Iranian oil output 3.1 million barrels per day

The US Energy Information Administration (EIA) in a report disclosed Iranian crude oil output at 3.1 million barrels per day (bpd). This indicates Iranian oil output has risen 500,000 bpd in the current year.

On October 29, the spokesman of the Iranian Oil, Gas and Petrochemical Products Exporters’ Union said that Iran’s oil production has increased to 3.4 million barrels per day, despite the US sanctions aimed at curbing oil exports and the associated revenue to Iran’s government.

“The latest reports show that Iran’s oil production has increased to 3.4 million barrels per day, while it was about 2.9 million barrels per day until recently,” Hamid Hosseini told IRNA.

Given that previously closed oil wells have been reopened and returned to the production cycle, Iran can increase its oil production to 3.8 million bpd, he said.

“If we seek to increase oil exports from 3.8 million barrels per day to 4.2 million bpd in the 7th National Development Plan, we need to invest an average of US$25,000 for each barrel of oil. Since these oil wells, we have the opportunity to increase the oil production to 3.8 million barrels per day,” he explained.

Hosseini also said that about 40,000 bpd have been added to the country’s oil production from the Sepehr and Jafir oilfields, which can help with the economic growth of the country.

 

Why can’t Pakistan buy oil and gas from Iran?

The United States first imposed sanctions on Iran in 1979 on the pretext of radical students storming its embassy and taking staff hostage. Since then sanctions have remained in force, in fact new sanctions have been imposed over the years.

While the United States continues to play the mantra that Iran is busy in the production of nuclear warheads, it hasn’t come up with any credible proof. Many doubt it is a hoax call like presence of Osama bin Laden in Afghanistan and Iraq busy in the production of weapons of mass destruction (WMD).

The growing perception is that the United States considers Iran a hurdle in the creation of its hegemony in the region, the major source of crude oil.

There is also growing impression among Pakistanis that the successive governments in Pakistan due to the US pressure stopped buying crude oil from Iran and didn’t go ahead on the construction of Iran-Pakistan gas pipeline.

The US administration is fully cognizant of the fact that Pakistan’s GDP growth is being pegged due to looming energy crisis. However, Pakistan is not allowed to buy crude oil and gas from Iran.

It is on record that India has been buying crude oil from Iran and also from Russia, despite imposition of sanction.

It is high time Pakistan should ask the United States to allow it to import crude oil and gas from Iran.

To be honest, the United States has no legal or moral authority to restrict any country from buying Iranian energy products.

Lately, the United States has not only swapped prisoners with Iran, but also allowed transferred US$6 billion to Iran. This was in fact Korean money payable to Iran, against crude oil already purchased.

Is it not the height of hypocrisy that United States has used money which it never owned for the exchange of prisoners, but didn’t release the funds when Iran needed it the most during COVID-19 pandemic?

The time has come Pakistanis should assert themselves and convince the US that buying energy products from Iran bodes well for Pakistan. If India can pay Russia in different currencies, Pakistan should also be allowed to buy energy products from Iran against supply of food.

On may recall that during sanctions on Iraq, the country was allowed to export certain quantity of crude oil and use the proceeds for buying food under “Oil for Food Program”.

Iranian oil exports hit five year high

Iranian crude exports and oil output have hit new highs in 2023 despite US sanctions, according to consultants, shipping data and a source familiar with the matter, adding to global supply when other producers are limiting output.

Tehran's oil exports have been limited since former US President Donald Trump in 2018 exited a 2015 nuclear accord and reimposed sanctions aimed at curbing oil exports and the associated revenue to Iran's government.

Exports have risen during the term of his successor President Joe Biden. Iranian and Western officials have said the US is holding talks with Iran to sketch out steps that could limit the nuclear program.

Iranian crude exports exceeded 1.5 million barrels per day (bpd) in May 2023, the highest monthly rate since 2018, according to Kpler, a provider of flows data. These were around 2.5 million bpd in 2018, before the US withdrawal from the nuclear deal.

Iran said in May it has boosted its crude output to above 3 million bpd. That's about 3% of global supply and would be the highest since 2018, according to figures from the Organization of the Petroleum Exporting Countries (OPEC).

A source familiar with the matter told Reuters earlier this month output was still at this level.

The International Energy Agency this week put Iran's May production at 2.87 million bpd, close to Iran's official figure.

The rise from Iran comes as OPEC Plus, which includes OPEC, Russia and other allies, is cutting output to support the oil market, where expectations that economic weakness will dent demand have pressured prices.

Other analysts say Iran's production and exports have risen. SVB International, a consultant, estimates crude production hit 3.04 million bpd in May, up from 2.66 million bpd in January. Exports of crude and condensate were 1.93 million bpd in May.

"Sanctions are in place but perhaps not fully implemented or monitored," said Sara Vakhshouri of SVB, who has previously said during Biden's term there hasn't been any serious crackdown or action against Iran's oil exports.

"Also all of these supply volumes are in the dark market, where there is no transparency and so these are not reflected in formal global supply and export data."

On the issue of whether the US is strictly enforcing the sanctions, the US State Department and Treasury did not immediately respond to requests for comment.

China is Iran's biggest customer while volumes also head to Syria and Venezuela, according to analysts and shipping data.

OPEC+ Plus agreed on June 4 a wide-ranging deal to limit oil supply into 2024. Iran is not required to make cuts as, together with Venezuela and Libya, it has an exemption. Nigeria is not exempt but has faced internal challenges in raising output.

Analysts at JP Morgan in a report this week said OPEC+  Plus needed to cut more. They lowered their Brent oil-price forecast for 2023 to US$81 a barrel from US$90, saying rising supply was offsetting demand growth.

"Within the broader OPEC Plus alliance, supply has been also rising outside the core members," the analysts at JP Morgan said, and revised up their production expectations for Venezuela, Nigeria and Iran by almost 600,000 bpd from November last year.

"Invariably, to make room for this supply growth, OPEC Plus needs to cut more, were the alliance to adhere to the market management strategy."

 

 

 

 

 

 

Iranian president meets Venezuela president

Iranian President Ebrahim Raisi and his accompanying delegation held several meetings with Venezuelan officials in a bid to deepen partnership between Tehran and Caracas. 

On Monday morning Iran’s local time, President Raisi left Tehran for a tour of three Latin American nations -Venezuela, Nicaragua, and Cuba- as the head of large politico-economic delegation. 

Upon his arrival in the Venezuelan capital, the Iranian president was accorded an official reception in which the national anthems of Iran and Venezuela were played. During the playing of the national anthem of the Islamic Republic of Iran, a group of Venezuelan children and teenagers sang the national anthem of Iran in Persian.

After the reception ceremony, President Raisi and his Venezuelan counterpart Nicolas Maduro held a meeting in which they discussed ways to boost bilateral cooperation. 

In the meeting, Raisi described the relations between the two countries as strategic. 

“Despite the expansion of relations between Iran and Venezuela in recent years, diverse mutual capacities require the agreements of the two countries to be implemented as quickly as possible and the relations between them to be upgraded to higher levels,” he said, according to the official website of the Iranian presidency. 

Raisi underlined the achievements that Iran made while being under US. sanctions. He said Iran can share these achievements with Venezuela.

“The Iranian nation has gained valuable experiences and achievements in the field of science and technology by standing up to the domination system and overcoming the sanctions, which can be shared with Venezuela,” Raisi noted.

The Iranian president also touched on the emerging new world order, saying that such a development can benefit Iran and Venezuela. Stating that a new system is being formed in the world, Raisi said that the future of these developments will benefit the freedom-seeking and independent countries of the world.

President Maduro, praised the history of strategic relations between Tehran and Caracas and announced his determination and the members of the cabinet of this country to start a new round of efforts and measures to expand relations with the Islamic Republic of Iran.

Maduro also hailed the emerging new world order. “In the new world that is being formed, imperialism is falling and the countries that have resisted the arrogance of the arrogant are on the verge of victory,” he said. 

Stressing the need for establishing a direct air link between the two countries and strengthening shipping lines to increase trade between Iran and Venezuela Maduro said, “The two countries have good capacities for cooperation in the fields of tourism, agriculture and animal husbandry.”

In the meeting of the high-ranking delegations of Iran and Venezuela, the presidents of the two countries called Martyr Haj Qassem Soleimani and the late Venezuelan politician Simón Bolivar as heroes of the fight against domination and imperialism.

Maduro praised General Soleimani. “I always remember General Soleimani and I pay tribute to him. In 2018, a brutal cyber attack from United States was launched on our energy infrastructure. He directed a team to investigate the cyberattack and helped us a lot. Many do not know about that,” Maduro said, according to Fars News. 

He added, “I also pay my respects and we will install his bust in the tomb of Simon Bolivar.”

In Caracas, President Maduro also awarded Raisi the national honor of Venezuela.

Raisi and Maduro also participated in Iran-Venezuela high-level joint commission meeting. After the meeting, the presidents of the two countries held a joint press conference.  

“Iran and Venezuela have common interests and views in the fields of independence, freedom and justice, which has brought the people of these two countries closer together,” Raisi said at the presser. 

He also stated that the people of Iran and Venezuela have common enemies who do not want them to live independently. 

“The Iranian nation has proven its friendship with the Venezuelan people over the past years and has always shown that it is their friend during their difficult times,” Raisi added.

Pointing out that the relations between Iran and Venezuela are not ordinary, but strategic, President Raisi said, “Having common interests, views and enemies have made cooperation deep and strategic.”

He added, “Today, the two countries are determined to develop relations in different fields.”

Raisi stated, “The Islamic Republic of Iran, thanks to the blessings of the Islamic Revolution, the pure blood of the martyrs, and the resistance of the Iranian people, has been able to turn the pressures and sanctions into opportunities, and in this way has provided various capacities that are ready to be shared with the resilient nation of Venezuela.”

At the end, Raisi once again paid tribute to the national heroes of Venezuela and honored the memory and name of the resistance martyr Haj Qassem Soleimani and saluted his noble soul.

 

Pakistan-Iran to revive gas pipeline project

Pakistan and Iran on Wednesday agreed to explore new avenues of collaboration in the fields of aviation including direct flight, revival of gas pipeline project and expansion of trade between the two nations.

The understanding was reached during a meeting between Commerce Minister Naveed Qamar and visiting Chairman of the Commission of National Security and Foreign Policy of the Majlis of the Islamic Republic of Iran Vahid Jalalzadeh, who is leading a high-level delegation to Pakistan to discuss various measures to promote bilateral economic relations between the two countries.

An official announcement issued after the meeting said that both sides underlined the need to strengthen economic ties and emphasized the importance of increased connectivity.

Jalalzadeh proposed the initiation of direct flights between Iran and Pakistan to enhance travel and business opportunities.

Qamar acknowledged the significance of this proposal and expressed his support for establishing direct flights as a means to facilitate trade and promote people-to-people exchanges.

During the meeting, the discussions also touched upon the long-standing issue of the Pak-Iran Gas pipeline. Qamar stressed the importance of expediting the project, as it holds immense potential for energy cooperation between the two countries.

He pledged his commitment to resolve any obstacles and move forward with the pipeline, which would bring substantial benefits to both nations.

Recognizing the current trade volume of approximately US$2 billion as insufficient, Jalalzadeh urged the need to take solid steps to increase it to a multi-billion-dollar level. However, there is no official trade between the two countries owing to the non-availability of banking channels and restrictions.

Qamar emphasized the importance of opening new border markets and implementing a barter trade system to facilitate greater commercial exchange. These measures, he believed, would significantly boost trade volume.

Jalalzadeh also invited Qamar to visit Iran.

The inauguration of one of the six crossings at the Pasheen Border on May 18 by the prime minister of Pakistan and the president of Iran also came under discussion.

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.

 

Russia and Iran in Energy Market: Competition or Cooperation

Many observers believe Moscow is behind every significant international development or organization, be that the results of the US Presidential elections or the decisions of the European Parliament.

That is rooted in lack of systemic understanding of international relations and sovereign motivation of its actors. A similar approach is taken with regard to Iran’s policy in the Middle East. Where a Shiite individual or movement makes a step, Iran’s opponents see footprints leading to Tehran. Neither of the two capitals has both motivation and capabilities to control such developments abroad, so before ascribing any role to Moscow or Tehran, one should better study how things work in reality, rather than according to their imaginary schemes, even if such schemes make sense to the public.

One of these approaches, which is rather similar to the conspiracy theory, is to blame Russia of taking deliberate actions to strain the relations between Iran and Europe, and subsequently, targeting Iran in the energy market as a potential actor to replace Russia in Europe's energy supply.

The global developments that have turned up in the last few years have caused Iran-Russia relations to enter a new, comprehensive and rather strategic phase. Despite the unprecedented violations and sanctions imposed on Iran by Western countries, the evidences of new cooperation between Iran and Russia show that the recent alliances are on the path of comprehensive development.

Cooperation in the field of advanced technologies, unprecedented trade volume up to US$4 billion in 2022, bilateral military collaboration, gas memorandum between Iran and Russia's Gazprom and also, Russia's support for Iran's membership in the Shanghai Cooperation Organization shows the remarkable expansion of strategic relations in recent years, especially after the intensification of Western sanctions on both countries.

In a completely simplistic judgment, some analysts believe in Russia's pre-planned strategy to completely eliminate Iran from global equations, especially by preventing the restoration of this country's relations with the European Union in the field of energy exports as an alternative to the sanctioned Russia in this market. In order to justify their claim, they pointed to the military cooperation between Iran and Russia, which became an excuse to intensify the sanctions of the European Union against Iran, as well as diminishing the possibility of revitalizing the JCPOA, and they consider it as a scheme by Russia.

Spreading such pessimistic views lead to questions that can invalidate such views to some extent. Considering the disconnection between Russia and European countries in the field of energy trade, how can Iran supply the amount of energy needed by Europe as an alternative to Russia in terms of production infrastructure, production volume, export capacity, as well as logistical ability?

A detailed examination of Iran's production and export capacities and capabilities in the field of energy such as oil, gas and even petrochemical products can well answer the above question and negate the mentioned point of view.

According to the gas crisis of Europe during the last year, many supposed that Iran would be the best option to compensate for the shortage of gas in Europe. Declaration of such a proposal showed that some analysts were not informed about the production capacity and conditions of facilities and infrastructure of Iran's gas fields.

According to statistics, the average gas consumption in the country is 250 billion cubic meters per year, and the total gas production in 2021 was about 269 billion cubic meters. Moreover, Iran's total gas exports to Iraq and Turkey are 17 billion cubic meters annually. Therefore, if we consider consumption and export to Turkey and Iraq, the amount of production is almost equal to both consumption and exports. Therefore, considering gas export, Iran will need a large investment for development of production infrastructure, that the recent agreement between Iran and the Russian company Gazprom is concluded with the anticipation of the infrastructure expansion, which is a manifestation of Russia's willingness to strategic cooperation with Iran even in the field of energy.

Others point to Europe's greater need for Iranian oil than gas, and this will be the best opportunity for Iran to take advantage of the current situation by supplying oil to European Union countries.

Although this expectation seems reasonable to some extent, it should be noted that in the current situation Europe's immediate demand for oil is lower than gas. One should acknowledge that oil transportation is easier than gas, and Europe's supply sources, such as Saudi Arabia have more variety of products. Moreover, it should also be taken into consideration that even with restoration of the JCPOA and the beginning process of exporting oil to Europe, in the current conditions Iran's oil will not have a notable impact on the reduction of Europe's oil demands.

Considering the production of 4 million barrels of oil per day and also in light of domestic consumption, Iran's export capacity is expected to be 2.0 to 2.5 million barrels per day. Referring to the number of barrels that will be exported to South Korea, Japan, China and India, therefore ultimately one cannot imagine a significant amount for export to Europe. Although one should admit that this number of barrels will make no difference to Russia and the long-term prospects of this country in international relations.

According to the mentioned points, it implies that some criticisms toward the enlargement of Iran and Russia's relation are completely thoughtless and stem from the lack of correct and systematic understanding of international relations, and undoubtedly, some of them are rooted in some historical narratives in the relations between the two countries.

The analysis of any international policies should be based on the principles of international relations and realities, not on excitement and personal interests to a particular side or even conspiracy theories.

The relations between Iran and Russia have been progressing towards comprehensive development in recent years, and its effects can be seen in the internal and external developments of both countries.

One of these fields is energy trade, where both countries have had valuable cooperation to increase each other's production and export capabilities.

Nevertheless, the Russia's strategy in destruction of relations between Iran and Europe with the aim of maintaining the monopoly of energy exports is completely simplistic as well as short-sightedness of the depth of Iran-Russia relations in recent years.

Courtesy: Tehran Times

 

 

Iran dispatches export cargo ship to Venezuela

A ship carrying Iran-made export goods has been dispatched by the Islamic Republic of Iran Shipping Line Group (IRISL) to Venezuela, IRIB reported.

According to IRISL, this is the fourth vessel carrying consignments produced by Iranian producers to the Latin American country in the current year.

As reported, another ship is also scheduled to be sent to Venezuela next month if anticipated capacities are being completed.

The IRISL has notified Iranian authorities and the chambers of commerce of the country, expressing readiness to create regular shipping line to export Iranian commodities to Venezuela.

Iran hosted the ninth meeting of the Iran-Venezuela Joint Economic Committee on November 15, 2022 during which the two sides reached agreements for the expansion of cooperation in several areas.

A senior delegation of Venezuelan officials including the country’s Transportation Minister Ramon Blazquez and Agriculture Minister Wilmar Castro Soteldo visited Iran to attend the mentioned meeting to explore new avenues for mutual cooperation.

The major economic event was co-chaired by Venezuelan Transport Minister Ramon Blazquez and Minister of Defense and Armed Forces Logistics of Iran Mohammadreza Gharaei Ashtiani.

At the end of the meeting, the two sides inked a comprehensive cooperation document covering a variety of areas including industry, mining, energy, petrochemical, trade, agriculture, science, and technology.

Addressing the event, Ashtiani said, “We firmly believe that the successful holding of this committee meeting will be the beginning and a turning point in the macro and strategic relations between the Islamic Republic of Iran and the Bolivarian Republic of Venezuela under the leadership of Seyed Ebrahim Raisi and Nicolas Maduro, the presidents of the two countries.”

He stressed that Iran and Venezuela are two independent countries with close and common positions on regional and international issues.

Prior to the two countries’ Joint Economic Committee meeting, Soteldo met with Iranian Agriculture Minister Javad Sadati-Nejad and the two sides inked a cooperation document on plant conservation and quarantine.

As reported, the signed document is a prelude to future agreements in various agriculture fields including mechanization, contract farming, knowledge and technology transfer, etc.

Speaking at the signing ceremony, Sadati-Nejad mentioned the visit of several Venezuelan delegations over the past few months, saying that these exchanges indicate the determination of the two countries to expand mutual ties.

Emphasizing the capabilities of the Islamic Republic of Iran regarding the export of agricultural products, the minister expressed hope that the export of all kinds of agricultural products and food such as dried fruits, citrus fruits, apples and etc. to Venezuela will be realized as soon as possible.

He also called on the Venezuelan side to consider special tariff reductions for Iranian agricultural products in future exchanges.

Also, on the sidelines of the two countries’ Joint Economic Committee meeting, Blazquez met with Head of Iran’s National Development Fund (NDF) Mehdi Ghazanfari during which the Iranian side expressed readiness for investment in Venezuela’s oil and petrochemical projects.

Blazquez also held a meeting with the former Head of the Islamic Republic of Iran Customs Administration (IRICA) Alireza Moghadasi during which the two sides signed an agreement on customs cooperation.

According to Moghadasi, mutual assistance and cooperation in technical fields, exchange of information between the customs of the two countries, especially focusing on the mutual identification of authorized economic operators (AEO) and risk management, are among the important provisions of this agreement.

World must adapt Russian sanctions new norm

According to Seatrade Maritime News, the joint statement by the G-7 Finance Ministers for the month of September confirmed as much when they said, “We underscore our shared commitment to our determined and coordinated sanctions imposed in response to Russia’s war of aggression.”

Russia now faces the highest number of sanctions in the world. The figure stood at 5,581 in March, some way ahead of Iran and Syria. By August 7,750 individuals faced sanctions along with 1,452 entities, 91 vessels and six aircraft.

Even if a ceasefire in the current Ukraine war were agreed tomorrow, the sanctions would continue since it would take so long for Russia to be accepted as a normal trading partner by the G7 countries and their allies.

The important point is that everyone engaged in international trade must accept the semi-permanence of anti-Russian sanctions and ensure they take every step possible to adhere to them. Carriers, forwarders, charterers, insurers, importers and exporters and port authorities, all need to know who they are dealing with more than ever and be fully alert to the possibility of Russian proxies masquerading as legitimate entities.  

From now on, due diligence means screening all vessels and trade transactions to pick up suspicious activity by shell companies or front organizations that link back to Russia, which is capable of highly sophisticated workarounds when it comes to sanctions?

While Iran has been increasingly cunning in side-stepping sanctions, Russia is a larger economy with many more established contacts beyond its vast borders. For all organizations engaging in trade, monitoring for sanctions or trade-based money laundering is more of a necessity than ever.

In Britain, the urgency for organizations to screen and monitor for illegal Russian trading activity has increased with the introduction by OFSI (The Office of Financial Sanctions Management) of a strict liability test for sanctions breach investigations.

But around the world, more countries are taking different aspects of sanctions seriously, especially in relation to cargo-carrying vessels.

In Asia it was the Monetary Authority of Singapore that took the strongest line on such matters.

In April, in a sign that times are changing, the Central Bank of Bangladesh mandated the country’s banks to implement vessel-tracking to cut down on money laundering.

All legitimate organizations involved in trade need to increase the scope of routine and ongoing activity such as KYC and TBML monitoring and screening. They must have the ability to spot the indicators of illicit Russian activity or illegal trade with “Russian owned or affiliated” entities.

There are several areas that need close attention, which include:

Complex or changed ownership structures in companies supplying vessels for transactions: While there are often valid reasons for complex ownership, organizations need to watch out for shell companies, and questions of registration, domicile and control. This is more than simply looking at public details. Technology drawing on many sources can now see more deeply into ownership structures, which is an important first step.

Histories: Organizations need to avoid use of vessels or carriers with records of infringement or “going dark” by switching off AIS beacons, or which have a history of visits to areas or ports known for sanctions-flouting. Switches to flags of convenience or sudden changes of ownership should be warning lights in the current climate.   

Obscure supply chains: It is important to know which banks are financing transactions and who the parties and beneficiaries are. In the physical supply chain, anyone financing or participating in a transaction needs to know where the goods or commodities are coming from and where they are going. Just looking at vessels listed is not enough.

Vessel monitoring: Organizations need the end-to-end visibility to see ports of origin and ports of loading in any transaction. But they also must track vessels carrying the cargo across the oceans and be aware when they linger in areas known for illegal ship-to-ship transfers, or visit ports recognized as high-risk for sanctions flouting. Having the technology to check certificates of origin, bills of lading, consignees and so forth is vital, especially for banks financing or facilitating thousands of trade deals and shipments every day.

Vague drafting of sanctions: Knowing who or what is “Russian-owned and affiliated” can be difficult to nail down. It is understandable that port authorities, for example, do not want to make wrong moves that prove to be costly, such as impounding vessels where lawyers can make a strong case for legitimacy, or where ownership and responsibility are difficult to establish. Many ports lack sufficient screening technology, which is a deficit they need to address.

With thousands of transactions underway at any moment, the burden of ensuring continuing compliance with a mounting body of sanctions is immense.

Success will only be achievable through technology that can pull in all the relevant data at scale and analyses it in near-real time as part of an integrated monitoring and compliance solution.

Many financial organizations, for example, already have compliance technology into which they could integrate advanced sanctions-screening solutions.

Sanctions are unlikely to become any less complex and those against Russia are here to stay for years. For any organization participating in cross-border trade, it is surely worth avoiding any failure in screening or monitoring that could result in hefty fines and significant long-term reputational damage.

 

US and EU making the world a big fool

The United States and European Union have ramped up buying key industrial metals from Russia, despite logistical problems spurred by the war in Ukraine and tough talk about foreign exchange starved Moscow.

The metal shipments highlight the West's difficulty in pressuring Russia's economy, which has performed better than expected and seen its currency (rouble) surge as buoyant oil revenue has helped offset the impact of sanctions. 

The US and EU import of Russia's main base metal products, aluminium and nickel, during March-June period increased by as much as 70% shows official trade data.

The total value of US and EU imports of the two metals from March to June were reported at US$1.98 billion.

The West has imposed repeated waves of sanctions on a wide range of Russian products, people and institutions, but has largely spared the industrial metals sector.

A US State Department spokesperson said in response to a query from Reuters, "Although we don't preview our sanctions actions, nothing is off the table to increase the price on Putin's unjustified war against Ukraine."

Analysts said the United States and Europe have learned lessons after huge disruption on construction, auto and power sectors caused by sanctions imposed by former US President Donald Trump on Russian aluminium 2018. Those sanctions were lifted the following year.

Prices of both metals surged to record peaks shortly after Russia launched its invasion of Ukraine on February 24 on fears that sanctions or difficult logistics would block shipments.

But those fears were unfounded, since the data show Russian exports during March to June were relatively strong.

"Market mechanisms are working," said Julius Baer analyst Carsten Menke, referring to Russian metals shipments.

"We know from commodity traders it's mainly a question of the price. It's not so much about some politician not wanting you to buy, but is there a deal here."

Russia's Rusal is the world's largest aluminium producer outside China and accounts for about 6% of estimated world production.

During the four months following Russia's invasion of Ukraine, the EU was the biggest importer of unwrought aluminium from Russia, pulling in an average of 78,207 tons a month in March-June, 13% more than the same period last year.

Rotterdam, Europe's largest port, said in a report total volumes rose 0.8% in the first half of 2022, but "break bulk" - cargo that does not fit in containers -- rose sharply by 17.7%, driven by higher imports of metals.

A port spokesperson told Reuters that shipments of aluminium and nickel were still arriving in the port since they are not sanctioned, but declined to give any figures.

US monthly imports of Russian aluminium averaged 23,049 tons in March-June, up 21% from the same period last year.

"For the Americans, it's very important that they get as many different aluminium sources as possible," said Tom Price, Head of Commodities Strategy at Liberum.

"They're very reluctant to get any metal from China, where exports are shrinking, so Russian Rusal aluminium is very important, that is the reason they haven't shut that trade down."

Russian aluminium imports to last year's top seven destinations in March to June averaged 221,693 tons a month, 9% less than the same period last year, but 4% higher than the monthly average for all of 2021.

In nickel, Russia accounts for about 10% of global output and the country's Nornickel makes about 15%-20% of the world's battery-grade nickel. Nickel imports from Russia by the top three destinations in March-June rose 17% year-on-year. The United States saw the biggest gains, surging 70% compared to last year, while EU shipments gained 22%.

Benchmark nickel on the London Metal Exchange doubled to a record above US$100,000/ton on March 08, prompting the LME to suspend trading and cancel deals.

 

United States slaps new oil sanctions on Iran

 

The United States Department of Treasury this week imposed more oil and petrochemical industry sanctions on Iran amid stalled nuclear negotiations.

"While the United States is committed to achieving an agreement with Iran that seeks a mutual return to compliance with the Joint Comprehensive Plan of Action, we will continue to use all our authorities to enforce sanctions on the sale of Iranian petroleum and petrochemicals," said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson.

In a news release, the Treasury said it would sanction an international network of companies and individuals involved in the marketing of Iranian crude oil and petroleum products in East Asia.

Secretary of State Anthony Blinken said in a tweet that the US is imposing the sanctions "absent a commitment from Iran to return to the JCPOA."

The latest round of talks between Iran and the US facilitated by the European Union ended inconclusively last week, with participants saying they would resume soon.

Meanwhile, Iran has stepped up its demands on the US side, according to the US Special Envoy for Iran—demands that have nothing to do with the nuclear deal.

"They have, including in Doha, added demands that I think anyone looking at this would be viewed as having nothing to do with the nuclear deal, things that they've wanted in the past," Robert Malley told NPR this week.

"The discussion that really needs to take place right now is not so much between us and Iran, although we're prepared to have that it's between Iran and itself, that they need to come to a conclusion about whether they are now prepared to come back into compliance with the deal, if we're prepared to do the same, and we've said we are," the Special Envoy for Iran also said.

Iran's Foreign Minister, who led the latest talks with the EU, said, as quoted by Reuters, "We are prepared to resume talks in the coming days. What is important for Iran is to fully receive the economic benefits of the 2015 accord."

 

Russia-Ukraine conflict paves way for free trade agreements among EU members

Russia’s war with Ukraine is giving member countries of the European Union fresh incentives to speed up work on free-trade agreements. At least nine nations including Germany and Spain are planning to send a letter to the EU seeking to speed the delayed talks, according to a Bloomberg report.

The signatories want faster negotiations with New Zealand, Australia, India and Indonesia, while speeding the implementation of accords agreed with Chile, Mexico and the Mercosur bloc of countries, which include Argentina, Brazil, Uruguay and Paraguay.  

The letter also says that the process to negotiate, sign and implement trade deals is too long, and points out that the massive Regional Comprehensive Economic Partnership was signed in late 2020 and will enter into force this year for most members.

In Brussels, a slow-moving trade bureaucracy has often been displaced and made irrelevant by quicker political developments.

For example, in 2016 a transatlantic trade deal negotiated during the Obama administration tanked after Donald Trump’s election reversed the trajectory of US-EU trade liberalization efforts.

Then in late 2020 the EU announced the conclusion of its seven-year investment negotiations with China, only to see it promptly belly flop after Brussels clashed with Beijing over its alleged human-rights abuses in Xinjiang.

Trade agreements take time to complete and sometimes span the length of entire careers, which makes it understandably frustrating to see years of hard work go down the drain.

Now Russia’s invasion is hastening a fundamental rewiring of the global economy that is reinforcing existing trade ties among geopolitical allies and incentivizing new ones. It’ll play out in the months ahead through business decisions about supply chains and government deal-making.

“In a post-invasion world, it has become increasingly untenable to isolate trade from universal values such as respect for international law and human rights,” European Central Bank President Christine Lagarde said in a speech last month.

Shifts are occurring from dependence to diversification, from efficiency to security, and from globalization to regionalization, she said.

In Russia, businesses and the government may already be substituting imports from Europe with imports from Asia, according to Vincent Stamer, head of the Kiel Trade Indicator.

The Russian port of Novorossiysk in the Black Sea has recently seen a significant increase in the number of container ships arriving, whereas the port of St. Petersburg, which is involved in European trade, continues to record declines, Stamer said in a post Thursday.

“This could be a first indication of trade diversion” and “makes it all the more important to create economic incentives for countries such as India to move closer to Europe rather than Russia,” he added.

 

Iran Oil Show 2022 to kick off on May 13

The 26th International Oil, Gas, Refining and Petrochemical Exhibition of Iran (Iran Oil Show 2022) is scheduled to kick off on May 13 at Tehran Permanent International Fairgrounds, Shana reported.

As reported, all Covid-19 related permits have been obtained from the National Headquarters to Combat Coronavirus Pandemic and the four-day exhibit will be held in full compliance with health protocols and standards.

Iran Oil Show is among the most significant oil and gas events in the world in terms of the number of participants and its diversity.

The event covers a variety of oil industry areas, including upstream industries, universities and science centers, start-ups, and science and technology parks, petrochemicals and related industries, gas and related industries, pipes and tubes, valves, refining and distribution and related industries, rotary machines, as well as products exporters, and etc.

 

 

World heading towards worst food crisis

There are more warnings about the worsening global food crisis. Here is a snapshot of the latest key food stories from around the world. The countries having ample stockpiles have to stop smuggling to neighboring countries, and those with little supplies have to purchase as much as they can affords, that too in a speedy manner.

Pricey Nutrients

Expensive fertilizers are just one of many factors that have driven food prices to a record level. In response, rice farmers across Asia are scaling back usage of the nutrients, threatening harvests of a staple that feeds half the world.

The repercussions could be huge, predicts International Rice Research Institute. Yields could drop 10% in the next season, causing a loss of 36 million tons of rice, or the equivalent of feeding 500 million people. That could exacerbate food inflation that’s contributing to turmoil gripping developing nations such as Egypt, Tunisia and Sri Lanka.

Costly Shipping

Food prices are also being buoyed by high shipping costs, which is bad news for grain-importing countries, particularly in Africa and Asia.

The International Chamber of Shipping said about 80 to 100 ships have been unable to leave Ukrainian waters for almost two months due to underwater mines and military blockades.

Bulk freight rates are rising as owners and charterers expect ships will be tied up for longer periods. And that’s at a time when many importers are struggling to afford to buy enough grain. 

Food for Thought

The quality of Indian wheat — which has put off some buyers in the past — will be crucial as the country’s grain becomes competitive for the first time in years as the Ukraine war upends global trade flows. 

In Canada, where drought pummeled harvests last year, snow now threatens to delay crop plantings. The wintry weather there should mean more maple syrup because farmers can tap trees for longer.

And prices of fish crackers, a popular side dish in Indonesia, are set to surge as it becomes more expensive to make them.

Can barter trade between Iran and Pakistan become a reality?

Despite close political relations and geographical proximity, sanctions by United States on the Islamic Republic have prevented Iran-Pakistan economic ties from realizing their full potential, solely because the Islamic Republic of Iran cannot access international banking.

To resolve the mentioned problem, the two countries inked a barter trade agreement during the meeting of their Joint Economic Committee in Tehran in November 2021.

According to the government officials of the two countries, under the framework of this agreement, the two countries aim at boosting annual trade to US$5 billion.

Although barter trade is clearly an effective tool for sidestepping economic sanctions on Iran, the question is, “will it be enough for Iran-Pakistan trade to get back on track?”

Sanctions and solutions

The trade between Iran and Pakistan has been overshadowed by the US sanctions. The two countries having great historical and cultural ties, have been stripped of opportunities for mutually beneficial business.

Bilateral trade between the two neighbors, which share a border of 960 kilometers, was reported at about US$300 million in 2021, while the value of Pakistan’s trade with China amounted to over US$27.8 billion in the same year.

Considering the significantly low level of trade between Iran and Pakistan, the two nations are going to use barter mechanisms as a solution that can remove some of the current barriers to trade and hopefully allow them to fully benefit from their mutual economic capacities.

Regulatory barriers

According to a Pakistani expert and Member of the Digital Economy Task Force in United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) Muhammad Anwar, although signing the barter trade agreement is a big step toward removing the barriers in the way of trade between the two countries, it is not enough for realizing the US$5 billion annual trade target.

In order for the barter trade agreement to be implemented effectively, the two countries should make several regulatory adjustments as well, Anwar stressed.

“There are regulatory matters that should be resolved as well]. Iran charges Pakistani trucks US$1 for each three kilometers distance in terms of the fuel price difference, despite that they need to buy fuel on open market rate in Iran,” Anwar said.

Iranian trucks carrying cargoes from Pakistan and going inside Pakistan don't need to pay any tax as per Pakistan government policy, he added.

Trading in national currencies

Anwar believes that another step that would help the two countries realize their economic potential is to use their national currencies for trade along with the barter trade mechanism.

“Current trade balance is in favor of Iran. Due to banking restrictions exports of Pakistan to Iran are less,” the official said.

Trading in national currencies will make the two sides able to diverse the variety of the exchange commodities and this way the trade between the two sides will be more balanced, Anwar stated.

Asked about the major items exchanged between Iran and Pakistan he said, “From Pakistan mostly foodstuff like rice, sesame seed, fresh fruits, minerals are being exported whereas from Iran side LPG, petrochemicals, consumer good, etc.”

According to the expert, Pakistan’s affordable agricultural products can meet the growing demand in Iran.

Developing Transit

Anwar, who is also the CEO of a transportation company called North South Transport Network (NSTN), further mentioned the transit capacities of the two countries as a perfect opportunity for the two sides to increase their trade balance.

Iran and Pakistan which are both members of the Economic Cooperation Organization (ECO), can also cooperate to improve transit trade corridors in Central Asia, he said.

“Pakistan and Iran are in the center of east and west. Pakistan is bordering with India and China the two largest populated countries in the world whereas Iran connects Turkey and CIS and beyond Turkey, Europe which is great consumer markets for Asian products,” the official explained, adding “Iran and Pakistan can play a great role in connecting east with west.”

Islamabad-Tehran-Istanbul train is an example of the works that can be done to fully realize the connectivity and capacity in this regard, the official mentioned.

 

US Senate votes 100-0 to limit trade with Russia

The US Senate on Thursday passed legislation to end normal trade relations with Russia and Belarus, capping off weeks of negotiations that had stalled the bill. 

Senators voted 100-0 on the legislation, which ends permanent, normal trade relations with the two countries. The bill also reauthorizes Magnitsky Act sanctions that target human rights violations and corruption with penalties like visa bans or asset freezes.

The Senate is also expected to pass a separate bill to codify the Biden administration’s ban on Russian oil imports on Thursday. The two bills have been effectively linked together in the Senate and were part of a deal announced on Wednesday night.

“No nation whose military is committing war crimes deserves free-trade status with the United States. No vile thug like Putin deserves to stand as an equal with the leaders of the free world,” Senate Majority Leader Charles Schumer said ahead of the votes.

Senators were under pressure to reach an agreement before they leave town on Thursday for a two-week break and as Russia continues its weeks-long bloody invasion of Ukraine. That pressure only grew this week after photos emerged over the weekend of destruction in Bucha, a town northwest of Ukraine’s capital, including images of people lying dead in the streets and in mass graves, triggering widespread condemnation.

Biden said that he believed Russia had committed war crimes, while Schumer went further, saying it was “genocide, and Mr. Putin is guilty of it.”

The Senate’s vote is the first Ukraine-related bill it has had a roll call vote on since it passed billions in Ukraine aid as part of a sweeping government funding bill last month.

The trade bill passed the House on March 17, while the bill to codify the Biden administration’s oil ban passed on March 09, 2022.

But they faced headwinds in the Senate, as negotiators faced several potential sticking points. The most high-profile hurdle was a days-long negotiation with Senator Rand Paul over reauthorizing the Magnitsky Act sanctions, which is riding on the trade bill. The House bill changed the Magnitsky Act language from targeting “gross” human rights violations to targeting “serious” human rights violations, codifying a Trump-era executive order.

Negotiators had appeared to cut a deal with Paul last week but indicated as recently as Tuesday that they were still haggling over the language. In the end, the Senate deal sticks with the original Magnitsky Act language currently in law, instead of updating it.

As part of a deal to get votes on the Russia package today, the Senate also passed bipartisan legislation on Wednesday night to establish a lend-lease program for Ukraine, making it easier to send military aid to the country.

“As the world bears witness to the most serious security threat to Europe and our global stability since World War II, this legislation to speed up the process of moving military equipment to the frontlines couldn’t be more urgent,” Senator Jeanne Shaheen said about the bill.

“I appreciate the bipartisan support to pass our legislation in the Senate and urge the House to swiftly follow suit. As this crisis rapidly escalates and Putin bears down on Ukraine, every minute counts,” she added. 

 

Iran drills 75 oil and gas wells in a year

According to The Tehran Times, National Iranian Drilling Company (NIDC) has completed operation and drilled 75 oil and gas wells during the Iranian calendar year, ended on March 20, 2022. 

Hamidreza Golpayegani, Managing Director of the company informed that NIDC has drilled six development, five exploratory and 64 workover ones.

The official stated that 56 of the mentioned wells were drilled in the operational zone of the National Iranian South Oil Company (NISOC), 10 wells were drilled in the fields under the supervision of the Iranian Offshore Oil Company (IOOC), three in the fields under the operation of Petroleum Engineering and Development Company (PEDEC), one in the field under the supervisor of Iranian Central Oil Fields Company (ICOFC), three wells in the framework of project and two in the operational zone of the drilling management department of National Iranian Oil company (NIOC).

The official said that 76,125 meters of drilling was conducted in the mentioned wells. Collectively 44 light and heavy drilling rigs of NIDC are operating in the operational zone of NISCO, two rigs including one onshore and one offshore, in the zone of IOOC, seven rigs in the zone of PEDEC, six rigs in the zone of the drilling management department of NIOC, and one rigs in the project of using underground waters implemented by the Vice-Presidency for Science and Technology.

NIDC owns 70 light, heavy and super-heavy drilling rigs, including 67 onshore drilling rigs and three offshore rigs.

The company managed to carry out 10,182 meters of horizontal and directional drilling in 43 oil and gas wells across the country during the Iranian year 1399.

Some 654 meters of core extraction drilling was also conducted in the mentioned period which was a huge achievement for assessing the condition of the country’s oil and gas reserves.

Back in July 2021, Shahram Shamipour, Director of Renovation and Upgrading in NIDC had informed that the Company had allocated 5.2 trillion rials, about US$18 million for the renovation and upgrading of its drilling rigs and equipment in the company’s operational, technical, specialized, and logistical departments.

According to him, the renovation and upgrading operations are aimed at improving the performance of these rigs which are active in the country’s oil and gas field development projects.

Shamipour noted that the equipment going through renovation operations include fluid pumps, draw-works machinery, charting tools, pumps for cementing and acidizing trucks, tow trucks, cranes, piping machines, generators, hydrogen sulfide gas treatment systems, acid-coated storage tanks, and cement transport bunkers. 

Considering the National Iranian Oil Company’s strategies for strengthening the presence of domestic companies in the development of the country’s oil fields, NIDC, as a major subsidiary of the company, has been supporting such companies by lending them drilling rigs and other necessary equipment.

After the US reimposition of sanctions against Iran, indigenizing the know-how for the manufacturing of the parts and equipment applied in different industrial sectors is one of the major strategies that the Islamic Republic has been strongly following up to reach self-reliance and nullify the sanctions.

Oil, gas, and petrochemical industries have outstanding performances, with indigenizing the knowledge for manufacturing many parts and equipment that were previously imported.

Among different sectors of the mentioned industries, drilling could be mentioned as a prominent example in this regard.

 

United States to seize assets owned by Russian elites

In a far-flung conflict where Joe Biden has pledged to refrain from military intervention, the United States has largely turned to financial sanctions to exact punishment on Russia. 

Those efforts have been centered on some of the wealthiest Russians with ties to Vladimir Putin and the Kremlin — a group whose connections have led to fortune and an opulent lifestyle directly targeted by Biden.

As the nation’s intelligence leaders gathered before lawmakers earlier this month to offer grim assessments of Russia’s invasion of Ukraine, there was one topic that sparked both impatience and excitement.

“Are we going to seize some yachts?” Patrick Maloney asked FBI Director Christopher Wray.

“I mean, that sounds great. Are we going to see some of the stuff taken out of their hands?”

“We are joining with our European allies to find and seize your yachts, your luxury apartments, your private jets. We are coming for your ill-begotten gains,” Biden said during his State of the Union address.

The Department of Justice the next day announced its KleptoCapture task force to do just that.

But experts say the task force may not be able to immediately deliver the wins — and the seizures — lawmakers are eager for. 

“It's a bit of the fascination with the luxury of asset recovery, and what are in essence sort of the shiny exemplars of corruption, excess, that can be symbols of sort of poetic justice or rightful retribution,” said Juan Zarate, the first-ever assistant secretary of the Treasury for terrorist financing and financial crimes under the George W. Bush administration.

“But asset recovery is more than just the luxury items, and it gets quite complicated,” added Zarate, who helped seize Saddam Hussein's fleet of private jets and return them to Iraq.

Investigators are coming up against what’s designed to be a complex labyrinth.

“These people are extremely savvy when it comes to protecting their ill-gotten gains,” Dennis Lormel, a former special agent with the FBI who served as chief of its financial crimes program, told The Hill. 

“They're going to circumvent controls, they're going to circumvent the system, they are going to be as non-transparent as possible.”

Russia’s uber wealthy seldom directly own their vast holdings, instead creating layers and layers of shell companies.

“Think of these situations as kind of an asset version of Russian nesting dolls,” said David Laufman, who oversaw the enforcement of sanctions at the Department of Justice during the Obama and Trump administrations.

The result means lots of tracking down records from across the globe and sifting through piles of paperwork to determine ownership.

Adding to the complication is that many holdings may be owned by a trusted ally of the person being targeted.

“Russian oligarchs and elites have not openly held their assets. They've held them through shell companies or nominees or proxies,” said Sharon Cohen Levin, a partner with Sullivan & Cromwell who led the money laundering and asset forfeiture unit of the US Attorney’s Office for the Southern District of New York for two decades.

The combination makes it particularly difficult — not impossible, but challenging — to unwind and understand the true owners of the property.

“The first challenge that KleptoCapture task force is going to face is to be able to not just identify the yacht, but answer the question who actually owns it? The fact that you’ve seen an oligarch on it doesn't necessarily mean that it's their property,” she said — even if the oligarch “named the yacht after their mother.”

While the wealth of oligarchs affords a number of luxuries — high-rise penthouse apartments, private jets, even football clubs — yachts have remained a top focus.

A Twitter account charting the movement of oligarch-affiliated yachts created earlier this month has already climbed to nearly 30,000 followers, while several news outlets have mapped the ports where they are parked.

“Yachts are fancy playthings for very rich people,” Laufman said, “They are symbolically representative of the kinds of vast wealth of these oligarchs and create kind of a feel good ‘we got you’ moment for governments that are participating in this coalition to counter Russia's aggression.”

Some countries have already managed to commandeer yachts. France earlier this month seized Amore Vero, a yacht believed to belong to Igor Sechin, the head of oil giant Rosneft. Italian authorities have also seized at least three such vessels.

But there are only so many oligarchs and so many yachts to seize. 

The number of those sanctioned by the US ballooned Thursday, when the White House announced it would sanction another 400 individuals, including 328 members of the Duma.

Of the smaller group of those initially sanctioned, however, The Associated Press compiled a list of some 56 superyachts believed to be owned by Russian oligarchs. Maps from a number of outlets show the vessels scattered across the globe — with very few in US waters. 

Laufman said the yacht fixation overlooks the vast amount of wealth otherwise held by Russian elites.

“I’m not dumping on seizing yachts,” he said. “I’m a fan of seizing yachts, but that’s not even the tip of the iceberg. That’s just two or three snowflakes on the iceberg compared to the wealth that has likely been squirreled away in accounts that may currently be evading the visibility of US law enforcement or intelligence agencies.”

Once the task force identifies assets belonging to sanctioned oligarchs it can freeze them, but to formally seize them they will need to go to court.

The distinction may matter little to the public. Freezing an asset — whether a bank account or boat — blocks its use, cutting off access to a certain lifestyle.

US law also allows such a status in perpetuity, the reason some Iranian assets have been frozen since the late 1970s.

But the formal seizure requires proving that the assets were used in furtherance of a crime or gained through some form of corruption.

For Zarate, even attempting to seize those assets on the basis of corruption is itself a mind shift.

“We are now judging all of this to be illegitimate or at least worthy of seizure and investigation in a way that we haven't before, right? It's not new that these oligarchs all owned yachts. Everyone knew this. What's different is not just the invasion, but this conversion of an attitude toward what those assets represent. And they represent the proceeds of illicit or corrupt activity tied to the Russian economy and tied to the Kremlin,” he said. 

“That's the shift here that's happened both intentionally and unintentionally.”

To make a case in court, however, Cohen Levin said DOJ’s task force will need not just prosecutors and investigators but data analysts and others that can do the hard work to help demonstrate that an asset is indeed owned by an oligarch.

It’s a case that may have to be built on circumstantial evidence.

“It's absolutely super complex for them,” Cohen Levin said. 

 “What the government's going to have to do is they're going to have to show — they're going to have to prove by a preponderance of the evidence, that it's more likely than not — that this person owns it. So they're going to have to say, ‘This Company is really owned by this company, which is owned by this company, which is owned by this company, and then this person that runs it really works for this Russian oligarch,’ ” she said.

Experts warned the process will ultimately take months. But law enforcement officials did not seem deterred when questioned by lawmakers watching with anticipation.

“Whatever we can lawfully seize,” Wray told Maloney, “we’re gonna go after."

 

United States and allies have declared hybrid war on Russia: says Kremlin

The United States and its Western allies have declared a hybrid ‘total war’ against Russia said Russian Foreign Minister Sergei Lavrov.

“Today a real hybrid war, a ‘total war’ has been declared against us. This term, which was used by Nazi Germany, is now used by many European politicians when they explain what they want to do to the Russian Federation,” Lavrov said, according to state-run media.

He claimed, “And their goals are not hidden, they want to destroy, to break, to strangle the Russian economy, and Russia as a whole.”

“The desire by the West to maintain its dominance in international affairs, to subjugate everything and everyone and return to a unipolar world … these are, of course, illusions,” Lavrov also remarked, adding, “In fact, we are witnessing the culmination of the policy of containment of Russia, which the West has pursued for a long time.”

Lavrov’s comments appear to be an escalation in rhetoric from Russia’s leadership against the United States and NATO allies.

Since February 24, the start of the conflict, the United States, Europe, Japan, and other like-minded nations have placed heavy sanctions on Russian economy, Russian President Vladimir Putin, Lavrov, and other top Kremlin officials.

On Thursday, the White House announced even more sanctions against hundreds of Russian lawmakers, defense companies, and other entities.

The United States also placed a ban on Russian oil imports, although European Union countries have not done so, citing the bloc’s heavy dependence on Russian energy products.

On Thursday, about three-fourths of the United Nations General Assembly voted to demand aid access and civilian protection in Ukraine and claimed Russia was creating what they said is a dire humanitarian situation in Ukraine. 

Ukraine and Western allies have claimed Moscow is attacking civilians indiscriminately, which the Kremlin has denied.

But Russian ex-President and Deputy Head of Security Council Dmitry Medvedev claimed Friday that the sanctions won’t sway the Kremlin. 

The sanctions will only consolidate the Russian society and not cause popular discontent with the authorities, Medvedev told Russia’s RIA news agency in an interview.

“Let us ask ourselves, can any of these major businessmen have even the tiniest quantum of influence of the position of the country’s leadership?” Medvedev said. “I openly tell you: no, no way.”

 

War in Ukraine to wipe out 15 years of Russian economic growth

In today’s time media plays a more lethal role, as compared to weapons. The conventional media, controlled by the West, spreads disinformation by portraying bleaker outlook for the country under the US sanctions.  One such example is the details about Russia released by Institute of International Finance.

According to Institute of International Finance (IIF), Russia is likely to erase 15 years of economic gains by the end of 2023 after its invasion of Ukraine spurred a multitude of sanctions and prompted companies to pull out of the country.

The economy is expected to contract 15% in 2022, followed by a decline of 3% in 2023, leaving gross domestic product where it was about fifteen years ago. This was written by economists Benjamin Hilgenstock and Elina Ribakova in a preliminary assessment of the impact of the war, noting that further sanctions may change their view.

“Sharply lower domestic demand is likely to play a crucial role, while a collapse in imports should offset lower exports, leading to a marginally-positive contribution from net foreign demand,” the economists wrote.

“However, should further sanctions in the form of trade embargos be implemented, exports might fall more than we currently forecast.”

Russia’s invasion of Ukraine in February 2022 spurred a collapse of its currency (ruble) and threw global supply chains and commodities prices into chaos. This also sparked mass departure of companies from the country. French automaker Renault SA is among the latest firms to pull out, announcing that it will halt operations at its Moscow plant. It is also considering the future of a longstanding Russian venture called AvtoVaz.

Even after the immediate hit to Russia’s economy, the economy will suffer for years to come from a “brain drain” the exodus of educated, middle class Russians with the financial means to leave the country.

Sanctions from United States and European Union, which control export of technology, including microelectronics, will also hinder technological development in Russia for years, according to the IIF.

At the same time, “self-sanctioning” by foreign companies which no longer want to do business with Russia will lead to a weakening of important sectors of the Russian economy, the report said.

 “The negative effect on medium- and long-term economic prospects could be even more important,” the IIF economists wrote.