Written by rjs, MarketWatch 666
Here are some more selected news articles about the oil and gas industry from the week ended 15 August 2020. Go here for Part 1.
This is a feature at Global Economic Intersection every Monday evening. This week the post has been delayed by one day.
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Global oil supplies were 3.35 million barrels per day short in July; US gasoline imports rose to a 53 week high
Operators, state agencies make moves to limit flaring in oil-rich Permian Basin | S&P Global Platts – The crude crash price and subsequent shut-ins across the Permian Basin in the second quarter of 2020 allowed multiple producers to reduce their associated gas flaring volumes, prompting state officials in Texas and New Mexico to strike while the iron was hot and introduce rules to curb the practice permanently.The Texas Railroad Commission, the state agency charged with regulating oil and natural gas production, introduced a revision to Rule 32 Data Sheet intended to limit the exemptions producers use to flare volumes of associated gas. The gas is a by-product produced by operators targeting oil-rich zones in plays such as the Permian and Eagle Ford Shale. Rather than capturing, processing and sending the gas to market, it has been simpler to flare, or burn off, the fuel at the wellhead.Changes to the rule include:
- The period of time for which an operator may obtain an administrative exception to flare gas will be reduced by as much as 80% in some instances
- Incentives will be provided for operators to use technologies to reduce the amount of gas flared
- Operators must provide more specific information to justify the need to flare or vent gas in accordance with commission rules
- Flares would be related to specific production properties to facilitate compliance with reported production
- Tracking the new information and data points will be valuable in any future efforts to tailor policy that addresses flaring.
Public comments on the rule change are being accepted by the TRC at https://rrc.texas.gov/about-us/resource-center/forms/proposed-form-changes. Several major producers have already started making strides to reduce the practice. EOG Resources, along with fellow Permian producers, managed to decrease flaring outputs during Q2 as output dipped.”Our gas capture rate now exceeds 99.5%,” Ken Boedeker, EOG executive vice president of exploration and production, said during an Aug. 7 earnings call. “To reduce flaring we have introduced a new technique called closed-loop gas capture. We reflow gas back into our wells when a downstream interruption occurs. It allows us to eventually bring the captured gas back to production.””We continue to be the best in the Permian in regards to flaring at less than 1%,” said Pioneer Natural Resources CEO Scott Sheffield during an earnings call. “This is based on state data from Texas and New Mexico … Other companies are also striving to reduce flaring intensities. I am confident … two more gas pipelines coming online next year, along with reduced activity, should help continue to reduce flaring.”Sheffield was referring to Permian Highway Pipeline and Whistler Pipeline, which will proved more than 4 Bcf/d of combined takeaway capacity.
Companies offer super-cool solution to flaring gas in the Permian – Permian Basin oil producers, under increasing pressure to reduce the amount of natural gas that they burn during drilling operations, may have found a solution to convert waste gas into a super-cool product.The answer could be small-scale liquefied natural gas plants, which chill the gas to minus 260 degrees Fahrenheit and convert it to liquid that is easier to transport to power plants and other markets. These small-scale plants produce no more than 100,000 gallons of LNG per day, compared to millions of gallons produced at massive LNG processing and export facilities along the Gulf and East coasts. The technology has been used for decades across to service niche natural gas markets — such as Northeast, where small-scale plants provide natural gas to power plants during high-demand winter months, or along Florida’s Atlantic coast, where the plants fuel oceangoing vessels.In recent years, a new generation of even smaller LNG units, known as micro-scale plants, have been developed. These units, which produce no more than 10,000 gallons of LNG per day, are small enough to be hauled by trucks to well sites to process natural gas. The small-scale LNG industry has bypassed the Permian, which stretches from West Texas into New Mexico, but that could change as the volumes of natural gas that are burned away remain at or near record levels in the Permian. The practice, known as flaring, has come under increasing scrutiny and criticism, not only for the greenhouse gases and other pollutants spewed into the atmosphere, but also because its wastes a valuable resource. Between April 2019 and April 2020, oil companies in the Texas portions of the Permian burned away 146 billion cubic feet of natural gas – equivalent to the consumption of two-thirds of Texas households – according to the Railroad Commission, which regulates the state’s oil and gas industry. The Railroad Commission has done little to rein in flaring – it did not deny a single flaring request of more than 27,000 made over seven years, according to the advocacy group Environmental Defense Fund – but that appears to be changing. The commission has rejected eight flaring permits since February, a spokesman said.
Trump EPA Poised to Weaken Obama Methane Rule, Despite Possibility of Later CRA Overturn – The Trump administration is poised to roll back rules on release of methane, a potent greenhouse gas estimated to be 25 more potent than carbon dioxide and which accounts for about 10% of U.S. greenhouse gas emissions.The weaker Trump rule, expected no later than Friday, would replace a tougher standard set by his predecessor’s EPA, according to the New York Times. The new rules would eliminate requirements that oil and gas producers have systems and procedures to detect methane leaks in their systems, according to the WSJ: The rule changes will apply to wells drilled since 2016 and going forward, and remove the largest pipelines, storage sites and other parts of the transmission system from EPA oversight of smog and greenhouse-gas emissions. The changes also ease reporting requirements for the industry and, for some facilities, how often a plant must check for leaks of other pollutants, the officials said.The new rules, expected to be signed and issued this week, adopt most of the core elements of two proposals from 2018 and 2019. Agency officials are fulfilling a directive by President Trump to ease regulations on U.S. energy producers, and have said the rules being eliminated are duplicative of other federal and state rules.They were adopted in 2016 under former President Obama amid concerns about methane-gas leaks contributing to climate change. The 2016 rule was in part a response to the surge in natural gas production, according to the WSJ:As the drilling boom sent natural-gas production surging, the EPA responded in 2016 with requirements for companies to make plans for reducing emissions at new wells and the pipelines they feed. That included regular checks to close leaky valves, pipelines and tanks in the sprawling network covering millions of miles that supplies home furnaces, power plants, industrial sites and other consumers. The Trump administration never seems to have met a fossil fuel regulation it didn’t try to circumvent, eliminate, or weaken. And Trump seeks to roll back every element that he can of his predecessor’s climate change policy – weak and over-rated as it may be – and of course, in many instances goaded, aided, and abetted by at least some of the producers in the fossil fuel industry.
Rolling Back Obama’s Methane Rules May Give Trump A Bump But It Could Burn Natural Gas – The Trump administration has, ironically, just bucked the wishes of Big Oil by acting today to roll back regulations on methane emissions – the most potent greenhouse gas of them all.The move is political as much as it is ideological: smaller oil and gas producers have been struggling long before the coronavirus hit and as such, they have been clamoring for regulatory relief. At the same time, unconventional oil and gas production is big in two key battleground states this November: Texas and Pennsylvania. And anything that Trump can do to accentuate the differences between himself and Joe Biden could help him in those states. But the move also comes with risks. Companies such as BP, Exxon Mobil Corp.XOM +0.4% and Royal Dutch Shell have already made major investments to capture escaping methane from their pipes and drilling equipment – money that has earned them positive PR and potentially even greater profits. For starters, the methane can be resold and used in the manufacturing and chemical processes. Even more compelling is that those energy producers are banking big on natural gas – a fuel that has about half the carbon content as does coal. But loose methane, which is 80% more potent than CO2, could block the path forward. “Our federal methane safeguards have been in place since 2016, protecting Americans from unhealthy and climate-damaging pollution. “Eliminating these safeguards would ignore the overwhelming body of scientific evidence documenting the urgent need to reduce methane pollution. And it is also starkly at odds with the broad and diverse set of stakeholders – including some major oil and gas producing companies – that support retaining and strengthening methane safeguards.” The methane rule is part of President Obama’s legacy. He saw natural gas as an essential bridge fuel before renewables could dominate but also as a fuel that would not reach its potential without environmental safeguards. Obama’s goal was to cut the level of methane gas emissions by 40%-45% by the year 2025, from 2012 levels – a policy backed by Biden. If escaping natural gas could be captured and resold, industry could increase its revenues by as much as $188 million a year. ICF International ICFI -1.4% agrees, saying that oil and gas companies could cut their emissions by 40% below the projected 2018 levels.
Methane plume menaces Navajo as EPA weakens safeguards – On a day in late June, Navajo and Pueblo tribal activists met virtually with EPA and White House officials to urge them to reverse a decision that would weaken rules governing the release of methane at oil and gas wells.EPA is preparing to finalize a rule later this month that would significantly lighten requirements for fossil fuel producers and remove the regulations entirely for natural gas transmission and storage facilities.The agency’s proposed replacement would permit the industry to conduct fewer searches for methane leaks and reduce remediation for a broad swath of the oil and gas sector. It would also rule out the possibility that older oil and gas wellheads would become subject to regulation in the future.But Native American advocates on a June 30 teleconference stressed that those changes would put their communities at risk by undermining air quality and public health on and near Navajo Nation tribal lands in New Mexico. The region, which has been the site of oil, gas, coal and uranium production for a century, has the highest concentration of methane emissions in the U.S.Julia Bernal of Pueblo Action Alliance said she told officials with EPA and the White House Office of Management and Budget that the federal government had neglected to look at the damage that scrapping the methane rules would do to people in the Four Corners region. The area, which straddles the borders of Utah, New Mexico, Colorado and Arizona, is home to hundreds of thousands of Native Americans.”There’s already a huge methane cloud that sits over the Four Corners area in the Southwest,” Bernal said in an interview. “Indigenous people have raised those concerns. How come that hasn’t been addressed?”EPA’s removal of federal methane curbs for new oil and gas wells might have an outsize impact on the San Juan Basin of northwestern New Mexico. That’s because the Trump administration’s rollback is designed to head off future regulations for existing oil and gas infrastructure.The basin is an older oil field that saw declining production even before the coronavirus pandemic caused a massive contraction in the sector this spring. Many of the wells there might not have been covered under EPA’s methane rule, known as a new source performance standard, because they’re too old.But they would have been regulated under a rule tailored to cover existing infrastructure. If EPA gets its way, that rule may never be written
Democrats unveil bill to penalize gas producers for blowouts ahead of expected Trump methane rollback – Sens. Chris Van Hollen (D-Md.) and Ed Markey (D-Mass.) unveiled a bill Thursday that aims to hold natural gas producers liable for major leaks. The bill comes the same day that the Trump administration is expected to roll back methane regulations. The legislation would create financial penalties for an uncontrolled leak, known as a blowout, based on the volume of gas, including flared gas, that is released. It would also mandate that companies report blowouts to the Environmental Protection Agency (EPA) within 72 hours and establish a blowout database. “Our legislation holds polluters accountable for large-scale natural gas methane emissions by penalizing those who don’t take measures to prevent them. It’s simple: polluters should pay for the harm they cause,” Van Hollen said in a statement. “We will keep fighting the Trump Administration’s dangerous agenda to roll back protections to our health and environment,” he added. Their legislation comes on the same day that the EPA is expected to eliminate requirements for producers to have systems and processes to find methane leaks, among other measures. Methane, the main element of natural gas, is a greenhouse gas that can be 25 times more powerful than carbon dioxide in equal quantities, according to the EPA. In 2018, it accounted for nearly 10 percent of all U.S. greenhouse gas emissions caused by human activity. The new legislation, which would face an uphill battle in the Republican-led Senate, would also aim to use funds from the blowout penalties to reduce their frequency. In the past, some blowouts have had major environmental impacts. For example, the 2015 Aliso Canyon blowout leaked more than 100,000 tons of methane into the atmosphere.
Biden VP Pick Has Record of Fighting Oil Industry — Less than two hours after Kamala Harris was named Joe Biden’s running mate, President Donald Trump had cast the California Democrat as an oil industry and fracking foe. “She is against fracking. She’s against petroleum products,” Trump said at a White House news conference Tuesday. “I mean, how do you do that and go into Pennsylvania or Ohio or Oklahoma or the great state of Texas? She’s against fracking. Fracking’s a big deal.” It’s a line Trump will surely use again and again against Harris. Some oil industry figures already fearful of Biden’s environmental agenda worry Harris would bolster his resolve to combat climate change and stifle fossil fuel development, including through regulations making them more expensive to produce. But industry advocates plan to emphasize the importance of oil and gas as an engine driving the U.S. economy and critical to its post-pandemic recovery. “The oil and gas industry represents about 8% of the American economy,” and is “a very important component of our recovery,” American Petroleum Institute President Mike Sommers said by phone. “The world looks a lot different behind the desk in the Oval Office than it does on the campaign trail, and we’re an industry that represents 10 million American workers and will be a key part of that recovery.” The oil and gas industry faces significant headwinds, not least from the historic drop in demand caused by the coronavirus pandemic. Gas companies seeking to build new pipelines have been stymied in court recently, and some economists have argued a more effective recovery plan would involve green-friendly policies. As California attorney general, Harris filed lawsuits against Phillips 66, ConocoPhillips and other oil companies for alleged environmental violations. Her office secured criminal indictments against Plains All American Pipeline LP for a 2015 spill in Santa Barbara, California, which resulted in convictions in 2018, after Harris was elected to the Senate. Harris also has a history of tangling with oil refiners that have operations in California — a pugilistic approach that could add heft to Biden’s threat to target fossil fuel executives and “put them in jail.” For instance, Harris opposed Chevron Corp.’s planned expansion of a refinery in Richmond on grounds it risked accidents and would exacerbate climate change. And Harris criticized a bid by Valero Energy Corp. to receive rail shipments of crude at its Benecia refinery, emphasizing the risk for spills and explosions along an expected Northern California route.
Massive Refiners Are Turning into Biofuel Plants in the West – The latest sign of a worldwide energy transition: Massive oil refineries across the western U.S. are being converted into biofuel plants. Phillips 66 on Wednesday became the latest in a string of U.S. refiners to say it’s converting an oil refinery in California into a biofuel plant as gasoline loses its luster to fuels derived from agricultural and waste products. The company said its 120,000 barrel-a-day Rodeo refinery near San Francisco will become the world’s biggest plant that makes so-called renewable diesel, as well as gasoline and jet fuel, out of used cooking oil, fats, greases and soybean oils. The announcement came about a week after fuel giant Marathon Petroleum Corp. said that it may convert two refineries into renewable diesel plants. In June, HollyFrontier Corp. said it would turn its Cheyenne, Wyoming, refinery into a renewable diesel plant by 2022. As refiners across the U.S. struggle with depressed fuel demand and an uncertain future amid the pandemic, California’s fight against global warming is offering a pathway to survival. Demand for so-called renewable diesel is surging in the Golden State where fuel suppliers buy credits from clean energy producers to make up for their emissions as part of a program that’s designed to cut the region’s transportation-related emissions 20% by 2030. “There is overcapacity on the refining market,” Marijn van der Wal, biofuel adviser at Stratas Advisers in Singapore, said in a phone interview Wednesday. “Are we going to shut down our refineries or are we going to repurpose them?” The LCFS credits as well as federal RIN D5 credits and recently reintroduced Blenders Tax Credits generate about $3.32 a gallon in subsidies for renewable diesel producers, sufficient to cover production costs, Van der Wal said in a report last June. “It’s a mind-boggling amount of money,” he said by phone. “You will make a lot of money as long as all these subsidies come in.” The Rodeo plant is well suited for conversion because of its dock and rail access for receiving the tallows, vegetable oils and used cooking oils that will feed into plant, Nik Weinberg-Lynn, manager of renewable energy projects at Phillips 66, said by phone. The facility has two hydrocrackers that are important to the conversion process as well a plentiful supply of hydrogen. In addition, the plant is located where demand is strongest. “The California market for the renewable diesel product is certainly the largest in the world,” he said. Phillips 66 plans to invest $700 million to $800 million in the conversion including constructing pre-treatment facilities, Weinberg-Lynn said. The Rodeo plant could start operating as early as 2024, producing 680 million gallons a year of about 70% renewable diesel, 10% gasoline, and 20% jet fuel, the company said.
The Bakken Boom Goes Bust With No Money to Clean up the Mess – More than a decade ago, fracking took off in the Bakken shale of North Dakota and Montana, but the oil rush that followed has resulted in major environmental damage, risky oil transportation without regulation, pipeline permitting issues, and failure to produce profits. Now, after all of that, the Bakken oil field appears moving toward terminal decline, with the public poised to cover the bill to clean up the mess caused by its ill-fated boom. In 2008, the U.S. Geological Service (USGS) estimated that the Bakken region held between 3 and 4.3 billion barrels of “undiscovered, technically recoverable oil,” starting a modern-day oil rush. This oil was technically recoverable due to the recent success with horizontal drilling and hydraulic fracturing (fracking) of oil and gas-rich shale, which allowed hydrocarbons trapped in the rock to be pumped out of reservoirs previously unreachable by conventional oil drilling technology. The industry celebrated the discovery of oil in the middle of North America but realized it also posed a problem. A major oil boom requires infrastructure – such as housing for workers, facilities to process the oil and natural gas, and pipelines to carry the products to market – and the Bakken simply didn’t have such infrastructure. North Dakota is a long way from most U.S. refineries and deepwater ports. Its shale definitely held oil and gas, but the area was not prepared to deal with these hydrocarbons once they came out of the ground. Most of the supporting infrastructure was never built – or was built haphazardly – resulting in risks to the public that include industry spills, air and water pollution, and dangerous trains carrying volatile oil out of the Bakken and through their communities. With industry insiders recently commenting that the Bakken region is likely past peak oil production, that infrastructure probably never will be built. Meanwhile, the petro-friendly government of North Dakota has failed to regulate the industry when money was plentiful during the boom, leaving the state with a financial and environmental mess and no way to fund its cleanup during the bust.
Weekly EIA Petroleum Report — August 12, 2020 – Link here.
- US crude oil in storage: 514.1 million bbls, about 15% above the already fat five-year average;
- US crude oil in storage decreased by a moderate 4.5 million bbls;
- refiners are operating at 81.0% capacity, pretty much unchanged, but up slightly from last report:
- US imported 5.6 million bopd, down by 389,000 bopd from previous week;
- over the past four weeks, crude oil imports averaged about 5.7 million bpd, 20.4% less than the same four-week period last year;
- total products supplied averaged 18.5 million bpd, down by 14.3% from same period last year
- distillate fuel product supplied averaged 3.6 million bpd over the past four weeks; down by 9.3% from the same period last year
- distillate fuel inventories decreased by 2.3 million bbls, but still an astounding 24% above the already fat five-year average for this time of the year;
- jet fuel supplied was down 45.8% compared with same four-week period last year; about the same as previous report;
Oxy Books $6.6B Charge for Second Quarter — Occidental Petroleum Corp. booked a total impairment of $6.6 billion for the second quarter after the collapse in energy prices reduced the value of several of its assets. The shares fell as much as 3.3% in after-market trading in New York. Almost every large oil and gas company has either taken or warned of massive writedowns after energy markets collapsed in the second quarter, eroding the value of their reserves. With uncertainty over when or if petroleum demand will fully recover and savage spending cuts, the industry is effectively saying large portions of its oil in the ground may never be economically produced. Occidental is struggling with a $40 billion debt burden after its ill-timed purchase of Anadarko Petroleum Corp. last year. The company is currently considering selling assets and refinancing to pay down the $5 billion of debt due next year. The company is in talks to sell operations in Africa and the Middle East to Indonesia’s state-owned PT Pertamina for about $4.5 billion, people familiar with the matter said last month. It’s also running a process to sell land and minerals in Wyoming.
How the coronavirus pandemic is debunking some long-held myths of the energy industry – The coronavirus pandemic has exposed some hard truths to the world’s largest oil and gas majors, energy analysts have told CNBC, with many reeling after historic second-quarter losses laid bare the financial frailty of the industry. “Big Oil” companies, referring to the world’s largest oil and gas firms, posted huge losses in the three-month period through to June as coronavirus lockdown measures coincided with an unprecedented demand shock. The results were expected to mark the low point of what has already been touted as potentially the worst year in the history of global oil markets. The devastating economic impact of the coronavirus outbreak has prompted energy majors to slash shareholder distributions, rack up increasing levels of debt, and sell or write-down the value of their assets. The chief executive of Saudi Aramco, Amin Nasser, sought to reassure market participants about the outlook for the energy industry earlier this month. Speaking during an earnings call with investors shortly after the world’s largest oil company posted a 50% fall in profits for the first half of its financial year, Nasser said: “The worst is likely behind us.” Yet, as energy industry peers warn of significantly lower oil and gas prices through to 2050, others are not so sure. “I like to look at the financials, and the picture has been bleak for this industry for a decade,” Kathy Hipple, an analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), told CNBC via telephone. The beleaguered energy sector has fallen 36% year-to-date, making it the worst-performing sector on the S&P 500. The sector has consistently disappointed investors since 2010, Hipple said, with oil and gas companies clearly finding it “increasingly hard” to raise enough cash flow from their operations to cover shareholder distributions. Instead, many cash-strapped energy giants have opted to dig themselves further into debt or sell off their assets in order to cover dividends or share buybacks. “That is financially unsustainable,” she continued. “You might be able to get away with that from time to time but that is certainly not a long-term strategy to run a business.”
Oil spill in Venezuela stains treasured Caribbean beaches (AP) – An oil spill in Venezuela has coated a stretch of the crisis-wracked nation’s Caribbean coastline, treasured for its white sand beaches, clusters of small islands and wildlife. Fisherman and locals living around Morrocoy National Park began reporting oil washing ashore last week and it has coated roughly 9 miles (15 kilometers) of beaches. The area popular with tourists is located 180 miles (300 kilometers) from the capital of Caracas. Venezuelan authorities acknowledged the spill, saying they’re containing and cleaning it up, but so they far haven’t said what caused it. The area is near El Palito refinery operated by the struggling state-owned PDVSA oil company, but Environmental Minister Oswaldo Barbera tweeted late Tuesday that a flyover confirmed that the spill did not come from the refinery. He didn’t identify the source, however. Park rangers and volunteers had already collected several bags of spilled oil from the beach, he said, adding that the work continues. “We’ll keep the cleanup going and contain the spilled oil,” Barbera said. “We’re continuing to inspect the areas affected.” Victoria Gonzfllez, general director of the local Azul Foundation environmental organization, called on Venezuela’s prosecutors to launch an investigation into what caused the spill and hold those responsible accountable. She told the local online news source VPI TV on Tuesday that the probe should start with PDVSA. She said the damage could bring a “high environmental cost” to sensitive wildlife.
Mauritius declares environmental emergency after oil spill – The Indian Ocean island of Mauritius has declared a “state of environmental emergency” after a Japanese-owned ship that ran aground offshore days agobegan spilling tons of fuel.The prime minister, Pravind Jugnauth, made the announcement late on Friday as satellite images showed a dark slick spreading in the turquoise waters near environmental areas that the government called “very sensitive”.Mauritius has said the ship was carrying nearly 4,000 tons of fuel and cracks have appeared in its hull.Jugnauth earlier in the day said his government was appealing to France for help, saying the spill “represents a danger” for the country of some 1.3 million people that relies heavily on tourism and has been been hit hard by the effects of the coronavirus pandemic.“Our country doesn’t have the skills and expertise to refloat stranded ships, so I have appealed for help from France and president Emmanuel Macron,” he said. “Bad weather has made it impossible to act, and I worry what could happen Sunday when the weather deteriorates.”Jugnauth shared a photo of the vessel, the MV Wakashio, tilted precariously.Video footage posted online showed oily waters lapping at the shore as people peered at the ship in the distance. Online ship trackers showed the Panama-flagged bulk carrier had been en route from China to Brazil.
Mauritius scrambles to counter oil spill from grounded ship – Anxious residents of the Indian Ocean island nation of Mauritius stuffed fabric sacks with sugar cane leaves Saturday to create makeshift oil spill barriers as tons of fuel leaking from a grounded ship put endangered wildlife in further peril.The government has declared an environmental emergency and France said it was sending help from its nearby Reunion island. Satellite images showed a dark slick spreading in the turquoise waters near wetlands that the government called “very sensitive.” “When biodiversity is in peril, there is urgency to act,” French President Emmanuel Macron tweeted Saturday. Wildlife workers and volunteers ferried dozens of baby tortoises and rare plants from an island near the spill, Ile aux Aigrettes, to the mainland as fears grew that worsening weather on Sunday could tear the Japanese-owned ship apart along its cracked hull. A French statement from Reunion on Saturday said a military transport aircraft was carrying pollution control equipment to Mauritius and a navy vessel with additional material would set sail for the island nation. Residents and environmentalists alike wondered why authorities didn’t act more quickly after the ship ran aground July 25 on a reef. Mauritius says the ship, the MV Wakashio, was carrying nearly 4,000 tons of fuel.. “Why that ship has been sitting for long on that coral reef and nothing being done. This is the country’s first oil spill, he said, adding that perhaps no one expected the ship to break apart. For days, residents peered out at the precariously tilted ship as a salvage team arrived and began to work, but ocean waves kept battering the ship.”They just hit and hit and hit,” Gardenne said. Cracks in the hull were detected a few days ago and the salvage team was quickly evacuated. Some 400 sea booms were deployed to contain the spill, but they were not enough. Videos posted online have shown oily waters lapping at the mainland, and a man running a stick across the water’s surface then lifting it, dripping black goo. The Mauritian Wildlife Foundation is working to free trapped seabirds and turtles. Environmental group Greenpeace Africa warned that tons of diesel and oil are leaking into the water. It shared video showing Mauritius residents, to chants of “One, two, three!,” shoving the makeshift oil barriers into the sea, while crowds of children and adults hurried to make more. “Thousands of species around the pristine lagoons of Blue Bay, Pointe d’Esny and Mahebourg are at risk of drowning in a sea of pollution, with dire consequences for Mauritius’ economy, food security and health,” said Greenpeace’s climate and energy manager, Happy Khambule.
Satellite images show oil spill disaster unfolding in Mauritius: “We will never be able to recover” Anxious residents of the Indian Ocean island nation of Mauritius stuffed fabric sacks with sugar cane leaves Saturday to create makeshift oil spill barriers as tons of fuel leaking from a grounded ship put endangered wildlife in further peril. The government has declared an environmental emergency and France said it was sending help from its nearby Reunion island. Satellite images showed a dark slick spreading in the turquoise waters near wetlands that the government called “very sensitive.” Wildlife workers and volunteers ferried dozens of baby tortoises and rare plants from an island near the spill, Ile aux Aigrettes, to the mainland as fears grew that worsening weather on Sunday could tear the Japanese-owned ship apart along its cracked hull. A French statement from Reunion on Saturday said a military transport aircraft was carrying pollution control equipment to Mauritius and a navy vessel with additional material would set sail for the island nation. Residents and environmentalists alike wondered why authorities didn’t act more quickly after the ship ran aground July 25 on a reef. Mauritius says the ship, the MV Wakashio, was carrying nearly 4,000 tons of fuel. “That’s the big question,” Jean Hugues Gardenne with the Mauritian Wildlife Foundation told The Associated Press. “Why that ship has been sitting for long on that coral reef and nothing being done.” This is the country’s first oil spill, he said, adding that perhaps no one expected the ship to break apart. For days, residents peered out at the precariously tilted ship as a salvage team arrived and began to work, but ocean waves kept battering the ship. “They just hit and hit and hit,” Gardenne said. “All the volunteers are covered black,” Sunil Dowarkasing, a former Greenpeace strategist and environmental expert assisting in the clean-up, told AFP from Mahebourg, one of the worst affected areas.
Damaged ship leaking oil off Mauritius could split – A ship that ran aground off Mauritius leaking tonnes of oil into the ocean is cracking, the prime minister said Sunday, threatening an even greater ecological and economic disaster for the island nation. More than 1,000 tonnes of fuel has seeped from the bulk carrier MV Wakashio into the azure sea off southeast Mauritius, befouling the coral reefs, white-sand beaches and pristine lagoons that lure tourists from around the globe. But another 2,500 tonnes remain aboard the stricken vessel, which ran aground on a reef on July 25 but only started oozing from a crack in the hull in the past week. Experts warn a further rupture could unleash a spill that will be beyond catastrophic for the fragile coastal ecosystem upon which Mauritius, and its economy, relies. Prime Minister Pravind Jugnauth said response crews had managed to stymie the leak for now, but were bracing for the worst. “The cracks have grown. The situation is even worse,” he told reporters late Sunday. “The risk of the boat breaking in half still exists.” Japan said Sunday it would send a six-member expert team to assist with what Mauritius has declared an unprecedented environmental emergency. France also dispatched a naval vessel, a military aircraft and technical advisers from nearby Reunion Island after Mauritius appealed for international help. Thousands of volunteers, many smeared head-to-toe in black sludge, have marshalled along the coastline, stringing together miles of improvised floating barriers made of straw in a desperate attempt to hold back the oily tide. Mitsui OSK Lines, which operates the vessel owned by another Japanese company, promised Sunday to “make all-out efforts to resolve the case”. But some fear the damage is already done. Aerial images show the enormity of the disaster, with huge stretches of crystal-clear seas around the marooned cargo ship stained a deep inky black. Thick muck has coated mangrove forests and unspoiled inlets up and down the coastline, exacting irreparable harm and undoing years of painstaking conservation work, environmental activists say. The opposition has called for the resignation of the environment and fisheries ministers, while volunteers have ignored an official order to leave the clean-up operation to local authorities, donning rubber gloves to sift through the sludge. “People by the thousands are coming together. No one is listening to the government anymore,” said Ashok Subron, an environmental activist at Mahebourg, one of the worst-hit areas. “People have realised that they need to take things into their hands. We are here to protect our fauna and flora.” Police boarded the Japanese-owned but Panamanian-flagged Wakashio on Sunday and seized the ship’s log book and black box as part of investigations into the disaster. The bulker struck a reef at Pointe d’Esny, an ecological jewel fringed by idyllic beaches, colourful reefs, sanctuaries for rare and endemic wildlife, and unique RAMSAR-listed wetlands.
Mauritius races to clean up oil as ship leaking fuel breaks up – Salvage crews raced against time Monday to prevent a second disastrous oil spill off the picture-perfect coastline of Mauritius, with a damaged tanker carrying thousands of tonnes of fuel at risk of splitting apart. The bulk carrier MV Wakashio ran aground on July 25 with 4,000 tonnes of fuel aboard and began seeping oil last week, staining coral reefs, mangrove forests and tranquil lagoons in an unprecedented environmental catastrophe for the archipelago nation. More than 1,000 tonnes has already oozed from the ship, its Japanese operator says, causing untold ecological damage to protected marine parks and fishing grounds that form the backbone of Mauritius’ economy. Fuel was being airlifted Monday by helicopter to the shore, but efforts to pump more from the hold were being thwarted by rough seas and strong winds. The weather, which is also fanning the oil slick further up the coast, is not forecast to improve until evening. Some fuel has been removed but 2,500 tonnes still remains aboard, said Prime Minister Pravind Jugnauth, who warned cracks in the hull were worsening, and there was a very real chance the boat could split. “We are in an advanced fracturing process. The bulk carrier does not have much time ahead of it,” said one scientist working on the emergency effort, speaking on condition of anonymity. Divers have reported fresh cracks in the hull, while creaking sounds from the vessel could be heard from the southeast shore, where a major clean-up operation is underway to remove treacly sludge coating miles of Mauritius’ unspoiled coastline. Japan on Monday dispatched a six-member team, including members of its coast guard, to assist. A French naval vessel with technical advisers aboard arrived Sunday from nearby Reunion, a French Indian Ocean island. A spokesman at Mitsui OSK Lines, which operates the Wakashio, owned by another Japanese company, Nagashiki Shipping, told AFP it would send a team of experts as soon as Tuesday if they tested negative for coronavirus. “Nagashiki Shipping deeply apologise to the people of Mauritius and will do their utmost protect the environment and mitigate the effects of the pollution,” the Wakashio’s owner said in a statement Monday. The bulker struck a reef at Pointe d’Esny, an ecological jewel fringed by idyllic beaches, colourful reefs, sanctuaries for rare and endemic wildlife, and protected wetlands.
Sea life around Mauritius dying as Japanese ship oil spill spreads – (Reuters) – Mauritian volunteers fished dead eels from oily waters on Tuesday as they tried to clean up damage to the Indian Ocean island’s most pristine beaches after a Japanese bulk carrier leaked an estimated 1,000 tonnes of oil.The ship, MV Wakashio, owned by Nagashiki Shipping and operated by Mitsui OSK Lines Ltd, struck a coral reef on Mauritius’ southeast coast on July 25 and began leaking oil last week, raising fears of a major ecological crisis. Activists told Reuters that dead eels were floating in the water and dead starfish were marked by the sticky black liquid. Crabs and seabirds are also dying. “We don’t know what may happen further with the boat, it may crack more,” said clean up volunteer Yvan Luckhun. The MV Wakashio is still holding some 2,000 tonnes of oil and it is expected to eventually break up, Prime Minister Pravind Jugnauth said late on Monday, warning that the country must brace for the worst. Tourism is a leading part of the Mauritius economy. The government, which declared an emergency on Friday due to the spill, is working with former colonial ruler France to try to remove the oil.The spill has set back two decades worth of restoring the natural wildlife and plants in the lagoon, which started after the government banned sand harvesting in the area back in 2000, said Vikash Tatayah, conservation director at Mauritius Wildlife Foundation, a non-governmental organisation. The fragmentation of the oil in the sea is expected to damage corals when the heavier particles in the oil settle on them, he said, adding that the steps taken by the government to prevent the disaster are also being scrutinised.
UN experts arrive in Mauritius to assist in oil spill – A team of United Nations experts arrived on the island nation of Mauritius on Tuesday to aid efforts to prevent an oil spill from further damaging its pristine environment. Salvage crews were in a race against the clock as they pumped fuel from the stricken Japanese-owned bulk carrier MV Wakashio, which ran aground on a coral reef last month and began leaking oil five days ago. Authorities have warned the boat could split in two at any moment, with cracks in the hull growing larger by day. The inter-agency United Nations team will “support efforts to mitigate impact of (the) oil spill on natural resources and on (the) population”, read a statement from the UN office in Mauritius. Japan has dispatched a six-member team, including members of its coastguard, to assist. Meanwhile France has sent more than 20 tonnes of technical equipment — including 1.3 kilometres (0.8 miles) of oil containment booms, pumping equipment and protective gear — along with technical advisers from nearby Reunion, a French Indian Ocean island. The Wakashio ran aground with 4,000 tonnes of fuel, and according to a statement by Mitsui OSK Lines, which operates the Wakashio, some 1,180 tonnes of fuel has leaked into the surrounding powder blue waters. Vashist Seegobin, an ecology and conservation professor at the Mauritius University said that while the amount of fuel seeping from the boat appeared to have slowed, “it is still leaking, we must remain on alert.” The bulker struck a reef at Pointe d’Esny, an ecological jewel fringed by idyllic beaches, colourful reefs, sanctuaries for rare and endemic wildlife, and protected wetlands. Thousands of volunteers, many smeared head-to-toe in black sludge, have turned out along the coast since Friday, stringing together miles of improvised floating barriers made of straw in a desperate attempt to hold back the sludge. Mitsui OSK Lines said about 1,800 tonnes of fuel remained onboard the fragile vessel.
Mauritius seeks compensation as oil spill cleanup continues (AP) – Mauritius says it is seeking compensation from the owners of a Japanese ship that spilled oil after it grounded in the shallow waters off the Indian Ocean island nation, while urgent efforts continue to pump out the remaining fuel. The MV Wakashio has spilled 1,000 tons of its cargo of 4,000 tons of oil into the sea, fouling the coastline of Mauritius, including a protected wetlands area. That threatens 35 years of work to restore the area, environmental activists said Wednesday. An estimated 2,500 tons of fuel has been pumped from the ship, stranded on a coral reef at Pointe d’Esny, a sanctuary for rare wildlife. Workers are racing to empty the ship before it breaks up in heavy seas and further pollutes the shore. Prime Minister Pravind Jugnauth said Mauritius will seek compensation for the extensive environmental damage from the Wakashio’s owner, Nagashiki Shipping. He has declared the oil spill a national disaster. Jugnauth’s government is under pressure to explain why it did not take immediate action to empty the ship when it ran aground on July 25. Two weeks later, after pounding by waves, the ship cracked and began leaking. Some of the turquoise waters surrounding Mauritius were stained a muddy black, fouling mangrove wetlands and drenching waterbirds and reptiles with sticky oil. Thousands of Mauritians have been working for days to reduce the damage by making improvised booms from fabric and stuffed with straw and sugar cane leaves to try to contain the oil’s spread. Others have scooped up oil from the shallow waters. It is estimated that nearly 400 tons that spilled have been removed from the sea.
Mauritius oil spill: Almost all fuel oil pumped out of MV Wakashio – BBC News Almost all the fuel oil from the Japanese-owned ship that has caused a huge oil spill off the coast of Mauritius has been pumped out, Prime Minister Pravind Jugnauth has said. The operation had been a race against time, he added, amid fears that the MV Wakashio would break up. The ship, believed to have been carrying 4,000 tonnes of fuel oil, ran aground on a coral reef on 25 July. Mauritius is home to world-renowned coral reefs, and popular with tourists. The fuel has been transferred to shore by helicopter and to another ship owned by the same Japanese firm, Nagashiki Shipping. France has sent a military aircraft with pollution-control equipment from its nearby island of Réunion, while Japan has sent a six-member team to assist the French efforts. The Mauritius coast guard and several police units are also at the site in the south-east of the island. Mr Jugnauth said more than 3,000 of the 4,000 tonnes of oil from the ship’s fuel reservoirs had been pumped out. A small amount remained on board elsewhere. Police spokesperson Shiva Cooten said they “still have work to do but the situation is all under control”. Earlier, police chief Khemraj Servansing said that cracks in the ship “keep increasing”. “It is difficult to say when it will break but we have a boom deployment plan with the French Navy helping and we have made provisions for high sea booms,” he said. The MV Wakashio ran aground at Pointe d’Esny, a known sanctuary for rare wildlife. The area also contains wetlands designated as a site of international importance by the Ramsar convention on wetlands.
Mauritius says almost all oil removed from damaged Japanese ship – Nearly all the oil from a damaged Japanese ship that caused a spill off the coast of Mauritius has now been removed, the country’s Prime Minister Pravind Jugnauth said on Wednesday. The prime minister’s office also said that everything in the ship’s fuel tanks had been removed but there was still residue in parts of the ship. Jugnauth said Mauritius will seek compensation from the ship’s owner, Nagashiki Shipping, for the environmental damage it has caused. MV Wakashio, a bulk carrier, has been stranded on a coral reef off the nation’s coast for over two weeks now. The vessel ran aground on July 25 and has since leaked an estimated 1,000 tonnes of oil into coral reefs, mangrove forests and protected wetlands. Salvage teams have managed to avert further ecological disaster as the ship is at risk of breaking apart any moment. Jugnauth’s government is under pressure to explain why it did not take immediate action to empty the ship. The spill was declared a national disaster and thousands of Mauritians have been working for days by making improvised booms from fabric, stuffed with straw and sugarcane leaves, in attempts to contain the spill. “It was a race against the clock, and I salute the excellent work to prevent another oil spill,” said Jugnauth.
Tanker That Caused Mauritius Oil Spill Splits In Two, Sending More Fuel Into Indian Ocean – A ship that ran aground off the coast of Mauritius last month has now split in two, spilling more oil into the Indian Ocean.The Japanese-owned MV Wakashio struck a coral reef on July 25, 12 days before the approximately 4,000 metric tons of oil on board started to spill out into the crystal-clear water. It was estimated the tanker had leaked about 1,300 metric tons of oil into the ocean, but that a split would worsen the ecological disaster. Prime Minister Pravind Jugnauth previously warned: “The boat can still break in two. “The cracks have developed. The situation is even more serious. “Arrangements have been made so that the part which is already underwater is towed in case of breakage. “The part still out of the water must be stabilized because it is this which contains the bulk of the heavy oil load of the ship.” Oceanographer Vassen Kauppaymuthoo previously warned of the damage if the vessel was to break apart. He told RFI: “The damage we are seeing now is nothing compared to what may happen when the Wakashio will break. “The whole east coast, from Blue Bay to Grand Gaube, will be affected.”
Mauritius dodges second oil spill as fuel pumped from stricken ship – Mauritius avoided a second catastrophic oil spill Wednesday after salvage crews pumped the remaining fuel from the tanks of a cargo ship that ran aground off its coast, imperiling world-famous wildlife sanctuaries. The stricken vessel threatens to break apart after more than two weeks stranded on a reef, where it leaked more than 1,000 tons of fuel into pristine seas. Prime Minister Pravind Jugnauth said “all the fuel” had been pumped from reservoirs beneath the MV Wakashio bulk carrier, dodging what experts warned would been a crippling blow to an island nation popular with honeymooners and ecotourists. “It was a race against the clock, and I salute the excellent work to prevent another oil spill,” said Jugnauth, who added that another 100 tons still remained elsewhere aboard the Japanese-owned ship. “The weather was calm and it helped the pumping exercise, it also prevented the breakup of the boat, which is inevitable.” Mauritius declared an unprecedented environmental emergency last week as the Wakashio, which ran aground on July 25, began seeping oil into a protected marine park boasting unspoiled coral reefs, mangrove forests and endangered species. Jugnauth said the “ecological crisis” was beyond the scope of the tiny Indian Ocean nation, and appealed for urgent international help. France and Japan were among those to answer the call, along with thousands of ordinary Mauritians who volunteered day and night to clean sludge from the picturesque tropical coastline to which their economy is deeply tied.
Massive poisonous shock- Scientists fear lasting impact from Mauritius oil spill (Reuters) – Some corals have lived for centuries at the fringes of Mauritius. Now smothered for days in heavy fuel oil spilled from a wrecked Japanese tanker nearby, parts of those reefs may be in trouble. The full impact of the toxic spill is still unfolding, scientists say. As the Indian Ocean island’s residents scramble to mop up the oil slicks and clumps, they are seeing dead eels and fish floating in the water, as fuel-soaked seabirds limp onto shore. Satellite images also show the 1,000 tonnes of spilled oil spreading northward along the coastline from the spill site in the turquoise waters of Blue Bay Marine Park. The damage, scientists say, could impact Mauritius and its tourism-dependent economy for decades. “This oil spill occurred in one of, if not the most, sensitive areas in Mauritius,” oceanographer and environmental engineer Vassen Kauppaymuthoo told Reuters by telephone from the island, where he was surveying the disaster. “We are talking of decades to recover from this damage, and some of it may never recover.” The wildlife at risk include the seagrasses blanketing sand in the shallow waters, clownfish darting around coral reefs, mangrove trees corralling the coastline with their tangled root systems, and the critically endangered Pink Pigeon, endemic to the island. Giant tortoises slow-walk through a nature reserve on the nearby islet, Ile-aux-Aigrettes, where there is also a scientific research station. Altogether, Blue Bay Marine park counts 38 types of coral and 78 species of fish. The spill brings “a massive poisonous shock to the system,” said Adam Moolna, an environmental scientist from Mauritius who lectures at Keele University in Britain. “This oil will have cascading effects across the webs of life.” The spill came from the Japanese-owned MV Wakashio, which rammed into a reef in the marine park on July 25. It is still unclear why the ship was sailing so closely to the coast. About a week later, oil began gushing from the cracked vessel. A general view shows the bulk carrier ship MV Wakashio, belonging to a Japanese company but Panamanian-flagged, ran aground on a reef, at the Riviere des Creoles, Mauritius August 13, 2020. REUTERS/Reuben Pillay However, the flow had been stopped, authorities say, after they pumped the remaining oil from the ship. On Thursday, the ship’s owner Nagashiki Shipping said it would face up to its liability and assess compensation for the disaster. Already, about 15 km of coastline have been affected by the spill, said Mauritius Marine Conservation Society President Jacqueline Sauzier. “We don’t have the equipment or the expertise to remove the oil, and time is of the essence to limit the damage,” she told Reuters.
Massive poisonous shock- Scientists fear lasting impact from Mauritius oil spill (Reuters) – Some corals have lived for centuries at the fringes of Mauritius. Now smothered for days in heavy fuel oil spilled from a wrecked Japanese tanker nearby, parts of those reefs may be in trouble. The full impact of the toxic spill is still unfolding, scientists say. As the Indian Ocean island’s residents scramble to mop up the oil slicks and clumps, they are seeing dead eels and fish floating in the water, as fuel-soaked seabirds limp onto shore. Satellite images also show the 1,000 tonnes of spilled oil spreading northward along the coastline from the spill site in the turquoise waters of Blue Bay Marine Park. The damage, scientists say, could impact Mauritius and its tourism-dependent economy for decades. “This oil spill occurred in one of, if not the most, sensitive areas in Mauritius,” oceanographer and environmental engineer Vassen Kauppaymuthoo told Reuters by telephone from the island, where he was surveying the disaster. “We are talking of decades to recover from this damage, and some of it may never recover.” The wildlife at risk include the seagrasses blanketing sand in the shallow waters, clownfish darting around coral reefs, mangrove trees corralling the coastline with their tangled root systems, and the critically endangered Pink Pigeon, endemic to the island. Giant tortoises slow-walk through a nature reserve on the nearby islet, Ile-aux-Aigrettes, where there is also a scientific research station. Altogether, Blue Bay Marine park counts 38 types of coral and 78 species of fish. The spill brings “a massive poisonous shock to the system,” said Adam Moolna, an environmental scientist from Mauritius who lectures at Keele University in Britain. “This oil will have cascading effects across the webs of life.” The spill came from the Japanese-owned MV Wakashio, which rammed into a reef in the marine park on July 25. It is still unclear why the ship was sailing so closely to the coast. About a week later, oil began gushing from the cracked vessel. However, the flow had been stopped, authorities say, after they pumped the remaining oil from the ship. On Thursday, the ship’s owner Nagashiki Shipping said it would face up to its liability and assess compensation for the disaster. Already, about 15 km of coastline have been affected by the spill, said Mauritius Marine Conservation Society President Jacqueline Sauzier. “We don’t have the equipment or the expertise to remove the oil, and time is of the essence to limit the damage,” she told Reuters.
Crude oil suspected to be from Pertamina operation contaminates Thousand Islands… again – Crude oil waste that allegedly leaked from an offshore operation by state-owned energy giant Pertamina has again contaminated the waters of the Thousand Islands regency in Jakarta. On Tuesday morning, residents of Pari Island worked together to clean up the clotted oil waste along the coast. They said they had seen the oil in the waters of Pari and Lancang islands since Friday. The residents suspected the crude oil waste had leaked from Pertamina’s drilling operation in Indramayu and Karawang in West Java. “Seeing the currents, the crude oil waste likely originated from the east, to be precise, Karawang waters where oil drilling points are located,” Pari Island Care Forum (FP3) chairman Mustahgfirin said in a statement. He estimated that the oil waste had polluted 2 kilometers of the southern coast of Pari Island. If collected, he said, the waste could reach 50 tons. Pari residents said such pollution had regularly occurred in recent years, especially in the month of August along with easterly currents and winds. When oil spilled from an exploration well called YYA-1 north of Karawang last year, the Thousand Islands administration said the spill had reached seven of its southern islands. Pari was one of them, Mustahgfirin said. Pari residents have raised concerns over the impacts of oil pollution on marine organisms, which the residents depend on for their livelihoods. An FP3 member, Edi Mulyono, said the majority of Pari residents were fishermen, some of whom cultivated seaweed and grouper fish. “The grouper fish that eat the crude oil will die of poisoning, and if the waste sticks to the seaweed blades, they will burn and turn to white,”
Kuwait Oil Company says it has contained and isolated oil leak – (Reuters) – Kuwait Oil Company said on Wednesday it has contained and isolated the source of an oil leak that occurred on Tuesday night, located near Kilo 18 of the Seventh Ring Road.The incident did not result in any damage or injuries, the company said in a tweet. “The area where the leak occurred is now totally safe and under control, and the company confirms that its regular operations are continuing uninterrupted,” it added.
WTI Futures Rise on US Stimulus Progress – Nearest delivery oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange rallied Monday with the move by the West Texas Intermediate contract above $42 barrel (bbl) on the spot continuous chart spurred by reports of progress in U.S. stimulus talks after President Donald Trump signed executive orders to extend some parts of coronavirus relief.Further boosting the complex, industrial data out of China showed its factory output continued to improve last month as global demand for Chinese manufacturing goods picked up again midsummer, according to the National Bureau of Statistics. China saw its foreign trade gain 6.5% year-on-year in July, with exports and imports up 10.4% and 1.6%, respectively, official data showed. China’s fuels consumption has been one of the major drivers of global demand recovery as it exited coronavirus related lockdown prior to many of the Western economies. Domestically, gasoline consumption flattened out in July, the peak month for driving season, which is likely to pressure oil prices in coming weeks. Four-week average demand for the period ended July 31 was 8.6 million barrels per day (bpd), down roughly 9.1% versus last year’s levels, according to official data from U.S. Energy Informational Administration. That correlates closely with private mobility data showing little improvement in traffic volumes on U.S. roads over the last four weeks.Oil futures also found some support after U.S. President Donald Trump said House Speaker Nancy Pelosi and Senator Chuck Schumer wanted to meet with him to make a deal on coronavirus-related economic relief. That follows a string of executive actions signed over the weekend, which includes extension of the moratorium on evictions, $400 in weekly supplemental unemployment aid and deferral of payroll tax for U.S. businesses. “Fiscal policy has been unbelievably important in supporting the economy. It continues to be important because we have not got control over the virus spread. Another supportive package is really important,” said Chicago Fed President Charles Evans on Monday.
Oil eases as U.S. stimulus hopes dim, virus cases rise – (Reuters) – Oil prices fell about 1% on Tuesday after rising earlier in the session as hopes dimmed for a swift stimulus package to relieve the U.S. economy as coronavirus cases increased globally. Brent crude LCOc1 futures fell 49 cents, or 1.1%, to settle at $44.50 a barrel. U.S. West Texas Intermediate (WTI) crude CLc1 futures fell 33 cents, or 0.8%, to finish at $41.61 a barrel. Some profit-taking ahead of weekly U.S. oil inventory data weighed on prices. After the markets settled, industry data from the American Petroleum Institute showed that crude stocks fell by 4 million barrels last week, more than analysts’ expectations of a 2.9 million-barrel draw. Official government data is due on Wednesday. The U.S. Senate’s top Republican and Democrat criticized each others’ approach to coronavirus aid on Tuesday, with no word on when talks on a new package might resume and no movement on benefits for tens of millions who lost jobs in the crisis. “Now there’s doubt coming out on the stimulus package and the Russian news as well,” said Gary Cunningham, director of market research at Tradition Energy. President Vladimir Putin claimed on Tuesday Russia had become the first country in the world to grant regulatory approval to a COVID-19 vaccine. But the approval has concerned some experts as the vaccine still must complete final trials. Still, signs of recovering Asian oil demand helped market sentiment. On Sunday, Saudi Aramco CEO Amin Nasser said he expects oil demand to rebound in Asia as economies open up. China’s factory deflation eased in July, driven by a rise in global oil prices and as industrial activity climbed back towards pre-coronavirus levels, adding to signs of recovery in the world’s second-largest economy. Prices also found support from a rally in European stocks, which rose for a third straight session as automakers gained on firm Chinese sales data.
EIA Raises 2020 Oil Price Forecasts – The U.S. Energy Information Administration (EIA) has raised its 2020 average spot price forecasts for both Brent and West Texas Intermediate (WTI) oil. According to its latest short-term energy outlook (STEO), which was released on Tuesday, the EIA now sees Brent spot prices averaging $41.42 per barrel and WTI spot prices averaging $38.50 per barrel in 2020. In its previous STEO, the EIA forecasted that Brent spot prices would average $40.50 per barrel and WTI spot prices would average $37.55 per barrel this year. Looking further ahead, the EIA now predicts that Brent spot prices will average $49.53 per barrel in 2021, which is a slight reduction on its previous 2021 projection of $49.70 per barrel. WTI spot prices are expected to average $45.53 per barrel next year, which also marks a slight decrease on the EIA’s previous prediction of $45.70 per barrel. In its latest STEO, the EIA said it expects high inventory levels and surplus crude oil production capacity will limit upward price pressures in the coming months. The organization added, however, that as inventories decline into 2021, upward price pressures will increase. The EIA estimates that global liquid fuels inventories rose at a rate of 6.4 million barrels per day (MMbpd) in the first half of this year and expects they will decline at a rate of 4.2MMbpd in the second half of 2020, then by 0.8MMbpd in 2021. The organization noted that its latest STEO “remains subject to heightened levels of uncertainty because mitigation and reopening efforts related to the 2019 novel coronavirus disease (COVID-19) continue to evolve”.
Light Crude Approaches $42 — Oil posted the biggest gain in a week in New York amid signs that the U.S. may move forward with another economic stimulus deal that could bolster consumption. Treasury Secretary Steven Mnuchin said that there are areas where compromise over a massive aid bill is possible and a “fair deal” could be agreed upon. Meanwhile, a recovery in the U.S. is seeing some momentum: new Covid-19 cases have decelerated by the most since the start of the pandemic and applications for unemployment benefits dropped to a pandemic low. Further supporting sentiment, crude demand in Asia is almost back to pre-coronavirus levels, Saudi Aramco Chief Executive Officer Amin Nasser said Sunday. Prices are supported by a “continued risk appetite,” said Bart Melek, head of global commodity strategy at TD Securities. “At least there are signals from Washington that imply growing likelihood that economic stimulus is pending.” Oil is on the precipice of breaking through the top end of the range where it’s been stalling for months, but remains weighed down by the Covid-19 pandemic that’s casting doubt on a sustained economic rebound. Adding to price pressure, the OPEC+ alliance is unleashing crude back onto the market this month following historic output cuts. “We have prices rallying, but it’s probably unlikely they are going to go to new highs,” Melek said. “OPEC has a great amount of spare capacity that they will move into the market along with growth.” West Texas Intermediate for September delivery rose 72 cents to settle at $41.94 a barrel Brent for October settlement climbed 59 cents to end the session at $44.99 a barrel Yet, in a sign of recovering consumption, the quantity of commercial flights around the world rose almost 6% in the seven days to Sunday, according to FlightRadar24 data. The average number of 67,000 planes in the sky was still far below the more than 100,000 pre-Covid.
Crude rises 2% after draw in U.S. oil stocks spurs demand hope – (Reuters) – Crude prices rose more than 2% on Wednesday after government data showed U.S. oil inventories fell across the board, bolstering hopes that fuel demand in the world’s biggest economy will withstand the coronavirus pandemic. Brent crude LCOc1 settled up 93 cents, or 2.1%, at $45.43 a barrel. West Texas Intermediate CLc1 oil ended $1.06, or 2.6%, higher at $42.67 a barrel, having dropped 0.8% in the previous session. U.S. crude oil, gasoline and distillate inventories fell last week as refiners ramped up production and demand improved, a government report showed. U.S. fuel demand rose to 19.37 million barrels per day last week, the highest since March, data from the Energy Information Administration showed. “We’re seeing the demand bounce back,” said Phil Flynn, senior energy analyst at Price Futures Group. “The market is tightening a lot quicker than people thought.”
Oil Prices Post Gains on Recovery Signal — Oil closed above a key technical level buoyed by U.S. energy data that suggest a much-awaited recovery in demand is underway as the summer driving season nears an end. Futures in New York rose 2.5% to the highest level in five months, settling above its 200-day moving average for the first time since January. Domestic crude supplies declined over 4 million barrels last week and refineries ratcheted up rates above 80% for the first time since March when the coronavirus pandemic led to widespread lockdowns, according to an Energy Information Administration report. Gasoline and distillate inventories also decreased. “There were pretty high expectations overnight built into the oil market in regard to these draws, and this report pretty much confirmed those,” said Rob Thummel, a portfolio manager at Tortoise. “We had some beef up in demand for gasoline and across the board, refining utilization was up.” Still, investors are keeping an eye on supply levels at the Cushing, Oklahoma, storage hub, which have increased each week since early July. U.S. benchmark crude futures are finding support from shrinking stockpiles and expectations for American shale producers to show restraint even as prices creep higher. In fact, U.S. shale oil supply may be 650,000 barrels a day lower than the current estimate of 5.83 million barrels a day by year-end because of slower rig action, according to JBC Energy. West Texas Intermediate for September advanced $1.06 to settle at $42.67 a barrel Brent for October settlement added 93 cents to end the session at $45.43 a barrel The EIA report showed gasoline stockpiles fell by 722,000 barrels last week, while distillate supplies declined by 2.32 million barrels. Stockpiles at Cushing are hovering at just over 53 million barrels, the highest since May.
OPEC trims 2020 oil demand, sees doubts about 2021 on virus fallout – (Reuters) – World oil demand will fall more steeply in 2020 than previously forecast due to the coronavirus and there are doubts about next year’s recovery, OPEC forecast on Wednesday, potentially making it harder for the group and its allies to support the market. World oil demand will tumble by 9.06 million barrels per day (bpd) this year, the Organization of the Petroleum Exporting Countries said in a monthly report, more than the 8.95 million bpd decline expected a month ago. Oil prices have collapsed as the coronavirus curtailed travel and economic activity. While some countries have eased lockdowns, allowing demand to recover, fear of new outbreaks has kept a lid on prices and OPEC expects this to persist. “Crude and product price developments in the second half of 2020 will continue to be impacted by concerns over a second wave of infections and higher global stocks,” OPEC said in the report. OPEC stuck to its forecast that in 2021 oil demand would rebound by 7 million bpd but said the outlook was subject to large uncertainties that might result in “a negative impact on petroleum consumption”, such as demand for air travel, more fuel-efficient cars and more competition from other fuels. “Almost all forecasters expect jet fuel in 2021 to struggle making up for lost demand,” OPEC said. “Gasoline demand will face pressure to return to 2019 levels.”
Oil edges lower after OPEC report, U.S. stocks draw supports – (Reuters) – Crude oil prices slipped on Thursday after OPEC said it expected demand for fuels to fall more than expected, although U.S. government data showing a fall in inventories suggested demand is returning despite the coronavirus pandemic. Brent crude LCOc1 was down 8 cents at $45.35 a barrel by 0726 GMT, after a gain of around 2% in the previous session. West Texas Intermediate CLc1 oil was down by 4 cents at $42.62 a barrel after gaining 2.6% on Wednesday. The Organization of the Petroleum Exporting Countries (OPEC)said in a monthly report that world oil demand will fall by 9.06 million bpd this year, more than the 8.95 million bpd decline expected a month ago. “OPEC released a bearish monthly forecast which indicated that world oil demand will fall more steeply in 2020 than previously forecasted due to the coronavirus and there are doubts about next year’s recovery,” . Still, U.S. crude oil, gasoline and distillate inventories fell last week as refiners ramped up production and demand improved, a government report showed. [EIA/S] U.S. fuel demand rose to 19.37 million barrels per day last week, the highest since March, data from the Energy Information Administration (EIA) showed, while crude output fell to 10.7 million barrels per day (bpd) from 11 million bpd. Crude inventories USOILC=ECI fell by 4.5 million barrels, compared with analysts’ expectations in a Reuters poll for a 2.9 million-barrel drop. The EIA’s downward revision on Tuesday to a key U.S. oil production forecast for this year is helping support prices.
IEA sees lower oil demand in 2020, 2021 on upsurge of coronavirus cases and stalling mobility – The International Energy Agency lowered its global oil demand forecasts for the first time in several months on Thursday, as the number of Covid-19 infections remains high and amid ongoing weakness in the aviation sector. In a closely-watched monthly report, the IEA said it now sees global oil demand for 2020 at 91.1 million barrels per day, reflecting a fall of 8.1 million barrels per day year-on-year. This revised forecast is 140,000 barrels per day lower than the IEA’s previous projection. The agency also revised down its 2021 global oil demand estimate by 240,000 barrels per day to 97.1 million barrels per day, with jet fuel demand identified as the “major source” of weakness. The report comes shortly after the world’s largest oil and gas firms reported historic losses in the second quarter as coronavirus lockdown measures led to an unparalleled demand shock in energy markets. Earlier this year, IEA Executive Director Fatih Birol told reporters that 2020 may well come to represent the worst year in the history of oil markets. “Recent mobility data suggest the recovery has plateaued in many regions, although Europe, for now, remains on an upward trend,” the IEA said in its release Thursday. “For road transport fuels, demand in the first half of 2020 was slightly stronger than anticipated, but for the second half we remain cautious and the upsurge in Covid-19 cases has seen us downgrade our estimates, mainly for gasoline.” International benchmark Brent crude futures traded at $45.29 on Thursday morning, more than 0.3% lower, while U.S. West Texas Intermediate futures stood at $42.52, down around 0.4%. Oil prices have slipped more than 25% year-to-date. The coronavirus outbreak “has cast a long shadow” over oil demand, the IEA said in its oil market report. The Paris-based energy agency said aviation and transport, both essential components of oil consumption, continued to struggle in the wake of the pandemic. It estimated aviation activity, measured in passenger kilometers, was down by around two-thirds from normal levels in July, typically one of the peak months for air traffic.
Oil slips after IEA lowers 2020 demand forecast – (Reuters) – Oil prices eased on Thursday after the International Energy Agency lowered its 2020 oil demand forecast due to unprecedented travel restrictions to fight the coronavirus, but resilience in equities markets and a weak dollar limited losses. Brent crude LCOc1 ended the session down 47 cents, or 1%, at $44.96 a barrel while West Texas Intermediate (WTI) CLc1 settled down 43 cents, or 1%, at $42.24 a barrel.The International Energy Agency cut its 2020 oil demand forecast and said reduced air travel due to the pandemic would lower global oil consumption this year by 8.1 million barrels per day (bpd).The Organization of the Petroleum Exporting Countries (OPEC) said that world oil demand will fall by 9.06 million bpd this year, more deeply than the 8.95 million bpd decline expected a month ago. “Overall, neither yesterday’s OPEC or today’s IEA release appeared to have much effect on an oil market that is still primarily focused on the ongoing expansion in risk appetite that remains undeterred by lack of progress in formulating a viable U.S. stimulus deal,”
Oil drops 1% after IEA lowers demand forecast – Oil prices eased on Thursday after the International Energy Agency lowered its 2020 oil demand forecast following unprecedented travel restrictions, but resilience in equities markets and a weak dollar limited losses.Brent crude was down 43 cents, or 0.95%, at $45.00 a barrel, and West Texas Intermediate settled 43 cents, or 1.01%, lower at $42.24 per barrel.The International Energy Agency cut its 2020 oil demand forecast on Thursday and said reduced air travel because of the COVID-19 pandemic would lower global oil consumption this year by 8.1 million barrels per day (bpd).The Organization of the Petroleum Exporting Countries (OPEC) also said that world oil demand will fall by 9.06 million bpd this year, more than the 8.95 million bpd decline expected a month ago.”Overall, neither yesterday’s OPEC or today’s IEA release appeared to have much effect on an oil market that is still primarily focused on the ongoing expansion in risk appetite that remains undeterred by lack of progress in formulating a viable U.S. stimulus deal,” said Jim Ritterbusch of Ritterbusch and Associates.Wall Street has recovered most of the trillions lost during the start of the COVID-19 pandemic and the S&P 500 remained within striking distance of a record high.The dollar fell to its lowest in a week against a basket of currencies on Thursday. A weaker dollar makes oil cheaper for holders of foreign currencies.Investors across asset classes are still awaiting a breakthrough on a U.S. stimulus package and keeping watch on frayed U.S.-China ties ahead of trade talks on Aug. 15.Russian Energy Minister Alexander Novak said he did not expect hasty decisions on output cuts when a monitoring committee of OPEC and its allies, known as OPEC+, meets next week as the oil market has been stable. Last month OPEC+ eased the cuts to around to 7.7 million bpd until December from a previous reduction of 9.7 million bpd, reflecting a gradual improvement in global oil demand.
Oil prices down on demand worries, growing supply – (Reuters) – Oil prices edged lower on Friday on worries that demand would recover more slowly than expected from COVID-19 pandemic lockdowns, while rising supply also overshadowed optimism over falling crude and fuel inventories. This week, two prominent forecasters, the International Energy Agency and the Organization of the Petroleum Exporting Countries, trimmed their 2020 oil demand forecasts. OPEC and its allies are increasing output this month. “The big-picture question is whether the spread of coronavirus is going to continue to impact on the return of gasoline and diesel demand,” said Andy Lipow of Lipow Oil Associates in Houston. Brent crude LCOc1 settled at $44.80 a barrel, falling 16 cents. U.S. West Texas Intermediate CLc1 settled at $42.01 a barrel, down 23 cents. For the week, Brent was up 0.9% and WTI gained 1.9%.Prices were bolstered earlier in the week by U.S. government data showing crude oil, gasoline and distillate inventories falling last week as refiners ramped up production and demand for oil products rose. “If that trend continues, it’s very supportive of prices and should drive prices higher,” The number of U.S. oil and gas rigs, an indicator of future supply, fell this week for a 15th straight week to record lows, according to energy services firm Baker Hughes.
Oil slips on demand worries, but U.S. supply declines help solidify weekly price gains – Oil futures finished lower Friday, with pressure attributed in part to downbeat global demand forecasts from major organizations this week, but prices still ended the week higher following declines in U.S. supplies.“Future demand expectations have been dialed back this week” by the Organization of the Energy Information Administration, the Organization of the Petroleum Exporting Countries and the International Energy Agency, In a monthly report Thursday, the IEA said it expects 2020 global oil demand to contract by 8.1 million barrels a day to 91.9 million barrels a day, year over year. OPEC’s monthly report issued Wednesday called for a larger fall of 9.1 million barrels a day in 2020 demand growth for global petroleum and liquid fuels to 90.6 million barrels per day, while a monthly report from EIA Tuesday forecast 2020 demand at 93.1 million barrels a day, down 8.1 million from 2019. “The demand outlook remains a function of the virus and where it strikes next, while the impasse in Washington over a relief act creates uncertainty as to its magnitude and impact,” West Texas Intermediate crude for September delivery on the New York Mercantile Exchange fell 23 cents, or 0.5%, to settle at $42.01 a barrel, while the global benchmark, October Brent crude lost 16 cents, or 0.4%, at $44.80 a barrel on ICE Futures Europe. For the week, WTI ended 1.9% higher, while Brent gained 0.9%, according to Dow Jones Market Data.
Oil Prices Finish Higher for the Week — Oil squeezed out a gain for the second straight week but uncertainty around the U.S.-China trade deal and fears of a resurgent pandemic limited the price rally. Crude futures in New York fell 0.5% Friday, but rose 1.9% for the week. The U.S. and China postponed talks planned for over the weekend that had been aimed at reviewing progress at the six-month mark of their phase-one trade agreement, according to people familiar with the matter. Meanwhile, a rebound in U.S. retail sales slowed sharply in July amid a surge in Covid-19 and still-high unemployment cooled the economic recovery. “If China headlines come out and there’s a problem with the meeting that’s going to happen, you could see a push down to the support levels,” for crude futures, said Tariq Zahir, managing member of the global macro program at Tyche Capital Advisors LLC. Still, U.S. benchmark crude futures extended their rally to over 4% in the past two weeks, with American crude stockpiles declining after imports from Saudi Arabia dropped and gasoline consumption rising. Adding to support, some data points show bright spots in the economic outlook, with U.S. industrial production increasing for a third straight month in July. But growing signs of a resurgence of the coronavirus has highlighted the patchy recovery in oil consumption. On Thursday, the International Energy Agency downgraded a majority of its demand forecasts for the next 18 months. Meanwhile, the pace of well reactivations in the U.S. has increased since July, according to Rystad Energy, potentially casting a further pall amid a stubborn supply overhang.
Saudi Aramco’s first-half profits plummet 50% amid pandemic – – Saudi Aramco’s net income plunged by 50% in the first half of the year, according to figures published Sunday, offering a revealing glimpse into the impact of the coronavirus pandemic on one of the world’s biggest oil producers.Profits for the first six months of the year plunged to $23.2 billion, half of last year’s $46.9 billion for the same time period.The results were announced as Aramco’s 2222, -0.30% second quarter earnings dipped to $6.6 billion compared to $24.7 billion during the same time last year, reflecting a staggering 73% drop.The majority state-owned company’s financial health is crucial to Saudi Arabia’s stability. Despite massive efforts by Saudi Crown Prince Mohammed bin Salman to diversify the economy, Saudi Arabia still depends heavily on oil exports to fuel government spending.The price of Brent crude BRNV20, +0.02% hovers just under $45 a barrel, significantly less than before the pandemic but up from a low of around $21 a barrel in April.Aramco CEO Amin Nasser acknowledged the company’s finances were impacted by “strong headwinds from reduced demand and lower oil prices” sparked by the pandemic, which halted flights around the world and plunged economies into recession, including Saudi Arabia’s. The company said it will uphold its commitment to pay out dividends of $18.75 billion for the second quarter as part of its promise to pay $75 billion in annual dividends. Nasser described Aramco’s half-year earnings as “solid” and credited the company’s low production costs and operational strength, which helped it to maintain its promised dividend payments.Looking ahead, Nasser said the energy market is seeing a partial recovery as countries around the world ease restrictions and reboot their economies.
Interpol Supports Murder Charge Against MbS – Barkley Rosser In today’s Washington Post David Ignatius reports that Interpol refused a request from Saudi Crown Prince Mohammed bin Salman (MbS) to extradite Saad Aljabri to Saudi Arabia from Canada in 2017. MbS had been trying to entice Aljabri to return and had arrested his children, who remain arrested despite complaints from the US government and basically the entire rest of the world. Aljabri was the top aide of MbS’s rival, the former Crown Prince, Mohammed bin Nayef (MbN), who was overthrown by MbS in a coup. Aljabri and MbN were highly regarded by officials in the US of several administrations, as well as other governments, and apparently was personally responsible for blocking a serious possible terrorist attack in the US.After Interpol refused to extradite Aljabri from Toronto, MbS sent a crew to kill him. This was two months after MbS sent such a crew to Istanbul to kill and dismember Kamal Khashoggi, a columnist for the Washington Post. Aljabri warned the Canadian government they were coming and the team was detained at the Toronto airport, where they were found to have exactly the same implements that were used to dismember Khashoggi. Aljabri is now suing MbS in US courts for trying to kill him. MbS has claimed that Aljabri stole funds, but Aljabri says this is a false claim. Ignatius notes that MbS will have to produce his claims, and the big deal here is that up until now the Interpol report was not public. They refused MbS’s extradition request on this claim, and their report makes it clear that much lies behind their decision, including massive violations of human rights in Saudi Arabia by the murderer, MbS.
UN appeals for Yemen tanker access to prevent oil leak (Xinhua) — The United Nations appealed on Monday for access to the derelict tanker, Safer, off Yemen in order to prevent a catastrophic leak of more than 1 million barrels of oil. The Beirut port explosion last week highlights the urgency of resolving the threat of an oil spill from an aging vessel that has had almost no maintenance since 2015, said the UN Office for the Coordination of Humanitarian Affairs (OCHA). A major spill would be catastrophic for the environment and would destroy the livelihoods of coastal communities in Yemen. Most of the oil would likely wash up on Yemen’s west coast in areas controlled by the Houthi authorities, it said. A spill would also likely force Hodeidah port, Yemen’s largest, to close for weeks or months, OCHA said. Since Yemen imports nearly all its food and everything else through the port, there would be devastating consequences for millions of people, including communities located far from the coast. Two months ago, seawater began leaking into the engine room, which could have destabilized and sunk the entire vessel, potentially releasing all the oil into the sea. A temporary fix was applied, but it is unclear how long this might last. The United Nations officially requested the rebel Houthi authorities on July 14 to allow an assessment and initial repair mission to the Safer and now is urging them to expedite the necessary procedures so work can begin. “The main purpose of the mission will be to conduct a technical assessment and undertake whatever initial repairs might be feasible,” OCHA said. “Because the Safer has gone so long without maintenance, its current status is not clear.” “The technical assessment will provide the scientific evidence we need to determine how best to resolve this challenge in the safest way possible,”
Iran ‘Accidentally’ Sank Mock US Aircraft Carrier In Wrong Place — Iran’s Islamic Revolutionary Guard Corps (IRGC) conducted a large-scale military exercise in the Persian Gulf in late July, as they showcased their naval capabilities and new weapons. During the exercises, the IRGC was seen attacking a mock U.S. aircraft carrier that was positioned near the Strait of Hormuz.It was expected that Iran would not fully destroy this replica of the U.S.S. Nimitz, as they would use it for future military drills; however, as shown in the photo below, the aircraft carrier is submerged in the Persian Gulf.New imagery from yesterday shows the capsized #IRGC replica of the Nimitz Class Carrier appears to have listed more outside of Bandar Abbas Port, #Iran. She appears more listed here than previous imagery from the 31st July. The depth here is a reported 14m. Fun to reclaim…. pic.twitter.com/tKTHJAaGCS – Aurora Intel (@AuroraIntel) August 2, 2020 As pointed out by South Front, who quoted an expert from the Forbes article that was previously posted about the vessel, this aircraft carrier was not meant to sink. In fact, during the military drills in the Persian Gulf, the IRGC’s soldiers could be seen landing on the aircraft carrier from one of their transport helicopters.“The Iranian armed forces, particularly the IRGC-N (Islamic Revolutionary Guard Corps Navy) delight in attacking the mock U.S. Navy aircraft carrier. It makes their war games more dramatic. And it may be intended to symbolize that they could, if called upon, sink an American carrier,” the Forbes article said.“The carrier itself, actually an elaborate target barge, is not intended to sink, however. It is meant to be reusable and has been symbolically ‘destroyed’ twice already. But now it really has sunk. And in very much the wrong place,” the report continued.
Iran’s Pact With China Is Bad News for the West – A recently leaked document suggests that China and Iran are entering a 25-year strategic partnership in trade, politics, culture, and security. Cooperation between China and Middle Eastern countries is neither new nor recent. Yet what distinguishes this development from others is that both China and Iran have global and regional ambitions, both have confrontational relationships with the United States, and there is a security component to the agreement. The military aspect of the agreement concerns the United States, just as last year’s unprecedented Iran-China-Russia joint naval exercise in the Indian Ocean and Gulf of Oman spooked Washington. China’s growing influence in East Asia and Africa has challenged U.S. interests, and the Middle East is the next battlefield on which Beijing can challenge U.S. hegemony – this time through Iran.This is particularly important since the agreement and its implications go beyond the economic sphere and bilateral relations: It operates at the internal, regional, and global level. Internally, the agreement can be an economic lifeline for Iran, saving its sanctions-hit, cash-strapped economy by ensuring the sale of its oil and gas to China. In addition, Iran will be able to use its strategic ties with China as a bargaining chip in any possible future negotiations with the West by taking advantage of its ability to expand China’s footprint in the Persian Gulf. While there are only three months left before the 2020 U.S. presidential election, closer scrutiny of the new Iran-China strategic partnership could jeopardize the possibility of a Republican victory. That’s because the China-Iran strategic partnership proves that the Trump administration’s maximum pressure strategy has been a failure; not only did it fail to restrain Iran and change its regional behavior, but it pushed Tehran into the arms of Beijing.
Exclusive: How Venezuela lost three oil supertankers to its Chinese partner – (Reuters) – A shipping joint venture between Venezuela and China has fallen apart in the wake of U.S. sanctions, resulting in the South American nation losing three supertankers at a time when foreign shippers are reluctant to carry its oil, court documents show. PetroChina, which had been state-run Petroleos de Venezuela’s [PDVSA.UL] partner in the Singapore-based joint venture CV Shipping Pte Ltd, took control of the three tankers between January and February, according the documents from a Singapore court reviewed by Reuters. The transfer of the Junin, Boyaca and Carabobo very large crude carriers (VLCC) has not been previously reported. It came after U.S. sanctions on PDVSA left the vessels without insurance, leading to millions of dollars in losses for CV Shipping and prompting PetroChina to place it in bankruptcy. The original purpose of the venture was to ship Venezuelan oil to China and some other export destinations. PDVSA’s loss of the three tankers, which carry each up to 2 million barrels of oil, comes as it is more dependent than ever on its in-house fleet. Washington is intensifying its 18-month campaign to oust Venezuelan President Nicolas Maduro by sanctioning third-party vessels that transport the OPEC nation’s oil. That has prompted major Greek shipping firms, some of whose vessels have been sanctioned for transporting Venezuelan crude, to stop working with PDVSA, prompting Venezuelan oil exports to collapse.PDVSA has until now managed to retain a fourth VLCC from the venture, the Ayacucho. But a U.S. glass manufacturer seeking to collect a $500 million arbitral award for Venezuela’s 2010 expropriation of two factories is suing in Singapore court to seize that tanker, Reuters reported last week. The dispute marks an unceremonious end to the once-ambitious venture launched in 2008 as oil-hungry China sought to deepen ties with Venezuela under former President Hugo Chavez, Maduro’s predecessor and mentor. China has since drastically scaled back support, contributing to Venezuela’s collapse under Maduro.
U.S. seizes multimillion-dollar Iranian fuel shipment bound for Venezuela – The Justice Department said Friday that federal agents seized a multimillion-dollar Iranian fuel shipment bound for Venezuela, in what it described as the largest-ever seizure of its kind. The U.S., with the assistance of foreign partners, confiscated a total of 1.1 million barrels of petroleum from four foreign-flagged oil tankers, as Tehran and Caracas attempt to sidestep U.S. sanctions. According to the Justice Department, after the seizure, “Iran’s navy forcibly boarded an unrelated ship in an apparent attempt to recover the seized petroleum but was unsuccessful.” Footage released by Central Command, the U.S. military’s combatant command that oversees the wars in Iraq, Syria and Afghanistan, shows the failed Iranian operation. “We are seeing more and more global shipping fleets avoiding the Iran-Venezuela trade due to our sanctions implementation and enforcement efforts,” State Department spokeswoman Morgan Ortagus wrote in a statement. “The United States remains committed to our maximum pressure campaigns against the Iranian and Maduro regimes,” she added. In June, five Iranian oil tankers brought approximately 1.5 million barrels to gas-starved Venezuela, which was once a prominent fuel exporter. Gasoline is scarce in the South American nation due to a near-complete breakdown of the OPEC nation’s 1.3 million barrel-per-day refining network. The two OPEC nations have previously helped each other in the face of U.S. sanctions. In 2010-2011, Venezuela’s state-run oil company, PDVSA, sent fuel to Iran, which was targeted by sanctions aimed at stifling its nuclear weapons program. Venezuela – once the crown jewel of Latin America’s developing economy – has hit dire straits in recent years. The price of oil, the country’s biggest export, has plummeted more than 60% since Nicolas Maduro succeeded dictator Hugo Chavez as Venezuela’s president in 2013. Earlier this year, U.S. crude prices briefly traded in negative territory for the first time ever as the coronavirus dented the global economic growth outlook. The drop in oil prices coupled with a massive depreciation of the Venezuelan bolivar and sky-high inflation have left Venezuela scrambling for cash, food, medicine and other essentials.
Greek Warships Are Reportedly Near Turkish Exploration Vessel Actively Disrupting Seismic Signal – Greek national media reported on Tuesday, that the Greek Armed Forces are on high alert, at a time when the eastern Mediterranean region is witnessing tensions with Turkey due to its eastern Mediterranean oil and gas exploration.The Greek newspaper Ekathimirini reports that “Greece’s armed forces were placed in a state of absolute readiness, with units of the Hellenic Navy and Air Force deployed in the wider sea area where the Turkish research was expected.” This moves comes at a time when the Turkish Navy is escorting the seismic exploration vessel, Oruc Reis, near or within Cypriot and Greek territorial waters, which is currently being closely monitored by Egypt and Greece.On Monday, the Turkish Navy issued a navigational notification saying that the Turkish vessel would conduct seismic surveys in the eastern Mediterranean during the next two weeks.In response, the Greek Foreign Ministry announced that Athens had urged Turkey to stop illegal actions in the eastern Mediterranean, and that these activities were provocative and undermine peace and security in the region.“Greece will not accept blackmail. It will defend its sovereign rights,” the Greek foreign ministry statement said.
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