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The globally influential propaganda multiplier news agencies AP and AFP have both informed their readers that a “fugitive” has been extradited to the United States.

“Fugitive businessman close to Venezuela’s Maduro extradited to US,” reads the AFP headline.

“Alex Saab, a top fugitive close to Venezuela’s socialist government, has been put on a plane to the U.S. to face money laundering charges,” AP announced on Twitter.

You’d be forgiven for wondering what specifically makes this man a “fugitive”, and what that status has to do with his extradition to a foreign government whose laws should have no bearing on his life. The Colombian-born Venezuelan citizen Alex Saab, as it happens, is a “fugitive” from the US government’s self-appointed authority to decide which populations on our planet are permitted to have ready access to food. His crime is working to circumvent the crushing US sanctions which have been starving Venezuelan civilians to death by the tens of thousands.

Saab is being extradited from the African nation of Cabo Verde where he has been imprisoned since last year under pressure from the US government. In an article published this past May titled “Alex Saab v. The Empire: How the US Is Using Lawfare To Punish a Venezuelan Diplomat“, Roger D Harris explains how the US uses its domination of the international financial system to crush nations which disobey it and outlines the real reasons for Saab’s imprisonment, which has included torture and draconian living conditions. Harris writes:

Special Envoy and Ambassador to the African Union for Venezuela Alex Saab was on a humanitarian mission flying from Caracas to Iran to procure food and gasoline for the Venezuelan CLAP food assistance program. Saab was detained on a refueling stop in the African nation of Cabo Verde and has been held in custody ever since June 12, 2020.

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

The Effect of the Sanctions: Is Iran Cracking Down Under the Strain?

December 9, 2019

The Effect of the Sanctions: Is Iran Cracking Down Under the Strain?

I have to confess that the title of this post is a little of a clickbait. In reality, I will tell you more about Italy than about Iran. But, perhaps, from the story of how Italy reacted to the international economic sanctions imposed on the country in 1935, we can learn something about what could be the result of the current sanctions on Iran. Above, a photo from 1935, it shows a stone slab with the engraved words. “On 18 November 1935, the world besieged Italy. Perennial infamy on those who favored and consumed this absurd crime.” Most of these slabs were destroyed after the defeat of Italy in WW2, but some can still be found in Italy.

In 1935, Italy invaded Ethiopia, at that time the only remaining free African country. Why exactly that happened is a long story. Let me just say that, in part, it was a revenge for a defeat suffered long before, when an early attempt at invading Ethiopia had failed. In part, it had to do with reacting to the financial crash of 1929: governments often tend to seek for external enemies to distract people from internal troubles. Then, in part, it was seen as a way to displease the hated British, seen as guilty of not providing for Italy the coal that the Italian economy needed. And, finally, it had to do with some nebulous dreams about rebuilding the Roman Empire. It may sound silly, today, but if you read what people wrote at that time in Italy, that idea of creating a new Roman Empire was taken seriously.

Whatever the reasons, in 1935 the Ethiopian army was overwhelmed by the modern weaponry deployed by Italy. It included planes and tanks, with the added help of poison gas bombing, a military innovation for that time.

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

Oil Erases All Saudi-Attack Gains After Iran Sanctions Report

September 27, 2019

Oil Erases All Saudi-Attack Gains After Iran Sanctions Report

Already helped by reports of a partial Saudi cease-fire with Yemen, oil prices have legged lower – erasing all the price gains since the Saudi-attack – on the back on a Reuters report saying that US offered to remove all Iranian sanctions in exchange for talks.

That’s not going to help the value of the Aramco IPO.

Russia Urges “Independence” From “Imposed World Order” Of US Financial System

July 24, 2019

Russia Urges “Independence” From “Imposed World Order” Of US Financial System

Following Russia signalling last week, its willingness to join the controversial payments channel Instex – designed to circumvent both SWIFT as well as US sanctions banning trade with Iran – new statements from Russian Deputy Foreign Minister Sergei Ryabkov called on the international community to free itself from a purely US-controlled international financial system and US dollar dominance.

“We must protect ourselves from political abuses made with the help of the US dollar and the American banking system,” he said while addressing a ministerial meeting of the Non-Aligned Movement held in Venezuela, according to TASS. “We must turn our dependence in this sphere into independence,” he added.

“Let us be multipolar in the spheres of finance and currency,” he said.

The senior diplomat was specifically addressing US-led sanctions and the tightening economic noose, including a near total oil export blockade, on the Maduro government in Caracas.

The comments also come after early this year the Maduro regime was stymied in its bid to pull $1.2 billion worth of gold out of the Bank of England, according to a January Bloomberg report. The Bank of England’s (BoE) decision to deny Maduro officials’ withdrawal request was a the height of US coup efforts targeting Maduro.

Specifically top US officials, including Secretary of State Michael Pompeo and National Security Adviser John Bolton, had lobbied their UK counterparts to help cut off the regime from its overseas assets, as we reported at the time. Washington has further lobbied other international institutions, and especially its Latin American allies, to seize Venezuelan assets and essentially hold them for control of Juan Guaido’s opposition government in exile.

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

Ceasefire On The Rocks? Trump Sanctions Chinese Firm For Importing Iranian Crude

July 22, 2019

Ceasefire On The Rocks? Trump Sanctions Chinese Firm For Importing Iranian Crude

A huge escalatory step in the US-led economic war on Tehran and its global oil exports, and amid continued trade tensions with Beijing: the US State Department said Monday the US will impose new sanctions against a Chinese company for transporting Iranian crude in contravention of US sanctions. As the WSJ reports:

Secretary of State Mike Pompeo told The Wall Street Journal on Monday that Chinese company Zhuhai Zhenrong and one of its executives knowingly violated U.S. law barring the import of Iranian crude oil.

China had previously been part of the so-called waiver program, which had granted eight countries exceptions which allowed temporary imports of Iranian oil, but which expired May 2 of this year.

*Crude oil is unloaded at Zhoushan, East China’s Zhejiang province in February 2018. Image source: VCG*

The US did not renew the waiver program, known as ‘Significant Reduction Exceptions,’ in what was seen globally as a serious escalation by Washington attempting to bring Europe and other economic partners to heel over continued dealings with Tehran.

The Chinese company has been identified as Zhuhai Zhengrong Co Ltd, which Pompeo accused of violating US law over its continued Iran crude imports. Notably, its CEO will also be under sanction.

The WSJ continued:

The company and the executive will be barred from engaging in any foreign exchange, banking or property transactions under U.S. jurisdiction. The company couldn’t be immediately located for comment. Chinese officials did not respond to a request for comment.

Pompeo said while addressing reporters in Florida, “We’ve said that we will sanction any sanctionable behavior and we mean it.”

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

Trump To Unleash Hell On Europe: EU Announces Channel To Circumvent SWIFT And Iran Sanctions Is Now Operational

June 29, 2019

Trump To Unleash Hell On Europe: EU Announces Channel To Circumvent SWIFT And Iran Sanctions Is Now Operational

With the world waiting for the first headlines from the Trump-Xi meeting, the most important and unexpected news of the day hit moments ago, when Europe announced that the special trade channel, Instex, that will allow European firms to avoid SWIFT and bypass American sanctions on Iran, is now operational.

Following a meeting between the countries who singed the Iran nuclear deal, also known as the Joint Comprehensive Plan of Action (JCPOA), which was ditched by US, French, British and German officials said the trade mechanism which was proposed last summer and called Instex, is now operational.

As a reminder, last September, in order to maintain a financial relationship with Iran that can not be vetoed by the US, Europe unveiled a “Special Purpose Vehicle” to bypass SWIFT. The mechanism would facilitate transactions between European and Iranian companies, while preventing the US from vetoing the transactions and pursuing punitive measures on those companies and states that defied Trump. The payment balancing system will allow companies in Europe to buy Iranian goods, and vice-versa, without actual money-transfers between European and Iranian banks.

The statement came after the remaining signatures of JCPOA gathered in Vienna for a meeting that Iranian ministry spokesman Abbas Mousavi called “the last chance for the remaining parties…to gather and see how they can meet their commitments towards Iran.”

Until today, Tehran was skeptical about EU’s commitment to the deal and threatened to exceed the maximum amount of enriched uranium allowed it by the deal after US had imposed a series of sanctions on the country.

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

US Threatens Europe With “Loss Of Access To US Financial System” Over SWIFT-Evading Iran SPV

May 29, 2019

US Threatens Europe With “Loss Of Access To US Financial System” Over SWIFT-Evading Iran SPV

It’s going from bad to worse for Europe, whose currency had just hit session lows after Brussels confirmed that Italy faces a massive fine over its debt, when the Euro was hit with a double whammy after Bloomberg reported that the Trump administration is escalating its battle with “European allies” over the fate of the Iran nuclear accord, and is “threatening penalties against the financial body created by Germany, the U.K. and France to shield trade with the Islamic Republic from U.S. sanctions.“

According to Bloomberg, the Treasury Department’s undersecretary for terrorism and financial intelligence, Sigal Mandelker, sent a letter on May 7 warning that Instex, the European SPV to sustain trade with Tehran, and anyone associated with it could be barred from the U.S. financial system if it goes into effect.

As a reminder, last September, in order to maintain a financial relationship with Iran that can not be vetoed by the US, Europe unveiled a “Special Purpose Vehicle” to bypass SWIFT. Back then we predicted that Washington would not be too delighted with this development seeking to undermine the dollar’s reserve status. We were right.

*EU foreign policy chief Federica Mogherini alongside Iranian Foreign Minister Mohammad Javad Zarif*

“I urge you to carefully consider the potential sanctions exposure of Instex,” Mandelker wrote in the letter to Instex President Per Fischer. “Engaging in activities that run afoul of U.S. sanctions can result in severe consequences, including a loss of access to the U.S. financial system.”

Germany, France and the U.K. finalized the Instex system in January, allowing companies to trade with Iran without the use of U.S. dollars or American banks, allowing them to get around wide-ranging U.S. sanctions that were imposed after the Trump administration abandoned the 2015 Iran nuclear deal last year.

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

$1 Billion In Iranian Crude Is Stranded At A Chinese Port

May 1, 2019

$1 Billion In Iranian Crude Is Stranded At A Chinese Port

It’s no secret that Beijing has chafed at American audacity to try and dictate whom Chinese refineries can and can’t buy oil from. And in the latest example of just how aggravating the decision to end waivers for Iranian crude imports has been for the world’s second-largest economy, Reuters reported that some 20 million barrels of Iranian crude have been languishing at the northeastern port of Dalian for months, but because of the US’s decision to re-impose sanctions on Iran back in November, nobody wants to touch the oil.

Even when the waivers were in effect, Chinese refineries couldn’t secure financing and insurance that would allow them to purchase the oil because of the uncertainty surrounding the future of the waivers.

Iran sent the oil to China via the National Iranian Tanker Company before the sanctions were imposed as Iran struggled with a backlog of oil that had exhausted the country’s domestic storage capacity. So Beijing, the largest buyer of Iranian oil, allowed the NTCC to store some oil in so-called bonded storage tanks situated in the Dalian port. The oil has yet to go through Chinese customs.

China filed a formal complaint with the US over its decision to end the waivers, but the US has refused to consider any exceptions to its plans to reimpose full sanctions.

As one analyst told Reuters, no Chinese company will touch the oil unless specifically instructed to do so by the Chinese government.

The oil is being held in so-called bonded storage tanks at the port, which means it has yet to clear Chinese customs. Despite a six-month waiver to the start of May that allowed China to continue some Iranian imports, shipping data shows little of this oil has been moved.

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

PATRICK LAWRENCE: The US Moves on Iran’s Oil Market as an Expression of an Irrational Foreign Policy

April 30, 2019

PATRICK LAWRENCE: The US Moves on Iran’s Oil Market as an Expression of an Irrational Foreign Policy

Patrick Lawrence gauges the backfiring potential of Pompeo’s withdrawal on Thursday of U.S. sanction waivers from eight major importers.

A Decisive Defeat in Long-Running Battle with Foreign Policy Minders

Secretary of State Mike Pompeo’s announcement last week that no importer of Iranian oil will henceforth be exempt from U.S. sanctions is as risky as it is misguided. The withdrawal of waivers as of this Thursday effectively gives eight importers dependent on Iranian crude — India, Japan, South Korea, China, Turkey, Taiwan, Italy, and Greece — 10 days’ notice to adjust their petroleum purchases. This is now a full-court press: The intent is to cut off Iran’s access to any oil market anywhere as part of the administration’s “maximum pressure” campaign against Tehran. “We are going to zero,” Pompeo said as he disclosed the new policy.

Nobody is going to zero. The administration’s move will further damage the Iranian economy, certainly, but few outside the administration think it is possible to isolate Iran as comprehensively as Pompeo seems to expect. Turkey immediately rejected “unilateral sanctions and impositions on how to conduct relations with neighbors,” as Foreign Minister Mevlüt Çavusoglu put it in a Twitter message. China could do the same, if less bluntly. Other oil importers are likely to consider barter deals, local-currency transactions, and similar “workarounds.” In the immediate neighborhood, Iraq is so far ignoring U.S. demands that it cease purchasing natural gas and electricity from Iran.

Pompeo joining an Iranian diaspora meeting in Dallas, April 15, 2019. (State Department/Ron Przysucha via Flickr)

Insights on Overreach

There are a couple of insights to be gleaned from this unusually aggressive case of policy overreach.

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

Saudi Arabia Will Cap The Oil Price Rally

April 26, 2019

Saudi Arabia Will Cap The Oil Price Rally

The US said on Monday that it won’t extend the sanctions waivers for eight countries importing crude oil from Iran. The move could remove around 1.1 million barrels per day from the market.

Although Rystad Energy anticipated a further tightening of sanctions, the details in the announcement have led us to revise our forecast downward for Iranian crude production.

Rystad Energy forecasts that production will drop to 2.27 million bpd for the second half of 2019, reaching this level by July 2019, which equates to a drop of 0.43 million barrels per day (bpd) from current March 2019 levels.

The net effect for the oil market is bullish, as the market will lose more supply from Iran, mostly of medium-sour and heavy-sour quality.

“However, Saudi Arabia and several of its allies have more replacement barrels than what would be lost from Iranian exports in a worst case scenario. This should limit the positive impact on crude prices,” says Rystad Energy Head of Oil Market Research, Bjørnar Tonhaugen.

“Since October 2018, Saudi Arabia, Russia, the UAE, and Iraq have cut 1.3 million bpd, which is more than enough to compensate for the additional loss. However, realistic spare capacity will be cut significantly, reducing room for error in Libya, Nigeria, and Venezuela,” Tonhaugen added.

Rystad Energy says that Iranian crude exports have dropped from around 2.5 million bpd in April 2018 to around 1.1 million bpd currently.

“In our new base case, we no longer expect India to buy Iranian oil after May 2019, and now only expect China and Turkey to continue purchasing Iranian cargoes. We lower our Iranian crude exports estimate from 900,000 bpd to 600,000 bpd from May 2019 onwards, allocating around 500,000 bpd of exports to China and the remainder to Turkey,” Tonhaugen remarked.

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

Saudi Oil Minister: We Won’t Ramp Up Oil Production Soon

April 24, 2019

Saudi Oil Minister: We Won’t Ramp Up Oil Production Soon

Saudi Arabia plans to stay within the limits of its ceiling under the OPEC+ production cut deal in May and will certainly not rush to ramp up production, although it would respond to customer needs if they want more oil, Saudi Energy Minister Khalid al-Falih said on Wednesday.

As the U.S. announced on Monday that it would be ending sanction waivers for all Iranian oil customers, the Trump Administration said that it “had extensive and productive discussions with Saudi Arabia, the United Arab Emirates, and other major producers to ease this transition and ensure sufficient supply.”

While the U.S. and President Trump appear certain that Saudi Arabia would compensate for Iranian losses, the Kingdom seems reluctant to start swiftly raising production before seeing actual figures for how much Iranian oil will actually be lost and how tight the market will be.

Saudi Arabia’s oil production in May is pretty much set and will differ “very little” from previous months, Reuters quoted al-Falih as saying in Riyadh today.

Last month, OPEC’s de facto leader and largest producer Saudi Arabia followed through its commitment from February to cut deeper and pump well below 10 million bpd in March. Saudi Arabia’s crude oil production dropped by a massive 324,000 bpd from February to stand at 9.794 million bpd in March—just as al-Falih had said the Kingdom would do. Saudi Arabia pumped around 9.8 million bpd in March, some 500,000 bpd below the 10.311-million-bpdcommitment in the OPEC+ deal.

Speaking today, al-Falih said, as carried by Reuters:

“Inventories are actually continuing to rise despite what is happening in Venezuela and despite the tightening of sanctions on Iran. I don’t see the need to do anything immediately.”

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

Iran Threatens To Close Strait Of Hormuz If US Blocks Its Oil Exports

April 22, 2019

Iran Threatens To Close Strait Of Hormuz If US Blocks Its Oil Exports

With oil surging to a six month high after a now confirmed report that Trump will not reissue Iranian oil export waivers after they expire on May 2, removing up to 1 million barrels from the market…

… Tehran has gone on the offensive and on Monday a senior Iranian military official said the Islamic Republic will close the Strait of Hormuz if it’s prevented from using it, the state-run Fars news agency reported.

“The Strait of Hormuz based on international law is a waterway and if we are prevented from using it, we will close it,” Reuters reported, citing Alireza Tangsiri, head of the revolutionary guards navy force.

Separately, the semi-official Tasnim news agency on Monday quoted an unnamed Iranian oil ministry source as saying that “whether the waivers continue or not, Iran’s oil exports will not be zero under any circumstances unless Iranian authorities decide to stop oil exports … and this is not relevant now.” The source added that “we have been monitoring and analyzing all possible scenarios and conditions for the advance of our country’s oil exports, and necessary measures have been taken … Iran is not waiting for America’s decision or the lack of it to export its oil. We have years of experience in neutralizing efforts by enemies to strike blows against our country.”

* * *

To be sure, this is not the first time Iran has made such a threat: back in December Iran warned it would close the global oil chokepoint, when it said that “if someday, the United States decides to block Iran’s oil (exports), no oil will be exported from the Persian Gulf.”

President Rouhani’s December threat had been welcomed by hardline clerics and military officials, including Gen. Qassem Soleimani, the commander of the Revolutionary Guard’s elite Quds Force.

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

Reuters: OPEC’s Oil Production Drops To Lowest Since 2015

April 1, 2019

Reuters: OPEC’s Oil Production Drops To Lowest Since 2015

OPEC’s oil production in March 2019 fell to its lowest level since February 2015, as Saudi Arabia cut more than it had pledged under the output cut deal and Venezuela continued to struggle amid U.S. sanctions and a major blackout, the monthly Reuters survey showed on Monday.

The combined production of all 14 OPEC members stood at 30.4 million bpd last month, down by 280,000 bpd compared to February and the lowest level of OPEC production since February four years ago, according to the survey.

Production in March beat the previous four-year-low record of the cartel’s oil production from February 2019. As per Reuters survey last month, OPEC’s oil production fell by 300,000 bpd in February compared to January to stand at 30.68 million bpd.

The figures in the survey for March suggest that Saudi Arabia continues to over-deliver in its share of the cuts, as it has promised multiple times since the new OPEC+ deal began in January 2019.

Under the OPEC/non-OPEC agreement for a total of 1.2 million bpd cuts between January and June, Saudi Arabia’s share is a cut of 322,000 bpd from the October level of 10.633 million, to reduce output to 10.311 million bpd.

The rate of compliance from the eleven OPEC members bound by the pact—with Iran, Venezuela, and Libya exempted—also suggests that the Saudis and their Arab Gulf partners are deepening the cuts.

The eleven OPEC members with quotas had a combined compliance of 135 percent in March, surging from 101 percent in February, according to the Reuters survey tracking supply to the market and based on shipping data and information provided by sources at oil companies, consulting firms, and OPEC.

The survey did not provide figures for the Saudi production, but estimated that exempt Venezuela—under U.S. sanctions and suffering from a major power blackout in March—saw its oil production plummet by 150,000 bpd in March compared to February.

Response to US global bullying: Iran, India ditch dollar to continue trading oil despite sanctions

January 15, 2019

Response to US global bullying: Iran, India ditch dollar to continue trading oil despite sanctions

In an effort to circumvent US-imposed sanctions, India and Iran have reportedly ditched the US dollar and are trading oil in rupees. The reason becomes clear after considering the dynamics at play in the region.

In mid-February last year, Iranian President Hassan Rouhani visited India, and the two countries signed nine agreements signalling a strengthening of ties. Indian Prime Minister Narendra Modi appeared to celebrate the growing relationship, stating that it was “a matter of great pleasure” for India that an Iranian president came to India “after a gap of 10 years.”

Fast-forward a few months later, and then-UN ambassador Nikki Haley was bluntly telling India that they should rethink their relationship with Tehran.

Donald Trump’s decision to rip up the Joint Comprehensive Plan of Action (JCPOA) last year, also known as the Iranian nuclear accord, was a particularly significant blow to Iran-India relations. At the time the JCPOA was formulated, Indian officials believed the deal to be the “best deal available.” After the JCPOA’s implementation in 2016, exports of Iranian oil to India increased by more than 110 percent.

Maybe the issue isn’t always that Washington wants to contain its rivals in the Middle East and Asia, but perhaps there is a chance that it also wants to keep a lid on its so-called allies as well. Right now, India is the third largest oil consumer in the world, and is expected to become the largest by the year 2040. As its domestic reserves are not meeting the needs of its rapidly expanding economy, India has been importing 80 percent of its oil supply from overseas, including and especially Iran.

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

All-Time Low Spare Capacity Could Send Oil To $150

August 16, 2018

All-Time Low Spare Capacity Could Send Oil To $150

While the oil market and analysts are trying to guesstimate how much Iranian oil the U.S. sanctions will stifle later this year, they all agree that the return of the sanctions is the market’s key bullish driver as well as the largest ‘known unknown’ for oil prices later this year and into 2019.

Some ultra-bullish hedge funds think that the U.S. sanctions will remove much more than 1 million bpd of Iranian oil from the market. Considering the low spare capacity for a quick ramp-up of production elsewhere, some hedge fund managers expect oil prices to jump to as high as $150 a barrel in 18 to 24 months.

“Our view is that by November 4, we will have lost between 1.3 and 1.4 million barrels [of output] a day. It is a very big number. That’s based on the view that the U.S. will allow a few temporary exception waivers,” Jean-Louis Le Mee, CEO at London-based Westbeck hedge fund told Reuters. “Ultimately, we could see losses from Iran exceed 2 million barrels a day,” Le Mee said.

According to Pierre Andurand, who manages the US$1.2-billion Andurand Commodities Fund, the world’s spare capacity is at its lowest ever, and this will be a real issue with global oil supply.

Replying to one of President Trump’s tweets blaming OPEC for the “too high” oil prices, Andurand said in mid-June that “OPEC has the lowest spare capacity ever right now. There is going to be a real issue. Prices will be above $150 in less than 2 years. Eventually higher prices will bring more supply. But right now too little supply coming over the next few years despite US supply growth.”

Generalist investors don’t have such bullish views, but “this is going to catch everybody by surprise,” Westbeck’s chief investment officer Will Smith told Reuters.

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

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