No war between China and Malaysia

The mere mention of the South China Sea these days conjures up an image of confrontation between China and rival claimants, military or otherwise. So many heads were turned following a leak of a diplomatic note from China to the Malaysian Embassy in Beijing calling on Kuala Lumpur to stop all drilling in the South China Sea. But we should not deduce that the Sino-Malaysian relationship is about to go south, argues Phar Kim Beng.

This is for several reasons, such as the two sides having developed the necessary channels of communication to handle friction, and that Malaysia has been the coordinator of the China-ASEAN relationship since last August.

This is illustrated by Malaysian Prime Minister Anwar Ibrahim taking to using the word "discussion" to replace "negotiation" with China. While this does not hint at any short or long term solutions, neither is it a sign of China and Malaysia engaging in a war of words, let alone their militaries coming to blows.

World leaders congratulate Pezeshkian

Iran’s newly elected president, Masoud Pezeshkian, has received warm congratulatory messages from across the world, including the leaders of neighboring countries and prominent international organizations.

They have called for strengthening relations and cooperation with the Islamic Republic on global and regional issues.

Putin praises “constructive” ties 

Russian leader Vladimir Putin congratulated Pezeshkian on his victory in the presidential runoff and attached significance to the improvement of ties with Iran. 

"I hope that your activity as president will facilitate the further boosting of constructive bilateral cooperation on all tracks to benefit our friendly peoples, in the interests of easing regional security and stability," he said in a statement published on the Kremlin website. 

The Russian president said Moscow and Tehran "efficiently coordinate efforts in resolving the pressing issues of the international agenda".

Addressing Pezeshkian, he said in the statement, "I wish you success, good health and prosperity."

Both Iran and Russia have been targeted by stiff Western sanctions. 

Xi commends strategic mutual trust

The Chinese president issued a similar message. 

"I attach great importance to the development of China-Iran relations and am willing to work with the President to lead the China-Iran comprehensive strategic partnership towards deeper advancement," state news agency Xinhua cited Xi Jinping as saying.

Xi added that Iran and China "have a long history of friendly exchanges, and bilateral relations have maintained healthy and stable development... for over half a century."

He also highlighted strategic partnership between Tehran and Beijing. 

"Faced with complex regional and international situations, China and Iran have always supported each other, worked together and continued to consolidate strategic mutual trust. This has not only brought benefits to our two countries' peoples, but has also made active contributions to promoting regional and world peace and stability," the Chinese president said.

Saudi Arabia demands stronger ties  

Saudi Crown Prince Mohammed bin Salman called for promoting ties with Iran as he congratulated Pezeshkian after winning the presidential election run-off.

“I affirm my keenness on developing and deepening the relations between our countries and people and serve our mutual interests,” Saudi Arabia’s state news agency, SPA, quoted bin Salman as saying.

Last year, a China-brokered deal saw Riyadh and Tehran re-establish diplomatic relations after years of tensions. The two Persian Gulf countries have since increased regular contact in an effort to bolster ties.

Iraq seeks closer ties 

The Iraqi president wished Pezeshkian success in his duties and in “fulfilling the ambitions and aspirations or the Iranian people”.

“We affirm our keenness to strengthen relations between Iraq and Iran in a way that serves the interests of the two neighboring countries and peoples,” Abdul Latif Jamal Rashid said in a message to Iran’s president-elect. 

Senior Iraqi Shia leader Ammar al-Hakim, a former leader of the Islamic Supreme Council of Iraq and current head of the National Wisdom Movement, also sent congratulations and expressed hope that Pezeshkian can help resolve regional differences.

Other Persian Gulf Arab leaders, including Emir Sheikh Tamim bin Hamad Al Thani of Qatar, Sultan Haitham bin Tariq Al Said of Oman and Sheikh Mishal al-Ahmad al-Jaber al-Sabah of Kuwait also extended their congratulations to the Iranian president-elect. 

Pakistan pushes for closer relations 

The Pakistani prime minister called for efforts to “ensure a bright future” for the two neighbors. 

“Heartiest congratulations to my brother Dr. Massoud Pezeshkian on his victory in Iran's presidential elections! I look forward to working closely with President-elect Dr. Pezeshkian to further strengthen Pakistan-Iran bilateral ties & promote regional peace & stability. As neighboring countries, Pakistan & Iran enjoy a close & historic relationship.

We must ensure a bright future for our two peoples through mutually beneficial cooperation’” Shehbaz Sharif wrote in a post on X, formerly known as Twitter. 

The Pakistani president also hoped that Tehran-Islamabad relations will grow under the Pezeshkian presidency.

“Pakistan looks forward to working together with Iran for the peace and prosperity of the region,” Asif Ali Zardari said. 

India hails long-standing relationship 

The prime minister of India also extended his congratulations to the newly elected Iranian president.

“Congratulations @drpezeshkian on your election as the President of the Islamic Republic of Iran. Looking forward to working closely with you to further strengthen our warm and long-standing bilateral relationship for the benefit of our peoples and the region,” Narendra Modi said in a post on X. 

South Korea wishes Iran prosperity 

In East Asia, South Korea expressed hope for improving relations between Tehran and Seoul.  

“We wish Iran a path of prosperity and development under the new government, contributing constructively to regional stability. We look forward to further enhancing our friendly relations with Iran,” South Korea’s Foreign Ministry said in a statement.

Malaysia urges fruitful collaboration 

The Malaysian prime minister said in a message to Pezeshkian that the outcome of Iran’s election reflects the vibrant spirit of Iranian democracy and heralds a promising future for the country.

Datuk Seri Anwar Ibrahim said with its rich and ancient civilization, Iran occupies a unique and prominent place in world history, and the potential for Malaysia-Iran relations is immense and filled with promise.

“We look forward to strengthening our bilateral mechanisms to deepen and broaden cooperation between the two countries. We are committed to collaborating on international platforms such as the Organization of Islamic Cooperation (OIC), the Non-Aligned Movement (NAM) and the Developing-8 (D8),” the Malaysian leader said. 

“I look forward to welcoming Pezeshkian to Malaysia at the earliest opportunity,” he said.

Syrian president hails strategic relationship 

In Syria, President Bashar al-Assad expressed hope in a message to Pezeshkian that Tehran and Damascus will cement their “strategic” ties. 

“We will work with you to boost the Syrian-Iranian strategic relationship and open new promising horizons for bilateral cooperation as resistance will remain the common approach that we follow in order to preserve the pride of our countries and defend the interests of their peoples,” al-Assad said.

The Syrian president added in his message, “Your country, which is impregnable as it has always been, is one of the most important countries with which we are keen to ensure that the relationship is at its peak because this relationship is based on roots established through decades of mutual respect, common understanding and firm principles to which Syria and Iran have always adhered.”

Aliyev invites Pezeshkian to visit Azerbaijan

Azerbaijan’s president extended an invitation to Pezeshkian to visit his country.  

“I heartily congratulate you on your election as the President of the Islamic Republic of Iran. I invite you to pay a visit to Azerbaijan to exchange views on the prospects for development of our bilateral cooperation,” Ilham Aliyev said in a letter to the Iranian newly elected president. 

He also threw a spotlight on friendly ties between Iran and Azerbaijan. 

“We attach great importance to the relations between the Republic of Azerbaijan and the Islamic Republic of Iran built on solid foundations such as common religious and cultural roots, friendship and brotherhood. Today, the agreements reached on the future development areas of Azerbaijan-Iran relations based on mutual respect and good neighborliness and the implemented joint projects serve the well-being of our countries, the sustainable development and security of the region as a whole,” he said. 

Armenia PM hails warm, friendly ties 

The Armenian premier also called for deepening bilateral relations in a congratulatory message to Pezeshkian. 

"Relations with the brother country of the Islamic Republic of Iran are of special importance for the government and people of the Republic of Armenia, which has been continuously developing since the declaration of independence of Armenia," Nikol Pashinyan said.

"Continuous deepening of warm relations between Armenia and Iran in the field of bilateral cooperation and stability and prosperity of the region is of particular importance," he added.

"I am confident that with the joint efforts of our governments, the agreements reached between the Republic of Armenia and the Islamic Republic of Iran will be implemented and we will jointly implement a number of new programs for the welfare of the friendly people of Armenia and Iran," Armenia’s prime minister concluded. 

Venezuela calls for confronting hegemony 

Venezuela hailed Iran for its “commitment demonstrated to democracy” during the two rounds of elections.

“Venezuela expresses its conviction that the decision made by the Iranian people will contribute to the prosperity of this nation, as well as its consolidation as an emerging power in the nascent multipolar world,” Venezuela’s foreign minister said. 

Yvan Gil said Pezeshkian will have the “absolute support” of Venezuelan President Nicolas Maduro and his government with the aim of expanding relations and continuing to defeat “the hegemonic pretensions that threaten multilateralism and world peace”.

Iran and Venezuela signed a 20-year strategic cooperation plan in 2022 in Tehran.

Both countries have been under US sanctions.

Lukashenko urges strategic partnership 

Belarusian President Alexander Lukashenko said in a congratulatory message to Pezeshkian that he is convinced the two countries will promote ties.  

“The dialogue between Minsk and Tehran at all levels is steadily expanding. I am convinced that in the near future we will be able to implement all the agreements reached, including those on raising the level of the Belarusian-Iranian relations to a strategic partnership,” Lukashenko said. 

Serbia sends message of hope 

The Serbian President also congratulated Iran’s president-elect.

“Sincere congratulations to Iranian President 

@drpezeshkian. Your victory reflects citizens' trust in your vision for the future, dedication to peace, and desire for your country's progress. I am confident that your leadership will bring prosperity and well-being to your people,” Aleksandar Vucic said in a post on X. 

SCO “committed to working with Iran” 

 The Shanghai Cooperation Organization (SCO) is among international organization that congratulated Pezeshkian on his election as Iran’s president. 

“The Shanghai Cooperation Organization is committed to working with Iran to jointly achieve sustainable development as the main guarantor of global stability, ensuring regional security and a mechanism for equality,” Zhang Ming, the organization’s secretary general, said in his congratulatory message. 

The Shanghai Cooperation Organization, an intergovernmental entity formed in 1996 by the leaders of China, Russia, Kazakhstan, Kyrgyzstan, and Tajikistan, aims to foster multilateral security, economic, and political cooperation. 

Iran's membership was initially agreed upon during late President Ebrahim Raisi's visit to Dushanbe, Tajikistan, on September 17, 2021, and later ratified by the Iranian parliament on November 27, 2022. The formal announcement of Iran's membership occurred during a virtual summit of SCO heads of state on July 4, 2023.

 

Malaysia to build port near Kuala Lumpur

Malaysia intends to build a new container port along the western coast of the Malay Peninsula facing the Malacca Strait, one of the world's busiest sea lanes, as the country prepares to capture logistics demand created by global supply chain shifts.

The estimated 2 billion ringgit (US$425 million) port will utilize artificial intelligence to improve operational efficiency, becoming the first port in Malaysia to do so. Local property developer Tanco Holdings, through its subsidiary Midports Holdings, will lead the development in collaboration with China-based marine engineering company CCCC Dredging Co., a group company of state-owned China Communications Construction Co.

The parties signed a memorandum of understanding earlier this month.

According to an announcement, the port will be developed in the city of Port Dickson, in the state of Negeri Sembilan. Close to Kuala Lumpur and the midpoint of the Malacca Strait, it could benefit from high traffic and connectivity to key industrial regions in Malaysia.

"The construction of this port will contribute to Malaysia's goal of establishing a modern and efficient port hub, accelerating economic development in Negeri Sembilan, and bolstering Malaysia's global trade position," Tanco Group Managing Director Andrew Tan Juan Suan said in a statement.

"This collaboration with CCCC Dredging marks a pivotal step towards realizing our vision of a world-class port in Port Dickson. The expertise and resources brought by CCCC Dredging will ensure the successful implementation of this project, which is set to drive economic growth and create job opportunities in the region."

The proposed port will feature a 1.8-kilometer jetty, terminal and container operation area of approximately 809,300 sq. meters. It will be able to accommodate the largest container ships, according to Negeri Sembilan Chief Minister Aminuddin Harun, as cited in a report by Malaysian national news agency Bernama.

The companies have yet to announce an expected completion date.

As global companies diversify their supply chains, Malaysia has emerged as a beneficiary, attracting investments from electronics and other manufacturers. Klang Port, the country's largest, plans to double its capacity to capture demand, operator Westports Holdings recently told Nikkei Asia.

Aminuddin said the new port could greatly boost the nation's logistics and marine transport services industry, as a network of roads and highways will connect it to major industrial areas.

According to the announcement, AI technology will enhance the port's operational efficiency, reduce human error and lower the accident rate. The AI system will analyze traffic data, schedule ship movements, track marine operations around the port and manage automated logistics.

These advancements are anticipated to streamline processes, reduce operational costs and minimize environmental impact. The port will also feature automated cranes, self-driving trucks and top-tier cybersecurity measures with the capacity to receive large container ships, according to the announcement.

 

Workers migration from Bangladesh to Malaysia declines

According to The Bangladesh Chronicle,, workers migration from Bangladesh to Malaysia fell dramatically in the past months following Malaysia’s suspension of issuing electronic visas for aspiring migrants amid huge allegations of irregularities.

Malaysia kept hiring Bangladeshi workers suspended between September 2018 and August 2022 due to huge irregularities in the migration process on both sides.

The Southeast Asian country was the second top destination for Bangladeshi migrants after the Kingdom of Saudi Arabia in 2023. 

While 351,683 Bangladeshis migrated to Malaysia in 2023, only 20,467 people migrated in the past two months.

Only 1,278 people migrated in the first 12 days of March, according to Bureau of Manpower, Employment, and Training data.

Migration experts said that Malaysia had suspended issuing electronic visas as allegations of syndicated market manipulation resurfaced.

State minister for expatriates’ welfare and overseas employment, Shofiqur Rahman Choudhury, said that the government was working to solve the problems.

‘We are trying to identify problems and find solutions,’ he said, adding that the government targeted sending more workers, giving skilled workers a priority. In the Malaysian system, a calling visa is needed to secure a job and complete the process, while an electronic visa is needed to enter the country.

The calling visa or demand note is issued by companies, while the authorities issue electronic visa.

Bangladesh Association of International Recruiting Agencies former secretary general Shameem Ahmed Chowdhury Noman said that over 40,000 people still have the calling visas but could not fly due to not getting electronic visas.

Experts said that the number of people having calling visas would be no less than 300,000.

Migration rights activists and sector insiders estimated that some 100,000 Bangladeshi workers could not manage any jobs in Malaysia, while many others were engaged in forced labour and remained underpaid or unpaid.

Andy Hall, a migrant rights activist and researcher in Malaysia, said that many foreign workers from different countries were facing the same exploitation in Malaysia, but it was acute in the case of Bangladeshi workers.

He explained that migrant workers became forced Workers and sometimes trafficking victims.

He said that workers were confined to locked shelters, their passports were confiscated, they were not given meals, and their movement was prohibited.

Andy said that many fake companies issue calling visas even though they do not need workers. When workers finally come, they send them to other companies for low-paid jobs.

Mofazzel Hossain from Meherpur said that he paid over Tk 400,000 as recruiting agency Musa International’s proprietor, Mohammad Musa Kalim, promised him to employ his son Taimur Zaman Nayan as a factory worker with a monthly pay of Tk 60,000.

‘When I talked to him last time, he wanted some money to buy food, but I did not know how to send the money,’ said Mofazzel, who filed a case against recruiter Musa and five others with the Gangni police station on February 27 seeking justice.

No one has been arrested so far in the case, according to the police.

Musa did not respond to phone calls or messages from New Age.

On February 26, Malaysia’s Home and Human Resource Ministry declared in a press statement that they had launched an investigation into the non-employment of 93 Bangladeshi workers in Cheras.

On March 8, Malaysian home minister Datuk Seri Saifuddin Nasution Ismail told The Star newspaper that foreign workers must enter the country by May 31.

He also asked valid employers to issue calling visa directly instead of through a syndicated server.

Shakirul Islam, chairman of the Ovibashi Karmi Unnayan Program, said that the aspirant migrants would bear the brunt of the sudden closure of the market, while recruiters, who already took money from aspirant migrants, would benefit.

‘Government agencies of both countries must bring the culprits to book,’ he said, adding that the Malaysian and Bangladeshi governments must ensure jobs for workers who are already there.

Officials at the expatriates’ welfare ministry said that they had already listed some recruiting agencies involved in unethical migration to Malaysia and restricted their activities.

 

Malaysia bans Israeli-linked shipping

Malaysian government announced on Wednesday imposition of a ban on all Israeli owned and flagged ships, as well as any vessels headed to Israel, from docking at its ports.

The announcement by Prime Minister Anwar Ibrahim’s office said the ban would take place with immediate effect and was in response to Israel’s conduct in its conflict with Hamas.

“This sanction is a response to Israel’s actions that disregard the basic humanitarian principles and violate international law through the ongoing massacre and continuous cruelty against the Palestinian people,” the statement read.

Muslim-majority Malaysia has long championed Palestinian rights and causes. Like Indonesia, Brunei, Bangladesh, the Maldives and Pakistan, it does not recognize Israel.

The ongoing bombardment of Gaza by Israel’s military has sparked mass rallies in Malaysia and put domestic political pressure on Anwar.

Anwar remains one of the most outspoken world leaders against Israel as well as its backers in the United States, although the latter remains a major trading partner.

In a parliamentary speech made in November, Anwar said that the government would maintain ties with Hamas and would not punish the group.

Malaysian passports also bear the inscription “Valid for all countries except Israel.” Israeli passport holders are forbidden to enter Malaysia without prior permission.

In its statement, the Malaysian government said Israeli-registered companies and ships had been previously allowed to dock in the country since 2005. “However, the government today has decided to override the past Cabinet’s decision to not allow ships using Israeli flags to dock in the country.”

The statement on Wednesday also singled out the Israel-based global shipping company ZIM. Its vessels have been docking in Malaysia since 2002, the statement said.

In addition, Malaysia has also imposed a ban on any ship that is heading to Israel from loading cargo at Malaysian ports.

Palm oil glut to impact producing countries

According to Nikkei Asia, weak prices for palm oil are pushing Indonesia and Malaysia - two of the world's biggest producers to boost domestic use through developing jet fuels and expanding biodiesel programs.

Widely used in Indonesia for cooking oil and applications such as personal care and cleaning products, palm oil is an important sector in Southeast Asia's largest economy with the industry employing millions of workers. Indonesia is the world's largest exporter and it is the country's top export commodity, apart from coal. Palm oil is similarly important in neighboring Malaysia, the world's second-largest producer and exporter.

The benchmark crude palm oil (CPO) price in Malaysia ranged from 3,500 ringgit (US$755) to 4,200 ringgit per ton between January and June. That is compared to the all-time high in April 2022 of almost 7,000 ringgit per ton, following the launch of Russia's invasion of Ukraine, which sent prices of all edible oils skyrocketing. That run-up in prices for palm oil, traditionally the cheapest among vegetable oils, was a continuation of one caused by pandemic-related disruptions since late 2020.

"Elevated inventories in India and mainland China, an expected increase in global soybean production through the 2023-24 season, and the upcoming September-October period of peak palm fruit yields - all point to downward pressure on prices through the remainder of 2023, BMI, a research unit of Fitch Group, said in an August 15, 2023 note.

"Through the medium term, it remains our view that average annual palm oil prices will continue to ease."

BMI forecast an average price of 3,800 ringgit per ton for Bursa Malaysia-listed third-month palm oil futures contracts in 2023, down from the average of 4,910 per ton last year. It also forecast prices will continue to fall, reaching 2,400 ringgit a ton in 2027 -- on par with a five-year pre-COVID pandemic average of close to 2,420 ringgit per ton.

The declines have hurt incomes of major palm oil producers after many enjoyed record profits in 2021 and 2022.

In Malaysia, state-owned conglomerate Sime Darby Plantation reported that second-quarter net profit fell by 54% to 380 million ringgit from the same period in 2022. FGV Holdings, also government linked, saw its plantation sector plunge 97% to 13.76 million ringgit, mainly due to the lower average CPO price compared to the previous year and on top of lower CPO sales and 37% higher CPO production costs.

In Indonesia, net income at top producers Sinar Mas Agro Resources and Technology, Astra Agro Lestari and Salim Ivomas Pratama declined 85%, 54% and 71%, respectively, in the first half of 2023, to 284.3 billion rupiah ($18.7 million), 367.6 billion rupiah and 128.4 billion rupiah.

Political issues also weigh on producers. A European Union regulation on deforestation-free supply chains entered force on June 29, 2023. S&P Global said in August that combined with the EU's renewable energy directive, which limits the use of palm oil for biofuel in EU markets starting in 2030, the new law is "seen as another layer of restrictions by palm oil producing countries."

Indonesia and Malaysia account for about 85% of global palm oil trade while the EU is typically the third largest importer after China and India. Indonesia, Malaysia and the EU have reportedly agreed to form an ad hoc task force to hash out issues related to the implementation of the deforestation regulation.

To deal with the market and political pressures, Jakarta and Kuala Lumpur are seeking new ways to utilize the commodity.

State-owned airline Garuda Indonesia in August announced the start of a static test on a "sustainable aviation fuel," or "bioavtur," on an engine used in its Boeing B737-800 NG fleet, with ground and flight tests to follow. Garuda's bio jet fuel is jointly developed by Indonesian state oil company Pertamina and the Bandung Institute of Technology.

Also last month, Indonesia expanded its mandatory B35 biodiesel program -- produced by Pertamina -- nationwide, after a partial introduction in February. B35 has a higher palm oil content in the diesel mix than the B30 launched in early 2020. Indonesia is next targeting B40 for 2030.

Indonesia is pushing the biodiesel program expansion as palm oil prices have fallen from the record highs. Malaysia is also exploring its own biofuel efforts.

The Malaysian Palm Oil Board and state energy giant Petronas signed an agreement in August to study using cooking oil and palm oil waste as sustainable aviation fuel. In the second phase of the National Energy Transition Roadmap launched late last month, the government included a B30 biodiesel mandate on heavy vehicles by 2030 after rollout by 2025.

Yusuf Rendy Manilet, economist at Indonesian think tank Center of Reform on Economics, sees Indonesia's biofuel policy as ultimately viable. 

"The government's goal is to reduce dependency on imports of oil by leveraging biofuels in order to improve the trade balance," Manilet told Nikkei Asia. "In the long run, with more biofuels becoming available and oil imports reduced ... fuels will become more affordable and lead to improving purchasing power."

BMI said increasing biofuels uptake could pose a "major upside risk" to its price outlook for edible oils overall. "An increase in the rate of diversion of palm oil to the manufacture of blended biofuels -- or, the greater diversion of alternative edible oils, such as soy oil, to biofuels - would tighten the supplies of edible oils for food consumption."

It added that the developing El Nino weather phenomenon, marked by drier and hotter weather in Southeast Asia, poses another major upside risk to its palm oil price outlook over the next 12 to 18 months -- although "much depends on the eventual strength of the El Nino event itself."

BMI said the 2014-16 El Nino, one of the most severe of modern times, led to double-digit annual declines in percentage terms for crop yields in both Malaysia and Indonesia over the 2015-16 season -which resulted in palm oil prices rising by 1,000 ringgit per ton during the period.

Britain to join trans-Pacific trade pact

Britain on Sunday formally signed the treaty to join a major trans-Pacific trade pact, becoming the first country to take part since its inception in 2018 and opening the way for members to consider other applications including from China and Taiwan.

The signing was part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) commission meeting being held in New Zealand.

Ministers from member countries will meet later on Sunday to discuss a range of topics, including how to move forward with new applications and a review of the agreement itself.

Britain's Business and Trade Secretary, Kemi Badenoch said at the signing that her country was delighted to become the first new member of the CPTPP.

"This is a modern and ambitious agreement and our membership in this exciting, brilliant and forward looking bloc is proof that the UK's doors are open for business," Badenoch said.

The British government still needs to ratify the agreement.

The CPTPP is a landmark trade pact agreed in 2018 between 11 countries including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

Britain will become the 12th member of the pact that cuts trade barriers, as it looks to deepen ties in the Pacific after its exit from the European Union in 2020.

China, Taiwan, Ukraine, Costa Rica, Uruguay and Ecuador have also applied to join the CPTPP.

New Zealand Prime Minister Chris Hipkins said the road to bringing Britain into the agreement had been long and at times challenging, but having major economies inside the partnership would bring the Atlantic to the Indo-Pacific in a way that strengthened the rules-based trading system in the region.

 

 

Indonesia seizes Iranian flagged tanker

Indonesian coast guard said on Tuesday it seized an Iranian-flagged supertanker suspected of involvement in the illegal transshipment of crude oil, and vowed to toughen maritime patrols.

The MT Arman 114 was carrying 272,569 tons of light crude oil, valued at US$304 million, when it was seized last week, the Indonesian authorities said.

The Very Large Crude Carrier (VLCC) was suspected of transferring oil to another vessel without a permit on Friday, the Southeast Asian nation's maritime security agency said.

The vessel was captured after being spotted in Indonesia's North Natuna Sea, carrying out a ship-to-ship oil transfer with the Cameroon-flagged MT S Tinos, the agency's chief, Aan Kurnia, said.

"MT Arman was spoofing their automatic identification system (AIS) to show its position was in the Red Sea but in reality it was here," Aan told reporters.

"So it seems like they already had a malicious intent," Aan said, adding that the vessel also dumped oil into the ocean, in violation of Indonesia's environmental law.

The vessels' operators could not be immediately reached for comment.

Along with the Arman, authorities detained its Egyptian captain, 28 crew and 3 passengers, who were the family of a security officer on board, the agency said.

After the two supertankers attempted to escape, authorities focused their pursuit on Arman, assisted by Malaysian authorities as the vessel sailed into their waters, Aan said.

The Tinos was supposed to have been scrapped in 2018, he added. It was built in 1999 while the Arman was built in 1997, according to shipping database Equasis.

The "shadow" fleet of tankers carrying oil from sanctioned Iran, Russia and Venezuela has been transferring cargoes in the Singapore Strait to avoid detection, a Reuters analysis showed this year.

The risk of oil spills and accidents is growing as hundreds of extra ships, some without insurance cover, have joined the opaque parallel trade over the past few years.

Aan vowed that Indonesia's coast guard, assisted by other authorities, would strengthen patrols in its waters. Indonesia is the world's largest archipelago, with about 17,000 islands.

"We have to be firm, tough," he said. "There has to be a deterrent effect so it will not happen again."

In 2021, Indonesia seized Iranian- and Panamanian-flagged vessels over similar accusations. The captains of the two vessels received two-year probation from an Indonesian court.

 

Venezuela oil export surpasses 700,000 barrels

Venezuela's oil exports in June rose 8% from the previous month to above 700,000 barrels per day (bpd), fueled by the restart of a key crude processing unit and faster approvals for cargoes departing its shores, according to shipping data and documents from state oil company PDVSA.

Exports by PDVSA and its joint ventures declined earlier this year as an extensive audit of oil sales temporarily froze most supply contracts and led to delays authorizing vessel departures.

Second quarter shipments flowed with less hiccups with US oil major Chevron consistently increasing Venezuelan crude exports to the US under a license extended by Washington, and with PDVSA renewing other contracts and signing new supply deals.

A total of 37 cargoes departed Venezuelan ports in June carrying 715,933 bpd of crude and refined products, and 294,000 metric tons of oil byproducts, according to the data and documents.

The main destination of Venezuelan exports, directly and through trans-shipments hubs like Malaysia, was China. Chevron's exports fell slightly to some 134,000 bpd from 150,000 bpd in May, while deliveries to ally Cuba rose to some 75,000 bpd last month, compared with 58,000 bpd in May.

Iranian companies received about 131,000 bpd of crude and fuel oil last month as part of a swap agreement that also allowed PDVSA to discharge 2.1 million barrels of Iranian condensate in recent weeks. Separately, Chevron supplied its joint ventures with a 450,000 barrel cargo of US heavy naphtha, the shipping data showed.

Venezuela's oil exports averaged 670,000 bpd in the first half of the year, almost 15% above the 585,000 bpd of the same period of 2022.

A 150,000-bpd crude upgrader operated by PDVSA and Russian state firm Roszarubezhneft restarted operations in mid-June following a December fire that caused extensive damages, one of the documents showed. The unit turns extra heavy oil into exportable grades.

The Petromonagas upgrader, which was producing some 73,000 bpd of diluted crude at the end of June, is the fourth oil processing facility now in service in the Orinoco Belt, Venezuela's main oil-producing region. It joined Petrolera Sinovensa, Petropiar and Petrocedeno in processing extra heavy crude. One upgrader remains offline.

PDVSA's inventories of upgraded and diluted crudes from the Orinoco jumped to some 6.1 million barrels at the end of June from 5.8 million barrels in May. But they stood below April's 7.5 million barrels, the documents showed.

 

 

Dark fleet: Creeping anarchy in oceans

The fatal explosion that ripped through the tanker Pablo offshore Malaysia has focused attention on the dangers the ‘dark fleet’ raises for shipping safety, reports Seatrade Maritime News.

It ought to be a red light flashing - an alarm signal alerting both world shipping and its regulators that there is something with the potential to do serious harm to an essential industry already under scrutiny for its environmental record.

The gruesome wreckage of the Aframax Pablo, swinging to its anchor in the South China Sea, ought to be ringing alarm bells, wherever the ‘dark fleet’ of sanction-busting tankers is to be found.

This is the second, albeit far more serious accident (with its three missing crew and multiple injuries) in these busy waters.

Where is the will to stop any of this growing threat to other shipping, coastal states and the global liability and compensation regime?

One does not require a terribly long memory of a period in shipping’s recent history of a time when low maintenance became no maintenance, with fatal consequences. And there is no secret about the risks that are being run by the shadowy figures that have moved into the transport of cargo from Russia, Venezuela and Iran.

At the recent meeting of the IMO Legal Committee, a whole range of doubtful practices were detailed, ranging from the dangers of ship-to-ship transfers of oil in the high seas and other unsuitable locations, to the routine practices of operating with AIS transponders turned off, a fairly conclusive reason for having something to hide.

Even more important and worrying is the age and operational standards of the dark fleet, said to be between 300-600 ships, with overdue inspections, almost certain sub-standard maintenance, opaque ownership and extremely dubious insurance status.

What is particularly worrying is the speed with which this deterioration has arisen and its threat to a well-run system that gave reasonable confidence to the industry players and the regulatory regime.

Is there any will to stop this creeping anarchy, or is it all to be lost in tedious legal arguments about sovereignty and freedom of the seas?

Where is the robust, international and immediate response that will stop this becoming a far worse international scandal that will leach out into the rest of world shipping?

There are flag states, which could just about cope with the registration of time-expired tiny coasters, which now find to their delight they are responsible (one should use this word advisedly), for fleets of elderly VLCCs, hopefully providing them with a delightful uplift in fees.

There are ships which change their identities almost overnight, owned by brass-plate entities of dubious provenance that will disappear in the blink of an eye.

One doesn’t want to even consider the potential for serious criminality and money laundering in this exciting currency of elderly ships.

There are classification societies, “Responsible Organizations” with no technical competence and lucrative business for suppliers of seafarers to run these ships for one-off voyages, about which questions will not be welcomed.

Who will be picking up the pieces after these ships come to grief? Where is the traceability, who might conceivably be liable for the wreck removal, the pollution response, the compensation for the relatives of the dead and the injured.

One might suggest that it is just a phase caused by temporary circumstances like the war and the imposition of sanctions (which have always been problematic). But while it lasts, are innocent others just bound to suffer from the almost automatic evasion of liabilities after the inevitable accidents? Why pay into pollution funds when the evasive…..evade?

It is probably true that there are some parts of the world at more risk than others from the deterioration of the dark fleet over time.

International maritime lawyers might huff and puff but who could possibly blame coastal states from unilaterally banning these ships from their EEZs and if they have appropriate military means, subjecting ships which stray into their seas to proper inspections.

Innocent passage isn’t very innocent when it involves ships with thoroughly suspect credentials, so it should be perfectly legitimate to ask questions, prohibit anchoring or ship-ship transfers.

Do we just sit around and wait for further groundings, collisions, explosions and other calamities, possibly involving a great deal of split oil.

 

Indonesia to suspend palm oil export permits

Indonesia will suspend some palm oil export permits to secure domestic supply amid rising cooking oil prices ahead of upcoming Ramadan, senior cabinet minister Luhut Pandjaitan said on his official Instagram account on Monday.

Palm oil exporters had accumulated large shipment quotas last year and they now had little incentive to supply the domestic market, he said.

Indonesia issues export permits for palm oil companies that have already sold a proportion of their products to the domestic market, under a policy known as Domestic Market Obligation (DMO).

The DMO currently allows export volumes that are six times what companies have sold at home.

"Exporters can use those export rights after the situation has calmed," said Luhut, Coordinating Minister for Maritime Affairs and Investment.

Firman Hidayat, an official at the same ministry, said about a third of existing export quotas could be used now, while the rest could be used after May 01, 2023.

He added exporters were holding around 5.9 million tons worth of export permits at end of January.

Exporters could increase their quota when they raised supplies to the domestic market, he said.

Retailers have complained that cooking oil packages at lower prices have been hard to procure and they have been forced to sell them above the regulated price of 14,000 rupiah (US$0.93) per litre.

The Trade Ministry last month said palm oil companies had been ordered to increase domestic supply to 450,000 tons per month until April, up from roughly 300,000 tons per month previously.

Food prices typically rise ahead of the Islamic month of Ramadan and the Eid al-Fitr celebration which falls in April this year.

Sahat Sinaga, chair of the Indonesia Palm Oil Board, said companies have been holding back exports, due to lower global market prices and high export levies. With little urgency for exports, companies were also not encouraged to meet their DMO.

Malaysian benchmark palm oil prices have fallen more than 40% since reaching a peak last year. Meanwhile, Indonesia resumed imposing export levies in November.

Sahat blamed distributors for the tight supply in the domestic market.

"This is a difficult situation, but everybody must work together. Distributors should not take advantage of the situation," he said.

Rattling global edible oil markets, Indonesia last year banned exports of palm oil used in everything from margarine to cosmetics and fuel for three weeks due to soaring cooking oil prices.

But palm oil prices have since fallen back sharply to stabilize at lower levels as the outlook is now less certain with energy prices off their highs and fears over a global recession.

Malaysia's palm oil futures market was closed on Monday for a public holiday.

Nancy Pelosi sets off on Asia tour

According to South China Morning Post, US House Speaker Nancy Pelosi has begun her anticipated trip to Asia, with her office naming four destinations but making no mention of Taiwan. 

This comes amid more stormy warnings from Beijing amid heightened tensions over her planned visit to the island.

Pelosi, No 3 in the line of US presidential succession, is leading a six-member congressional delegation to Singapore, Malaysia, South Korea and Japan, according to a statement released by her office on Sunday.

The statement skipped any mention of Taiwan, after days of intense speculation about a likely stop there fuelled tensions, with Beijing calling it a provocation and warning Washington against playing with fire.

“In Singapore, Malaysia, South Korea and Japan, our delegation will hold high-level meetings to discuss how we can further advance our shared interests and values, including peace and security, economic growth and trade, the Covid-19 pandemic, the climate crisis, human rights and democratic governance,” the statement quoted Pelosi as saying.

“America is firmly committed to smart, strategic engagement in the region, understanding that a free and flourishing Indo-Pacific is crucial to prosperity in our nation and around the globe,” the 82-year-old Democratic lawmaker said.

Beijing regards Taiwan to be a breakaway province, to be reunited by force if necessary, and warns against any official exchange with the self-governed island.

It earlier said Pelosi’s planned trip to Taiwan was a move to support Taiwan independence, in violation of one-China policy, followed by the United States.

On Thursday, Biden and China’s Xi Jinping spoke on the phone for over two hours. During the call, Biden tried to reassure Xi that US policy towards Taiwan has not changed.

“On Taiwan, President Biden emphasized that US policy has not changed and that the US strongly opposes unilateral efforts to change the status quo or undermine peace and stability across the Taiwan Strait,” an official readout on the White House website said.

After the leaders’ phone call, China’s Foreign Ministry quoted Xi as telling Biden that those who play with fire will perish by it and that they hoped the United States will be clear-eyed about this.

However, Pelosi indicated on Friday that she will be on a trip to Asia, but did not mention Taiwan. “I am very excited if we were to go to the countries that you will hear about along the way,” she said, Reuters reported.

White House spokesman John Kirby said, “Where she (Pelosi) is going to go and what she is going to do is up to the speaker to speak to.”

However, he added that the United States has not observed any signs of a specific military threat from China. “(We have) seen no physical, tangible indications of anything untoward with regard to Taiwan,” Kirby said.

  

Indonesian palm oil export ban sparks concerns in many countries

Reportedly, the prices of all types of edible oils such are expected to rise after Indonesia announced a surprise ban on export of palm oil. Major edible oils are already in short supply due to adverse weather and Russian invasion of Ukraine.

The move by Indonesia to pause exports has placed an extra strain on cost-sensitive consumers in Asia and Africa hit by higher fuel and food prices.

“Indonesia’s decision affects not only palm oil availability, but vegetable oils worldwide,” James Fry, Chairman of Commodities Consultancy LMC International, told Reuters.

Palm oil – used in everything from cakes and frying fats to cosmetics and cleaning products – accounts for nearly 60% of global vegetable oil shipments.

Top producer Indonesia accounts for around a third of all vegetable oil exports. It announced the export ban on April 22, 2022, until further notice, in a move to tackle rising domestic prices.

“This is happening when the export tonnages of all other major oils are under pressure: soya bean oil due to droughts in South America; rapeseed oil due to disastrous canola crops in Canada; and sunflower oil because of Russia’s war on Ukraine,” Fry said.

Rasheed JanMohd, chairman of Pakistan Edible Oil Refiners Association (PEORA) said, “Nobody can compensate for the loss of Indonesian palm oil. Every country is going to suffer.”

Vegetable oil prices have already risen more than 50% in the past six months as factors from labour shortages in Malaysia to droughts in Argentina and Canada – the biggest exporters of soyoil and canola oil respectively – curtailed supplies.

Buyers were hoping a bumper sunflower crop from top exporter Ukraine would ease the tightness, but supplies from Kyiv have stopped as a result of Russia’s invasion.

This had prompted importers to bank on palm oil being able to plug the supply gap until Indonesia’s shock ban delivered a “double whammy” to buyers, said Atul Chaturvedi, president of trade body the Solvent Extractors Association of India (SEA).

Importers such as India, Bangladesh and Pakistan will try to increase palm oil purchases from Malaysia, but the world’s second-biggest palm oil producer cannot fill the gap created by Indonesia, Chaturvedi said. Malaysia accounts for 31% of global palm oil supply, second after Indonesia’s 56%.

Indonesia typically supplies nearly half of India’s total palm oil imports, while Pakistan and Bangladesh import nearly 80% of their palm oil from Indonesia.

In February this year, prices of vegetable oils jumped to a record high as sunflower oil supplies were disrupted from the Black Sea region.

A state-backed Malaysian palm oil group said countries should pause or slow use of edible oil as biofuel to ensure adequate supply for use in food, warning of a supply crisis following Indonesia’s ban on palm oil exports.

Palm oil is also used as biodiesel feedstock. Indonesia and Malaysia make it mandatory for biodiesel to be mixed with a certain amount of palm oil – 30% and 20% respectively – and just last month said they remain committed to those mandates, despite higher palm prices.

Overcrowding of warships in South China Sea

Senior Chinese diplomats have called on the United States not to show off its power over the South China Sea and warned of the risk of a misfire in the disputed waters with increasing presence of naval vessels.

Speaking to a South China Sea forum in Sanya, on the Southern Chinese island province of Hainan, via video link, Chinese Foreign Minister Wang Yi blamed an unspecified country for seeking to show off its power and maritime dominance.

“We must adhere to multilateralism and jointly maintain maritime order. The ocean is not a zero-sum game of competition, and no one should use the ocean as a tool to impose unilateral power,” Wang said.

“We oppose that certain countries, for the purpose of safeguarding maritime hegemony, flaunt their forces and form cliques at sea, and continue to infringe on the legitimate and lawful rights and interests of other countries.”

China and the US have been stepping up their military presence in the disputed waters, with increasing risks of an accidental clash. Concerns have escalated as the US has teamed up with its allies, including Britain and France, to send naval vessels to the South China Sea. Diplomatic observers have warned the consequences would be more serious if there was a clash between nuclear submarines.

Last month, the USS Carl Vinson carrier strike group and the British carrier HMS Queen Elizabeth conducted a series of exercises in the South China Sea. It was the USS Carl Vinson’s ninth visit to the area this year.

The South China Sea is heavily contested between China, the Philippines, Vietnam, Malaysia, Brunei and Taiwan. The US is not a claimant, but accuses Beijing of stoking military tensions and restricting freedom of navigation there, and has said its presence is needed to provide security backup to its Asian allies.

“China calls on the United States to actively consider joining the convention and take concrete actions to participate in the defence of the international maritime rule of law,” he said.

Gloria Macapagal Arroyo, former president of the Philippines, said the tensions and troubles in the South China Sea were posing “grave threats” to stability, and Southeast Asian nations were seriously concerned.

“Imagine what an exchange of fire between warships of the People’s Liberation Army and the US Seventh Fleet would do to stock, currency and commodity markets worldwide,” she asked the forum.

“The world hopes that such an unwelcome event remains pure imagination. But there are reasons to worry. For the first time in years, if not ever, aircraft carrier groups of China and America deployed in the South China Sea at the same time; so did French and British warships. Earlier this year, the presence of hundreds of Chinese vessels near Whitsun Reef led to Philippine diplomatic protests and the exchange of unfriendly words between Manila and Beijing.”

Arroyo said the South China Sea disputes had previously been managed by the expansion of economic and diplomatic ties among the nations involved, and with a balance of power.

“Now, the balance of power approach is increasingly being taken with the growing presence of American and allied forces in the South China Sea, which will get even more formidable with the Aukus, to which the PLA may feel the need to respond,” she said, referring to the deal struck with the US and Britain to help Australia acquire a nuclear submarine fleet.

A Pentagon report last week said China’s navy had expanded to 355 ships and submarines by 2020. It said the Chinese navy had placed a high priority on modernizing its submarine forces, operating six nuclear-powered ballistic missile submarines (SSBNs), six nuclear-powered attack submarines (SSNs), and 46 diesel-powered attack submarines (SSs).

But Wu Jianghao, assistant Chinese foreign minister, said China had engaged in discussions with other South China Sea claimants on joint exploration of its resources and a code of conduct.

“We must oppose maritime hegemony, division and confrontation, and build the ocean into a territory where all parties expand cooperation, rather than a zero-sum arena,” he told the forum.

 

Israel saves Pakistan face

According a Reuters news, Israeli Regional Cooperation Minister, Ofir Akunis said there were two main candidate countries to become the next to move towards normal ties with Israel. He did not name either but said one is in the Gulf and could be Oman but would not be Saudi Arabia. The other, further to the east, is a “Muslim country that is not small” but is not Pakistan, he said.

Asked if a fifth country could sign up before Trump steps down on 20th January 2021, Ofir Akunis told Israel’s Ynet TV, “We are working in that direction.”

 “I believe ... there will be an American announcement about another country that is going public with the normalization of relations with Israel and, in essence, with the infrastructure for an accord — a peace accord,” he said.

Israel is working towards formalizing relations with a fifth Muslim country, possibly in Asia, during US President Donald Trump’s term, an Israeli cabinet minister said on Wednesday. The White House has brokered rapprochements bet­ween Israel and the UAE, Bahrain, Sudan and Morocco this year.

Indonesia, the most populous Muslim country, said last week it would not recognize Israel as long as Palestinian statehood demands remain unmet. Malaysia has signalled a similar policy.

“Malaysia’s firm stance on the Palestinian issue will not change,” Deputy Foreign Minister Kamarudin Jaffar told the country’s senate on Wednesday, adding that Kuala Lumpur would not interfere in other nations’ decisions on Israel.

In Dhaka, a foreign ministry official said Bangladesh was not interested in establishing diplomatic ties with Israel. “Our position remains the same,” he reiterated.

Oman has praised the US-brokered diplomatic drive but has not commented on its own prospects of forging Israel ties.

Colonialism proliferating, though in a different form

It may not be wrong to say that the World War-III started no sooner did World War-II ended. Under the new arrangement countries are not conquered using military but by subjugating their sovereignty.

In the past the World Bank and the International Monetary Fund used to take control of policy making of recipient countries but now power of these countries to make decision are curtailed by establishing the World Trade Organization (WTO).

After the World War-II, super powers namely USA, USSR, and later on China have emerged. While USSR faced disintegration after its failed attempt to get access to warm waters by attacking Afghanistan, China preferred to focus on becoming an economic power. The USA got a free hand to establish its hegemony.

China is a perfect example of ‘If you can’t kill your enemy, make him friend but never forget you have to kill him one day’. USA has emerged a major investor in China and also a major buyer of made in China products. The policy is driven by the lust to control Chinese economy.

Economic sanctions are imposed on countries trying to the US policy but all the decisions are driven by protecting its own interest and/or its peripheries. This is evident from the latest US decision to exempt India, Malaysia, South Korea, South Africa, Sri Lanka, Turkey and Taiwan buying oil from Iran. These countries are either the major buyers of made in USA arsenal or supplier of goods and services to the super power.

United Nations (UN) has also become subservient as most of the decisions are made by the permanent members enjoying veto powers. Any decision by the international community can be turned down by these countries.  However, if a rubber stamp is needed, UN endorses military action, the most recent examples being Libya and Syria. Iran has been facing economic sanctions for more than three decades.

Different blocs have been created for the collective exploitation and now to establish US hegemony and developing regional powers. India has been given the status of regional super power. Commonwealth keeps on reminding the sovereign countries that they were British colonies and are still under the thumb of Monarchy.

Economic assault has been initiated under the WTO that gives legal cover to the financial atrocities of the developed countries. These countries control economies of poor sates through multinational companies (MNCs). This is best understood when one looks at the balance sheets and profit and loss statements of Fortune-500, which has further reduced to Fortune-50 companies,

But armies still play key role in conquering countries, with US leading Nato member counties. Usually the campaign starts in the name of restoration of democracy. Regime Change Plans are executed by funding rebels and proving them arsenal. This is in no way any attempt to make their lives better but to keep the armament factories running at full capacities.