First commercial ship leaves Ukraine port since February 2022

According to Seatrade Maritime News, Joseph Schulte is the first commercial ship to leave Odessa port of Ukraine’s Black Sea ports on Wednesday, since the beginning of the war in February 2022.

The 9,400 teu Joseph Schulte, owned by German company Bernard Schulte and had been operated by MSC, which has been docked in the war-torn port of Odessa since the conflict in Ukraine began left for Turkey, ostensibly under ballast.

In July the Russians refused to renew the agreement that allowed bulk vessels to operate the grain corridor, exporting foodstuff to maintain populations in the Middle East and Africa.

In bringing that agreement to an end Russia effectively renewed its blockade of Ukraine’s Black Sea ports for commercial as well as military shipping. The departure of the Hong Kong flagged Joseph Schulte from Odessa will test Russia’s resolve to maintain that blockade.

On 13 August a Russian Navy vessel, fired warning shots across the bow of the Palau-flagged Sukru Okan, with troops boarding and searching the bulk carrier.

Nevertheless, Daniil Melnychenko, an analyst at transport consultancy Informall, based in Odessa, told Seatrade Maritime News, “The expectations are that Türkiye flagged ships that were stuck here in Ukraine since the beginning of the war will also leave the big Odessa regional ports.”

According to Melnychenko many of the bulk carriers that have been docked in southern Ukraine are Turkish flagged vessels, so the departure of the container ship has heightened expectations that others will follow.

VesselsValue reports suggest that the Joseph Schulte vessel, which MSC has confirmed is no longer in its fleet, will first call at the Luk Sintez Oil Terminal to load bunkers. It will then sail to the Turkish port of Ambarli on the north shore of the Marmara Sea, on the European side of Istanbul, to offload the few containers on board and for inspection.

Melnychenko added that the vessel will likely be crewed by a mixture of Turkish and older Ukrainian men, over 60-years-old.

Can United States keep Niger under its claws?

The United States appears to be caught in the horns of a dilemma, trying to balance a desire to maintain relations with Niger whose government cannot legally receive US aid, and the consequences that would accrue if US-Niger relations were severed. The clock is ticking on the fate of US-Niger relations, and there seems to be little any US official can do to change the outcome.

Lately, Acting Deputy Secretary of State for the United States Victoria Nuland made her third visit to Niger in the past two years. She was in the African country to respond to the July 26 military coup, which saw the ouster of the constitutionally-elected President Mohamed Bazoum by a group of military officers, operating under the umbrella of the newly-formed National Council for the Safeguard of the Homeland, led by the commander of the presidential guard, General Abdourahmane Tchiani, who subsequently declared himself to be the new head of state. 

Niger and Nigeria are two separate countries in the African continent. Since they are neighboring countries with similar names, most people get confused about the difference between Niger and Nigeria. Niger is located in Western Africa. It is a landlocked country surrounded by Libya, Chad, Nigeria, Benin, Burkina Faso, Mali, and Algeria. Niger is the biggest country in the West Africa with a land area of almost 1,270,000 square kilometers. However, about 80% of its land area lies in the Sahara desert. It has remained a French colony. The religion of the majority of the population in Niger is Islam. Niger ranks bottom in the United Nation’s Human Development Index. This country faces many challenges such as desert terrain, inefficient agriculture, overpopulation, poor educational level, poverty of people, poor health care, and environmental degradation. The main agricultural exports of Niger are peanuts and cotton. It is a big exporter of Uranium.

Nuland had sought a meeting with the ousted president, Bazoum, as well as the leader of the new military government, General Tchiani. She was denied both, and instead held a very strained dialogue with Tchiani’s military chief, General Moussa Salaou Barmou, who headed a delegation of lesser officers.

The reasoning behind the American game of semantics is that, by law, if the US recognizes the coup as a coup, then it must cease all military-to-military interactions between a force of some 1,100 US military personnel currently stationed in Niger, and its military counterparts, as well as all other forms of US-funded aid.

The law known as Section 7008 (of Public Law 117-328, Division K), specifically states that no funds appropriated by Congress in support of State, Foreign Operations and Related Programs (SFOPS) “shall be obligated or expended to finance directly any assistance to the government of any country whose duly elected head of government is deposed by military coup d’état or decree.” 

During her 2-hour discussions with the Tchiani government delegation, Nuland made it clear that while US relations were currently suspended, they were not permanently halted. In a post-meeting video press conference, Nuland emphasized the consequences of the failure to return President Bazoum to power with General Barmou, a Nigerien special forces officer who had been trained at US military schools and had extensive interaction with US military trainers in Niger.

Barmou’s personal experience with the US military is in many ways the personification of a relationship that today serves as the foundation of America’s military presence and mission in West Africa.

The US, France, and other European partners have been engaged in a years-long campaign, together with their West African partners, to combat Islamic extremism in the Sahel region of Africa. Niger, which hosts two major US bases, one outside the capital of Niamey known as Base 101, and a second, Air Base 201, in Agadez – a city located on the southern edge of the Sahara. Both bases support US intelligence, surveillance, and reconnaissance (ISR) operations conducted by MQ-9 Reaper drones and fixed-wing aircraft flown by a Joint Special Operations Aviation Detachment, as well as other US military operations, including military airlift and special forces training detachments (France also maintains a significant military presence in Niger, numbering over 1,000, and there are several hundred other military personnel from a variety of European Union (EU) nations.

With the collapse of the US, French, EU, and United Nations military presence in neighboring Mali, and in the aftermath of a military coup in Chad, Niger has emerged as the last remaining bastion of the US-led anti-terrorism effort in the Sahel. If the US were to cut relations with Niger because of the coup, there would be no Western-oriented anti-terrorism efforts remaining to counter the threat of Al Qaeda and Islamic State terrorism in the region.

From Washington’s perspective, the greatest threat that would emerge from any break in the military-to-military assistance between the US and Niger is not the potential spread of Islamic fundamentalist-inspired terrorism, but rather Russian influence, especially in the form of military security support allegedly provided by Wagner Group, a private military company whose African operations appear to operate in sync with Russian foreign policy objectives.

Prior to last month’s Russian-African Summit, Prigozhin had met with Wagner forces who had relocated to Belarus in the aftermath of the abortive June 23-24 insurrection – which resulted in halting Wagner operations in Donbass – during which he emphasized the importance Africa would play in future Wagner activities. Wagner's presence has been reported in several African countries, including the Central African Republic, Libya, and Mali. Members of the senior leadership of the coup have reportedly met with Wagner officials in Mali, to discuss security cooperation between Wagner and Niger. During her meeting with the coup government, Victoria Nuland singled out the potential deployment of Wagner into Niger as a worrisome development and indicated that she pressed upon her Nigerien counterparts her assessment regarding the detrimental role played by Wagner regarding African security. The reported meeting between Wagner and Niger representatives indicates that Nuland’s message did not resonate with hosts.

There is an option that neither Nuland nor her boss, Secretary of State Antony Blinken, have yet given voice to. In early 2003, the US Congress amended Section 7008 to provide for the Secretary of State to seek a waiver on the grounds of the national security interests of the United States.

There are two major obstacles for the US when it comes to any such waiver. First is the amount of political capital that the US has expended in trying to return President Bazoum to power – to reverse now would be the kind of nod to Realpolitik that the Biden administration is loath to do. Second is the fact that Niger, having evaluated its options going forward, may no longer be interested in maintaining the close relations it previously enjoyed with the US.

Niger, like Mali, Burkina Faso, and Guinea before it, has thrown off the mantle of its post-colonial relationship with France, a relationship that was closely linked with US national security policy in West Africa and the Sahel.

 

Russia accuses JPMorgan not processing its grain payments

Russia, on Friday accused that the US bank, JPMorgan has stopped processing payments for the Russian Agricultural Bank. Russia demanded action, not promises, from Washington to help Russian grain and fertilizer reach global markets.

It may be recalled that JPMorgan has handled some Russian grain export payments for the past few months with reassurances from Washington. However, that cooperation stopped this week, Russia's Foreign Ministry said on Friday.

"The direct channel between the Russian Agricultural Bank and JPMorgan ... was closed on August 02," foreign ministry spokeswoman Maria Zakharova was quoted by Russian media as saying.

The United Nations, the US State Department and JPMorgan declined to comment.

Moscow had allowed the safe export of Ukraine grain via the Black Sea for the past year under a deal it quit on July 17. Russia has a list of demands it wants met before it will return to the arrangement.

Under a related pact - also brokered in July 2022 - UN officials agreed to help Russian food and fertilizer exports reach global markets.

"As soon as this is done, this deal will immediately be renewed," Kremlin spokesman Dmitry Peskov told reporters on Friday.

A key Russian demand has been the reconnection of the Russian Agricultural Bank to the SWIFT international payments system. It was cut off by the European Union in June 2022 following Russia's invasion of Ukraine.

Zakharov, the foreign ministry spokeswoman, said the West and the United Nations tried to present (payment processing by JPMorgan) as a working alternative to SWIFT.

US Secretary of State Antony Blinken told reporters on Thursday that Washington would continue to do whatever is necessary to ensure Russia can freely export food if the Black Sea grain deal was revived.

While Russian exports of food and fertilizer are not subject to Western sanctions imposed after Russia's February 2022 invasion of Ukraine, Moscow has said restrictions on payments, logistics and insurance have hindered shipments.

Top US State Department sanctions official James O'Brien said on Friday that Russia needed to be clear about what it was asking for and what constituted success, suggesting it should be how much food and fertilizer reaches the world.

"It has put forth a number of different demands and all of them having to do with various Russian institutions not getting services from the private sector," he told reporters. "We have made clear that we're prepared to help on any of these matters."

"Russia is exporting record amounts of grain," O'Brien said. "So if the measurement is food for the globe ... Russia's complaints amount to minor allegations about a system that is working very well."

Russia may export at least 55 million tons of grain in the 2023/24 marketing season, slightly less than the estimated record-breaking 57 million tons in the 2022/23 season, Russia's Grain Union said last month.

Ukrainian exports for the 2022/23 season were almost 49 million tons, according to Agriculture Ministry data.

Nearly 33 million tons of that was shipped under the Black Sea deal.

Western countries have accused Russia of using food as a weapon of war by quitting the Black Sea deal, which had helped bring down global food prices, and then carrying out repeated air strikes on Ukrainian ports and grain stores.

Russia has complained that not enough Ukrainian grain was getting to the poorest countries. The United Nations has argued that the deal helped everyone because it brought prices down 23% from a record high in the weeks following Russia's invasion.

 

OPEC Plus keeps oil output levels unchanged

The Joint Ministerial Monitoring Committee (JMMC) of OPEC Plus affirmed on Friday the current levels of oil production of the group and didn’t make any recommendation to change the output.

Saudi Minister of Energy Prince Abdulaziz bin Salman chaired the 49th Meeting of the JMMC via videoconferencing.

The JMMC reviewed the crude oil production data for the months of May and June 2023 and noted the overall conformity for participating OPEC and non-OPEC countries of the Declaration of Cooperation (DoC). The committee urged all the participating countries to conform and fully adhere to the compensation mechanism.

The committee reaffirmed the commitment of its member countries to the DoC which extends to the end of 2024 as agreed in the 35th OPEC and non-OPEC Ministerial Meeting (ONOMM) on June 04, 2023. It also decided to adjust the frequency of the meetings to every two months for the JMMC and the authority of the JMMC to hold additional meetings, or to request an OPEC and non-OPEC Ministerial Meeting as agreed on in the 33rd OPEC and non-OPEC Ministerial Meeting (ONOMM) on October 05, 2022.

The committee will continue to closely assess market conditions noting the willingness of the DoC member countries to address market developments and their readiness to take additional measures at any time in tandem with the strong cohesion of OPEC and non-OPEC countries.

The committee also expressed its full recognition and support for the efforts of Saudi Arabia to support the stability of the oil market and reiterated its appreciation for the Kingdom’s additional voluntary cut of one million barrels per day which it extended to the month of September.

The committee acknowledged the Russian Federation's additional voluntary reduction of exports by 300,000 barrels per day for the month of September.

The next meeting of the JMMC is scheduled for October 04, 2023.

Buying Russian crude unviable for Pakistan

In one of my blogs I had questioned the economic viability of Pakistan importing Russian crude oil on three points: 1) longer distance, 2) higher freight and handling charges, 3) Pakistani refineries not tuned to refine Russian crude and on top of all 4) why to buy Russian oil on upfront payment when Saudi Arabia is supplying crude on deferred payment. Today, a Reuters report substantiated my apprehensions.

The report says, “Pakistan is unlikely to meet a target for Russian crude to make up two-thirds of its oil imports, despite attractive prices, hampered by a shortage of foreign currency and limitations at its refineries and ports”.

It also pointed, “The benefits are being offset by increased shipping costs and lower quality of refined products compared to the fuels produced from crude from Pakistan's main suppliers, Saudi Arabia and the United Arab Emirates”.

It goes to the extent of saying, “Added to the challenges, transportation costs for Russian crude are higher than for Middle Eastern crudes not only because of the longer distance traveled, but because Pakistan's ports cannot handle the large vessels departing Russia”.

According to the report, “Urals crude had to be transferred from a supertanker on to smaller ships, known as a lightering operation, in Oman before heading to Pakistan, unlike direct shipments from the Middle East”.

Even with that extra cost, it was worth importing Russian oil, said Viktor Katona, lead crude analyst at Kpler, as Saudi Arab Light crude is US$10 to US$11 per barrel more expensive for Pakistani refiners than Urals, while lightering operations add around US$2 to US$3 per barrel.

"Pakistani buyers would still be much better off," he said.

The key issue is, “Urals quality is a deterrent, as Pakistan's refineries cannot get as much gasoline and diesel out of Urals crude as they produce from Saudi and UAE crudes”.

It will take Pakistan Refinery (PRL) at least two months to fully process its first cargo of 100,000 tons (730,000 barrels) of Urals crude as it needs to be blended with Middle East crude to offset the high output of fuel oil from the Russian oil, Zahid Mir, chief executive of the refinery.

"Our optimum processing solution is to blend Urals with Middle Eastern imported crude while not exceeding 50% Ural in the blend," Mir said.

The residual fuel produced from Urals crude has to be mixed with diesel and kerosene to meet specifications for local use while the remainder is exported, but the deal was still commercially viable for Pakistan, Mir said.

PRL has no plans to upgrade its refinery to process fuel oil into higher quality fuels, he added.

Kpler's Katona expects Pakistan's liquidity issues and technical challenges to weigh on its appetite for Russian crude.

"Russian imports into Pakistan will not grow into anything bigger than one cargo per month," he said.

 

 

North Korea, China and Russia commemorate victory 70 years ago

Delegations from Russia and China, North Korea’s key allies in the Korean War, gathered in Pyongyang this week to celebrate North Korea’s Victory Day in the war that ravaged the Korean Peninsula seven decades ago.

North Korean leader Kim Jong Un gave Russian Defense Minister Sergei Shoigu – an architect of Moscow’s assault on Ukraine – a tour of a defense exposition in Pyongyang on Wednesday, with images from North Korean media showing them walking past an array of weaponry, from Pyongyang’s nuclear-capable ballistic missiles to its newest drones.

At a state reception for Shoigu and the Russian delegation, in a reference to the war in Ukraine, North Korean Defense Minister Kang Sun Nam expressed Pyongyang’s full support for the just struggle of the Russian army and people to defend the sovereignty and security of the country, according to a report from the state-run Korean Central News Agency (KCNA).

In remarks of his own, Shoigu then said the Korean People’s Army (KPA) has become the strongest army in the world and pledged continued cooperation to keep it that way.

Also Wednesday, at a reception for the Chinese delegation led by Politburo member Li Hongzhong, senior North Korean official Kim Song Nam thanked Chinese forces for joining in the Korean War, saying North Korea “would not forget forever the heroic feats and merits of the bravery soldiers who recorded a brilliant page in the history.”

Ankit Panda, Stanton senior fellow in the Nuclear Policy Program at the Carnegie Endowment for International Peace said the presence of the Chinese and Russian delegations at the armistice anniversary underscores the importance Pyongyang attaches to its relationships with both countries.

“Shoigu’s presence is particularly notable, a sign of just how close Pyongyang and Moscow have become since Russia’s invasion of Ukraine last year,” Panda said.

The gathering in Pyongyang illustrates a weakness too, said Blake Herzinger, a research fellow at the United States Studies Center in Australia.

“It’s really representative of how short both China and Russia’s lists of friends are, and the willingness of both to show support for a rogue regime,” Herzinger said.

Thursday was the 70th anniversary of the end of the 1950-1953 Korean War, one of the first international conflicts of the Cold War era.

In the fall of 1950, China sent a quarter million troops into the Korean Peninsula, supporting its North Korean ally and pushing back the combined forces of South Korea, the United States and other countries under the United Nations Command.

More than 180,000 Chinese troops died in the Korean War, Beijing calls the War to Resist US Aggression and Aid Korea.

Russia’s predecessor, the Soviet Union, also supported North Korea during the war, with combat support like Soviet aircraft engaging US jets and with supplies of heavy weaponry like tanks.

Despite Pyongyang’s claims of a victory, the war it launched in 1950 ended in a stalemate, with the current demilitarized zone along the 38th parallel in much the same location as it was before the war.

The Korean War armistice was signed on July 27, 1953, ending hostilities although a true peace deal has never been signed.

After the war, the US, which anchored the UN Command that supported South Korea, kept a large contingent of troops in the South at a range of Army and air bases. The US Camp Humphreys in Pyeongtaek, south of Seoul, is the largest overseas US military base.

Meanwhile, Moscow over the decades has been a staunch ally for North Korea, especially as the two share a joint animosity toward the West. The same can be said for the Chinese Communist Party, especially under China’s current leader Xi Jinping.

Panda noted how both Moscow and Beijing, permanent members of the UN Security Council, have defended Pyongyang’s interests before the world body as Western powers led by the US have tried to put further sanctions on North Korea.

Now the three authoritarian nuclear powers are putting up a united front over Ukraine, a former Soviet state which Russia invaded in February 2022 after Russian President Vladimir Putin declared it was historically Russian territory.

That invasion soon stumbled as Ukrainians put up a fierce defense of their homeland and as Western powers scrambled to send weapons and ammunition to Kyiv while Moscow burned through its own stocks and looked to allies like Iran and North Korea to resupply.

US officials said last year that North Korea was selling millions of rockets and artillery shells to Russia for use on the battlefield in Ukraine.

China has not supplied Russia with weaponry, but remained steadfastly in Moscow’s corner as the war in Ukraine drags into its 18th month, with Xi deepening his relationship with Putin and echoing the Kremlin’s rhetoric over the conflict.

After the brief mutiny in Russia by the Wagner mercenary group last month, a Chinese Foreign Ministry spokesperson expressed support for the Putin regime.

“As Russia’s friendly neighbor and comprehensive strategic partner of coordination for the new era, China supports Russia in maintaining national stability and achieving development and prosperity,” an online statement said.

Russian and Chinese militaries have been active in the waters off the Korean Peninsula, with their latest joint exercise, Northern/Interaction-2023, bringing together naval and air forces from both countries in drills aiming to “strengthen both sides’ capabilities of jointly safeguarding regional peace and stability and responding to various security challenges,” according to the People’s Liberation Army’s English website.

Those exercises in the waters between the Korean Peninsula and Japan occurred as South Korea and the US were conducting military displays of their own, including a US Navy nuclear-capable ballistic missile submarine making a port call in South Korea for the first time in four decades.

Pyongyang’s armistice commemorations were expected to continue Thursday with a military parade in the capital. North Korea typically marks key moments in its history with displays of its newest weaponry.

One such weapon that may be on display is the Hwasong-18 ICBM, a solid-fueled, nuclear-capable missile that North Korea claims could hit anywhere in the United States. It has tested that missile twice this year, most recently earlier this month.

G20 members fail to reach agreement on cutting fossil oil use

According to Reuters, the Group of 20 (G20) major economies meeting in India failed on Saturday to reach consensus on phasing down fossil fuels following objections by some producer nations.

Major fossil fuel producers Saudi Arabia, Russia, China, South Africa and Indonesia are all known to oppose the goal of tripling renewable energy capacity this decade.

Scientists and campaigners are exasperated by international bodies' foot-dragging on action to curb global warming even as extreme weather from China to the United States underlines the climate crisis facing the world.

The G20 member countries together account for over three-quarters of global emissions and gross domestic product, and a cumulative effort by the group to decarbonize is crucial in the global fight against climate change.

However, disagreements including the intended tripling of renewable energy capacities by 2030 resulted in officials issuing an outcome statement and a chair summary instead of a joint communiqué at the end of their four-day meeting in Bambolim, in the Indian coastal state of Goa.

A joint communiqué will be issued when there is complete agreement between member nations on all issues.

"We had a complete agreement on 22 out of 29 paragraphs, and seven paragraphs constitute the Chair summary," Indian Power Minister R.K. Singh said.

Sections urging developed countries to deliver on the goal of jointly mobilizing US$100 billion per year for climate action in developing economies for 2020-25, and description of the war in Ukraine, also eluded consensus.

Fossil fuel use became a lightning rod in day-long discussions, but officials failed to reach consensus over curbing unabated use and argued over the language to describe the pathway to cut emissions.

A draft late on Friday reviewed by Reuters read, "The importance of making efforts towards phase down of unabated fossil fuels, in line with different national circumstances, was emphasized."

However, the chair statement released on Saturday evening included concerns from some member nations which were missing in the Friday draft, noting that "others had different views on the matter that abatement and removal technologies will address such concerns".

Singh, in a press briefing after the conference, said some countries wanted to use carbon capture instead of a phase down of fossil fuels. He did not name the countries.

Is bidding farewell to fossil oil possible?

The western mantra to get rid of fossil oil is getting louder. There are suggestions that countries have to take extra measures to contain carbon emission. In this race the developed countries, particularly United States and its allies are promoting clean energy i.e. solar, wind and gas. In the mean time the pressure is mounting on the less developed countries, currently using fossil oil and coal.

The International Energy Agency (EIA) expects US$2.8 trillion of investment in energy this year, with roughly 60% of that going toward clean energy. In the past two years, clean energy investment has risen 24% as compared to 15% for fossil fuels.

Producers of fossil fuels reaped huge profits in 2022, but less than half their cash flow is going towards new supply. Unsurprisingly, Middle Eastern producers lead in terms of spending on new supply.

A question arises, why the sudden surge in clean energy investment? The main explanations include volatility in fossil fuel markets, renewed interest in energy security, rising appreciation of the disruption created by climate events and greater societal interest in slowing climate change.

The largest increases in spending on clean energy by far have come from China, the European Union and the United States. Despite high interest in clean energy, the transition faces many challenges, chief among them the complexity and cost of developing and growing new energy supply chains.

The ongoing energy disruptions in the wake of the hostilities in the Ukraine have had a dramatic impact on export of LNG from the United States.

In the newly released edition of the Natural Gas Monthly, published by the Energy Information Agency (EIA), part of the US Department of Energy, the changing dynamics of the US export trades are described in detail.

In the publication, the EIA notes, “During the first four months of 2022, the United States exported 74% of its liquefied natural gas (LNG) to Europe, as compared to an average of 34% a year ago.”  It adds, “In 2020 and 2021, Asia had been the main destination for US LNG exports, accounting for almost half of the total exports.” Overall, US LNG exports saw an 18% increase as compared to 2021.

Exports have averaged 11.5 billion cubic feet per day (Bcf/d) during the first four months of 2022, aided by the opening of new export facilities. The increase in US LNG exports was driven by additional export capacity at Sabine Pass (Train 6) and at nearby Calcasieu Pass, with a facility that came online in early March. The Sabine Pass terminal loaded nearly 110 LNG cargoes during Q1 2022. Venture Global’s Calcasieu terminal, Louisiana began exporting in March, when five cargoes were loaded - four to Europe and one to Japan.  

The move towards European destinations had already begun before the late February invasion of Ukraine, with the huge inventory draw downs underway in advance of the winter season. The EIA said, “The United States became the largest LNG supplier to the European Union and the United Kingdom in 2021. They said that LNG imports from the United States to the EU and the UK more than tripled during January to April, 2022, as compared to 2021, averaging 7.3 Bcf/d.”

The EIA pointed out, “During the first four months of 2022, US LNG exports to Asia declined by 51% to 2.3 Bcf/d as compared to 4.6 Bcf/d in 2021.”

Its analysts also alluded to a drop-off in moves to China due to the extremely high Asian LNG prices and pandemic-related lockdowns. China received only six LNG cargoes from the United States in January–April 2022 or just 0.2 Bcf/d as compared to 1.2 Bcf/d in 2021. Japan and South Korea also saw declines.

Can NATO allies save United States from eventual defeat in Ukraine?

The NATO summit this week delivered yet another blow to Russian President Vladimir Putin, with allies standing as united as ever against his war in Ukraine while announcing efforts to expand the alliance and boost defense spending.

The most punishing setback for Putin came on the eve of the summit, when Turkish President Recep Tayyip Erdoğan hashed out a deal to admit Sweden into NATO after more than a year of resistance.

Erdoğan’s reversal not only puts the gears in place to expand the borders of the western security alliance — it also signals the Turkish leader is moving closer to the west and away from Putin.

“He’s no longer interested in being dependent on Putin economically and strategically,” said Asli Aydıntaşbaş, a visiting fellow at Brookings Institution with the Turkey Project. “I think Russians are upset. I think the Kremlin is very upset.”

It also helped repair Turkey’s strained relations with its NATO allies and gave President Biden a major win heading into the high-profile summit in Vilnius, Lithuania. 

At the end of the summit, Biden declared that NATO was more united than ever in its history.

“We will not waver,” Biden affirmed in the Wednesday speech. “Our commitment to Ukraine will not weaken. We will stand for liberty and freedom today, tomorrow and for as long as it takes.”

Erdoğan’s Sweden approval also came just days after he freed Ukrainian fighters from the Azov regiment, a move that deeply angered the Kremlin because the prisoners of war were supposed to remain in Turkey until the end of the war.

Aydıntaşbaş said the prisoner release is an even bigger blow than the Sweden deal, the latter of which was likely anticipated. She assessed the Turkish leader has now sensed Putin has become weak — especially after the Wagner revolt — and is drifting closer to Biden.

“I wouldn’t call this a reset, but it lays the groundwork for a reset between the West and Turkey and that would be a big deal,” she added. “Because at the end of the day, Turkey is NATO’s second largest army and its drift away from the West has been a big issue.”

Aydıntaşbaş, however, acknowledged Erdoğan often makes deals for transactional benefits, and since he does not view the Ukraine war as a binary issue, he is likely to continue to play both sides.

Erdoğan only backed Sweden after he extracted concessions from the West, including enhanced counterterrorism operations, more arms sales and Swedish support for Turkey’s European Union membership hopes.

Erdoğan may also have won a deal to purchase long-awaited F-16 jets from Washington to modernize his air force, as the US announced the paused sale was moving forward a day after the Sweden agreement.

At the summit, Western allies also agreed to boost defense spending levels, a commitment that, if adhered to, would strengthen the alliance and its support for Ukraine. Members are now pledging to spend a minimum of 2 percent of gross domestic product on military resources and security.

NATO has for years tried to get the commitment to stick, to no avail. But Secretary-General Jens Stoltenberg said 11 allies have now reached or exceeded the target, while overall spending by Canada and Europe increased by 8.3% this past year. 

“This is the biggest increase in decades,” Stoltenberg said. “And we expect this number will rise substantially next year.”

Putin secured a minor victory in the dashing of Ukraine’s NATO aspirations, with GOP presidential contender and former United Nations ambassador Nikki Haley saying that Biden made Putin’s day by refusing to commit to Kyiv’s future NATO membership. 

But the US and Ukraine sought to minimize the damage at the end of the summit.

NATO decided against fast-tracking Kyiv into the alliance or setting a clear timeline for membership, a move Ukraine says will only embolden Russia and allow Moscow to use inclusion into the alliance as a bargaining chip in peace talks.

But the alliance still took steps toward admitting Ukraine, removing a procedural hurdle, establishing a NATO-Ukraine council and affirming that Kyiv is closer than ever to membership.

Ukrainian President Volodymyr Zelensky, who had expressed disappointment in the membership process just a day earlier, said he held a powerful meeting with Biden Wednesday.

“The meeting was at least twice as long as planned, and it was as meaningful as it needed to be,” Zelensky tweeted. “If the protocol had not stopped the meeting, we would have talked even longer.”

NATO allies this week also announced big steps toward supporting Ukraine in the long run, putting a damper on Moscow’s hopes of weakening Western support for the war.

A coalition of 11 NATO countries set a date for F-16 training in August for Ukrainian pilots; France confirmed the shipment of much-needed long-range missiles for Ukraine; and the Group of Seven (G7) economic and political bloc announced a long-term security commitment for Kyiv.

Russia has tried to downplay the news coming out of the summit. Moscow’s Foreign Intelligence Service chief told state-run media outlet TASS that the summit did not bring “any surprise to Russia.”

But Liana Fix, a fellow for Europe at the Council on Foreign Relations, said Russia’s attempts to weaken the narrative have largely failed.

“From a Russian propaganda perspective, it makes sense to downplay this as much as possible,” she said. “But the facts just speak against Russia, especially the long-term commitment of G7 members to deter Russia and to erode the optimism in the Kremlin [hoping] everyone in Europe gets tired.”

The Vilnius summit showed allies are standing by Ukraine, even as there are concerns about a lagging counteroffensive launched in early June and the prospect of a longer war, Fix said.

“At the beginning of this year, the messaging was all about Ukraine [and] what it means for this one counteroffensive this year,” she continued. “And I think that was recognized as a bit of a trap.”

This is “sort of an attempt to make clear that the commitment is not only until the end of this year, but the commitment will also extend to the next year.”

 

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.

 

United States plans naval logistics hub in India

The United States seeks to transform India into a center for resupplying and maintenance of naval vessels in the South Asia region, where it has been stretched thin with such capabilities.

US President Joe Biden and Indian Prime Minister Narendra Modi agreed to comprehensive defense and economic partnerships when Modi visited the White House in late June for a summit with Biden.

“The US-India Major Defense Partnership has emerged as a pillar of global peace and security,” the joint statement from the summit reads.

The US will provide India with support to develop infrastructure that will be used to resupply, repair and maintain ships and aircraft.

“We’ll have much more to follow in the near future, but the aim here is to make India a logistics hub for the United States and other partners in the Indo-Pacific region,” said Air Force Brig. Gen. Pat Ryder, the Pentagon press secretary, to reporters in late June.

As part of this effort, the US Navy will sign ship repair agreements with Indian shipyards.

The navy has concluded a Master Ship Repair Agreement with the Larsen & Toubro shipyard near the Indian city of Chennai, according to the White House. The navy is close to finalizing separate deals with two other shipbuilders, based in Mumbai and Goa.

The US military looks to build readiness for quickly handling resupply activities and repairs in the Indo-Pacific region. If the navy has access to more hubs in the region, then vessels and aircraft will waste less time pausing operations for both. The time savings can be allocated to joint exercises with other countries.

“There’s a big gap between the bases the United States sustains in the bilateral hub agreements they have in the Middle East and then the Western Pacific,” said Jeffrey Payne, assistant professor at the Near East South Asia Center for Strategic Studies. “So, India fulfills this.”

At present, Japan and Singapore serve as key naval hubs for the US in Asia.

Harry Harris, former commander of US Indo-Pacific Command, hailed the initiative.

“Currently, we operate from Diego Garcia and Western Australia in the Indian Ocean,” he told Nikkei via email. “Securing a maintenance, repair, and logistics hub on the Subcontinent is significant as this would give us much-needed flexibility in the vast Indian Ocean region.”

The Chinese navy has about 355 ships and submarines, making it the world’s largest numerically, according to the 2021 edition of the Pentagon’s annual report on China. If American vessels cannot spend more time at sea, then the US will risk falling behind China in terms of naval capabilities, weakening deterrence.

Because the Indo-Pacific is defined by large stretches of water, many believe that conducting supply activities in the region during emergencies will prove more difficult than similar activities in Europe, with its land routes.

“Are we ready today? Yes, we are,” Rear Adm. Mark Melson, commander of the US Navy’s logistics group stationed in Singapore, told Nikkei in an interview in early June. “But I will never claim to be ready enough.”

“We are certainly trying to improve the amount of access into a number of places where we can conduct expeditionary resupply, expeditionary refuel [and] if required, expeditionary rearm,” Melson said.

The Biden administration plans to deepen the partnership with India beyond the Indian Ocean in the maritime space. Daniel Kritenbrink, assistant secretary of state for East Asian and Pacific affairs, attended an event hosted by a US think tank at the end of June and touched on strengthening the collaboration with India in the South China Sea.

Indian External Affairs Minister Subrahmanyam Jaishankar met with Philippine Foreign Secretary Enrique Manalo in New Delhi at the end of June. The two ministers released a joint statement that backed a 2016 arbitration ruling at The Hague rejecting Chinese claims to nearly all of the South China Sea.

This marked the first time that India expressed support for the Hague ruling, which is based on the United Nations Convention on the Law of the Sea, according to Gregory Poling, a senior fellow at the Center for Strategic and International Studies in Washington. It put India in line with Japan and major Western countries on the issue.

India, as a representative of the so-called Global South emerging and developing countries, is gaining a stronger role and voice in the international community.

On the security front, India appears to have shifted focus on relations to the West. Modi’s visit to Washington in June is evidence of this. India on Tuesday hosted the Shanghai Cooperation Organization summit, which was held in a virtual format out of consideration for the US

But the basic theme of India’s diplomacy remains “strategic autonomy,” which entails working with other countries according to its own interests.

In recent years, the US apparently threatened to impose sanctions on India when it sought to acquire air defense systems from Russia. In 1971, the US sent an aircraft carrier to threaten India during the third Indo-Pakistani War. Whether today’s partnership between the US and India will completely dispel the latent distrust of Washington remains to be seen.

 

Erdogan demands Black Sea grain deal extension

Turkish President Tayyip Erdogan said on Saturday that he was pressing Russia to extend a Black Sea grain deal by at least three months and announced a visit by President Vladimir Putin in August.

Turkey, a NATO member, has managed to retain cordial relations with both Russia and Ukraine over the past 16 months of the war and last year it helped to broker prisoner exchanges. Turkey has not joined its Western allies in imposing economic sanctions on Russia but has also supplied arms to Ukraine and called for its sovereignty to be respected.

He was speaking at a joint news conference with Ukraine President Volodymyr Zelenskiy after the two parties met to discuss the fate of an arrangement, brokered last year by Turkey and the United Nations, to allow for the safe export of grain from Ukrainian ports via the Black Sea despite the war.

Zelenskiy's visit followed stops in Bulgaria and the Czech Republic, part of a tour of some NATO capitals aimed at encouraging them to take concrete steps at a summit next week towards granting Kyiv membership of the alliance, which Erdogan said Ukraine deserved.

Erdogan said work was under way on extending the Black Sea grain deal beyond its expiration date of July 17 and for longer periods beyond that. The deal would be one of the most important issues on the agenda for his meeting with Putin in Turkey next month, he said.

"Our hope is that it will be extended at least once every three months, not every two months. We will make an effort in this regard and try to increase the duration of it to two years," he said at the news conference with Zelenskiy.

Both men said they had also discussed another key question for Erdogan's talks with Putin ‑ the question of prisoner exchanges, which Zelenskiy said had been the first thing on their agenda. "I hope we will get a result from this soon," Erdogan said.

Zelenskiy said he would wait for a result to comment but made clear the discussion had gone into specifics on returning all captives including children deported to Russia and other groups.

"We are working on the return of our captives, political prisoners, Crimean Tatars," he said, referring to members of Ukraine's Muslim community in the peninsula annexed by Russia in 2014. "Our partners have all the lists. We are really working on this."

Erdogan said the issue could also come up in his contacts with the Russian leader before his visit. "If we make some phone calls before that, we will discuss it on the call as well," he said.

The Kremlin said it would be watching the talks closely, saying Putin has highly appreciated the mediation of Erdogan in attempting to resolve the conflict in Ukraine.

"As for forthcoming contacts between Putin and Erdogan, we do not rule them out in the foreseeable future," Kremlin spokesman Dmitry Peskov told reporters ahead of the Istanbul talks with Zelenskiy, which began on Friday.

Russia, angry about aspects of the grain deal's implementation, has threatened not to allow its further extension beyond July 17.

 

Iran, Russia and India to promote freight transit through INSTC

The founding member states of the International North-South Transport Corridor (INSTC), namely Iran, Russia, and India, gathered for the third time in Tehran on Tuesday, to discuss solutions for promoting freight transit through the newly developed international corridor.

The event, dubbed “Iran Rah” was attended by senior officials from the three countries including Iranian Transport and Urban Development Minister Mehrdad Bazrpash, Head of Iran's Ports and Maritime Organization (PMO) Ali-Akbar Safaei, Deputy National Security Advisor of India Vikram Misri, and Senior Aide to the president of the Russian Federation Igor Yevgenyevich Levitin.

Speaking at the meeting, Bazrpash underlined some of the Islamic Republic’s major principles regarding the promotion of INSTC including multilateralism, partnership, transit neighborhood, networking, facilitation of trade, and intelligent and technological development of transit, and called for maximum collaboration for the development of exchanges through the INSTC.

Further in the meeting, PMO Head Ali-Akbar Safaei mentioned some of the advantages of transit through Iran for the countries in the regions and said, “Iran's joining the Shanghai Cooperation Organization and the Eurasian Economic Union will provide unique opportunities to the country’s trade partners, and the Islamic Republic is determined to remove all its tariff and non-tariff barriers in the shortest possible time.”

The main rationale for these trilateral meetings is to promote freight transit between India and Russia and other Persian Gulf and the Caspian Sea countries, Safaei said.

Elsewhere in the gathering, Misri emphasized India’s determination to cooperate with Iran and Russia for completing the INSTC saying, “India has been a participant in various initiatives and projects regarding the north-south corridor and has always been committed to providing its resources in the best way to the implementers so that this corridor is developed in the best way possible.”

Lavitin for his part called the INSTC a humanitarian corridor and asked the countries of the region to join this corridor to achieve its goals.

He underlined the definition of a single policy for trade through this corridor as the most important requirement for the development of trade in this initiative and added, “The main issue discussed in this meeting is defining the same framework and reaching a common understanding for all the business operators that are willing to use this route.”

Established in 2000 by Iran, Russia, and India, this 7,200-km-long INSTC works as a multi-modal network of ship, rail, and road routes for moving freight between India, Iran, Azerbaijan, Russia, Central Asia, and Europe.

Geographically, Iran's territory, particularly the Chabahar port, is very strategic for the activation of the INSTC in linking India to Russia.

The INSTC is also an important transport agenda that is expected to considerably boost the transit and trade of Iran and Russia with the countries of the Caspian Sea and the Persian Gulf.

 

Number of countries willing to join BRICS Currency on the rise

The list of countries ready to join the BRICS alliance and accept the new currency is growing. From a set of 19 countries in April, the numbers have spiked to 41 by the end of June. A total of 22 new countries expressed interest to enter the bloc and ditch the US dollar in two months. 

The next BRICS summit will be held in August in South Africa where the bloc of five nations will collectively decide the formation of a new currency.

BRICS is an acronym for Brazil, Russia, India, China, and South Africa. The decision to expand the alliance will be jointly taken in the next BRICS summit and the bloc could soon become BRICS Plus.

The total number of countries that could challenge the US dollar on the global stage has reached 41. The developing nations that want to accept BRICS currency hail from Asia, Africa, and Eastern Europe.

The countries that have shown interest to join the BRICS alliance ahead of the summit are Afghanistan, Algeria, Argentina, Bahrain, Bangladesh, Belarus, Egypt, Indonesia, Iran, Kazakhstan, Mexico, Nicaragua, Nigeria, Pakistan, Saudi Arabia, Senegal, Sudan, Syria, the United Arab Emirates, Thailand, Tunisia, Turkey, Uruguay, Venezuela, and Zimbabwe.

Belarus is the first country in Eastern Europe that expressed interest to accept the new BRICS currency. On the other hand, France has also shown its interest to attend the next BRICS summit in South Africa.

Additionally, many countries in Africa remain on the sidelines and could announce their support for the BRICS currency after its launch.

It is worth noting why Africa is interested in BRICS and not the US dollar for global trade. 

Kenya has urged African nations to stop using the US dollar and trade in native currencies within the continent.

 

Quick end to Wagner insurrection upsets West

A short-lived armed mutiny in Russia was a well thought out and planned operation aiming to take over power in the country, says Russian deputy head of the Security Council Dmitry Medvedev.

When a country backed by the US-led NATO, with upwards of US$100 billion in sophisticated weapon shipments cannot counter Russian forces, it is quite impossible to imagine a single unit succeeding in a coup attempt. 

Life has returned to normal in Russia to the disappointment of NATO and its allies. 

Western media had always referred to Wagner PMC, whose members have been fighting in Ukraine as part of Russia's special military operation as mercenaries.

During the quick mutiny attempt, they were no longer referred to as mercenaries anymore in the Western news narrative, as Yevgeny Prigozhin and some of his forces had switched from battling NATO-backed Ukrainian forces to fighting against the Russian Federation. 

The US news outlets have cited sources as saying US intelligence agencies had known in advance that Prigozhin was planning a major move against the Russian government. 

The US is said to have deliberately avoided informing Russian authorities about the plan in an attempt to see how far Wagner PMC can go to inflict internal strife in Russia. 

Throughout the day of unrest in Russia, not a single drop of blood was shed. 

Many observers are of the belief that Prigozhin had been in touch with foreign intelligence agencies that have been trying to carry out the same mission as Prigozhin, but through other measures, in what Russian Foreign Minister Sergey Lavrov has called all-out hybrid warfare against his country. 

Western leaders have also been left frustrated as during the attempted coup, Russian military leaders, politicians, senior officials and the public came out in support of Putin and rallied around him in a strong sign of support for the Russian leader. 

Senior Russian officials had warned the West against using the mutiny attempt to advance their Russophobic goals, saying this would prove futile.

Prigozhin, head of the Russian private military company Wagner group, and his aides began the insurrection early on Saturday and ended by night. It was ended in a deal brokered by Belarus. 

The Wagner leader's adventure came to a swift halt following an agreement with the Kremlin, and Prigozhin called off his mutiny plans in return for security guarantees. 

As part of the agreement, it has been reported that Prigozhin has left Russia for Belarus while his Wagner fighters will be absorbed into the Russian military.
The Russian Federal Security Service has also dropped a criminal case over charges of a call for an armed rebellion.

Prigozhin ended the mutiny with the knowledge that his Wagner unit was heavily outmatched by the Russian military. His mission against Russia was similar to that of the US-led NATO military alliance, which has so far sent about US$100 billion worth of weapons to Ukraine to fight Russia. 

The armed contractors, who take their military orders from the commander of chief of the Russian armed forces, managed to seize several army headquarters in the southern Russian border city of Rostov-on-Don, while others forces tried to make their way to Moscow.

Sergey Surovikin, the deputy commander of the Russian joint forces in Moscow's special military operation, called on Wagner PMC to comply with President Putin’s order and to resolve all issues peacefully.

Wagner PMC has been leading the fight for the Ukrainian city of Bakhmut, in what has been the longest and deadliest battle between Russian and Ukrainian forces since the conflict erupted in February 2021.

Some analysts believe it showed the combat expertise that the Wagner armed forces lacked by stretching out the battle for too long and allowing Ukraine the time to carefully plan for its counter-offensive. 

Prigozhin began the attempted mutiny by claiming that his forces had been hit with an airstrike, accusing the Russian military leadership of killing members of his unit in Ukraine with the air attack. He failed to present any evidence to back up his allegation. Medvedev described the accusation as nonsense. 

The former Russian President pointed out that given the high degree of the attempted mutiny's preparedness, the professional coordination of action and the quality management of troop movements, it is possible to speak of a thought-out military plan and the participation in the mutiny of the individuals who earlier served in the elite units of the Russian Armed Forces or, quite possibly, of foreign specialists as well. 

Russian presidential spokesman Dmitry Peskov told journalists that an agreement was reached that PMC Wagner troops would return to their camps and places of deployment. Some of them, if they wish to do so, can later ink contracts with the Defense Ministry," Peskov said. "It also applies to fighters, who decided against taking part in this armed mutiny”.

"They have even requested the assistance of the traffic police as well as other help to return to their permanent places of deployment," Peskov added in remarks published by TASS.

Over the past six months, Prigozhin had been building a feud with Russia's Defense Minister Sergey Shoigu and Russia's chief of the general staff Valery Gerasimov. 

Putin had called on the businessman behind Wagner to settle any of his differences in a peaceful manner. Prigozhin chose the opposite, and that has raised eyebrows about what his true intentions had been and who was acting behind him.

A convoy of his forces crossed the border from the battlefield in Ukraine to a Russian border city, at one point taking full control of it, before the Russian military swiftly regained authority. 

His units have no aircrafts so there was no chance of success by his armed mutiny. The Russian military could have wiped out all his forces when they crossed the border, with Moscow enjoying powerful air superiority. 

Since the conflict in Ukraine, officials in Kyiv have repeatedly complained about a lack of advanced warplanes to match Russia's Air Force. 

 

OPEC Plus oil quota reform increases dominance of gulf producers

Saudi Arabian Energy Minister Prince Abdulaziz bin Salman earlier this month outlined one of the biggest reforms at OPEC in recent years and presented it as a reward for countries that invest in their oil industry.

The change clears the way for giving larger production quotas to OPEC Gulf members such as Saudi Arabia, the United Arab Emirates and Kuwait at the expense of African nations such as Nigeria and Angola.

Production quotas and baselines, from which production cuts are calculated, have been a sensitive subject within OPEC for decades as most producers want a higher quota so they can earn more from oil exports.

The shake-up is likely to become more extreme in the next few years as Middle Eastern state oil majors ramp up investments while production falls in African nations that have struggled to attract foreign investment.

Gulf producers, the holders of the little spare capacity in the global oil market, have long dominated OPEC.

Their power and influence has already increased in the last 15 years with their rising capacity, while African production has fallen as foreign investments have shrunk.

Unlike Gulf producers, African producers rely heavily on investment from international oil companies. Those companies have shunned Africa in recent years in favour of investment in the US shale patch and in prolific giant oilfields elsewhere such as offshore Brazil and Guyana.

In May, Saudi Arabia, the UAE and Kuwait's share of total OPEC production was over 10% higher than it was 15 years ago at 55%, according to OPEC production figures. Nigeria and Angola's total share over the same period has shrunk by over 3% to below 9%.

For Nigeria, capacity continues to be restricted by operational and security issues, combined with low investment levels, leading to decline, analysts at consultancy Wood Mackenzie said.

New field developments and recent discoveries in Angola will not be enough to stem long term capacity declines, they added.

In contrast, Saudi Arabia and the United Arab Emirates have plans in place to significantly boost their production capacity to 13 million bpd and 5 million bpd, respectively, by 2027 from current levels of about 12 and 4 million.

Fellow Gulf producer Kuwait on June 18 said it would boost its production capacity by 200,000 bpd by 2025 to reach 3 million bpd.

Capacity additions from the three Gulf countries over the 2020-25 period total a combined 1.2 million bpd, double the capacity that Nigeria and Angola are projected to lose over the same period, Reuters calculations find.

The two West African countries have lost nearly a quarter of their production capacity since 2019 as a result of underinvestment and security issues.

At its June 04 meeting, the Organization of the Petroleum Exporting Countries and allies, led by Russia, (OPEC+) overhauled production quotas for the majority of its members.

"In the final analysis what this agreement will achieve for all of us is that those who invest, not this year, but the years to come, 2024 and 2025 and moving forward, there will be a recognition for their investment," Prince Abdulaziz said.

While the majority of members of OPEC Plus got a lower production target, the UAE's was higher.

Richard Bronze, Head of Geopolitics at Energy Aspects, said one of the reasons behind the change was to address OPEC's previous credibility issues when policy changes were not necessarily reflected on oil markets.

"It meant that the actual supply increase or decrease resulting for a quota change would be far smaller than the announced figure, fuelling doubts in the market about the ability of the group to manage market fundamentals," he said.

 

 

Three scenarios surrounding Wagner mutiny

While the western analysts are offering all sorts of rationales, our readers are suggested to also consider three likely scenarios about the rebellion of Wagner's forces against the Russian army.

1- A possible deception plan by the Russian intelligence apparatus with the aim of diverting and draining the power and energy of enemy intelligence organizations as well as rival countries. In this case, the difference in the media narrative will deepen, some local operational tension will intensify, but from a functional point of view, the tension will not elevate to a strategic level.

2- Loyalty is what separates the Wagner unit and the Minister of Defense and the Chief of General Staff of the Russian Army. The former may be fake, the latter close to realty. In this case, based on the Russian approach and security-defense strategy, Prigozhin and his loyalists will be dealt with gradually but decisively.

3- A NATO-backed intelligence operation with the aim of disintegrating and weakening Russian forces. Prigozhin has coordinated with a foreign party. In this context, Wagner’s declared dispute is about greater loyalty to Russia, the effectiveness and efficiency of existing Russian defense and security approaches.

Any relationship with a Russian adversary will not flourish because it will highlight betrayal to Russia in alliance with an enemy.

This will lead to the collapse among the ranks of Wagner's forces. Part of NATO's goal will be achieved, but at the end of the day, it will consolidate Russia's defense and security superiority.

The important point is that Wagner, which is strongly dependent on the Russian defense sector, at least in the field of ammunition and logistics in the battlefield, will not be able to resist the Russia's powerful military.

 

United States exerting more influence on global oil market than other producers

Igor Sechin, Head of Russian energy major Rosneft has said that Russia is losing out to other OPEC Plus countries due to a smaller share of its oil production being exported.

Sechin, a longstanding ally of President Vladimir Putin, also said that the oil output boom in the United States, which is not a member of the OPEC Plus, was wielding more influence on the global oil market than other producers.

Some experts and analysts have noted that Russia's oil exports are still relatively high despite cuts in production.

Speaking at an economic forum, Sechin said some OPEC Plus countries were exporting as much as 90% of their output, whereas Russia supplies the global market with only half of its production.

"That puts our country in a less advantageous position under the current mechanism for assessing the impact and access to key markets," he said. "In this regard, it seems appropriate to monitor not only production quotas, but also oil export volumes, given the different sizes of domestic markets."

Currently, the Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC Plus, regulates only production, not exports.

Amid flagging oil prices, OPEC Plus agreed on a new oil output deal earlier this month, while Saudi Arabia, the group's biggest producer, pledged to make a deep cut to its output in July on top of a broader OPEC Plus deal to limit supply in 2024.

OPEC Plus accounts for around 40% of global oil production, while Rosneft takes the same share of Russia's oil output.

In remarks published later on Rosneft's website from Sechin's speech, he said Saudi Arabia is voluntarily cutting oil production, while also increasing production capacity.

He said Saudi Arabia may increase the amount of drilling rigs by at least a quarter in the next two years. As a result, by 2025-27, Saudi Arabia's oil producing capacity may rise by around 2 million barrels per day.

Speaking at the forum, Sechin also said it was more difficult for OPEC countries to find common ground due to differences in economic structure and oil production.

"In coming years, humanity will face the problem of production capacities and OPEC countries will no longer be able to meet the growing demand," he said.

 

Pakistan pays Russian crude price in Chinese currency

According to a Reuters report, Pakistan has paid for its first government to government import of discounted Russian crude in Chinese currency. It is a significant shift in its US dollar dominated export payments policy.

Discounted crude offers respite as Pakistan faces an acute balance of payments crisis, risking a default on its debt obligations. The foreign exchange reserves held by the central bank are scarcely enough to cover four weeks of controlled imports.

The first cargo of discounted Russian crude oil arranged under a new deal struck between Islamabad and Moscow earlier this year arrived in Karachi on Sunday. It is currently being offloaded at the port in the southern city of Karachi.

Petroleum Minister Musadik Malik, talking to Reuters by phone, did not disclose the commercial details of the deal, including pricing or the discount that Pakistan received, but said the payment was made in Chinese currency.

He said the purchase, Pakistan's first government-to-government (G2G) deal with Russia, consisted of 100,000 tons, of which 45,000 tons had docked at Karachi port and the rest was on its way. Pakistan made the purchase back in April.

Pakistan's purchase gives Moscow a new outlet to add to growing sales to India and China, as it redirects oil from western markets because of the Ukraine conflict.

Despite being a long-standing Western ally and the arch-rival of neighbouring India, which historically is closer to Moscow, analysts say the crude deal also presents a new avenue for Pakistan at a time that its financing needs are great.

Pakistan's Refinery Limited (PRL) will initially refine the Russian crude, the minister said. He had earlier referred to the purchase of the shipment as a trial run to judge financial and technical feasibility.

Malik on Monday played down concerns around the financial viability and concerns about the ability of local refineries to process Russian crude given the South Asian country's historical importation of Middle Eastern petroleum products.

"We've run iterations of various product mixes, and in no scenario will the refining of this crude make a loss," Malik said, adding, "We are very sure it will be commercially viable."

"No adjustments (were) needed at the refinery to refine the Russian crude," the minister told Reuters.

Energy imports make up the majority of the Pakistan's external payments. Islamabad imported 154,000 bpd of oil in 2022, around steady with the previous year, data from analytics firm Kpler showed.

The crude was predominantly supplied by the world's top exporter Saudi Arabia followed by the United Arab Emirates. The 100,000 bpd from Russia in theory greatly reduces Pakistan's need for Middle Eastern fuel.

 

Iran emerges second largest sponge iron producer in the world

According to an IRNA report, the World Steel Association (WSA), in its latest annual report, has ranked Iran second among the world’s top sponge iron-producing countries for the year 2022.

Islamic Republic managed to produce 32.9 million tons of sponge iron in 2022 to stand at second place after India with 42.3 million tons of production.

According to WSA, Iran also kept its place as the world’s 10th largest steel producer last year, with 30.6 million tons of crude steel output.

Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) was also reported to be the world’s 20th largest company based on the WSA ranking.

The total global production of crude steel in 2022 was 1.301 million tons while the consumption of this product in the world was 1.301 billion tons.

Earlier, WSA in its monthly report for April 2023 ranked Iran eighth among the world’s top steel-producing countries for the mentioned month, indicating a one-place rise compared to the previous month.

The April report showed that Iran’s crude steel output increased 5.9% in the mentioned month while the global average growth rate stood at negative 2.4%.

Based on the WSA data, Iran produced 3.1 million tons of crude steel in April.

Meanwhile, the Islamic Republic produced 9.7 million tons of steel in the first four months of 2023, registering a nominal growth of 0.1% as compared to the same period in the previous year.

WSA report said that the world’s 64 steel producers managed to produce 161.4 million tons of the commodity in April, 2.4% less than the figure for the previous year’s same period.

The steelmakers produced 622.7 million tons of steel in the first four months of this year, which indicates a 13% drop as compared to the same period last year.

According to the WSA report, China, India, Japan, the United States and Russia were the world’s top steel producers respectively.

The Iranian steel industry has been constantly developing over the past years despite all the pressures and obstacles created by outside forces like the US sanctions and the coronavirus outbreak that has severely affected the performance of the world’s top producers.