Dollar hegemony in danger

The history shows that the world’s base currency can lose its position, as happened with Britain’s pound in the 20th century. The US economy is much smaller as a share of world output now than it was after WWII, when its dominance began. And now some investors are flagging concerns about the potential for chaotic images emanating from the US election that could undermine confidence in American rule-of-law and the broader political system.

In 2009, after the meltdown in US mortgage securities triggered the biggest financial crisis since the Great Depression, China’s central bank chief of the time issued a high-profile call to move the global financial system away from the dollar. 

Fifteen years later, it continues to reign supreme — having weathered the launch of trade wars under Donald Trump’s administration and a welter of US sanctions on other countries that showcased the risk, for some nations anyway, of keeping assets in dollars. The greenback remains the main currency of choice in global reserves and massively dominates the foreign-exchange market.

Multiple stewards of US economic policy over decades have highlighted the importance of democratic, transparent governance and respect for the law in underpinning the dollar’s role. A violent attempt to disrupt the transfer of power occurred in the wake of the last election, and had little impact on markets. But further instances could have consequences, some warn.

“You can’t be complacent around any of these things” with regard to the dollar, Robin Vince, CEO of BNY Mellon — one of the world’s largest custodians of financial assets — said in an interview last week. “As is the case with many tipping points, you don’t quite know when you’re approaching it until you go over the other side.”

Thierry Wizman, a three-decade Wall Street veteran, said “the American exceptionalism narrative could end if traders lose faith in US institutions.”

“The way that could happen in the next few weeks is if we have an election without a definitive result for several weeks, and where people can’t trust the institutions to adjudicate any of these disputes,” said Wizman, a global currency and rates strategist at Macquarie.

Courtesy: Bloomberg

 

 

Remembering the day Saddam invaded Iran

On September 22, 1980, months after the victory of the Islamic Revolution in Iran, the army of the Iraqi Ba’athist regime led by Saddam Hussein invaded the Iranian border towns in the southwestern province of Khuzestan and launched a massive aerial bombardment on Iran, igniting an eight-year conflict with Iran.

The Iranians fought back to expel the invaders from their occupied soil. The Saddam regime, which received all-out support from the big powers, imposed the war on Iran that lasted until the summer of 1988.

Since the beginning of the war, Iran demanded that Iraq be officially declared as the initiator of the war. However, neither the Iraqi Ba’athist regime nor any of the major powers were willing to officially declare that the Saddam regime initiated the war against Iran.

The UN Security Council which has the primary responsibility for international peace and security failed to take any action to declare the Saddam regime as the aggressor and initiator of the war.

The Ba’athist regime committed crimes against the Iranian nation, using chemical weapons, firing missiles at civilian targets, bombarding cities and villages during the war, and other vicious acts.

Influenced by big powers, who armed the Saddam regime to the teeth, the Security Council refused to adopt an impartial stance in that regard during the eight years of war.

When Saddam tore up the 1975 Algiers Agreement in front of cameras and then started the war, the Security Council refused to say who started the war and which side violated the principle of non-invasion.

The Iraqi Ba’athist regime used to refer to border skirmishes that preceded the invasion as its pretext for starting the war. The regime claimed that it took action after a long history of border disputes.

The reality was that Saddam couldn't wait to tear up the Algiers agreement amid political instability and fast pace of developments in the post-revolution Iran. He might also have been pushed by hostile Western states that were angered by the victory of the Islamic Revolution.

Instead of the UN Security Council, it was UN Secretary General Javier Perez de Cuellar who declared Iraq as the aggressor and the initiator of the war in his report to the UN body in December 1991.

This action of the UN Secretary General to officially declare Iraq the initiator of war endorsed Iran’s right to self-defense.

The UN report naturally required Iraq to pay compensation to Iran, which was estimated at about one trillion dollars.

This action of the United Nations took place after the continuous political efforts of the Iranian authorities. It is considered a great victory for Iran because it proved Iran's right to self-defense against the aggressor.

This action took place while the propaganda apparatus of the Saddam regime and its backers were trying to manipulate public opinion in the world that Iran was the initiator of the war.

At the start of the war, Saddam was Iraq's undisputed political and military ruler and Iraq's national interests were his personal interests.

There had been border disputes and skirmishes before the start of the invasion which Saddam's regime sought to present as a pretext for attacking Iran. Saddam must have thought that amid instability and nascent revolution, it was the right time to materialize his malicious goal of seizing part of the Iranian territory.

The Iraqi dictator’s likely goal was to annex some parts of the oil-rich Khuzestan, which has a sizeable ethnic Arab population.

Border skirmishes preceded the invasion. Iraqi President Saddam Hussein claimed that Iran's Islamic government was trying to destabilize his country and the whole Middle East. But the then UN chief rejected that argument.

In a letter to the UN Security Council, Secretary-General Javier Perez de Cuellar in December 1991 Iran blamed Iraq for starting the war.

He rejected the Iraqi regime’s argument that border skirmishes pushed Iraq to invade Iran.

"Even if before the outbreak of the conflict there had been some encroachment by Iran on Iraqi territory, such encroachment did not justify Iraq's aggression against Iran -- which was followed by Iraq's continuous occupation of Iranian territory during the conflict," Javier Perez de Cuellar said.

Iran has always criticized the double standards of western states in dealing with the Iraqi war on Iran, especially the Security Council and Western powers were quick to take action against the regime after it invaded Kuwait on August 02, 1990.

Courtesy: Tehran Times

Iran wants US to abandon its hostility

Iran could hold direct talks with the United States if Washington demonstrates in practice that it is not hostile to the Islamic Republic, said President Masoud Pezeshkian on Monday.

Pezeshkian was responding to a question at a news conference in Tehran on whether Tehran would be open to direct talks with the US to revive a 2015 nuclear deal.

Former US president Donald Trump reneged on that deal in 2018, arguing it was too generous to Tehran, and restored harsh US sanctions on Iran, prompting Tehran to gradually violate the agreement's nuclear limits.

"We are not hostile towards the US, they should end their hostility towards us by showing their goodwill in practice," said Pezeshkian, adding, "We are brothers with the Americans as well."

After taking office in January 2021, US President Joe Biden tried to negotiate a revival of the nuclear pact under which Iran had restricted its nuclear program in return for relief from US, European Union and UN sanctions.

However, Tehran refused to directly negotiate with Washington and worked mainly through European or Arab intermediaries.

 

How far can crude oil prices plunge?

We are of the view that crude oil price may fall below US$60 per barrel, if production in countries like Libya, Iraq, Iran and Venezuela rise to normal. Sanctions on Russia and Iran are also there to avoid glut. We have the convictions that unrest in some of the African countries is there to avoid fall of crude oil price below US$50 per barrel  

Brent crude futures fell below US$70 a barrel on Tuesday for the first time since December 2021, after OPEC Plus revised down its demand forecast for this year and 2025.

Brent crude futures were traded at US$69.51 a barrel and US West Texas Intermediate (WTI) crude slipped to US$66.21. On Monday, both benchmarks had risen about 1%.

On Tuesday, the Organization of the Petroleum Exporting Countries (OPEC) in a monthly report said world oil demand will rise by 2.03 million barrels per day (bpd) in 2024, down from last month's forecast for growth of 2.11 million bpd. Until last month, OPEC had kept the forecast unchanged since it was first made in July 2023.

OPEC also cut its 2025 global demand growth estimate to 1.74 million bpd from 1.78 million bpd. Prices slid on the weakening global demand prospects and expectations of oil oversupply.

On Monday, Chinese data showed consumer inflation accelerated in August to its fastest in half a year, though domestic demand remained fragile, and producer price deflation worsened.

Data released on Tuesday showed China's exports grew in August at their fastest in nearly 1-1/2 years, yet imports disappointed with domestic demand depressed.

“If we lose China this market is going to have a problem because OPEC just cannot cut enough to offset the US and Brazilian position, and some of the other reservoirs at work,” said John Kilduff, partner at Again Capital.

 

US Reactions on Pezeshkian's Victory

We have picked up these quotes directly from a post which was sent to us by the United States Institute of Peace. These quotes seem to have an extremely biased opinion about Iran. One fails to understand the duality of standards. Hasn’t United States godfathering Israel in the genocide in Gaza and supplying all sorts of lethal arms to Ukraine. The readers are invited to read these quotes dispassionately and form their own opinion. 

National Security Council Coordinator for Strategic Communications John Kirby on July 08, 2024 said, “We’re not in a position where we’re willing to get back to the negotiating table with Iran just because they elected a new president. They’re still supporting terrorist groups like Hamas and Hezbollah. They’re still supporting the Houthis as the Houthis attack ships in the Red Sea. They’re still attacking shipping as well. And they’re still supplying drones and drone technology and drone expertise to the Russians so that the Russians can continue to kill innocent Ukrainians like they did over the weekend.”

“We will see what Pezeshkian wants to get done, but we are not expecting any changes in Iranian behavior sadly.”

State Department Spokesperson Matthew Miller on July 08 said, “So we have no expectations that this election will lead to a fundamental change in Iran’s direction or its policies. At the end of the day, it’s not the president that has the ultimate say over the future of Iran’s policy; it is the supreme leader, and of course we have seen the direction that he has chosen to take Iran in. Obviously, if the new president had the authority to make steps to curtail Iran’s nuclear program, to stop funding terrorism, to stop destabilizing activities in the region, those would be steps that we would welcome. But needless to say, we don’t have any expectations that that’s what’s likely to ensue.”

“So let’s let Pezeshkian take office first. I don’t have anything to announce today. We have always said that diplomacy is the most effective way to achieve an effective, sustainable solution with regard to Iran’s nuclear program, one of the issues with which we have great concerns, obviously, and nothing about the election has changed that. But we have also made clear that we are far from any kind of meaningful diplomatic resolution right now given Iran’s escalation across the board.”

State Department spokesperson Vedant Patel on July 01, said, "We’re not in a position to confirm or – any turnout number or speculate on what the implications of that might mean for the Iranian regime. Our viewpoint is that even the Iranian Government’s official numbers about turnout are most – like most other things as it relates to the Iranian regime, are unreliable. Our view is that these elections in Iran are not free and fair, and we have no expectation that these elections and whatever the outcome might be will lead to a fundamental change in Iran’s direction or lead the Iranian regime to offer more respect for human rights and more dignity for its citizens."

Deputy Special Envoy for Iran Abram Paley on June 26 said, “As the Iranian regime prepares for its presidential elections, the US unfortunately has no expectation of free and fair elections or fundamental change in Iran’s direction. Of course, the candidates have been hand-picked by the Guardian Council, but we also know the Iranian people lack access to even the most basic freedoms; necessary features of any democracy. In the face of the authoritarian regime’s long history of harassing and intimidating journalists, suppressing election coverage, and denying freedom of peaceful of assembly, we support the Iranian people. The United States will continue to defend human rights in Iran, shine a light on the regime’s repression, and support a free and democratic future.”

State Department spokesperson on June 30 said, "The elections in Iran are not free and fair.”

"Unfortunately, we have no expectation that these elections, whatever the outcome, will lead to fundamental change in Iran’s direction or more respect by the Iranian regime for the human rights of Iran’s citizens.”

 

Dollar dominance eroding, though slowly

Dollar dominance—the outsized role of the US dollar in the world economy—has been brought into focus recently as the robustness of the US economy, tighter monetary policy and heightened geopolitical risk have contributed to a higher greenback valuation. At the same time, economic fragmentation and the potential reorganization of global economic and financial activity into separate, non-overlapping blocs could encourage some countries to use and hold other international and reserve currencies.

Recent data from the IMF’s Currency Composition of Official Foreign Exchange Reserves (COFER) point to an ongoing gradual decline in the dollar’s share of allocated foreign reserves of central banks and governments.

Strikingly, the reduced role of the US dollar over the last two decades has not been matched by increases in the shares of the other “big four” currencies—the euro, yen and pound. Rather, it has been accompanied by a rise in the share of what we have called nontraditional reserve currencies, including the Australian dollar, Canadian dollar, Chinese renminbi, South Korean won, Singaporean dollar, and the Nordic currencies. The most recent data confirm this trend.

These nontraditional reserve currencies are attractive to reserve managers because they provide diversification and relatively attractive yields, and because they have become increasingly easy to buy, sell and hold with the development of new digital financial technologies (such as automatic market-making and automated liquidity management systems).

This recent trend is all the more striking given the dollar’s strength, which indicates that private investors have moved into dollar-denominated assets. Or so it would appear from the change in relative prices.

At the same time, this observation is a reminder that exchange rate fluctuations can have an independent impact on the currency composition of central bank reserve portfolios.

Changes in the relative values of different government securities, reflecting movements in interest rates, can similarly have an impact, although this effect will tend to be smaller, insofar as major currency bond yields generally move together.

Taking a longer view, over the last two decades, the fact that the value of the US dollar has been broadly unchanged, while the US dollar’s share of global reserves has declined, indicates that central banks have indeed been shifting gradually away from the dollar.

At the same time, statistical tests do not indicate an accelerating decline in the dollar’s reserve share, contrary to claims that US financial sanctions have accelerated movement away from the greenback.

To be sure, it is possible, as some have argued, that the same countries that are seeking to move away from holding dollars for geopolitical reasons do not report information on the composition of their reserve portfolios to COFER.

It is worth noting that the 149 reporting economies make up as much as 93% of global foreign exchange reserves.

One nontraditional reserve currency gaining market share is the Chinese renminbi, whose gains match a quarter of the decline in the dollar’s share.

The Chinese government has been advancing policies on multiple fronts to promote renminbi internationalization, including the development of a cross-border payment system, the extension of swap lines, and piloting a central bank digital currency.

It is interesting to note that renminbi internationalization, at least as measured by the currency’s reserve share, shows signs of stalling out. The most recent data do not show a further increase in the renminbi’s currency share - some observers may suspect that depreciation of the renminbi exchange rate in recent quarters has disguised increases in renminbi reserve holdings. However, even adjusting for exchange rate changes confirms that the renminbi share of reserves has declined since 2022.

Some have suggested that what we have characterized as an ongoing decline in dollar holdings and rise in the reserve share of nontraditional currencies in fact reflects the behavior of a handful of large reserve holders.

Russia has geopolitical reasons to be cautious about holding dollars, while Switzerland, which accumulated reserves over the last decade, has reason to hold a large fraction of its reserves in euros, the euro area being its geographical neighbor and most important trading partner.

When analysts exclude Russia and Switzerland from the COFER aggregate, using data published by their central banks from 2007 to 2021, they find little change in the overall trend.

In fact, this movement is quite broad. A paper by the IMF in 2022, identified 46 “active diversifiers,” defined as countries with a share of foreign exchange reserves in nontraditional currencies of at least 5% at the end of 2020. These include major advanced economies and emerging markets, including most of the Group of Twenty (G20) economies. By 2023, at least three more countries (Israel, Netherlands, Seychelles) have joined this list.

IMF also found that financial sanctions, when imposed in the past, induced central banks to shift their reserve portfolios modestly away from currencies, which are at risk of being frozen and redeployed, in favor of gold, which can be warehoused in the country and thus is free of sanctions risk.

This shows that the demand for gold by central banks responded positively to global economic policy uncertainty and global geopolitical risk. These factors may lie behind the further accumulation of gold by a number of emerging market central banks. It is important to recall that gold as a share of reserves still remains historically low.

In sum, the international monetary and reserve system continues to evolve. The patterns IMF has highlighted earlier—very gradual movement away from dollar dominance, and a rising role for the nontraditional currencies of small, open, well-managed economies, enabled by new digital trading technologies—remain intact.

 

MENA: New proxy war ground for US and China

Tensions between the United States and China are expanding beyond the Asia-Pacific region. The Middle East and North Africa (MENA) is likely to be one of many venues in what might be a new Cold War between Washington and Beijing.

We can imagine how Washington and Beijing’s respective global outlooks and ability to project (soft and hard) power could affect their future relations with the MENA region.

How MENA countries deal with each other and the role they play in the emerging global energy and economy transitions could influence how the two superpowers engage with the region in ways as interesting and important as what the superpowers are able to do themselves. On the MENA side of the equation, two critical dimensions are likely to shape their role in the future US-China competition in the region:

Intraregional politics

The first is how regional countries relate to each other with functional and practical economic and political integration, or sustained dysfunction and instability. Prior to the current war in Gaza, there was a trend toward de-escalation, stabilization, and integration.

Whenever that momentum might be regained, under the “functional and practical” route, we could imagine MENA nations looking in new ways at the lessons of pan-regional intergovernmental organizations.

The region could explore policies and mechanisms that emulate the practical benefits afforded to member states of other regional blocs like the European Union and the Association of Southeast Asian Nations. Such ideas could first lower trade barriers, then foster closer economic and commercial ties across the region.

Similarly, the thinking behind the Helsinki Final Act of 1975 and the Organization for Cooperation and Security in Europe could influence MENA governments’ approach to their citizens’ human rights and each other’s domestic affairs.

The functional and practical path would represent a MENA equipped with deliberative, consultative decision-making processes to act with agency, putting its own interests before the dictates of the US-Chinese competition.

The alternative path is easy to define, MENA governments continue to support various armed groups in proxy wars, and use that environment to ignore human rights, enabling outside players to exploit that dysfunction.

Levers of the future economy

The fossil fuel resources of Bahrain, Iran, Iraq, Kuwait, Libya, Oman, Qatar, Saudi Arabia, and the United Arab Emirates ‑ energy-rich club might soon include Egypt and Israel ‑ are likely to remain MENA’s main sources of leverage vis-à-vis Washington and Beijing — at least for the next couple of decades. Given the desire of two superpowers to secure the region’s oil and gas for themselves and their allies, or deny them to adversaries, US and Chinese companies will remain powerhouses in regional markets.

MENA is poised to influence the future global stage, and gain agency in the US-China competition over the region, by leveraging its energy and financial power in different ways in the future.

As the world turns to renewable energy, the region’s petrostates are simultaneously ramping up economic diversification into tech sectors, while also leveraging their wealth to finance climate-friendly energy projects and other green economy endeavors in their neighborhood and around the world.

The new frontier for the region’s resource- and capital-rich countries will be fostering innovation and science/technology/ideas hubs for the post-carbon economy that humanity intends to build in the 21st century.

Beside eventually waning hydrocarbons and ascending green energy, new logistical/transportation/energy networks have proliferated in the region and are likely to further increase its geopolitical and commercial significance.

Be it through long-established routes, such as the Suez Canal, or new and proposed ones, such as the Trans-Caspian International Transport Route, India-Middle East Corridor, and the Turkish-Iraqi-Emirati-Qatari Development Road, MENA is going to be sitting at the center of global trade networks. Many of the region’s seaports and airports will also play an expanded role in international affairs.

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.