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When you want to sanction States, you call them « terrorists »

The new unilateral sanctions by the United States against Iran, Russia and Syria add to the previous actions concerning the same three targets. They now form the most unforgiving embargo in History. The way in which they have been organised is illegal according to the definition of the Charter of the United Nations – these are weapons of war, designed for killing.

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Secretary of Defense James Mattis applauded by United States Secretary of the Treasury, Steven Mnuchin.

For his visit to Moscow on 8 November, ambassador James Jeffrey was tasked with explaining the current US obsession with the expansion of Persian influence in the Arab world (Saudi Arabia, Bahrein, Iraq, Lebanon, Syria, Yemen). Washington now wishes to formulate this question in geo-strategic rather than religious terms (Chiites/Sunni), while Teheran is organising its national defence around forward posts composed of Chiite Arabs.

Moscow then considered the possibility of negotiating on Teheran’s behalf for the easing of unilateral US sanctions, in exchange for its military withdrawal from Syria. President Vladimir Putin confirmed his proposition, not only for his US opposite number, but also for the Israëli Prime Minister, during their meeting in Paris on 11 November for the celebrations marking the centenary of the end of the First World War .

He attempted to convince the Westerners that Russia alone in Syria was preferable to the Irano-Russian tandem. However, he could not guarantee that Iran would have sufficient authority over Hezbollah – as both Washington and Tel-Aviv pretend – to be able to order it to withdraw also.

Washington’s only answer, nine days later, was to announce the eleventh series of unilateral sanctions against Russia since the beginning of August.

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

OPEC Cuts Deep to Save Cartel

OPEC Cuts Deep to Save Cartel

With oil prices in free fall and the dawning realization that Great Reflation trade of 2017 is over, OPEC needed to do something drastic to remind everyone how important they are.

Moreover, with Qatar quitting the cartel last week it was then doubly necessary for OPEC to make the markets stand up and remember them.

So, after a few days of wrangling, a 1.2 million barrel per day cut was announced by OPEC, far larger than the market was expecting.

The Trump administration is fuming today over this result.

Predictably, oil prices jumped on the news.  All is right with their world, yes?

Well, yes and no.  The Saudis need $80 per barrel oil.  Russia doesn’t get its hair mussed below around $50 and even then it simply scales back government spending in line with oil prices — auto-budgeting based on oil tariffs.

The free-floating ruble insulates Russia domestically from a sharp drop in oil prices far better than Saudi Arabia since the Riyal is pegged to the U.S. dollar.

But for Saudi Arabia, the stakes are far higher.  And its chief rival, Iran, understands this very well.  The reason the OPEC meeting was so touch and go was Iran exerting its leverage over the Saudis in response to U.S. sanctions.

Because while Russia agreed to a 200,000 barrel cut, which is nothing to them in the grand scheme of things, Iran was exempted from making any cuts.

Iran, Libya and Venezuela will be effectively exempt from the cuts, though the text of the deal will say they received “special considerations,” Iraqi oil minister Thamir Ghadhban said.

Saudi Loss Leader

Saudi leadership is weakening.  Qatar left to pursue its own ambitions without OPEC getting in the way.  That’s a nice way of saying they want to do business with Iran developing the shared North Pars gas field.

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

Oil Volatile As Iran Denies Reports It Agreed To Deal

Oil Volatile As Iran Denies Reports It Agreed To Deal

Update (8:00 am ET): Oil prices spiked Friday morning before quickly fading after Reuters reported that Iran has agreed to the OPEC deal for 800,000 b/d of cuts – only for an Iranian delegate to swiftly deny that report, sending crude prices back from whence they came.

The Iranian delegate said there’s still ‘lots of haggling’ about a possible deal.

* * *

Update (7:10 am ET): As furious negotiations continue on day two of the OPEC+ talks in Vienna, one OPEC delegate has informed BBG that the group has yet to finalize the final number for the cuts.

* * *

Update (6:30 am ET): Boom…

OPEC TALKS IN VIENNA ARE DEADLOCKED: DELEGATE
Reports of the deadline followed headlines claiming that Iran had demanded that an exemption must be included in any agreement about production cuts. A counteroffer for Iran to agree to a “symbolic” cut has reportedly been categorically rejected by the Gulf Producer. WTI has moved back to unch on the day.

* * *

Update (6:20 am ET): Expressing dissatisfaction with the terms of whatever deal has been discussed, Iran is reportedly holding out for language about an exemption for the struggling producer to be included in the agreement following three hours of talks on Friday.

It would be ironic if Iran – which has been blamed, along with Saudi Arabia and Russia, for triggering the collapse in oil prices due to the sanctions ‘exemptions’ on its oil exports extended by the US – ends up killing the deal, because the only less-desirable outcome for oil markets than a ‘baseline’ cut scenario would be ‘no deal’.

Oil prices are all over the place as the perceived prospects for a deal change with each new headline.

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

Blain: “Are We Backing The Wrong Country In The Saudi-Iran Race”

As excerpted from Blain’s Morning Porridge, submitted by Bill Blain

Where do we go from here?  

I’ve said it a few times already – 2019 is likely to see the start of the New Market Reality. Although some pundits claim yesterday’s sell-off was due to automated algo’s triggering a crash because they misread the US yield curve inversion – bad programming they claim – the reality is markets are extremely nervous: of the recessionary signals the inversion shows, slowing economic numbers, the prospects for trade war accelerating recession, etc. The US economy may be a full employment and growing, but where does it go from here as the rest of the globe falters, housing collapses, Auto sales plummet and everyone worries just how they are going to pay off student loans, mortgages and credit cards?

Markets have reversed polarity on Trump.

Peak Trump Bullshit means we just switched from positive to negative. Don’t think about what can go right as Trump forces through trade deals, tax cuts, a compliant Fed, etc. Think about Trump negatives – forget the FED put. Forget overly-optimistic valuations based on rosy global growth projections, and the belief very smart people will make bright shinny things brighter and shinier. Next year is going to be about real stuff, like how you going to sell this commodity (be it an electric car, swanky mobile phone with a fruit logo, or avacados. Why avocados…? because.. just because.) Consumption vs recession. Ouch.

Markets are being roiled by politics, soiling themselves on trade war panics, scared witless by mounting populism and its pay-off:

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

Iran: Oil To Fall To $40 If OPEC Fails To Reach Deal

Iran: Oil To Fall To $40 If OPEC Fails To Reach Deal

oil tanker hurricane

A fractured OPEC is meeting later this week to discuss a deal to cut oil production—yet again—to rebalance the market and lift oil prices that have recently slipped to below most of the cartel members’ budget-balance points.

OPEC needs a unanimous vote to pass decisions such as curtailing production. Yet, Iran—one of OPEC’s biggest producers but also one of the most sidelined members in recent months—warns that the group is unlikely to reach an agreement on a sizeable cut of around 1.4 million bpd as some are suggesting. Such a failure to act decisively would send oil prices plunging to $40 a barrel, Iran’s OPEC Governor Hossein Kazempour Ardebili told Bloomberg in an interview.

The cartel and its Russia-led non-OPEC allies may not extend their cooperation pact either, according to Iran’s representative at OPEC—a position typically held by the second most powerful oilman in a cartel member after the oil minister.

Iran has repeatedly expressed frustration with the Saudi/Russia-led increase in oil production since June to offset what was expected to be a steep decline in Iranian oil supply with the U.S. sanctions on Tehran’s petroleum and shipping industries.

Iran’s oil exports indeed dropped by some 1 million bpd, but they are likely still holding onto above 1 million bpd, while U.S. waivers to eight Iranian customers allow buyers to continue purchasing oil at reduced volumes until the end of April next year.

Oil prices have plunged by around 30 percent from early October as the market started to fear an oversupply is building up again, due to record high production in Saudi Arabia and Russia, and an all-time high oil output in the United States, coupled with fears of slowing economic and oil demand growth.

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

Iran Again Threatens To Block Key Oil Transit Choke Point As U.S. Aircraft Carrier En Route

Here we go again: Iranian President Hassan Rouhani has once more threatened to close the Strait of Hormuz, which is vital to up to one-third of all global oil shipping as it’s a key transit choke point in the Persian Gulf.

On Tuesday Iranian state broadcasts carried his words, saying “if someday, the United States decides to block Iran’s oil (exports), no oil will be exported from the Persian Gulf.” He further vowed that the United States will not be able to prevent Iran from exporting its crude — something the White House has repeatedly pledged to take down to zero exports through international allies and economic blockade through sanctions.

A prior Iranian Navy drill off the Strait of Hormuz, RFE/RL

The carrier deployment, though previously scheduled, was announced after the US condemned Iran’s test firing a medium-range nuclear capable ballistic missile on Sunday.

“The United States should know that we are selling oil and we will sell our oil and it cannot block Iran’s oil export,” he said on Tuesday addressing the people of Shahroud in Semnan province broadcast live on state TV.

The United States and the Israeli regime cannot stand the idea of a powerful and dignified Iran, and the Iranian nation will not bow to them, Rouhani highlighted, adding, “the United States failed in launching a coup in our country. They were after separating Khuzestan province, imposing sanctions against the country, and undermining Iran’s power, but they failed. It should be studied why the US is angry with Iran and Iranians.” MEHR News Agency

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

U.S. Aircraft Carrier Heads To Persian Gulf In “Show Of Force” After Iran Ballistic Missile Test

Days after Iran unveiled its first stealth destroyer in a televised ceremony on Saturday which saw the warship launched into operation in the Persian Gulf, and after the US condemned Iran’s test firing a medium-range nuclear capable ballistic missile on Sunday, Pentagon officials have announced the U.S. is sending an aircraft carrier strike group to the Persian Gulf in a show of force against Iran.

US officials told the Wall Street Journal the USS John C. Stennis and support ships will arrive in the Middle East “within days” — which will bring a close what’s been described as the longest period in two decades that a carrier group was absent from the region. Specifically the unnamed officials identified the purpose as to “exhibit a show of force against Iran” at a moment tensions are soaring after Nov. 4 renewed sanctions targeting Iran’s energy sector. The White House has vowed that it will work with international allies to reduce Iran’s oil exports to zero in continuing economic warfare that could easily spark direct military confrontation.

USS John C. Stennis nuclear-powered aircraft carrier, via Defence Blog

The WSJ reports:

The Stennis is scheduled to remain in the region for about two months, the officials said, spending most of that time in the Persian Gulf. Its presence “certainly provides a deterrence” against any potentially hostile Iranian activity in the region’s waters, one of the officials said.

Responding to the unprecedented sanctions regimen after President Trump withdrew the US from the 2015 JCPOA, Iran’s military leadership has over the past months issued a counter threat of blockading the vital Strait of Hormuz in the Persian Gulf, which would strangle global oil shipping. The US carrier presence inches the world closer to witnessing a major flare up in the gulf which could send the price of oil soaring.

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

Iran: Rumors of War

Iran: Rumors of War

Photo Source Blondinrikard Fröberg | CC BY 2.0

Consider a conversation between long-time Middle East reporter Reese Erlich and former U.S. ambassador to Saudi Arabia, Charles Freeman, Jr. on the people currently directing the Trump administration’s policy toward Iran. Commenting on National Security Advisor John Bolton’s defense of the invasion of Iraq, Freeman says “The neoconservative group think their good ideas were poorly implemented in Iraq,” and that the lesson of the 2003 invasion that killed upwards of 500,000 people and destabilized an entire region is, “If at first you don’t succeed, do the same thing again somewhere else.”

That “somewhere else” is Iran, and Bolton is one of the leading voices calling for confronting the Teheran regime and squeezing Iran through draconian sanctions “until the pips squeak.” Since sanctions are unlikely to have much effect—they didn’t work on North Korea, have had little effect on Russia and failed to produce regime change in Cuba—the next logical step, Erlich suggests in his new book The Iran Agenda Today: The Real Story Inside Iran And What’s Wrong with U.S. Policy, is a military attack on Iran.

Such an attack would be a leap into darkness, since most Americans—and their government in particular—are virtually clueless about the country we seem bound to go to war with. Throwing a little light on that darkness is a major reason Erlich wrote the book. For over 18 years he has reported on Iran, talking with important government figures and everyday people and writing articles on the country that increasingly looks to be our next little war. Except it will be anything but “little.”

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

Pompeo: US/Saudi Partnership ‘Vital’ – American Taxpayers May Disagree!

Pompeo: US/Saudi Partnership ‘Vital’ – American Taxpayers May Disagree!

Secretary of State Mike Pompeo has published a bizarre op-ed in the Wall Street Journal claiming that Saudi Arabia has been a guarantor of stability in the Middle East and a bulwark against “expansionist” Iran. Perhaps he forgot about Saudi support for jihadists in Syria and the Saudi destruction of Yemen? Is carrying water for the murderous Saudi kingdom in the Middle East really the best way to demonstrate “American values,” as Pompeo claims? We break down Pompeo’s neocon screed in today’s Liberty Report:

When you want to sanction States, you call them « terrorists »

The new unilateral sanctions by the United States against Iran, Russia and Syria add to the previous actions concerning the same three targets. They now form the most unforgiving embargo in History. The way in which they have been organised is illegal according to the definition of the Charter of the United Nations – these are weapons of war, designed for killing.

JPEG - 36.9 kb
Secretary of Defense James Mattis applauded by United States Secretary of the Treasury, Steven Mnuchin.

For his visit to Moscow on 8 November, ambassador James Jeffrey was tasked with explaining the current US obsession with the expansion of Persian influence in the Arab world (Saudi Arabia, Bahrein, Iraq, Lebanon, Syria, Yemen). Washington now wishes to formulate this question in geo-strategic rather than religious terms (Chiites/Sunni), while Teheran is organising its national defence around forward posts composed of Chiite Arabs.

Moscow then considered the possibility of negotiating on Teheran’s behalf for the easing of unilateral US sanctions, in exchange for its military withdrawal from Syria. President Vladimir Putin confirmed his proposition, not only for his US opposite number, but also for the Israëli Prime Minister, during their meeting in Paris on 11 November for the celebrations marking the centenary of the end of the First World War .

He attempted to convince the Westerners that Russia alone in Syria was preferable to the Irano-Russian tandem. However, he could not guarantee that Iran would have sufficient authority over Hezbollah – as both Washington and Tel-Aviv pretend – to be able to order it to withdraw also.

Washington’s only answer, nine days later, was to announce the eleventh series of unilateral sanctions against Russia since the beginning of August. This was accompanied by a ridiculous speech according to which Russia and Iran had together organised a vast plot aimed at maintaining President Assad in power and expanding Persian control in the Arab world.

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

Does The U.S. Really Need Saudi Oil?

Does The U.S. Really Need Saudi Oil?

oil rigs

“Saudi Arabia — if we broke with them, I think your oil prices would go through the roof. I’ve kept them down,” President Trump told reporters on Tuesday. “They’ve helped me keep them down. Right now we have low oil prices, or relatively. I’d like to see it go down even lower — lower.”

Oil prices have indeed fallen significantly in recent weeks, and to be sure, Saudi Arabia has played a large role in that. Saudi production reportedly hit a record high 11 million barrels per day (mb/d) at times this month, and global inventories are rising once again.

But Riyadh is also clearly upset at being “duped” by Trump. Having been convinced by the Trump administration that Iran’s oil exports were heading to zero, or at least close to zero, Saudi Arabia ramped up supply to offset the losses.

The U.S. then surprised the market by issuing a bunch of waivers, allowing Iran to continue to export oil. Japan and South Korea may even resume buying oil from Iran in January, after cutting imports to zero in anticipation of sanctions.

Almost immediately after the waivers were issued, oil prices crashed. Saudi Arabia then promptly announced that it would cut production by 500,000 bpd in December, and the rumors of an OPEC+ cut really began to pick up.

Trump is happy about the slide in oil prices, but Saudi Arabia clearly isn’t. Saudi Arabia and its OPEC+ partners could soon take action to push prices back up. So, it isn’t clear that Washington and Riyadh have the same objectives, or that their tight relationship is resulting in lower oil prices.

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

Here We Go Again: US Accuses Iran Of Hiding Chemical Weapons

In a trite refrain straight out of the standard Washington regime change playbook, the United States has lodged a formal complaint alleging Iran is developing nerve agents “for offensive purposes”.

Like Syria before (and Russia), first comes the “outraged!” human rights violations rhetoric, then come crippling sanctions and international “pariah status”, and for the final push comes unfounded chemical attack claims, a charge now being formally prepped and set in motion against Tehran by the West.

After the AP first revealed a week ago that the U.S. is set to accuse Iran of violating international bans on chemical weapons, an American diplomat has told the global chemical weapons agency in The Hague that Tehran has not declared all of its chemical weapons capabilities.

On Thursday Ambassador Kenneth Ward told a meeting of the Organisation for the Prohibition of Chemical Weapons (OPCW) that Iran was in violation of an international non-proliferation convention.

“The United States has had longstanding concerns that Iran maintains a chemical weapons program that it has failed to declare to the OPCW,” Ward said at an OPCW conference.

“The United States is also concerned that Iran is also pursuing central nervous system-acting chemicals for offensive purposes,” he added. He connected this with the general White House charge and theme that Iran and Russia had “enabled” Syria in attacking civilians with nerve agents, according to claims of officials in the West.

Specifically Amb. Ward claimed Iran has been hiding a production facility for filling aerial bombs while simultaneously maintaining a secret program to procure banned toxic munitions, include nerve agents.

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

 

Trump Claims Victory As Oil Prices Plummet

Trump Claims Victory As Oil Prices Plummet

Trump

Oil prices are now down over 20 percent from recent highs, and President Trump knows exactly where the credit for that belongs. “If you look at oil prices they’ve come down very substantially over the last couple of months,” President Trump said in a news conference last week. “That’s because of me.”

The President is partially correct about that, but not for the reasons he thinks. He attributes it to his hard line on OPEC. But what has actually happened is that crude oil inventories in the U.S. have risen for seven straight weeks.

As pointed out in the previous article, one reason for that is that China, in response to the ongoing trade spat, has stopped importing U.S. oil. Earlier this year China imported more than half a million barrels of day of crude oil from the U.S. Loss of this export market has contributed to the inventory growth in the U.S. — and hence to the drop in crude oil prices. (Presumably, crude oil inventories are dropping elsewhere, but possibly in countries with less transparency about their inventories).

Some feel that there is also an element of fear that global demand may be slowing. But this week Reuters reported that China’s crude oil imports reached an all-time high in October. So, despite the trade war, demand in China doesn’t appear to be slowing. But China isn’t getting its oil from the U.S. now.

Where is China getting its oil? Iran, for one. Another way that President Trump has helped oil prices go down is that he blinked as the deadline for sanctions on Iran’s oil exports neared. Oil prices had risen about 50 percent over the past year because of the impending sanctions that were expected to take Iran’s oil off the market. (I don’t recall him taking credit for oil prices that rose in response to sanctions).

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

Pompeo’s Albright Moment Arrives

Pompeo’s Albright Moment Arrives

Pompeo’s Albright Moment Arrives

Secretary of State Mike Pompeo is not a very bright guy. He is, like his boss, a thin-skinned bully with a narrow view of the world focused on US righteousness. With the sanctions going into place on Iran this week he gave an interview with the BBC which laid bare what happens when you scratch Pompeo just a hair beneath the polished surface.

Pompeo will be happy to see the people of Iran starve to achieve his ends. And those ends are purely in service of not only Israel and Saudi Arabia but the military contractors who back him and direct so much of the policy coming out of D.C.

Pompeo: Yeah, we’re going to work to do two things: that things that are sanctioned don’t happen, and things that are permitted to happen are permissible, and can in fact happen. [Speaking of food and medicine flowing unimpeded]

Well, remember, just so you remember, the leadership has to make a decision that they want their people to eat. They have to make a decision that they want to use their wealth to import medicine, and not use their wealth to fund Qasem Soleimani’s travels around the Middle East with – causing death and destruction. That’s the Iranian Government’s choice on how to use Iranian wealth. If they choose to squander, if the Iranian leadership chooses to spoil it, if they choose to use it in a way that doesn’t benefit the Iranian people, I’m very confident the Iranian people will take a response that tries to fix that themselves as well.

Aside from the fact that Pompeo has no idea how commerce works, this is a horrific statement. We’re going to destroy your economy and if you don’t overthrow your government you will starve.

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

The Biggest Threat To Dollar Dominance

The Biggest Threat To Dollar Dominance

Russian oil exporters are pressuring Western commodity traders to pay for Russian crude in euros and not dollars as Washington prepares more sanctions for the 2014 annexation of Crimea by Moscow, Reuters reported last week, citing as many as seven industry sources.

While it may have come as a surprise to the traders, who, Reuters said, were not too happy about it, the Russian companies’ move was to be expected as the Trump administration pursues a foreign policy where sanctions feature prominently. This approach, however, could undermine the dominance of the U.S. dollar as the global oil trade currency.

Early indications of this undermining became evident this spring, when Russia and Iran launched an oil-for-goods exchange program seeking to eliminate bilateral payments in U.S. dollars and plan to keep it going for five years. The sanction buddies discussed this sort of agreement earlier, back in 2014, when Iran was still under Western sanctions. Even after the notorious nuclear deal was reached, the two countries decided to go ahead with their barter deal, and the preliminary agreement was reached last year. According to it, Russia would receive 100,000 bpd of Iranian crude in exchange for US$45 billion worth of Russian goods.

In March, Iran banned purchase orders denominated in U.S. dollars and said that any merchant using dollars in their orders will not be allowed to conduct the import trade. A month later, Tehran announced that it will publish all its official financial reports in euros instead of dollars in a bid to encourage a switch to euros from dollars among state agencies and businesses.

Now, Russia’s biggest oil producers are renegotiating oil delivery contracts with commodity traders, and three of them, Rosneft, Gazprom Neft and Surgutneftegaz, have raised traders’ hackles by insisting they, the traders, commit to paying penalties beginning next year if U.S. sanctions disrupt sales and as a result the buyers fail to make payments.

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

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