were up 51 cents to $56.71 a barrel. “Prices appear to be treading water ahead of this week’s events,” said John Kilduff, partner at Again Capital Management. Traders and investors are watching the Fed this week, with U.S. central bankers expected to lower borrowing costs for the first time since the depths of the financial crisis more than a decade ago. U.S. President Donald Trump said a small Fed rate cut “is not enough.” Economic growth in the United States slowed less than expected in the second quarter, strengthening the outlook for oil consumption. Elsewhere, growth is slowing faster, partly because of the U.S.-China trade war over the past year. U.S. and Chinese negotiators meet this week for their first in-person talks since a G20 truce last month, but expectations are low after Trump said China might not want to sign a trade deal until after the 2020 U.S. election. “On the trade front, expectations may be low ahead of renewed Sino-U.S. talks, but any positive echoes this week will lift market sentiment,” said BNP Paribas global oil strategist Harry Tchilinguirian. Crude prices were also supported by supply risk as tensions remained high around the Strait of Hormuz, through which about a fifth of the world’s oil passes. Tensions have spiked between Iran and the West after Iranian commandos seized a British-flagged oil tanker in the Gulf this month in apparent retaliation for the seizure of an Iranian tanker by British forces near Gibraltar. Britain told Iran that if it wants to “come out of the dark” it must follow international rules and release the British-flagged tanker.
Oil Markets On Edge Ahead Of Big Week – Oil prices seem trapped between supply outages on the one hand, and fears of weak demand on the other. WTI and Brent moved up slightly in early trading on Tuesday.. The oil majors will report earnings this week. Total and Equinorstarted things off a few days ago, reporting disappointing results. However, BP beat analysts’ expectations on Tuesday. Royal Dutch Shell reports on Thursday, while Chevron and ExxonMobil report on Friday. As the Wall Street Journal reports, “The overriding challenge for large oil companies this period – and into the foreseeable future – will be how well they negotiate the transition to cleaner forms of energy and future-proof their businesses against changing public sentiment and policies that could add a surcharge on carbon emissions.” . As sanctions cut into Iranian oil exports, more oil is diverted into both onshore and floating storage. According to Kpler, storage has climbed above 110 million barrels. . Colorado Department of Public Health and Environment proposed new regulations on air pollution from the oil and gas industry. The rules would require mandatory inspections on leaks, close a loophole that allows companies to begin drilling without air permits, and an array of other regulations on emissions from pipelines, storage tanks and truck unloadings. “We’re going to reduce statewide emissions by 80% by 2030,” John Putnam, the state health department’s environmental programs director, said at a public meeting. “We’re still trying to figure out exactly how to get there. We cannot do it without regulating this oil and gas sector.” U.S. electric utilities are set toincrease capital expenditures as they shut down coal and turn to other forms of generation, according to CFRA Equity Research. Spending for the S&P 1500 Electric Utilities Index could grow by 5.5 percent in 2019 and 4.5 percent in 2020.
Oil jumps 1.5% on expectations of Fed rate cut, supply drawdown – Oil prices rose on Tuesday, on track to close at a two-week high, on optimism the U.S. Federal Reserve will cut interest rates this week for the first time in more than 10 years, boosting demand expectations in the world’s biggest oil user. Meanwhile, ahead of weekly data, crude oil inventories in the United States were also forecast to have dropped for a seventh straight week. Analysts also noted the market was up on optimism over U.S.-China trade talks, which could boost oil demand around the world. On its second to last day as the front-month Brent crude for September delivery were up $1.27, or 2.0%, at $64.98 a barrel by 2:22 p.m. EDT, while U.S. West Texas Intermediate crude was up $1.40, or 2.5%, to $58.27. That put both contracts on track to rise for a fourth day in a row to what would be their highest closes since July 15. “WTI spiked in late trade after passing through $57.50 a barrel, which was a psychological resistance, and $57.64, which was a recent trading high,” said Phil Flynn, an analyst with Price Futures Group in Chicago. For the month, however, both contracts were still set to decline due to lingering worries about oil demand with Brent down over 2% and WTI down almost 1%. “Crude oil moved higher today partly due to anticipation of another meaningful inventory draw this week along with tensions that remain escalated in the Strait of Hormuz,” said Brian Kessens, senior portfolio manager at energy investment manager Tortoise, noting “the prospect of lower rates and U.S.-China trade talks are buoying economic prospects.” U.S. central bankers will begin their two-day meeting later on Tuesday and were expected to lower borrowing costs for the first time since the depths of the financial crisis more than a decade ago.
Oil Prices Up More Than $1 – Both the WTI and Brent contracts rallied Tuesday amid Fed speculation. West Texas Intermediate (WTI) and Brent crude oil futures rallied Tuesday, buoyed by speculation that the U.S. Federal Reserve will announce a quarter-percentage-point cut in a key interest rate Wednesday. The WTI for September delivery rose $1.18 Tuesday to settle at $58.05 per barrel. The contract peaked at $58.32 and bottomed out at $56.96. The September Brent price settled at $64.72 per barrel, reflecting a $1.01 gain. Barani Krishnan, senior commodities analyst with Investing.com, told Rigzone that a price bump from a Fed interest rate cut could soon be erased by ongoing oil market considerations. “It’s supposed to be the week when assets from stocks to commodities get supercharged from ‘rate cut excitement,’” said Krishnan. “Yet, there’s a nagging feeling that whatever gains oil tacks on could be diminished by the end of the week as demand worries continue to tug at the market’s underbelly. Demand worries are continuing to haunt oil despite prospects of the first U.S. rate cut in a decade that could be a boon for commodities.” In addition, Krishnan pointed out that – despite oil’s recent positive momentum – dissipating Iran-related tensions could be the antidote for any crude rally. “If tensions over Iran ease further or if Tehran manages to strike a new nuclear deal with the Trump administration to suspend sanctions on its oil, there are concerns that up to 2 million barrels per day more of crude could enter the market, negating OPEC production cuts and adding to current oversupply,” said Krishnan. Krishnan added that the above supply scenario warrants serious market consideration.
WTI Extends Gains Above $58 After Bigger-Than-Expected Crude Draw — Oil rallied notably today as traders anticipated a growth jolt from The Fed tomorrow and tensions remain in the MidEast as Iran threatened to choke supplies. “The crude oil market loves trade headlines,” “Even if they were negative earlier in the day, at the end of the day the countries are trying to make a deal happen. They’re not there to fail, and that supports oil.” API
- Crude -6.024mm (-2.75mm exp)
- Cushing -1.449mm
- Gasoline -3.135mm
- Distillates -890k
After the prior week’s shockingly large draw, crude inventories were expected to modestly drop further but once again surprised to the downside with a bigger-than-expected 6mm drop in stocks (and big draw in gasoline also)… WTI had surged back above $58 ahead of the API print and extended gains after the surprise API Print
WTI Extends Gains After Across-The-Board Inventory Draws – Oil prices extended gains overnight off the back of API inventory data and a drop in Libya production“I expect draws in crude stockpiles, but not as big as we’ve seen in the last few weeks,” says Mark L Waggoner, president at commodity brokerage Excel Futures. “Refinery run rates will be ramping up a bit because we’re still in the middle of summer and driving season” DOE:
- Crude -8.50mm (-3.25mm exp)
- Cushing -1.533mm
- Gasoline -1.791mm
- Distillates -894k
Crude inventories have fallen – significantly – for seven straight weeks, but last week saw stocks dropping across the entire energy complex as Barry-driven shut-ins came back online. This streak pushes US Crude inventories to their lowest since Nov 2018… After the prior week’s collapse in crude production (thanks to Storm Barry shut-ins), production rebounded as expected…WTI hovered around $58.50 ahead of the DOE print and extended gains after the big draws…
Oil prices rise for fifth day after US stocks decline – Oil prices rose for a fifth day on Wednesday, buoyed by a bigger-than-expected drop in U.S. inventories and as investors awaited a widely expected cut in interest rates by the Federal Reserve, the first in more than 10 years. Brent crude was up 44 cents, or 0.7%, at $65.16 a barrel by 0324 GMT. U.S. West Texas Intermediate crude gained 41 cents, or 0.7%, to $58.46 a barrel. “The market is quite optimistic leading into what the Fed is going to do on interest rates and as a result of that we’ll see more demand,” Jonathan Barratt, chief investment officer at Probis Group in Sydney, said by phone, referring to the widely expected cut. Central bankers in the United States began their two-day meeting on Tuesday and were expected to lower borrowing costs for the first time since the depths of the financial crisis more than a decade ago. U.S. consumer spending and prices rose moderately in June, pointing to slower economic growth and benign inflation that cemented expectations of Fed rate cuts. U.S. President Donald Trump on Tuesday reiterated his call for the Fed to make a large interest rate cut. That would be an unlikely move by the central bankers, Barratt said. Despite the gains in prices, Brent is set to ease in July due to ongoing worries about demand, heading for a decline of about 2%, while WTI is down 1 cent. Still, U.S. inventories have been falling in recent weeks suggesting demand concerns are overstated. Crude stockpiles fell again last week, along with gasoline and distillate inventories, data from industry group the American Petroleum Institute (API) showed on Tuesday. “There is a definitive seasonal trend emerging as inventory draws continue to beat analysts’ expectations by a mile suggesting analysts have grossly underestimated consumption and the breadth of seasonal demand this year,” VM Markets Pte said in a note. Crude inventories fell by 6 million barrels in the week ended July 26 to 443 million barrels, compared with analysts’ expectations in a Reuters poll for a decrease of 2.6 million barrels, the API data showed. If confirmed by U.S. government data on Wednesday morning, the decline would put crude stocks down for a seventh week in a row. That would be longest stretch since they fell for a record 10 consecutive weeks ending in January 2018.
Oil drops as Fed signals rate cuts may be limited – Oil dropped on Thursday, declining for the first time in six days, after the U.S. Federal Reserve dampened hopes for a string of interest rate cuts and as rising U.S. output helped keep the market well supplied.The Federal Reserve reduced rates on Wednesday, but against expectations the head of the U.S. central bank said the move might not be the start of a lengthy series of cuts to shore up the economy against global economic weakness.Brent crude, the international benchmark, fell $1.49 to $63.56 a barrel. U.S. West Texas Intermediate (WTI) crude was down $1.77, or 3% at $56.81.“A relatively upbeat mood in risky assets took a spectacular U-turn after last night’s Fed decision,” Tamas Varga of oil broker PVM said. “The dollar started to strengthen and equities and oil went into a kind of meltdown mode.” A rising dollar makes oil more expensive for holders of other currencies and tends to weigh on commodities priced in the U.S. currency. The dollar hit a two-year peak against the euro on Thursday after the Fed decision. 1/8USD/ 3/8Oil’s drop came despite a bigger-than-expected decline in U.S. inventories and a fall in OPEC production in July, typically bullish drivers for prices. But U.S. output rose in a market that analysts say is well supplied.“Supply is plentiful and demand growth is showing signs of weakening globally because of trade conflicts, Brexit and other events that tend to potentially weaken economic growth and, hence, oil demand,” Victor Shum, senior partner at IHS in Singapore, said.“There’s a lot of oil out there. U.S. output is growing strongly.”
Oil prices nosedive 8% on Trump tariff threat — worst day in more than 4 years – US oil prices collapsed Thursday after President Donald Trump fired another shot in the US-China trade war. Trump’s vow to impose a 10% tariff on another $300 billion of US imports from China is worrying investors that a severe economic slowdown could eat into demand for oil and other commodities. The escalation also raises the risk that China will retaliate byimposing tariffs on US oil.Crude tumbled 8% to $53.95. That’s the biggest single-day decline since February 2015. Oil was already in the red prior to Trump’s tweet, which then accelerated those losses. “This is heightening fear of a major slowdown,” said Ryan Fitzmaurice, energy strategist at Rabobank.US stocks and Treasury bond yields also fell sharply on the news, underscoring the worry on Wall Street.Investors were already on high-alert for signs of weakness in the economy, especially after the Federal Reserve lowered interest rates this week for the first time in nearly 11 years.“Prices were weak prior to the tweet. And then once it came out, it really snowballed,” Fitzmaurice said. Earlier on Thursday, the Institute for Supply Management said American manufacturing activity tumbled in July to the weakest level in nearly three years. Economists had anticipated a slight improvement in factory activity.
Oil falls most in 4 years as Trump imposes more tariffs on China -Oil prices plummeted more than 7% on Thursday, with the U.S. benchmark posting its worst day in more than four years, after President Donald Trump said he would impose additional tariffs Chinese imports starting Sept. 1. The drop in Brent crude was the steepest in more than three years, undoing a fragile oil rally built on steady drawdowns in U.S. inventories even as global demand looked shaky due to the U.S.-China trade dispute. Trump’s announcement of an additional 10% levy on $300 billion worth of Chinese goods undermined hopes that the world’s two largest economies had reached a detente in a year-long conflict that has weakened growth worldwide. Brent crude fell $4.55, or 6.99%, to settle at $60.50 a barrel, after having dropped to $60.02, its lowest level since June 13. The international benchmark’s decline on Thursday was its biggest daily percentage drop since February 2016. “The U.S.-China trade war has damaged the energy demand outlook greatly, already, and this will only add to those concerns, ” said John Kilduff, partner at Again Capital Management. “The trade war is clearly far from over.” Wall Street abruptly reversed its gains following Trump’s tweets, after spending most of the session on track for the best day since June. Bond prices also rose, causing yields to drop as investors sought out safe assets. Oil prices were already weak on continued reaction to the Federal Reserve on Wednesday. The Fed cut rates as expected, but market sentiment turned negative after Fed Chairman Jerome Powell said the move might not be the start of a lengthy series of cuts to shore up the economy against global weakness.
Oil just had its worst day in years – here’s how experts are playing energy stocks – Oil prices saw their worst trading day in four years on Thursday after the Trump administration said it would put further tariffs on Chinese goods. Energy stocks, already under pressure from a dramatic quarterly profit miss at exploration and production company Concho Resources, fell further, with theEnergy Select Sector SPDR Fund, or XLE, dropping more than 2%. And although market watchers often see drops like these as chances to buy high-quality names that have been overly punished, “it’s hard to call it a contrarian opportunity right now” in the energy sector, said Matt Maley, chief market strategist at Miller Tabak.“This group has really been dead money most of this year,” he said Thursday on CNBC’s “Trading Nation,” referencing the XLE. “It’s been a rough ride. And … we see the XLE has formed what’s called a symmetrical triangle pattern.” That pattern tells Maley two things: that if the XLE can break out of the triangle soon, it could make for a big move; and that the longer it trades within the triangle’s boundaries, the smaller that breakout move will be. All in all, for Maley, “it’s hard to make a compelling bet to the upside right now,” he said.But that wasn’t the case for Mark Tepper, president and CEO of Strategic Wealth Partners.Despite the fact that “energy’s just in a death spiral,” Tepper still saw buying opportunities in the space, which he agreed has been “dead money” for years.“In our opinion, if you’re investing in energy stocks, it’s all about being selective and finding that right entry point, and there’s lots of companies today that are being unfairly punished,” he said in the same “Trading Nation” interview. “FANG’s one of them, Diamondback Energy. And, with the pullback today, I would view that as a buying opportunity. “As the lowest-cost producer in the oil-rich Permian Basin area of western Texas, Diamondback’s advantage is that it “can actually make money when oil’s below [$]50 bucks a barrel,” Tepper said.
Oil prices rebound after Trump trade tariffs trigger plunge – Oil prices rose more than $1 on Friday, rebounding from their biggest falls in years after U.S. President Donald Trump imposed more tariffs on Chinese imports, intensifying the trade war between the world’s two biggest economies and crude consumers. Brent crude futures slumped more than 7% on Thursday, their steepest drop in more than three years. U.S. West Texas Intermediate (WTI) crude futures fell nearly 8%, posting its worst day in more than four years. The collapse ended a fragile rally built on steady drawdowns in U.S. inventories, even as global demand looked shaky because of the trade dispute. Brent futures rose $1.53, or 2.6%, to $62.03 a barrel by 0220 GMT, while WTI futures gained $1.02, or 1.9%, to $54.97 a barrel. Trump said on Thursday he would impose a 10% tariff on $300 billion of Chinese imports from Sept. 1 and could raise tariffs further if China’s President Xi Jinping fails to move more quickly to strike a trade deal. The announcement extends Trump’s tariffs to nearly all of China’s imports into the United States and marks an abrupt end to a temporary truce in a trade war that has disrupted global supply chains and roiled financial markets. Brent and U.S. crude are heading for their first weekly declines in three, on track for falls of more than 2%. “Global growth estimates have been under pressure from the tariff war and the move by the U.S. erases all the goodwill gained earlier in the week when U.S. negotiators were in Shanghai to kick start trade talks,” There have been mounting signs this week of the economic toll of the trade dispute between the United States and China, which reported this week slowing manufacturing activity in July. U.S. manufacturing activity also slipped last month, dropping to a near three-year low, and construction spending fell in June as investment in private construction projects tumbled to its lowest level in 1-1/2 years. The economic slowdown has translated into falling oil demand in the United States, the world’s biggest oil consumer.
Oil Set for Weekly Loss as Trade War Worsens— Oil is set for a weekly loss after the steepest one-day drop in more than four years as President Donald Trump abruptly escalated the trade war with China, stoking concerns over slowing growth. While futures in New York rebounded on Friday, prices are still far from recovering the 7.9% slump on Thursday, the most since February 2015. Trump said 10% levies will be imposed Sept. 1 on $300 billion in Chinese goods after a round of trade talks on Wednesday ended without a breakthrough. The threat compounded fears about declining American manufacturing activity after the Federal Reserve dashed prospects for serial rate cuts to boost growth. Oil last month capped its smallest monthly move since 1991 as it was caught between concerns global demand may slow and fears crude flows from the Middle East may be disrupted. OPEC’s output slid in July to the lowest in five years as U.S. sanctions on Iran crimped exports from the Persian Gulf nation. Trump’s “latest comment definitely raised the prospect of the dispute extending for longer,” said Kim Kwangrae, a commodities analyst at Samsung Futures Inc. “Given the wider concern over slowing growth has already been reflected in prices, it remains to be seen whether oil will fall further from here as we have geopolitical risks still lingering in the Middle East.” West Texas Intermediate oil for September delivery added 84 cents, or 1.6%, to $54.79 a barrel on the New York Mercantile Exchange as of 8:01 a.m. in London. The contract slid $4.63 on Thursday and is down 2.5% this week. Brent for October settlement gained $1.16 to $61.66 a barrel on the ICE Futures Europe Exchange. Front-month prices are down 2.8% this week. The benchmark global crude traded at a premium of $6.81 to WTI for the same month.
Oil Prices Rebound but Down for the Week– The West Texas Intermediate (WTI) and Brent crude oil contracts on Friday regained some of the value that they lost the previous day. September WTI futures, which lost nearly 8 percent on Thursday, added $1.71 Friday to settle at $55.66 per barrel. The contract peaked at $56.05 and bottomed out at $54.15. Compared to the July 26 close, the WTI is down 1 percent. Brent crude oil for October delivery ended the day at $61.89 per barrel, reflecting a $1.39 gain. The contract is down 2.5 percent for the week. Tom Seng, Assistant Professor of Energy Business with the University of Tulsa’s Collins College of Business, told Rigzone that both the WTI and Brent advanced early in the week on positive economic news only to be “trashed” Thursday on news that the Trump administration plans to impose new tariffs on Chinese imports effective next month. He added, however, that Friday’s price movements represented something of a realization. “Today’s higher prices are the result of retracement from a fall that was ‘too far, too fast’ as well as profit-taking by those who shorted the market on the way down yesterday,” Seng said. “Heading into yesterday, oil prices had climbed steadily higher from last week in anticipation of, and the actual announcement that, the Fed was lowering interest rates for the first time since 2008.” Seng added that investors were disappointed, however, that the U.S. Federal Reserve’s outlook suggested no future rate cuts in the short term. Consequently, the U.S. dollar strengthened and supported crude oil’s initial decline Thursday, he said. “The final blow occurred with the announcement of the new 10 percent tariffs to be placed on Chinese imports as trade talks between the U.S. and China are not progressing,” he said. “Today, prices have rebounded about three percent. The U.S./China trade situations overshadowed a very bullish weekly inventory report.”
Iran calls European fleet in the Gulf ‘hostile’ and ‘provocative’ — Iran denounced as “provocative” and “hostile” a British proposal for a European-led naval mission to escort tankers in the Gulf amid soaring tensions over the seizure of ships.The condemnation on Sunday came as a Royal Navy warship arrived in the Gulf to accompany British-flagged vessels passing through the vital Strait of Hormuz.The HMS Duncan joined the Frigate HMS Montrose in the Gulf to defend freedom of navigation, Britain’s Ministry of Defence said on Sunday.”We heard that they intend to send a European fleet to the Persian Gulf, which naturally carries a hostile message, is provocative, and will increase tensions,” said Iranian government spokesman Ali Rabiei. Britain said on Monday it was planning a European-led force to escort tankers through the world’s busiest oil shipping lane, the Strait of Hormuz, in response to Iran’s seizureof a United Kingdom-flagged vessel on July 19. The capture of the Stena Impero came two weeks after British authorities detained an Iranian tanker – the Grace 1 – off its overseas territory Gibraltar over allegations it was breaching EU sanctions on Syria.
Iran Slams Hostile Message As 2nd UK Warship Arrives In Crowded Gulf – On the same day the large British warship HMS Duncan arrived in the Persian Gulf to assist the MHS Montrose in providing safety escorts to UK-flagged ships against the threat of Iranian seizure in the vital oil transit waterway, Tehran has again slammed the UK-led initiative of a joint European fleet patrolling the region. An Iranian government spokesman warned on Sunday that a joint European task force operating so close to Iran’s coast “sends a hostile message” and is “provocative and will increase tensions,” according to semi-official Fars News Agency. The rhetoric is nothing new; however what is new and poses immense danger for the prospect of stumbling toward major conflict is the frequency of US and UK warships’ movement in the increasingly “crowded” narrow Strait of Hormuz. Britain’s controversial call for a “European-led maritime protection mission” quickly gained the support last week of key EU nations France and Germany, with Denmark and The Netherlands also joining the initiative. The BBC reports that the HMS Montrose has thus far escorted 35 vessels through the strait, according to the Ministry of Defence (MoD). The larger HMS Duncan frigate will further join what Britain has dubbed “freedom of navigation” operations not just for UK vessels but “also our international partners and allies,” according Defence Secretary Ben Wallace. This as London has kept up pressure for the release of the still impounded Stena Impero, and after Iran’s leaders last week appeared to offer an “exchange” of vessels of sorts, demanding the release of the Grace 1, which had been seized by Royal Marines early this month off Gibraltar. Iranian Government Spokesman Ali Rabiyee said further on Sunday that Iran “welcomes” the mediation of certain countries, but that ultimately “seizure of the British tanker was based on legal principles but Britain should release our oil tanker as soon as possible.”
Iran not to allow US, UK to take control of Hormuz Strait – Mohsen Rezaei made the remarks on Sunday in a meeting with a Chinese delegation headed by Song Tao, head of the International Department of the Central Committee of the Communist Party of China (CPC), who arrived in Tehran on Sunday. In the meeting, Rezaei expressed his appreciation to Song Tao for the good cooperation of China’s ruling party with the Iranian Expediency Council (EC). The EC secretary also referred to the Iranian Parliament speaker’s visit to China as indicating the start of a new phase in strategic relations between Iran and China. He further attached great importance to the Chinese delegation’s visit to Tehran, expressing hope that the level of the two countries’ relations would increase to a considerable extent after their visit. Rezaei also pointed to the new developments in the region, saying “we live in the energy region of the world. Any kind of insecurity and conflict in this region would carry harm to global peace and security.” He added “Americans and Britain have been fanning the flames of war in the Persian Gulf region and they want to pretend they have control over the Strait of Hormuz and the movement of vessels. Of course, we do not allow this to happen. In the meantime, we expect cooperation from our friends in China.” Rezaei added that Iran is not seeking war but will defend itself, while saying that the Americans want conflict and seek to increase the tensions.
Tanker Seizures & The Threat To The Global Economy From Resurgent Imperialism – The British seizure of the Iranian tanker off Gibraltar was illegal. There is no doubt of that whatsoever. The Iranian response to the seizure of its tanker in the Strait of Gibraltar, by the seizure of a British Tanker in the Strait of Hormuz, was also illegal, though more understandable as a reaction. The implications for the global economy of the collapse of the crucial international law on passage through straits would be devastating. It may seem improbable that the UK and or France would ever seek to close the Dover Strait, but in the current crazed climate it is no longer quite impossible to imagine the UK seeking to mess up access to Rotterdam and Hamburg. It is still easier to imagine them seeking to close the Dover Strait against the Russian Navy. Yet the essential freedom of navigation through the Kerch strait, respected by Russia which controls it, is necessary to the survival of Ukraine as a country. For Turkey to close the Bosphorus would be catastrophic and is a historically recurring possibility. Malaysia and Indonesia would cause severe dislocation to Australia and China by disrupting the strait of Malacca and the Suharto government certainly viewed that as an advantage from which it should have the right to seek to benefit, and was a continued nuisance in UN Law of the Sea discussions. These are just a few examples. The US Navy frequently sails through the Taiwan Strait to assert the right of passage though straits. Keeping the Strait of Hormuz open is perhaps the most crucial of all to the world economy, but I hope that the above examples are sufficient to convince you that the right of passage through straits, irrespective of territorial waters, is an absolutely essential pillar of international maritime law and international order. The Strait of Gibraltar is vital and Britain has absolutely no right to close it to Iran or Syria. If the obligation on coastal states to keep maritime straits open were lost, it would lead to economic dislocation and even armed conflict worldwide.
No Quid Pro Quo – UK Rejects Iran’s Offer To Swap Seized Tankers – Britain this week has rejected an Iranian offer to swap each other’s captured tankers, as the crisis involving the British-flagged Stena Impero and the Iranian oil filled Grace 1 previously captured by Royal Marines off Gibraltar on July 4 has remained deadlocked. Most observers agree it’s virtually a “foregone conclusion” that the tankers will ultimately be traded for one another, however, UK officials are still stalling over what they say are the norms of international law. “There is no quid pro quo,” Foreign Secretary Dominic Raab asserted on BBC radio. “This is not about some kind of barter. This is about the international law and the rules of the international legal system being upheld and that is what we will insist on.” In boarding the Grace 1 on July 4 just as it sought to enter the Mediterranean, British authorities claimed to have thwarted illegal EU sanctions busting related to Syria, as the Grace 1 was reportedly bound for the Syrian port of Baniyas to offload some 2 million barrels of oil to the fuel-starved, war-torn country. Leaders in Tehran accused the UK of simply doing America’s bidding, however. Last Wednesday Iran’s president initially suggested an equal good faith swap of sorts. He proposed that should the UK release the Grace 1, Iran would do likewise and immediately release 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 had reportedly sent a mediator to Iran seeking to negotiate the ship’s return and its 23 detained crew members.
Iran, Russia Planning Joint Naval Drill In Contested Gulf Waters – Russia and Iran are planning a joint naval exercise scheduled within the next year, commander of Iran’s Navy Rear Admiral Hossein Khanzadi announced Monday, according to state media. Semi-official Fars has reported it will take place by March 2020 in the Indian Ocean, and will be staged as far north as the strategic and increasingly tense Strait of Hormuz. “A coordination meeting will be held between the two sides in this regard,” he said while on a three day visit to Russia. “When we speak of the Indian Ocean, perhaps the most important part of which is the northern region where it’s linked to the Sea of Oman, the Strait of Hormuz and also the Persian Gulf,” Khanzadi said from Saint Petersburg. . The Iranian naval chief is in Moscow to sign a ‘memorandum of understanding’ with the Russian Ministry of Defense for expanded mutual ties, and to observe a Russian naval parade. “This is the first MoU of its kind and can be regarded as a turning point in Tehran-Moscow military relations,” Khanzadi said of the largely symbolic agreement.This is expected to include further development of military cooperation in the Caspian Sea, though nothing specific was indicated regarding the world’s largest inland body of water between Europe and Asia. Iran is also trying to shore up the support of powerful allies as it’s preparing to resist US and UK military pressures in the vital Strait of Hormuz, and as it attempts to weather Washington’s economic and energy sanctions storm.This comes further as a weekend report in UK media said London is mulling offering Russia a seat at the table on its European-led maritime coalition to safeguard tankers from Iranian attacks, something Moscow would likely rebuff, or alternately Moscow could actually consider such a proposal in order to have a hand in ensuring the avoidance of escalation. Iran and Russia have going years back held joint naval drills in the Caspian Sea, however, wide-ranging drills in the Indian Ocean stretching up through the Persian Gulf would certainly gain the Pentagon’s attention and hold the potential for conflict as the region gets increasingly crowded with western naval assets to protect international shipping lanes.
Oil Tankers’ Tracking Signals Are Vanishing in the Strait of Hormuz – Oil tanker owners are finding a way to reduce the risks of navigating the Strait of Hormuz, the world’s most important — and lately most dangerous — energy chokepoint: vanish from global tracking systems. Copying from Iran’s own playbook, at least 20 ships turned off their transponders while passing through the strait this month, tanker-tracking data compiled by Bloomberg show. Others appear to have slightly altered their routes once inside the Persian Gulf, sailing closer than usual to Saudi Arabia’s coast en route to ports in Kuwait or Iraq. Before the latest increase in tensions with Iran, ships were more consistent about signaling their positions as they passed through a waterway that handles a third of seaborne petroleum. Once inside the Gulf, shipping routes took them fairly close to the Iranian coast, skirting the offshore South Pars/North gas field shared by Iran and Qatar. Most still do, but a growing number appear to be trying something new. It’s little surprise that ships are doing everything possible to minimize risk. The Gulf region has witnessed a spate of vessel attacks, tanker seizures and drone shoot-downs since May, all against the backdrop of U.S. sanctions aimed at crippling Iran. War-risk insurance soared for tanker owners seeking to load cargoes in the region. Two British warships are now situation in the waters around Hormuz where they were recently escorting the nation’s ships. The U.S. 5th Fleet also permanently operates in the region. On Wednesday, the Norwegian Maritime Authority advised the country’s flagged vessels to minimize transit time in Iran’s territorial waters. Tanker captains have become increasingly nervous about the risks of getting caught up in the conflict. See QuickTake on the Strait of Hormuz At least 12 vessels loaded in Saudi Arabia and shut off their transponders while passing through the strait within the past month. They include the supertanker Kahla, which turned off its signal on July 20 before passing through the strait. It reappeared two days later on the other side of the waterway. Likewise, at least eight vessels that loaded in Iraq and Kuwait went dark while leaving the Strait of Hormuz. A vessel shipping from the U.A.E. also dropped off tracking systems. The apparent shutdown of signals coincides with a slew of disruptions in the region. On July 11, the Royal Navy intervened to prevent Iran from impeding a tanker operated by BP Plc from passing through Hormuz. Three days later, Iran seized a Panama-flagged vessel. On July 19, Iranian forces took control of a British-flagged tanker in retaliation for similar action by U.K. authorities. The vessel, the Stena Impero, remains impounded.
U.A.E. Sends Coast Guard Delegation to Tehran, Mehr Reports — The United Arab Emirates sent a seven-member delegation from its coast guard for a meeting with counterparts in the Iranian capital Tehran, Iran’s state-run Mehr news agency reported without citing anyone. Illegal trafficking and shared maritime borders are among the topics to be discussed, according to the report. The meeting is the first between the coast guards of the two nations since 2013, Mehr said. It comes after the confrontation between Iran and the U.S. sent tensions in the Persian Gulf soaring, with American officials blaming Iran for recent attacks on oil tankers off the U.A.E. coast.
Turkey Mulling (Another) Military Operation in Northeastern Syria – Turkey’s top military brass and Defense Minister Hulusi Akar held a security meeting on Thursday and discussed a potential military operation in northeastern Syria, immediately after three days of talks with a US delegation over setting up a safe zone along the Turkish-Syrian border.The Anadolu news agency reported that the meeting took place under the leadership of Minister Akar and with the participation of Chief of General Staff Gen. YaÅŸar Güler as well as commanders of the land, naval and air forces.It said the meeting was focused on Turkish-US talks on the safe zone and Turkey’s potential unilateral military operation in the eastern Euphrates region in a bid to end the presence of the Kurdish People’s Protection Units (YPG) along the border. James Jeffrey, the US special envoy for Syria, had meetings with Minister Akar, Presidential Chief Foreign Policy Advisor Ä°brahim Kalın and Deputy Foreign Minister Sedat final earlier this week. The talks concentrated on the details of the safe zone, an idea that was put back on the agenda by President Donald Trump in mid-January 2019.The fresh ideas on the modalities of the safe zone tabled by Jeffrey did not satisfy Turkey.“We have conveyed our views and proposals to them. We are awaiting an immediate reply,” Akar was quoted as saying by Anadolu on Thursday. “We have once again underlined that we have no tolerance for any delay and that we’ll take action when necessary.”
Israel Fought Behind The Scenes To Drop Turkey From US F-35 Program- Report – A new bombshell report making headlines in Israeli media alleges Tel Aviv went to great lengths to exert pressure on Washington to block the sale of US F-35 stealth fighter jets to Turkey.“Israel worked behind the scenes to ensure the United States blocked the sale of its F-35 stealth fighter jets to Turkey as part of its efforts to preserve its military qualitative edge in the region,” The Times of Israel revealed Thursday, citing a prior Israeli Channel 12 report.”Israel in recent months lobbied Washington to drop Ankara from the F-35 program after President Recep Tayyip Erdogan went ahead with a purchase of a Russian-made missile defense system that would give Turkey advanced air capabilities,” the report continued. Though neither US nor Israeli officials have commented on the alleged lobbying campaign, it’s consistent with the fact that Israel has seen growing Russian-Turkish defense ties as a significant threat to both its anti-Iran policy and actions in Syria. And further, Ankara and Tel Aviv have a long history of clashing over Palestinian related issues. Last month the White House announced Turkey has been effectively booted from the F-35 program for procuring Russia’s S-400 anti-air defense system, further entrenching Moscow’s growing influence and security arc in the Middle East. Crucially, both Israel and Turkey were set to be the only countries outside the United States which possessed the advanced Lockheed-made fighter. But it appears Israel did its best to ensure it’d be the only one, as The Times of Israel noted: Israel has agreed to purchase at least 50 F-35 fighter jets from the US defense contractor Lockheed Martin. So far, 16 aircraft have been delivered, and the remaining planes are slated to arrive batches of twos and threes until 2024. Israel is the second country after the US to receive the F-35 from Lockheed Martin and one of the few allowed to modify the state-of-the-art aircraft, known in Israel as the Adir.
Mystery Airstrikes On Iraqi Camp Were Israeli Stealth Jets In Anti-Iran Escalation –Regional experts had immediately suspected the possibility of an Israeli air raid after a pro-Iranian militia arms depot in Iraq was obliterated during a mysterious attack on July 19, and another reported follow-up attack this past Sunday.The attack happened around 80 km from the Iranian border and 40 km north-east of Baghdad at Camp Ashraf, former home to the Iranian exile group Mojahedin-e Khalq, but now reportedly in the hands of Iranian intelligence and paramilitaries. Speculation was rampant in the days that followed as to the source of the ‘mysterious’ air strikes – or what was also initially reported as a drone strike – however, some pointed the finger at an American operation targeting Iranian militants inside Iraq. But now Israeli and regional media, citing western diplomats, have confirmed it was a nearly unprecedented Israeli operation on Iraqi soil – representing a major escalation and expansion of Israel’s anti-Iran operations. Israel reportedly launched a total of two separate air strike operations on the camp using its US-supplied F-35 stealth fighter jets. According to the Israeli newspaper Haaretz: Israel has expanded the scope of its anti-Iranian attacks and struck targets in Iraq, the London-based Arabic newspaper Asharq Al-Awsat reported Tuesday. According to the report, which cites anonymous Western diplomats, Israel struck Iranian warehouses storing arms and missiles at Camp Ashraf, north-east of Baghdad, twice in the past month. On July 19, the base was struck by an Israeli F-35 fighter jet, the sources added. The base was allegedly attacked again on Sunday.
The UN Just Rebuked Two Close US Allies For Shocking Child Death Tolls – As US diplomatic officials around the globe are no doubt lecturing ‘official enemies’ over human rights, and enforcing crippling sanctions from Caracas to Damascus to Tehran to Moscow, they might pause for a moment and look closer to home, as days ago the United Nations slammed key American allies Saudi Arabia and Israel for killing an appalling high number of children. Not unrelated, as we’ve noted before, the two countries have also grown closer in their relationship over the past years in common cause against Iran and related to Syria regime change policy. First the Saudis, which found themselves for the first time under unprecedented international scrutiny following the December 2018 Jamal Khashoggi killing in Istanbul. Reuters reported Friday: A Saudi Arabia-led military coalition fighting in Yemen killed or injured 729 children during 2018, accounting for nearly half the total child casualties, United Nations Secretary-General Antonio Guterres said in a report to the Security Council on Friday that blacklisted the coalition for a third year. It should be noted that this is a very conservative estimate among the some 100,000 total number of people believed killed as a result of the four-year long Saudi coalition bombing campaign over Yemen, as a recent report in The Guardian tallied. And of the Israelis, Reuters related the following concerning the UN censure: Guterres also reported that the highest number of Palestinian children had been killed or injured last year since 2014, mainly by Israeli forces, though no parties were blacklisted in the annex to the annual Children in Armed Conflict report, seen by Reuters. The UN report indicated 56 Palestinian children killed by Israeli forces in 2018, which is the highest since the 2014 war in Gaza. Perhaps more astounding though, UN Secretary General Antonio Guterres told the Security Council in his report that Israeli troops injured nearly 2,700 children “in the context of demonstrations, clashes and search and arrest operations.”
Facebook Dismantles Saudi-Linked Network of Fake Accounts – Facebook said on Thursday it had dismantled a network of fake accounts and pages linked to the Saudi government that promotes propaganda and targets Riyadh’s adversaries. More than 350 accounts and pages with some 1.4 million followers had been taken down, the social media site said. It is the first time such action has been linked to the Saudi government. Like Russia and Iran, Saudi Arabia has sought to influence public opinion through social media. Under the direction of Saud al-Qahtani, a close aide to Crown Prince Mohammed bin Salman who has been heavily implicated in the murder of journalist Jamal Khashoggi, a network of pro-Saudi social media accounts known as “the flies” has been set up in recent years. The accounts on platforms such as Facebook and Twitter seek to laud the crown prince and pour scorn on the kingdom’s adversaries and detractors. Many target Qatar, a neighbouring emirate that Riyadh and its allies have placed under a blockade in an attempt to alter its policies. The accounts were also responsible for spreading disinformation following Khashoggi’s murder by a team of Saudi agents in Istanbul in October. “For this operation, our investigators were able to confirm that the individuals behind this are associated with the government of Saudi Arabia,” said Nathaniel Gleicher, Facebook’s head of cybersecurity policy. “Any time we have a link between an information operation and a government, that’s significant and people should be aware.”
Bahrain Follows U.S. Lead on Executions — Citing the existence of the death penalty in the United States as justification, Bahrain’s government executed political prisoners Ali al-Arab and Ahmed al-Malali by firing squad on the morning of Saturday, July 27. Another man was also executed in a separate, non-political case. The killings came two days after the Trump administration announced it was reinstating the federal death penalty after an absence of nearly two decades.The two political prisoners had been convicted of killing a police officer in 2017 in a trial that involved over 50 defendants. I’ve been in Bahraini courtrooms and seen how these mass, sham political trials work, how defendants’ claims of tortured confessions are dismissed, and fabricated evidence permitted. The process doesn’t much resemble anything recognisable as a fair hearing that would meet international legal standards. In May, five United Nations experts called for the executions to be stopped “amid serious concerns that [the two men] were coerced into making confessions through torture and did not receive a fair trial.” The day before the executions, Agnes Callamard, UN Special rapporteur onextrajudicial, summary or arbitrary executions, urged that the men be spared. “I remind Bahrain that the only thing that distinguishes capital punishment from an arbitrary execution is full respect for the most stringent due process and fair trial guarantees,” she said.
Dubai Ruler’s ‘Escaped’ Wife Seeking Forced Marriage Protection Order In UK Court – A dramatic legal battle between the ruler of Dubai, Sheikh Mohammed bin Rashid al-Maktoum, and his estranged wife, Jordanian princess Haya bint al-Hussein, over their children’s custody began this week in a London court and has already witnessed a “non-molestation order” and a “forced marriage protection order” brought against the powerful Emirati sheikh by his wife. She’s reportedly been hiding out in London and says she’s “afraid for her life.”It was first reported weeks ago that the 45-year-old daughter of late King Hussein had fled the UAE with her two children, seeking to escape her billionaire (and allegedly abusive) husband, which drove speculation as to whether Dubai would invoke diplomatic powers to try and force her back to the UAE. She fears she could be abducted and rendered back to Dubai, similar to what happened in the case of Sheikha Latifa – daughter of the Dubai ruler who mounted her own “escape” attempt last year, only to be captured later by Emirati forces on a yacht attempting to flee.The family is said to be worth over $4 billion and exercises huge influence in other countries where they maintain substantial assets and real estate, such as the UK. The protection orders are being considered by the court in response to Sheikh Mohammed’s seeking a legal order for the summary return of their children to Dubai. The 70-year old sheikh was absent from the proceedings but is represented by his legal team.
Libya’s Grim Civil War Escalates – Barely eight years after Libyan dictator Moammar Gadhafi was toppled and the militias in Misrata put his corpse on display in a butcher’s fridge, the country is in the throes of a third civil war. According to the United Nations, around 1,000 people have been killed and 5,000 injured in the fighting south of Tripoli. More than 100,000 residents have been forced to flee their homes. Libya now has two governments and has long since ceased to be a state. One in the east, in Tobruk, supports Haftar, a 75-year-old former colonel who once helped Gadhafi organize the coup that brought him to power. After falling out of favor with Gadhafi, Haftar lived in the United States for nearly two decades and is rumored to have occasionally worked for the CIA. After Gadhafi’s fall, Haftar returned to Libya and since 2016 has given himself the title of field marshal.The rival government in the west, the Government of National Accord (GNA), is led by Prime Minister Fayez Sarraj in Tripoli. It’s recognized by the United Nations and the European Union, but not by the elected parliament, which has fled to the east. The GNA is largely powerless, relying on the support of the militias, who are the de facto rulers of Tripoli.Amid all this chaos, thousands of migrants from sub-Saharan Africa are stranded here on their long trek to Europe. Many have been interned by the militias in brutal torture camps, kept in slave-like dependency and are in some cases conscripted into military service. More than 50 people died during an air raid on a refugee prison in Tripoli on July 3. It is the tragedy of a country that could be the richest on the continent, with the world’s ninth largest oil deposits. But after Gadhafi bled the country dry for 42 years, he left behind a power vacuum that imploded after he was killed, and an ongoing struggle erupted among cities, tribes and their militias over power and access to wealth.
Air strike on Libya hospital kills five doctors – An air strike has killed five doctors in a hospital in the southern outskirts of Libya’s capital Tripoli, an official from the UN-backed government says. A warplane belonging to Khalifa Hafta, the rogue general who commands the Libyan National Army, carried out the attack, the health ministry spokesman added. The LNA has not commented. Libya has been roiled in conflict since the fall of long-time leader Muammar Gaddafi in 2011. Fighting between the UN-backed Government of National Accord (GNA) led by Prime Minister Fayez al-Sarraj, and Mr Haftar’s LNA, has claimed 1,100 lives since April, according to the World Health Organization (WHO). The fighting has remained deadlocked on the outskirts of the capital, with both sides resorting to air strikes, news agency AFP reports. Saturday’s bombing also wounded seven people, including some rescuers, Lamine al-Hashem, the spokesman from the health ministry, said. “It was a direct hit against the field hospital which was packed with medical teams,” Mr Hashemi added. The attack was the third to target a hospital in the capital’s south, AFP reports. African migrants who use Libya as a key crossing point to Europe have also been caught up in the fighting. The GNA blamed the LNA for last month’s air strike on a detention centre that killed at least 50 migrants.
Mass protests erupt after Sudan’s military junta guns down school children – Tens of thousands of students and youth took to the streets this week after Sudan’s armed forces opened fire on a youth rally Monday over bread and fuel shortages in El-Obeid, the regional capital of North Kordofan. Six people were killed, including four school children, and more than 60 injured. The military junta has now closed down all the nation’s schools. Videos on social media show security forces in El-Obeid firing a truck-mounted machine gun against protesters from close range. The truck is marked with a skull and crossed swords insignia and a windscreen sticker reading, “Playing with the big guys is tough.” It has rocket-propelled grenades hanging on the side. According to the Sudanese Doctors Committee, some of the protesters were shot by snipers. Demonstrators accused the Rapid Support Forces (RSF), the paramilitary group led by one of the leading members of Sudan’s military junta, Mohammed Hamdan Dagolo, also known as Hemeti, of the killings. The governor of Northern Kordofan ordered a statewide closure of schools and a 9 p.m. to 6 a.m. curfew in four towns and cities in a bid to quell the unrest. But outrage provoked by the killings could not be contained. One of the main protest groups, the Sudanese Professionals Association (SPA), called for nationwide demonstrations “to denounce the El-Obeid massacre and demand the perpetrators be brought to justice.” Tens of thousands of students and youth responded in the capital Khartoum on Tuesday and in El-Obeid on Wednesday in a rising tide of opposition to the Transitional Military Council (TMC), which ousted long-term dictator President Omar al-Bashir in April to prevent the overthrow of the entire regime. Some protesters in Khartoum wore school uniforms and chanted, “Killing a student is killing a nation.” Security forces used tear gas and live ammunition to disperse the crowds. As the unrest continued, the nationwide shutdown of schools was ordered.
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