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Trump On Path for War With Iran in the “National Interest”

Trump’s Iran policy not only has US allies hopping mad, it also has us on a path towards another major Mideast war.

“We will seek to provide unprecedented financial pressure on the Iranian regime,” the U.S. said, rebuffing Britain, France, and Germany which requested sanction exemptions.

The United States has rejected an appeal from Britain, France and Germany to grant broad exemptions to European firms doing business in Iran, saying it would press ahead with sanctions intended to exert “unprecedented” economic pressure on the Tehran regime, U.S. and Western officials told NBC News.

The letter from the Trump administration marks the latest dispute in an increasingly tense U.S. relationship with European allies, aggravated by the president’s harsh criticism of NATO partnersthis week during his visit to Brussels.

According to a report in Axios, Israel and the United States formed a joint working group in recent months to help support internal opposition to the Tehran regime. And at a press conference in Brussels on Thursday, Trump said that that “there might be an escalation between us and the Iranians.”

Pompeo has unveiled plans for a major address on July 22 entitled “Supporting Iranian Voices” after having issued a series of tweets endorsing Iranian protests and pointing to high unemployment among the country’s youth. “People are tired of the corruption, injustice & incompetence of their leaders. The world hears their voice,” Pompeo wrote on June 27.

Path Towards War

In an Atlantic Op-Ed, Virginia Senator Tim Kaine says Don’t Let Trump Go to War With Iran.

The decision of the United States to wage war against Iraq in 2003 was one of the worst mistakes our country has ever made. Was Saddam Hussein a brutal dictator?

…click on the above link to read the rest of the article…

Russia Plans $50 Billion Investment In Iran’s Oil, Gas Industry

Russia Plans $50 Billion Investment In Iran’s Oil, Gas Industry

Pars oil field

Russia is getting ready to invest US$50 billion in Iran’s oil and gas industry as the two countries continue to seek closer ties, just as the United States is looking to cut as much Iranian crude oil exports from the market as possible.

“Russia is ready to invest $50bn in Iran’s oil and gas sectors,” according to Ali Akbar Velayati, Senior Adviser for International Affairs of the Supreme Leader of the Islamic Republic, as carried by the Financial Times.

Velayati was on a visit to Moscow that included a meeting with Russian President Vladimir Putin.

“Military and technical co-operation with Russia is of major importance to Iran,” FT quoted Velayati as saying.

“The discussion focused on Russian-Iranian cooperation issues as well as the situation in the region, including developments in Syria. The parties reaffirmed their commitment to the Joint Comprehensive Plan of Action on Iran’s Nuclear Deal (JCPOA),” the Kremlin said in a brief statement on the meeting on Thursday.

According to the Iranian official, a Russian oil company has signed an agreement with Iran worth US$4 billion, and that deal “will be implemented soon.”

Russian energy giants Rosneft and Gazprom have also started talks with the oil ministry of Iran to potentially sign deals worth up to US$10 billion, the Iranian adviser said, while a Russian government official confirmed to FT Russia’s US$50-billion investment plans.

Earlier this year, a local Iranian company, Dana Energy, in a consortium led by Russia’s Zarubezhneft, signed an agreement with the National Iranian Oil Company (NIOC) to redevelop the Aban and West Paydar oilfields, with total capex estimated at around US$740 million.

Separately, Russia’s Energy Minister Alexander Novak said on Friday that Russia was studying all legal implications for a possible deal with Iran under which Moscow would provide goods to Tehran in exchange for oil. Such a deal is still possible, Novak said.

Trump May Tap Up To 30MM Barrels From Oil Reserve To Halt Rising Gas Price

Having already yelled at OPEC on several prior occasions on Twitter with demands for Saudi Arabia and the rest of the OPEC cartel to boost production in order to push oil – and gasoline – prices lower…

… only to realize that the amount of needed incremental output is next to impossible to achieve when considering the amount of Iran exports that will be curbed on November 4 when the Iran sanctions kick in officially, Trump has been left with two choice: ease off the Iran sanctions and implement them more gradually, or release oil from the US Strategic Petroleum Reserve.

And now, with oil prices continuing to rise and pushing the price of gasoline to levels not seen in 4 years, at a critical time with November mid-term elections fast approaching, Trump appears to have decided on the latter, and is actively considering tapping into the nation’s emergency crude oil reserve, Bloomberg reported citing two people “familiar with the situation.”

While no decision has been made yet to release crude from the 660-million-barrel SPR stockade, options under review range from a 5-million-barrel test sale to a larger release of 30 million barrels. An even larger release could be possible it it were to be coordinated with other nations.

For Trump, the magic number appears to be $3 per gallon on the national level; every time regular gasoline nears that round number, Trump has been quick to voice his displeasure.

“Oil prices are too high, OPEC is at it again. Not good!” he said on Twitter last month. On the Fourth of July, Trump tweeted: “The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $’s. This must be a two way street. REDUCE PRICING NOW!”

…click on the above link to read the rest of the article…

Oil’s Perfect Storm Lays At Trump’s Feet

Oil’s Perfect Storm Lays At Trump’s Feet

Trump at stage

It’s becoming painfully clear that the way forward for global oil markets is going to be bumpy, very bumpy, particularly as we head into next year. Much of this uncertainty, even blame, is being increasingly leveled at a person that has surprised, flabbergasted and even shocked political opponents, allies and adversaries alike since he took office – President Donald Trump.

A growing line of thought surmises that while Trump uses the presidential bully pulpit, in this case Twitter, to put pressure on long-time ally and de facto OPEC leader Saudi Arabia to get ready to pump more oil to keep (both oil and gas) prices from spiraling out of control, much of the blame for higher prices actually belong to Trump.

The argument makes perfect sense. If Trump would ease back on both his heated rhetoric toward Iran, though that case could be made over much of Trump’s dealings with China, the EU, Canada and others, and if Trump would revisit his decision on re-imposing sanctions on Iran, then oil markets would benefit. Why? A softer line on Iran would reduce the worry or even fear that a loss of some 2.7 million barrels per day (bpd) of Iranian crude would roil oil markets so much that the Saudis would have to pump an unprecedented amount of oil, perhaps as much as 12.5 million bpd, eating up all of its spare capacity.

The Saudi’s have never pumped more than around 10.7 million bpd of oil, a level reached in June, and has for more than 50 years kept at least 1.5-2 million bpd of spare capacity for oil market management.

…click on the above link to read the rest of the article…

Spare Capacity: The Biggest Mystery In Oil Markets

Spare Capacity: The Biggest Mystery In Oil Markets

Oil Rig Offshore

With around 2.5 million barrels per day (mb/d) of Iranian supply targeted by the Trump administration, how will the oil market cope with the losses? Is there enough supply capacity to make up for the shortfall?

There is a great deal of debate about the true extent of the world’s spare capacity. Or, more precisely, there are a range of guesses over how much surplus is located in Saudi Arabia, the one country that really has the ability to ramp up large volumes of supply on short notice.

Saudi Arabia claims it could produce 12.5 mb/d if it really needed to. However, that claim has not been put to the test. Saudi Arabia’s all-time highest level of production was just over 10.7 mb/d in 2016, just before it helped engineer the OPEC+ production cuts.

Adding around 2 mb/d of extra supply – as President Trump demands – is a tall order. “More recent history shows Saudi has never produced more than 10.6mn b/d on average over a single month. And even in the recent period, we have observed a steep decline in domestic Saudi oil inventories,” Bank of America Merrill Lynch wrote in a note, arguing that there is plenty of reason to question the notion that Saudi Arabia has around 2 mb/d of idled capacity. “Thus, it appears the oil market has little confidence that Iran volumes can be easily replaced.”

The International Energy Agency estimates that there is around 1.1 mb/d of total global spare capacity that can truly be ramped up in a short period of time. A looser definition of spare capacity that encompasses the ability to add supply over several months puts the figure at about 3.4 mb/d, 60 percent of which is located in Saudi Arabia. Smaller additions come from the UAE, Kuwait, Iraq and Russia.

…click on the above link to read the rest of the article…

How Bad Is Iran’s Oil Situation?

How Bad Is Iran’s Oil Situation?

Oil

The U.S. government has continued its attempts to shut down Iran’s oil exports, and in recent days Iranian officials responded by threatening to block the Strait of Hormuz. Such an outcome is highly unlikely, but the war of words demonstrates how quickly the confrontation is escalating.

Oil prices spiked in late June when a U.S. State Department official said that countries would be expected to cut their imports of oil from Iran down to “zero.” The official also suggested that it would be unlikely that the Trump administration would grant any waivers.

This hard line stance fueled a rally in oil prices as the oil market was quickly forced to recalibrate expected losses from Iran, with a general consensus changing from a loss of around 500,000 bpd by the end of the year, to something more like 1 million barrels per day (mb/d), or even as high as 2.0 to 2.5 mb/d in a worst-case scenario in which all countries comply.

A loss of that magnitude would be hard to offset, even if Saudi Arabia decides to burn throughall of its spare capacity.

That led to a dialing back of the rhetoric from the Trump administration, or so it seemed. A follow-up statement from the State Department suggested that the U.S. government would work with countries on a “case-by-case basis” to lower Iranian oil imports. High oil prices seemed to put pressure on Washington.

But for now, there is no policy shift. “I think there’s going to be very few waivers. That’s what we’re hearing all the time from officials across the administration. I think it’s a very strong policy decision,” Brenda Shaffer, an adjunct professor at Georgetown’s School of Foreign Service, told Oilprice.com.

Time will tell, but early evidence suggests that the Trump administration is having success convincing top buyers of Iranian crude to curtail their purchases.

…click on the above link to read the rest of the article…

Chinese Refiner Halts US Oil Purchases, May Use Iran Oil Instead

With the US and China contemplating their next moves in what is now officially a trade war, a parallel narrative is developing in the world of energy where Asian oil refiners are racing to secure crude supplies in anticipation of an escalating trade war between the US and China, even as Trump demands all US allies cut Iran oil exports to zero by November 4 following sanctions aimed at shutting the country out of oil markets.

Concerned that the situation will deteriorate before it gets better, Asian refiners are moving swiftly to secure supplies with South Korea leading the way. Under pressure from Washington, Seoul has already halted all orders of Iranian oil, according to sources, even as it braces from spillover effects from the U.S.-China tit-for-tat on trade.

“As South Korea’s economy heavily relies on trade, it won’t be good for South Korea if the global economic slowdown happens because of a trade dispute between U.S and China,” said Lee Dal-seok, senior researcher at the Korea Energy Economic Institute (KEEI).

Meanwhile, Chinese state media has unleashed a full-on propaganda blitzkrieg, slamming Trump’s government as a “gang of hoodlums”, with officials vowing retaliation, while the chairman of Sinochem just become China’s official leader of the anti-Trump resistance, quoting Michelle Obama’s famous slogan “when they go low, we go high.” Standing in the line of fire are U.S. crude supplies to China, which have surged from virtually zero before 2017 to 400,000 barrels per day (bpd) in July.

Representing a modest 5% of China’s overall crude imports, these supplies are worth $1 billion a month at current prices – a figure that seems certain to fall should a duty be implemented.

…click on the above link to read the rest of the article…

US, Iran Clash in Hormuz Strait: Not an Improbable Scenario

US, Iran Clash in Hormuz Strait: Not an Improbable Scenario

US, Iran Clash in Hormuz Strait: Not an Improbable Scenario

The US remains adamant in its desire to cut Iran’s oil exports to zero, even if it hurts importing countries. America’s secondary sanctions on firms dealing with Iran would “snap back” on August 6 for trade in cars and metals and on November 4 for oil and banking transactions. The “wind down” period varied between 90 and 180 days is intended to allow entities to end businesses in Iran. There will be no waivers. India, China and Turkey are the oil importers expected not to succumb to US pressure.

Brian Hook, the State Department’s director of policy and planning, said “Our goal is to increase pressure on the Iranian regime by reducing to zero its revenue from crude oil sales.” The US has already approached Saudi Arabia on the subject of increasing exports to compensate for the reduction of Iranian oil on the world market.

The goal is to hit Iran’s economy against the background of ongoing protests inside the country. Last July, John Bolton openly called for regime change in Tehran. He was not national security adviser at the time but nothing makes believe he has changed his views since then.

Iran’s President Hassan Rouhani warned the United States about consequences. He said shipments from other countries would be disrupted if Iranian oil exports were suspended. Qassem Solaimani, the commander of the Al Quds Force in the Revolutionary Guards, joined him to confirm that his country will block oil shipments through the Hormuz Strait if the US administration stops Iranian oil exports. Mohammad Ali Jafari, the commander of the Islamic Revolutionary Guard Corps, said that “either all can use the Strait of Hormuz or no one.”

…click on the above link to read the rest of the article…

How the Iran sanctions drama intersects with OPEC-plus

How the Iran sanctions drama intersects with OPEC-plus

Major states buying oil from Iran are unlikely to heed the US call to drop imports; key allies want a waiver to avoid sanctions; OPEC, meanwhile, will have trouble boosting output in the short-term; the puzzle is not solved, but there are dark clouds

A file photo taken in March 2017 shows an oil facility on Khark Island, on the Gulf. The US warned this week that countries must stop buying Iranian oil before November 4 or face economic sanctions. A State Dept official said tightening the noose on Tehran was a top national security priority. Photo: AFP/ Atta Kenare

A file photo taken in March 2017 shows an oil facility on Khark Island, on the Gulf. The US warned this week that countries must stop buying Iranian oil before November 4 or face economic sanctions. A State Dept official said tightening the noose on Tehran was a top national security priority. Photo: AFP/ Atta Kenare

Turkey and India Have Leverage in Trump’s Iran Sanction War

Turkey and India Have Leverage in Trump’s Iran Sanction War

Both India and Turkey have said they will defy President Trump’s call for them to stop buying Iranian oil once the U.S. reapplies sanctions in November.  That isn’t really news.

Both of them defied the Obama administration in 2012, albeit in different way. Turkey changed its banking rules to monetize gold and used its gold reserves as a means to launder Iranian oil payments for third parties through its banking system.

India bypassed cutting off Iran from the U.S. dollar by beginning a goods-for-oil swap program.

Today, however, the geopolitical background is far different.  Today, Iran can and does list its oil for sale in Shanghai’s futures market payable in Chinese Yuan.  Turkey can recycle its Yuan it receives from its large trade deficit with China to up its purchases of Iranian oil if need be.

But, more importantly, both India and Turkey have geopolitical freedoms they didn’t have in 2012.  I have covered the Turkey angle on this at length.  India, on the other hand, I haven’t.

Iran has become Turkey’s biggest oil importer.

Turkey, a NATO ally, is dependent on imports for almost all of its energy needs. In the first four months of this year, Turkey bought 3.077 million tons of crude oil from Iran, almost 55 percent of its total crude supplies, according to data from Turkey’s Energy Market Regulatory Agency (EPDK).

President Recep Tayyip Erdoğan last year said Turkey was looking to raise the volume of its annual trade with Iran to $30 billion from $10 billion.

And it doesn’t look like this will change with Trump’s sanctions.

With President Erdogan winning re-election he now goes into the NATO Summit with Trump on July 11-12th with a lot of leverage.  Erdogan has openly courted Russia on energy supplies.

…click on the above link to read the rest of the article…

Turkey Defies Trump, Will Keep Importing Iranian Crude

Defying the Trump administration, Turkey said it would ignore the State Department’s call on US allies to stop importing Iranian crude oil by November 4, when the latest sanctions against Iran are set to kick in. Earlier this week, the State Department called on all US allies to completely stop buying Iranian crude, sending the price of oil to 4 year highs in the process. While many are trying to find a way around the sanctions, it is for now proving tricky, and many buyers are winding down their purchases of Iranian crude.

But not Turkey.

The decisions taken by the United States on this issue are not binding for us. Of course, we will follow the United Nations on its decision. Other than this, we will only follow our own national interests,” Turkey’s Economy Minister Nihat Zeybekci said according to Turkish daily Hurriyet, adding that “we will pay attention so our friend Iran will not face any unfair actions.”

Turkey is hardly alone in its defiance: oil importers including Japan, South Korea, and India, as well as European countries have said they will continue buying Iranian crude, although whether they will really do that remains to be seen – French oil giant Total has already stopped purchasing Iranian products.

The European Union is particularly concerned about the situation because not only because it relies on substantial Iranian imports, but because there is only so much that the three European signatories to the Iran nuclear deal could do to prevent Tehran from exiting it, which might happen if it stops seeing benefits from it, President Hassan Rouhani said.

The nuclear deal, which Iran signed with the US, France, Germany, the UK, Russia, and China, ended the international sanctions that Iran was subjected to because of its nuclear program, and gave it access to international markets, especially oil markets.

…click on the above link to read the rest of the article…

Many Trump Supporters Now Cheering For The Deep State Over WikiLeaks And Iran

Many Trump Supporters Now Cheering For The Deep State Over WikiLeaks And Iran

I just want to briefly document some of the ways I’m seeing the 2015/2016 anti-establishment sentiment of Trump’s base being hijacked and re-routed into supporting some highly conspicuous pro-establishment interests this year.

In 2016 and 2017, much of the anti-establishment sentiment on what passes for America’s political “left” today was co-opted and re-routed into supporting longstanding establishment agendas against WikiLeaks, Russia, and Syria. I watched many Bernie Sanders supporters I’d fought alongside in 2015 and 2016 succumb one by one to the establishment Russiagate mind virus; it felt like watching a zombie apocalypse unfold, infection by infection.

Fearmongering about Trump was used to herd people who support peace into cheering for ancient neoconservative agendas against Russia, making everyone terrified of a country they’d previously never thought much about using still-unproven and plot hole-riddled claims about hacking and election meddling. This in turn was used to create narratives about “Russian propaganda”, which was used to poison the well against anyone who questioned the warmongering establishment Syria narrative. It was also used to turn people against WikiLeaks who had supported it since its publications about Bush administration war crimes, and in the case of Berners even during the 2016 DNC/Podesta email drops.

In exactly the same way, I’ve been watching a lot of Trump supporters herded into supporting longtime neoconservative agendas they would surely have claimed to oppose in 2016. Because of the establishment psyop known as “QAnon” and Trump’s near-total abandonment of the anti-interventionist platform he campaigned on, a good chunk of Trump’s base who in 2016 would never have been on board with attacks on WikiLeaks or another regime change agenda in the Middle East are now fully on board with both of those things.

…click on the above link to read the rest of the article…

Iran Furious After Trump Calls Saudi King, Demands 2MM Barrel Production Boost 

Update: as expected, it did not take long for Iran – which has the most to lose from any Saudi output hike which would not only send the price of oil lower but also allow Riyadh to capture Iran’s sanctioned market  share – to respond, and moments ago Bloomberg reported that in an interview with Hossein Kazempour Ardebili, Iran’s OPEC governor, he said that “if Saudi Arabia accepts U.S. President Donald Trump’s request to boost output, that means he is calling on them to walk out from OPEC.

“We are 15 countries in an agreement. Set aside that they do not have the capacity, there is no way one country could go 2 million b/d above their production allocation unless they are walking out of OPEC.”

Well, if they don’t have the capacity (which they do), there is no reason to be concerned. And yet Iran is precisely that, and considering that Trump said Saudi Arabia has “agreed” to his demand, we may have just witnessed the end of OPEC.

* * *

Earlier this week, when within minutes of each other, news hit last Tuesday that first Saudi Arabia would boost production to a record 10.8mmb/d, an increase of nearly 1 million barrels per day from the Kingodm’s current 10.03mmb/d output, only to be followed almost immediately by a warning from the State Department advising US allies of a crackdown on Iran, and demanding they cut their Iranian oil exports to 0 by the Nov. 4 deadline, oil first dipped then spiked, as the market weighed the news of the potential drop in Iranian production far more than any potential Saudi output: after all that was already largely priced in during last weekend’s OPEC summit.

…click on the above link to read the rest of the article…

Donald of Arabia, Oil Sanction Idiocy: Another Oil Shock Coming

I did not believe Trump would be so foolish as to force the entire world to accept Iranian sanctions. I was wrong.

Here’s my general policy: When you are wrong, it’s best to admit it or someone will admit it for you, in a worse way.

I was wrong about how far Trump would carry his foolish policy on Iran.

Hedgeye energy analyst Joe McMonigle got it correct as this Energy Flashback shows.

Choking Point

Yesterday, Trump tightened the noose on Iran. How tight?

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) and Trump Administration officials have explained that primary and secondary sanctions will be reimposed after 90- or 180-day “wind-down” periods, depending on the business activity, and that failure to halt sanctioned activity by the end of the wind-down period would risk “severe consequences.”

President Trump’s NSPM indicates that “all” of the sanctions waived or lifted under the JCPOA will be reimposed. These changes most likely will be implemented through new Executive Orders (EOs) from the president; termination of the periodic statutory sanctions waivers that have been issued by the Secretary of State; and changes to licenses, licensing policy, and the SDN list that will be made by OFAC. While there are numerous questions still outstanding about how the new sanctions may be implemented on a practical level, it is clear that the greatest impact of the reimposition of the sanctions will be on non-US entities, including non-US entities owned or controlled by US persons.

Sanctions Subject to 90-Day Wind-Down

  • The purchase or acquisition of US dollar banknotes by the Government of Iran
  • Iran’s trade in gold or precious metals
  • The direct or indirect sale, supply, or transfer to or from Iran of graphite, raw, or semi-finished metals such as aluminum and steel, coal, and software for integrating industrial processes

…click on the above link to read the rest of the article…

Why You Should Be Intensely Skeptical Of Everything You Hear About Iran Protests

Why You Should Be Intensely Skeptical Of Everything You Hear About Iran Protests

Every few weeks I switch from being accused by pro-establishment Democrats of writing propaganda for Putin and Assad to being accused by pro-Trump Republicans of writing propaganda for the Iranian government, all because I am opposed to US-led regime change intervention in both Syria or Iran. Whichever country the US war machine is roaring loudest at on a given day, that’s the country I’m writing propaganda for, because somehow the social engineers have succeeded in turning regime change interventionism in Iran vs. regime change interventionism in Syria into a partisan wedge issue.

Couldn’t possibly just be that I know the US intelligence community lies constantly about such things.



Today there are reports being triumphantly bandied about by neoconservative pundits everywhere (often hilariously using pictures of the MEK terror cult) that some Iranian protesters have been recorded chanting “Death to Palestine” and “Death to the dictator” and carrying signs which admonish the Iranian government to pull its troops out of Syria. All of which just so happen to play nicely into the pro-regime change narratives of America’s defense and intelligence agencies.

“To reporters everywhere: Please pay attention to what is happening in Iran now,” said the Bush administration’s Press Secretary Ari Fleischer in a viral tweet about the new reports. “I know foreign bureaus are almost non-existent these days, but keep a close eye on this story – and report it.”

So naturally I am being accused by Trump supporters on social media of being a paid propagandist for the leaders of the Iranian government.

…click on the above link to read the rest of the article…

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