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The Trump administration is going to extreme lengths to disrupt as much oil from Iran as possible, and the implications for the oil market could be severe.

When the Obama administration sought to isolate Iran, it built an international coalition, put in place tight sanctions, and tried to curtail Iran’s oil exports. It worked, knocking around 1 million barrels per day offline. Still, the Obama administration granted leeway to an array of countries that depended on Iranian oil, including India, Japan and much of the EU, by granting them exemptions from sanctions as long as they did their best to reduce purchases.

The Trump administration has no compunction about making harsh demands to various countries, including U.S. allies, to cut off Iranian oil.

The U.S. government is calling on its allies to zero out imports of oil from Iran by November 4, or else face sanctions, and Washington is leaning towards granting no waivers at all. An official from the U.S. State Department said on Tuesday that it had plans to follow up on the matter with Turkey, India and China, even as the U.S. is trying not to “adversely impact” these countries, Bloomberg reports.

Late last week, Bloomberg also reported that the U.S. has sent a request to Japan to completely halt imported oil from Iran. Japan imported a little less than 180,000 bpd from Iran in 2017.

The fallout from a hard line from Washington could be significant. In the lead up to the U.S. withdrawal from the Iran nuclear deal, many analysts predicted that the Trump administration would struggle to match the impact of international sanctions on Iran from 2012 through 2015, particularly because the U.S. would have to do it without the help of the European Union, Russia or China. As such, the thinking was that the Trump administration might only be able to disrupt a few hundred thousand barrels per day of Iranian supply.

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

Economic War on Iran: Trump Sets Sanction Policy for Entire World

June 27, 2018

Economic War on Iran: Trump Sets Sanction Policy for Entire World

Trump will grant no waivers on purchases of Iranian oil. Effectively, this is an economic declaration of war on Iran.

Starting November 4, Trump threatens sanctions on any nation or company that trades with Iran.

Effectively, Trump sets sanction policy for the whole world, by proclamation.

Trump’s actions constitute an economic declaration of war on Iran. Any country that does not comply with his mandates will also be at war.

Deadline November 4

The U.S. is pressing allies to end all imports of Iranian oil by a Nov. 4 deadline and doesn’t want to offer any extensions or waivers as it follows through on President Donald Trump’s decision to quit the 2015 Iran nuclear deal, a State Department official said.

When Trump announced the U.S. was quitting the nuclear accord he warned that other nations would face sanctions unless they stopped trading with the Islamic Republic. Iran reached the 2015 agreement, which called for it to curb its nuclear program in return for the easing of sanctions, with the U.S., the U.K., France, Germany, China and Russia.

Saudi Arabia has a maximum production capacity of just above 12 million barrels a day, according to the International Energy Agency. If Iran exports drop more than one million barrels a day, Riyadh is likely to have to pump at maximum capacity for the first time since the late 1960s.

“If Saudi Arabia can not offset the loss of Iranian oil, then Washington could always tap into its Strategic Petroleum Reserve. So could China,” said Jan Stuart, an oil economist at consultant Cornerstone Macro LLC in New York.

Zero Tolerance

The Wall Street Journal says U.S. Signals Zero Tolerance on Future Iran Oil Exports:

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

Anyone Promoting Regime Change In Iran Is An Evil Piece Of Shit

June 24, 2018

Anyone Promoting Regime Change In Iran Is An Evil Piece Of Shit

I have been saying all year that the 8chan phenomenon known as “QAnon” is bogus, and as time has gone on the evidence has become overwhelming that it is an establishment psyop designed to herd the populist right into accepting the narratives and agendas of the establishment orthodoxy. Whether they’re claiming that every capitulation the Trump administration makes to longstanding neoconservative agendas is actually brilliant 4-D chess strategy, or saying that Julian Assange isn’t really trapped in the Ecuadorian embassy, QAnon enthusiasts are constantly regurgitating talking points which just so happen to fit in very conveniently with the interests of America’s defense and intelligence agencies.

A recent “Q drop” (a fancy name for an anonymous user posting text onto a popular internet troll message board with zero accountability) makes this more abundantly clear than ever, with text reading as follows:

Free Iran!!!
Fight
Fight
Fight
Regime change.
People have the power.
We stand with you.
Q

Once you’re cheering for a longtime neoconservative agenda to be accomplished in one of George W Bush’s “Axis of Evil” countries, you are cheering for the establishment. Or, to put it more clearly to Q followers, you are cheering for the deep state.

So now you have conspiracy-minded populist right wingers being manipulated into supporting the same standard Bush administration globalist agendas that Alex Jones built his career on attacking. The support for regime change interventionism in Iran isn’t limited to the QAnon crowd, having now gone fully mainstream throughout Trump’s base, and I’d like to address a few of the arguments here that they have been bringing to me:

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

OPEC “Deal” Ends With Output Confusion, Sets Stage For “Deal Unraveling”

June 23, 2018

OPEC “Deal” Ends With Output Confusion, Sets Stage For “Deal Unraveling”

Just 24 hours after OPEC appeared on the edge of splintering, Iran seemed to cave and in a deal that was described as a victory for everyone, OPEC member states and Russia provided a vague assurance they would boost output by striving to return to full compliance of the original production quotas as set in the 2016 Vienna production cut agreement.

As Goldman summarized in its post-mortem, “no further details were provided, including no country level allocation, no guidance for non-OPEC participants or timeline for the increase.” Furthermore, during the press conference following Friday’s deal, the one question which never got an explicit answer is how much output would be boosted by, with little clarity shed beyond “targeting full compliance at the group level”.

This suggests that there is room for countries with spare capacity to increase production above the individual quotas but also that such adjustments could not be resolved.

As a result, Goldman’s energy analyst Damien Courvalin said that he views today’s agreement “as masking disagreements within the group and a potential start to the unraveling of the deal, with core-OPEC and Russia looking to increase production but Iran opposing such an increase.”

Bloomberg’s Javier Blas confirmed as much, noting that Friday’s agreement was a “fudge in the time-honored tradition of OPEC, committing to boost output without saying which countries would increase or by how much” a fudge which gave every member – especially Iran which by endorsing a production boost would have been seen as effectively approving of Trump’s sanctions and allowing other states to take its market share – an “out” to save face, by sufficiently masking up the details so no explicit accusations of backtracking can be made.

Importantly, “it gives Saudi Arabia the flexibility to respond to disruptions at a time when U.S. sanctions on Iran and Venezuela threaten to throw the oil market into turmoil.”

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

Jordan Sends Tanks To Border Amidst Syrian Army Advance

June 23, 2018

Jordan Sends Tanks To Border Amidst Syrian Army Advance

Images surfaced overnight Thursday of a large Jordanian military convoy reportedly headed to the border near the Syrian province of Daraa, including M-60 battle tanks and heavy military equipment.

This as German Chancellor Angela Merkel met with Jordan’s King Abdullah in Amman on Thursday, telling him, “You live not just with the Syria conflict, but also we see Iran’s activities with regard to Israel’s security and with regard to Jordan’s border.”

Beirut based Al Masdar News published the photos provided through its sources in the region with the description: The Jordanian military is deploying reinforcements, including heavy military equipment, on the border with the Syrian province of Daraa, according to Jordanian and Syrian sources.

*A Jordanian M-60 battle tank en route to border with Syria. Via Al Masdar News*

As we reported this week, the long awaited battle for Daraa has begun despite repeat warnings issued to the Syrian government from the US not to extend its military campaign to the country’s south, where the conflict first began with fierce anti-Assad protests in 2011 which quickly spiraled into violence.

The convergence of geopolitical interests among the external and regional powers which have long fueled the Syrian proxy war makes Syria’s southwest region the perfect storm for potential outside intervention and dangerous broader conflagration.

The below summarizes this week’s developments which makes the rapidly unfolding events in Syria’s southwest provinces a highly volatile and escalating situation:

Israel has warned against the deployment Iranian and Hezbollah fighters allied with the Syrian government, especially near the contested Golan Heights area.
The US has threatened to take “take firm and appropriate measures” should Damascus continue its military campaign in Deraa.
The Syrian Army and the US-backed group, Jaysh Al-Mughawir Al-Thoura from the Al-Tanf area clashed on Thursday, leaving one Syrian soldier dead.
…click on the above link to read the rest of the article…

The Diseased, Lying, Condition of America’s ‘News’Media

June 21, 2018

The Diseased, Lying, Condition of America’s ‘News’Media

Both President Trump and former President Obama are commonly said in America’s ‘news’ media to be or to have been “ceding Syria to Russia” or “ceding Syria to Russia and Iran,” or similar allegations. They imply that ‘we’ own (or have some right to control) Syria. That’s not only a lie; it is a very evil and harmful one, dangerously goading the US President to go even more against Russia (and Iran) (and, of course, against Syria) than has yet been done — but the ‘news’media don’t care about that evil, and that falsehood, and that dangerousness — they do it anyway, and none of them attacks the others for perpetrating this vicious war-mongering lie, that lying provocation to yet more and worse war than already exists there. And the fact that none is exposing the fraudulence of the others on this important matter, is a yet-bigger additional scandal, beyond and amplifying the media’s common lying itself. Because they all function here like a mob, goading to more and worse invasions, and doing it on the the basis of dangerous lies — that America, and not the Syrians themselves, own Syria.

These lies simply assume that America (probably referring to the US Government, but whatever) somehow “has” or else “had” Syria (so that America can now ‘cede’ it, to anyone); and this assumption (that the US somehow owns Syria) is not only an imperialistic one (which is bad, and wrong, in itself), but it reduces to nothingness the rights (in the minds of the American public) of the Syrian people, to control their own land. That lie is what America’s ‘news’media won’t expose, but instead they all cooperate with it, when they’re not actually participating, themselves, in spreading these lies.

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

China’s Oil Trade Retaliation is Iran’s Gain

June 21, 2018

China’s Oil Trade Retaliation is Iran’s Gain

I’ve told you that once you start down the Trade War path forever will it dominate your destiny.

Well here we are. Trump slaps big tariffs on aluminum and steel in a bid to leverage Gary Cohn’s ICE Wall plan to control the metals and oils futures markets. I’m not sure how much of this stuff I believe but it is clear that the futures price for most strategically important commodities are divorced from the real world.

Alistair Crooke also noted the importance of Trump’s ‘energy dominance’ policy recently, which I suggest strongly you read.

But today’s edition of “As the Trade War Churns” is about China and their willingness to shift their energy purchases away from U.S. producers. Irina Slav at Oilprice.com has the good bits.

The latest escalation in the tariff exchange, however, is a little bit different than all the others so far. It’s different because it came after Beijing said it intends to slap tariffs on U.S. oil, gas, and coal imports.

China’s was a retaliatory move to impose tariffs on US$50 billion worth of U.S. goods, which followed Trump’s earlier announcement that another US$50 billion in goods would be subjected to a 25-percent tariff starting July 6.

It’s unclear as to what form this will take but there’s also this report from the New York Times which talks about the China/U.S. energy trade.

Things could get worse if the United States and China ratchet up their actions [counter-tariffs]. Mr. Trump has already promised more tariffs in response to China’s retaliation. China, in turn, is likely to back away from an agreement to buy $70 billion worth of American agricultural and energy products — a deal that was conditional on the United States lifting its threat of tariffs.

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

Unprecedented Israeli Strikes Target Iraqi Shia Militias In Syria

June 19, 2018

Unprecedented Israeli Strikes Target Iraqi Shia Militias In Syria

A day after a mysterious airstrike close to the Iraq-Syria border reportedly killed over 30 Syrian government soldiers and Iraqi paramilitary forces backed by Iran, a US official has told CNN the attack was carried out by Israel and not by the US coalition.

Syrian state media blamed the strike on the US-led coalition — though in the immediate aftermath any level of confirmation or evidence was hard to come by. The claims prompted the US coalition spokesman to issue a formal denial, calling Syria’s accusation “misinformation” as US-backed SDF forces are only operating east of the Euphrates, and not near Abu Kamal, which lies west, according to the statement.

If confirmed it would mark the first time in the war that Iraq’s paramilitary forces have been targeted by Israel. The Iran-backed Popular Mobilization Units (PMU, or PMF) have increasingly coordinated with the Syrian Army as well as pro-Syrian irregular Shia fighters during anti-ISIS operations along Syria’s eastern border of late.

The incident marks the second time in three weeks that the Syrian Army has accused the US Coalition of bombing their troops in southeast Syria; however it is uncertain as yet how Damascus will respond to this new claim of Israeli responsibility.

The CNN source is an unnamed US official, who gave no other details on the strike, including how many jets conducted the mission or the flight path into the Iraq-Syria border area, though CNN notes, “The area is some distance from Israel and Israeli jets would have had to overcome significant logistical hurdles to strike that area.”

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

IEA: Oil Prices Could Rise Further As Shale Can’t Fill The Gap

June 14, 2018

IEA: Oil Prices Could Rise Further As Shale Can’t Fill The Gap

U.S. shale will continue its breakneck growth rate into 2019, despite bottlenecks, but the oil market still faces serious supply risks from the potential losses from Venezuela and Iran, the International Energy Agency (IEA) said in a new report.

The IEA said that the run up in oil prices in the last few months dampened oil demand growth, although the agency left its forecast for oil demand growth unchanged at 1.4 million barrels per day, after downgrading that estimate last month. Subsidies and price regulation in a growing number of countries, intended to blunt the impact of rising fuel prices, could keep demand growth on track, despite oil prices trading significantly higher than, say, a year ago.

Looking ahead to 2019, the IEA thinks that oil demand growth will expand by yet another 1.4 mb/d, this time with the help of the petrochemical sector. A number of projects are coming online earlier than expected, adding more consumption to the mix. The demand estimate is a rather strong one, given substantial expansion in demand over the past few years.

There are risks to that forecast, including “a weakening of economic confidence, trade protectionism and a potential further strengthening of the US dollar,” the IEA said. Those factors should not be overlooked. Indeed, strong demand does not stand independent of the price variable, for instance. How this plays out is unclear, but with the oil market now much tighter than at any point in the last few years, strong demand going forward will start to drive up prices much more than it did in the past.

The supply side of the equation is much more interesting. On the positive side of the ledger, the IEA sees non-OPEC supply growing by 2 mb/d in 2018, followed by another jump of 1.7 mb/d in 2019. The U.S. makes up three quarters of both of those figures.

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

Trump Slams OPEC Again, Demands Lower Prices: “Oil Prices Are Too High, OPEC Is At It Again”

June 13, 2018

Trump Slams OPEC Again, Demands Lower Prices: “Oil Prices Are Too High, OPEC Is At It Again”

Nearly two months after Trump drew a line in the sand on oil prices, when on April 20 he lashed out at OPEC, tweeting that “Oil prices are artificially Very High! No good and will not be accepted!”which promptly set a ceiling on crude and prompted Saudi Arabia to scramble to boost production…

✔

Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!

6:57 AM – Apr 20, 2018

… moments ago Trump doubled down on his oil- price targeting, and in a lengthy tweetstorm that touched on everything from Marc Sanford’s loss, to the strength of the economy, to the just concluded North Korean summit, his relationship with Kim Jong Un and the cancellation of war games with South Korea, even the announcement of the world cup host nation (US, Mexico and Canada), Trump once again lashed out at OPEC, tweeting that “Oil prices are too high, OPEC is at it again. Not good!“

✔

Oil prices are too high, OPEC is at it again. Not good!

7:52 AM – Jun 13, 2018

Translation: Trump realizes that the middle-class is spending increasingly more on gasoline, taking away from disposable income, and hopes that Saudi Arabia will pump more to offset the loss of Venezuela and Iran oil (which would not be impaired if Trump hadn’t killed the Iran deal), in line with what we described in “Rising Gas Prices Threaten To Wipe Out Trump’s Tax Cut Benefits“.

This time, the market reaction to Trump’s angry tweet was far muted, with oil barely moving – so far – after it slumped following yesterday’s API report, even if it recovered most of the losses.

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

Geopolitical Tensions Reach Boiling Point Ahead Of OPEC Meeting

June 11, 2018

Geopolitical Tensions Reach Boiling Point Ahead Of OPEC Meeting

The upcoming OPEC meeting on June 22 is shaping up to be a contentious one, after news broke that the U.S. government asked Saudi Arabia to increase oil production before Washington pulled out of the Iran nuclear deal.

Earlier last week, news surfaced that the U.S. government asked Saudi Arabia to boost output to relieve pressure on prices. But Reuters followed up with a report on June 7, adding more context to that story. According to Reuters, a high level Trump administration official called Saudi Arabia a day before Trump was set to announce the U.S. withdrawal from the Iran nuclear deal, asking for more oil supply to cover for disruptions from Iran.

The last time the U.S. government pressured OPEC into adding supply, it was also over Iran. The Obama administration wanted the cartel to offset disrupted Iranian production, after an international coalition put stringent sanctions on Iran in 2012. Roughly 1 million barrels per day were knocked offline.

While the Trump administration’s request might irk OPEC members, with Iran obviously the most aggrieved, the apparent willingness of Saudi Arabia to comply with Washington’s request has ignited furor from within the group.

“It’s crazy and astonishing to see instruction coming from Washington to Saudi to act and replace a shortfall of Iran’s export due to their Illegal sanction on Iran and Venezuela,” Iran’s OPEC governor, Hossein Kazempour Ardebili, said in comments to Reuters. He said that OPEC would not simply comply with Washington’s requests. “No one in OPEC will act against two of its founder members,” he said, referring to Iran and Venezuela. “The U.S. tried it last time against Iran, but oil prices got to $140 a barrel.”

“OPEC will not accept such a humiliation. How arrogant and ignorant one could be (to) underestimate the history of 60 years’ cooperation among competitors,” he said.

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

Gold and the Monetary Blockade on Iran

June 7, 2018

Gold and the Monetary Blockade on Iran

This blog post is a guest post on BullionStar’s Blog by the renowned blogger JP Koning who will be writing about monetary economics, central banking and gold. BullionStar does not endorse or oppose the opinions presented but encourage a healthy debate.

With Donald Trump close to re-instituting economic sanctions on Iran, it’s worth remembering that gold served as a tool for skirting the the last round of Iranian sanctions. If a blockade were to be re-imposed on Iran, might this role be resuscitated?

The 2010-2015 Monetary Blockade

The set of sanctions that the U.S. began placing on Iran back in 2010 can be best thought of as a monetary blockade. It relied on deputizing U.S. banks to act as snitches. Any U.S. bank that was caught providing correspondent accounts to a foreign bank that itself helped Iran engage in sanctioned activities would be fined. To avoid being penalized, U.S. banks threatened their foreign bank customers to stop enabling Iranian payments or lose their accounts. And of course the foreign banks (mostly) complied. Being cut off from the U.S. payment system would have meant losing a big chunk of business, whereas losing Iranian businesses was small fry.

One of the sanctioned activities was helping Iran to sell oil. By proving that they had significantly reduced their Iranian oil imports, large importers like Japan, Korea, Turkey, India, and China managed to secure for their banks a temporary exemption from U.S. banking sanctions. So banks could keep facilitating oil-related payments for Iran without being cut off from the dollar-based payments system. The result was that Iran’s oil exports fell, but never ground to a halt. This was a fairly balanced approach. While the U.S. wanted to deprive Iran of oil revenue – which might be used to build nuclear weapons – it didn’t want to force allies to do entirely without necessary crude oil.

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

Next Stage of Pressure on Iran – Lower Oil Prices

June 7, 2018

Next Stage of Pressure on Iran – Lower Oil Prices

President Trump is stepping up his attack on Iran. He’s now planning the long-game for maximum pressure. The news that Trump quietly asked Saudi Arabia to ramp up output by 1 million barrels a day is the key.

From the analysis at Oilprice.com:

Saudi Arabia and some of its close Arab allies in the Gulf, as well as the leader of the non-OPEC nations taking part in the production cut deal—Russia—are the only producers that have the spare capacity to increase production. So, in case of increased production from OPEC and allies, the potentially lower oil prices would hurt the other OPEC members that don’t have the spare capacity to boost output.

The point here is to begin dropping oil prices now that the U.S. has blown out Turkey’s finances and helped Saudi Arabia improve its fiscal position for the rest of the year with high oil prices.

Turkey is a net energy importer and $75+ per barrel oil is a huge drain on its finances at a time when its currency and bond markets are under serious pressure from a strengthening U.S. dollar. Don’t think for a second the Turkish lira wasn’t helped in its fall. This is a classic hybrid war attack on a country not playing by U.S. rules.

But, now that Trump’s U.S. economy is threatened by high energy costs, he’s looking to improve that situation while also putting a strain on Iran’s finances through the double whammy of losing not only up to 1 million barrels of production per day but also getting $20-25 less per barrel.

And right on target, oil shorts are piling on because that’s what happens when the markets are told which way policy is heading.

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

US Treasury Dept Warns Allies Against Accidentally Trading With Iran

June 6, 2018

US Treasury Dept Warns Allies Against Accidentally Trading With Iran

Companies ‘face substantial risks’ if they’re caught trading with Iran

The US Treasury Department on Tuesday issued a statement directed at allied governments, and private companies operating out of allied countries, warning them against any trade with Iran, warning they “face substantial risks” if they are caught.

Undersecretary of the Treasury Sigal Mandelker says that the world must “harden your financial networks,” and make sure they have “airtight” procedures in place to prevent even accidental business ties to Iran. He added that nations must make sure “Iran and its proxies are not exploiting your companies to support their nefarious activities.”

Though presented as a warning about being tricked by Iran, the warning is likely primarily directed at EU nations, as the EU has already decided to prohibit its companies complying with US sanctions on Iran. The EU is planning to try to block the US from punishing those companies, but many of the major businesses are being very cautious about new deals with Iran, fearing the US will go after them anyhow.

US sanctions against Iran’s nuclear program are expected to ratchet up in the next several months, after President Trump withdrew the US from the nuclear deal. Yet the deal remains in place, and many nations may not be willing to follow the US in this crackdown so long as Iran remains compliant.

Trump Asked Saudi Arabia To Boost Oil Production By 1 Million Barrels Per Day

June 5, 2018

Trump Asked Saudi Arabia To Boost Oil Production By 1 Million Barrels Per Day

It all started on April 20, when having tweeted at and about virtually everything else, President Trump realized that surging oil and gasoline prices are wreaking havoc on his economic agenda and eating away at the benefits from his tax cuts, and so he made it clear when he lashed out on twitter against OPEC which he said was “at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!”

✔

Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!

6:57 AM – Apr 20, 2018

The result was instant, sending the price of oil sharply lower….

… and effectively capping the price oil, which is now at the level when Trump made his warning.

Since then Trump’s stance has only hardened, and because the US president has become an especially good friend with the ruling Saudi regime, there has been a dramatic reversal within OPEC, whose next meeting is now expected to see the cartel and Russia modestly boost oil production to comply with Trump’s demand.

But by how much?

This morning Bloomberg reported the answer, when it said that the Trump administration has quietly asked Saudi Arabia and other OPEC producers to increase oil production by about 1 million barrels a day, or – not surprisingly – just enough to offset expected Iran oil export declines as a result of Trump’s renewed embargo on Tehran.

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

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