Bridge linking Russia and Crimea damaged

The bridge, commonly known as Crimean Bridge was built by Russia after it declared Crimea to be Russian territory in 2014. Russia uses it to move military equipment, ammunition, and personnel from Russia to battlefields in southern Ukraine. The bridge is particularly hated by Ukrainians as it is seen as a symbol of Russian occupation. However, Ukraine has not accepted responsibility of attack on the bridge.

Russian authorities said that a massive explosion involving a truck on Saturday caused a fire and destroyed a section of a bridge linking Russia and Crimea, killing at least three people. The bridge is regarded as a key supply route for Russian troops in southern Ukraine.

The Crimean Bridge, a US$3.69 billion (230 billion rubles) project, was constructed following the annexation of Crimea. Russia opened the first part of the span to car traffic in May 2018. The parallel bridge for rail traffic opened the following year. Before the bridge’s existence, the Crimean Peninsula could only be reached from Russia by sea or air.

The Crimean Bridge—also called Kerch Strait Bridge or Kerch Bridge—is a structure 19 kilometers (12 miles) in length that passes across the Kerch Strait and links southern Russia to the Crimean Peninsula. The Kerch Strait links the Black Sea and the Sea of Azov.

A truck exploded on the bridge. Russia’s National Anti-Terrorism Committee announced that the explosion caused a fire on the parallel rail section, where seven railway cars carrying fuel caught fire. The blast also caused a “partial collapse of two sections of the bridge.”

The Russian Investigative Committee said in a statement that the incident killed at least three people, “presumably the passengers of a car that was driving by the truck that exploded on the bridge.”

‘The bodies of a woman and a man were recovered from the water, their identities are being established,” the statement reads, according to Russian state-owned news agency TASS.

The Crimean Peninsula is the key to sustaining Russia’s military operations in the south. If the bridge is made inoperable, it would make it significantly more challenging to ferry supplies to the peninsula. While Russia seized the areas north of Crimea early during the invasion and built a land corridor to it along the Sea of Azov, Ukraine is pressing a counteroffensive to reclaim them.

The explosion on the Crimean Bridge took place hours after multiple explosions early Saturday hit the eastern Ukrainian city of Kharkiv, which triggered a series of secondary explosions.

While no one has yet to explicitly claim public responsibility for the attack, Ukrainian President Volodymyr Zelenskyy’s aide, Mikhail Podoliak, posted on Twitter saying the explosion is “the beginning.”

Podoliak previously in August threatened the bridge, telling The Guardian that the bridge is “an illegal construction and the main gateway to supply the Russian army in Crimea” and that “such objects should be destroyed.”

Armageddon Warning by Joe Biden, Desperation or Insanity

This morning I posted a blog, who is the Biggest Satan? Within few hours I am obliged to share President Joe Biden’s warning about the possibility of ‘Armageddon’. Over the last eight months, I have been saying that in this proxy war Ukrainians are the biggest losers. One point is sure that the US considers Putin a ‘bad guy’ and all US policies seem to be touching insanity.  

President Joe Biden’s warning about the possibility of ‘Armageddon’ rumbling from the battlefields of Ukraine has scrambled an already complicated picture in the eight-month conflict. He raised this warning during a recent appearance at a Democratic fundraiser. 

But White House press secretary Karine Jean-Pierre, asked Friday if there were any new intelligence assessments that had caused Biden to “ratchet up the level of concern,” responded, “No.”

Jean-Pierre sought to cast the president’s words as a general warning about the dangers of an escalation and as a riposte to Russian President Vladimir Putin’s saber-rattling — not as an actual prediction that there would be a nuclear attack.

“We have not seen any reason to adjust our own strategic nuclear posture, nor do we have indications that Russia is preparing to imminently use nuclear weapons,” the press secretary told reporters on board a short Air Force One flight to Hagerstown.

The debate over Biden’s comments is in many ways a classic Washington back-and-forth, focused on the question of whether the president’s words were out of whack with intelligence assessments and whether the White House will now have to walk them back.

Ukraine has made startling gains against Russian forces in recent weeks, taking back enormous swathes of territory that Putin’s troops once held. Ukrainian President, Volodymyr Zelensky claimed late Thursday night that his forces had liberated more than 500 square kilometers of territory since the beginning of this month alone, after having run up much bigger gains throughout September.

But the Ukrainian gains have had the grimly ironic effect of making Putin more desperate— and more willing to countenance the kinds of tactics that have not previously been used since the Kremlin launched the invasion in February.

In a speech last week, Putain said that the United States had created a “precedent” for the use of nuclear weapons by its atomic bomb attacks on the Japanese cities of Hiroshima and Nagasaki during the Second World War.

The idea that Putin might use nuclear weapons causes outrage for obvious reasons. But it has also stirred discussion as to what the United States and its allies might do in response.

The Biden administration has been adamant that it will not put American boots on the ground in Ukraine, even as it backs Kyiv with billions of dollars in military aid. 

National security adviser Jake Sullivan said last month that the US had warned Russia that there would be “catastrophic” consequences in the event of such a move.

But it’s simply not clear what those consequences might be. Experts advance various different ideas, most of which stop short of a direct American military attack.

“I would expect NATO would respond through the Ukrainians,” said Robert Wilkie, who served as Under Secretary of Defense during the Trump administration and is now a distinguished national security fellow at the America First Policy Institute. 

He suggested this could be done by using weapons supplied by the US and other Western powers to complete the encirclement of Putin’s troops in Crimea — meaning weapons would be used to take out their lines of retreat there, but NATO forces would never touch the ground in Ukraine.”

Joel Rubin, who served as a deputy assistant secretary of State during the Obama administration, cautioned against the idea that the use of nuclear weapons by Putin would necessarily be expected to bring a symmetrical and instant response.

“There is a narrative from some folks that if he uses nukes, we have to use nukes. But there is no winner in a nuclear war — everyone loses,” Rubin said. 

Instead, he suggested, “all options would be available and nuclear would be one of them, but that is not the preferred choice. There would certainly be new moves to completely cut Russia off from every actor on the planet, whereas now China and Saudi Arabia are still giving oxygen to this leader.”

“Maybe that would be enough,” Rubin added of such isolation. “Who knows?”

In some ways, it is the kind of scenario for which Biden is well-prepared. He was steeped in foreign policy throughout his decades in the Senate, including a stretch as Chairman of the Foreign Relations Committee. His career has been long enough to encompass an era when there were real worries about nuclear war with the Soviet Union.

Biden’s handling of the Russian invasion of Ukraine has won a degree of approval even from some ideological opponents, especially regarding his effectiveness in assembling and maintaining an international coalition.

On the other hand, there is a legitimate question of whether he overstepped with the “Armageddon” remark, perhaps raising the very tensions he is seeking to ease.

Wilkie, the Trump administration veteran, called it “very disturbing” that Biden would make such a remark apparently off-the-cuff at a fundraising dinner.

The gravity of the situation, Wilkie argued, “Demands going to the American people and explaining what’s at issue and what’s at stake — instead of these off-script, ‘I’m a tough guy’ moments.”

Who is the Biggest Satan?

I have often written that Saudi Arabia and Iran must end their animosity and find out who is their common enemy. Over the decades United States has brainwashed Saudis by propagating “Iran is a bigger threat as compared to Israel”. I am sure if, Russia, Iran and Saudi Arabia join hands and develop a common currency to trade oil; it could bring US hegemony to an end. I want all my readers to read the following content and find out “The biggest Satan”.

The decision by OPEC Plus nations to reduce oil production is a foreign policy black eye for President Biden after his July visit to Saudi Arabia. It’s also prompting calls from congressional Democrats to rethink the Washington-Riyadh alliance, particularly on the subject of weapons and defense technology sales.  

Human rights advocates have long criticized what is sometimes a rocky relationship between the US and Saudi royals, particularly after the 2018 murder of Washington Post columnist Jamal Khashoggi. 

When Biden met with Saudi Crown Prince Mohammed bin Salman in July, it was viewed by many as a necessary evil that could potentially lead to increased OPEC output and lower gas prices. Since Wednesday’s announcement, a number of Democratic lawmakers have called for the US to respond by ending arms sales and military assistance to the kingdom.

“From unanswered questions about 9/11 and murder of Jamal Khashoggi, to conspiring with Russian President Vladimir Putin to punish the US with higher oil prices, the royal Saudi family has never been a trustworthy ally of our nation. It’s time for our foreign policy to imagine a world without their alliance,” Sen. Dick Durbin, the number two Democrat in the Senate, tweeted Thursday.

Sen. Bernie Sanders, meanwhile, called the cutback “a blatant attempt to increase gas prices at the pump” and called for an end to military assistance to Saudi Arabia. 

On the House side, Reps. Tom Malinowski, Sean Casten and Susan Wild have introduced legislation to withdraw US troops from the kingdom, calling the cutback “a turning point in our relationship with our Gulf partners.” 

Another vocal House critic of the Saudis, Rep. Ro Khanna, has also called for the nation to be dealt with “harshly” and for an end to weapons sales. 

“The Saudis need us more for weapons than we need them. President Biden should make it clear that we will cut off weapons if OPEC Plus doesn’t reverse the decision to make drastic cuts in production,” Khanna said in a statement to The Hill. “In Congress, we should also explore ways to rein in OPEC Plus control over energy prices worldwide.” 

Sen. Bill Cassidy, a vocal critic of Biden’s energy policies, told The Hill that critics of the Saudi government are “upset because having consciously made ourselves dependent upon them, they’re not bending to our will” despite Biden taking office “promising an adversarial relationship.”  

Sarah Leah Whitson, Executive Director of the nonprofit Democracy for the Arab World Now, was skeptical that the cuts would lead to a lasting schism in the relationship. In an interview with The Hill, Whitson said much of the public anger at Saudi Arabia was likely “performative,” but added that “some of it is real, because publicly, this is so humiliating to Biden.”  

Ahead of Biden’s Saudi trip over the summer, the White House was careful to portray the president as not meeting directly with bin Salman, who the intelligence community determined approved Khashoggi’s killing in Istanbul in 2018. But upon arrival in Jeddah in July, Biden was met by bin Salman outside the royal palace where the two men fist-bumped, a casual gesture critics viewed as elevating Salman on the world stage despite Biden’s campaign pledge to make the kingdom a pariah.

American military support for Saudi Arabia dates back to World War II, when President Franklin Roosevelt and King Abdul Aziz reached an agreement under which the US would provide security backing in exchange for access to Saudi oil. In 2015, the Saudis led a coalition to intervene in Yemen’s civil war against Iran-backed Houthi rebels. Over the next four years, US arms sales to the Saudis increased 130 percent, according to data from the Stockholm International Peace Research Institute.  

Biden was a vocal critic of Saudi Arabia on the campaign trail and early in his presidency, pledging to end US backing for the Saudis and the United Arab Emirates in Yemen. However, in August his administration allowed the sale of more than US$5 billion in arms to the two OPEC nations. The administration also caught the ire of Saudi critics by failing to call for an end to its blockade of Yemen. 

In the meantime, Whitson said, despite the calls to sever the business relationship with the Saudis, the American defense industry is likely to stiffly resist any attempts to unwind it. In the meantime, she said, the Saudis would likely find alternate sellers to replace much of the lost arms sales to the US. 

An end to arms sales “is not just a punishment for Saudi Arabia. It’s a punishment for a very powerful defense industry that has extremely close ties to Biden administration,” she said. “So I think there will be countervailing pressures on taking the actions that are being threatened.” 

“The painful reality that we see over and over and over again, is that our policymakers … are not actually in a position to make the decisions that are in the best interests of the American people because they are beholden to so many interests,” she said.  

 

Israel-Lebanon maritime deal

The Israel-Lebanon maritime deal is in the interests of both countries. The deal can help unlock energy security for both states at a time when the world needs new and secure natural gas supplies.

Israel has much to gain from the current talks, but it does not mean Israel must make a deal at any price. Lebanon appears to be pushing for last-minute changes to a US-backed deal that President Joe Biden’s energy envoy, Amos Hochstein, has worked on for the past year.

Prime Minister Yair Lapid said Israel will not compromise on its security and economic interests. Several entwined issues are at stake.

Israel wants the Karish gas field to begin production, and Energean, which developed the field, is ready to move ahead. 

Hezbollah is openly threatening the field – not only launching drones, but prodding Lebanon to increase rhetoric against Israel’s exploitation of these resources off its coast.

The deal that has been worked on with US support would see Israel receive royalties from gas that Lebanon extracts in the disputed area of the Mediterranean Sea, but Israel would concede a triangle of economic waters. 

Lebanon only recently asserted more claims to these waters. Lebanon also wants to develop a field called Qana that extends into areas Israel claims.

The current deal would preserve a line of buoys that extends some five kilometers off the coast into the sea. 

Then the line would deviate slightly and give Lebanon more of the area it wants. It appears that this would be in the interests of other countries as well, such as France.

Lebanese block 9 of its offshore concessions could lead to exploitation of the Qana field, but Lebanon does not want Israel receiving any share of profits from that field. 

This creates complexity. In the past, it was assumed that trade and economics could underpin peace in the region. Lebanon needs investment, and Hezbollah is busy siphoning off money from the state. 

The upcoming Israeli election also hangs over the current discussions. Opposition leader Benjamin Netanyahu has opposed Lapid’s decisions and has openly said the deal, which he views as surrender to Hezbollah threats, would not bind a new government that he seeks to establish after the November election.

This could create another strange situation in which one Israeli government accepts the deal and the next tears it up, the way the US shifted tactics on the Iran deal. 

This would lead to tensions and accusations that Israel is then crossing the line and give Hezbollah an excuse to resist by firing rockets.

 

 

 

 

               

 

Israel snubs Lebanese request for changes in maritime deal

Lebanon said US-brokered talks to demarcate its maritime border with longtime foe Israel were at a make or break point on Thursday after Israel rejected revisions to a draft deal requested by Beirut, throwing years of diplomatic efforts into doubt.

The draft, which has not been made public, had a warm preliminary reception from the Israeli and Lebanese governments. But amid domestic opposition in both countries, Lebanon on Tuesday sought amendments from the US envoy.

On Thursday, Israeli Prime Minister Yair Lapid was updated on the details of the substantial changes Lebanon is seeking to make and instructed the negotiating team to reject them, an Israeli official said.

A spokesperson for the US embassy in Jerusalem said the parties were at a critical stage in the negotiations and the gaps have narrowed.

According to Israeli media, a main sticking point was over recognition of a line of demarcation buoys Israel has strung out to sea from its coast. Lebanon worries about any action that may connote formal acceptance of a shared land border.

Lebanon, which has never recognized the state of Israel, with any broader peace deal beyond the horizon - has also said Israel will earn no royalties from the Lebanese share of gas in the Qana prospect.

Top Lebanese negotiator Elias Bou Saab told Reuters on Thursday that he would only respond to official statements and not to media reports on Israel's stance.

He said the deal is 90% done but the remaining 10% could make it or break it, adding that he was in constant contact with US mediator Amos Hochstein.

Israel has been preparing to activate a gas rig, Karish, which is outside Qana. Lebanon's Iran-backed Hezbollah made veiled threats about Karish that lent urgency to the talks.

Israel previously presented the draft deal with Lebanon, if finalized, as securing Karish. But on Thursday, it changed tack.

Israel is now pressing ahead with Karish, regardless of progress or no progress in the talks, whereas before it cast a successful deal as a means of securing Karish.

"Israel will produce gas from the Karish rig as soon as it is possible to do so," the Israeli official said, adding that negotiations will "stop immediately" in the face of any threats.

Defence Minister Benny Gantz further hardened the tone, saying in a speech that "Lebanon will bear a heavy military price" if Hezbollah attacks, and he put forces on alert.

 

Nord Stream investigation finds evidence of detonations

A crime scene investigation of the Nord Stream 1 and 2 gas pipelines from Russia to Europe has strengthened suspicions of gross sabotage involving detonations, Sweden's Security Service said on Thursday.

Swedish and Danish authorities have been investigating four leaks from the pipelines in Swedish and Danish exclusive economic zones in the Baltic Sea since they were first spotted at the beginning of last week.

Europe, which is a facing an energy crisis is investigating what caused the damage as Moscow seeks to pin the blame on the West, suggesting the United States stood to gain.

Washington denies any involvement as a stand-off between Russia and European countries continues over supplies of gas that have stopped flowing or been put on hold as a result of the conflict in Ukraine.

The Nord Stream operators said this week they were unable to inspect the damaged sections because of restrictions imposed by Danish and Swedish authorities who had cordoned off the area.

"After completing the crime scene investigation, the Swedish Security Service can conclude that there have been detonations at Nord Stream 1 and 2 in the Swedish economic zone," the Swedish Security Service said in a statement.

The security service said there was extensive damage to the gas pipelines and they had retrieved some material from the site that would now be analyzed. The evidence has strengthened the suspicions of gross sabotage, they said.

Sweden's Prosecution Authority said in a separate statement that the area, where gas spewed into the sea for almost a week, was no longer cordoned off.

Russia said on Thursday it had been informed via diplomatic channels that it was not able to join the investigation.

"As of now, there are no plans to ask the Russian side to join investigations," Kremlin spokesman Dmitry Peskov told reporters, adding that Moscow replied it was not possible to conduct an objective investigation without its participation.

Swedish prosecutors had on Monday cordoned off the area of the leaks for a crime scene investigation conducted by the Swedish Coast Guard and Navy.

On Wednesday, Sweden's Justice Minister said in response to the Kremlin that it was not possible to let others take part in a Swedish criminal investigation.

Denmark's Foreign Minister Jeppe Kofod told Reuters on Thursday that his Ministry had not told Russia to stay out of the investigation, but that a police-led taskforce between Denmark, Sweden and Germany was in charge of the investigation.

Maria Zakharova, spokeswoman for the Russian Foreign Ministry, said separately on Thursday that Moscow would insist on a comprehensive and open investigation that includes Russian officials and Gazprom.

"Not to allow the owner (of the pipelines) to witness the investigation means there is something to hide," Zakharova said.

 

 

Can the US impose sanctions on Saudi Arabia?

The United States is all critical of the latest decision of the OPEC Plus to cut oil production. Interestingly the hike in oil and gas prices is due to the US imposing sanctions on Russia, earlier on Venezuela and Iran. It is feared that out of desperation the US may impose some sanctions on Saudi Arabia, often termed de-fecto leader of oil cartel. I invite all my readers to carefully read a Reuters news dated May 05, 2022.

According to the details, a US Senate committee passed a bill that could expose the Organization of the Petroleum Exporting Countries (OPEC) and partners to lawsuits for collusion on boosting crude oil prices.

The No Oil Producing or Exporting Cartels (NOPEC) bill sponsored by senators, including Republican Chuck Grassley and Democrat Amy Klobuchar, passed 17-4 in the Senate Judiciary Committee.

White House spokesperson Jen Psaki said the administration has concerns about the potential implications and unintended consequences of the legislation, particularly amid the Ukraine crisis. She said the White House is still studying the bill.

Versions of the legislation have failed in Congress for more than two decades. But lawmakers are increasingly worried about rising inflation driven in part by prices for US gasoline, which briefly hit a record above US$4.30 a gallon.

"I believe that free and competitive markets are better for consumers than markets controlled by a cartel of state-owned oil companies ... competition is the very basis of our economic system" Klobuchar said.

NOPEC would change US antitrust law to revoke the sovereign immunity that has long protected OPEC and its national oil companies from lawsuits.

The bill must pass the full Senate and House and be signed by President Joe Biden to become law.

If passed, the US Attorney General would gain the ability to sue OPEC or its members, such as Saudi Arabia, in federal court. Other producers like Russia, which works with OPEC in wider group known as OPEC Plus to withhold output, could also be sued.

Saudi Arabia and other OPEC producers have rebuffed requests by the United States and other consuming countries to boost oil production beyond gradual amounts, even as oil consumption recovers from the COVID-19 pandemic and Russian supply falls after its invasion of Ukraine.

OPEC Plus, which cut production when oil prices crashed to historic lows when the pandemic slashed oil demand, had agreed to stick to its existing plans to reverse the curbs with modest increases for another month.

NOPEC is intended to protect US consumers and businesses from engineered spikes in the cost of gasoline, but some analysts warn that implementing it could also have some dangerous unintended consequences.

In 2019, Saudi Arabia threatened to sell oil in currencies other than the dollar if Washington passed NOPEC, a move that could undermine the dollar's status as the world's main reserve currency, reduce Washington's clout in global trade and weaken its ability to enforce sanctions on nation states.

Senator John Cornyn, a Republican from the top US oil producing state Texas, opposed the bill, saying it could prompt OPEC to restrict shipments to the United States.

"If we really want to deal with price at the pump we ought to produce more oil and gas here in America," Cornyn said.

The bill is also opposed by the American Petroleum Institute, the top US oil and gas lobbying group. In a letter to the committee's leaders, API said, NOPEC creates significant potential detrimental exposure to US diplomatic, military and business interests while likely having limited impact on the market concerns driving the legislation.

Some analysts have cautioned that NOPEC could ultimately harm domestic energy companies if it pressures Saudi Arabia and other OPEC members to flood global markets with oil, because they produce oil much more cheaply than US companies do.

 

OPEC Plus agrees deep oil production cuts

OPEC Plus agreed steep oil production cuts on Wednesday, curbing supply in an already tight market, causing one of its biggest clashes with the West as the US administration called the surprise decision shortsighted.

The de-facto leader of the cartel, Saudi Arabia said the cut of 2 million barrels per day (bpd) of output - equal to 2% of global supply - was necessary to respond to rising interest rates in the West and a weaker global economy.

The kingdom rebuffed criticism it was colluding with Russia, which is included in the OPEC+ group, to drive prices higher and said the West was often driven by "wealth arrogance" when criticizing the group.

The White House said President Joe Biden would continue to assess whether to release further strategic oil stocks to lower prices.

"The President is disappointed by the shortsighted decision by OPEC+ to cut production quotas while the global economy is dealing with the continued negative impact of (Russian President Vladimir) Putin’s invasion of Ukraine," the White House said.

Biden faces low approval ratings ahead of mid-term elections due to soaring inflation and has called on Saudi Arabia, a long-term US ally, to help lower prices.

US officials have said part of the reason Washington wants a lower oil price is to deprive Moscow of oil revenue. Biden travelled to Riyadh this year but failed to secure any firm cooperation commitments on energy. Relations have been further strained as Saudi Arabia has not condemned Moscow's actions in Ukraine.

Saudi Energy Minister Abdulaziz bin Salman said OPEC Plus had needed to be pro-active as central banks around the world moved to "belatedly" tackle soaring inflation with higher interest rates.

Wednesday's production cuts of 2 million bpd are based on existing baseline figures, which means the cuts would be less deep because the cartel fell about 3.6 million barrels per day short of its output target in August.

Under-production happened because of Western sanctions on countries such as Russia, Venezuela and Iran and output problems with producers such as Nigeria and Angola.

Analysts from Jefferies said they estimated the figure at 0.9 million bpd, while Goldman Sachs put it at 0.4-0.6 million bpd saying cuts would mainly come from Gulf OPEC producers such as Saudi Arabia, Iraq, the United Arab Emirates and Kuwait.

 

OPEC Plus thought of production cut annoys US

OPEC Plus looks set for deep oil output cuts in its meeting today (Wednesday), curbing supply in an already tight market despite pressure from the United States and other consuming countries to pump more.

The likely cut could spur a recovery in oil prices that have dropped to about US$90 from US$120 three months ago due to fears of a global economic recession, rising US interest rates and a stronger dollar.

The cartel that includes Saudi Arabia and Russia, is working on cuts in excess of one million barrels per day (bpd). Reuters reports the cuts could be as high as two million bpd if reductions could include additional voluntary cuts by members such as Saudi Arabia or if cuts could include existing under-production by the group.

OPEC has been under-producing over 3 million bpd and the inclusion of those barrels would dilute the impact of new cuts.

"Higher oil prices, if driven by sizeable production cuts, would likely irritate the Biden Administration ahead of US midterm elections," Citi analysts said in a note.

"There could be further political reactions from the US, including additional releases of strategic stocks along with some wildcards including further fostering of a NOPEC bill," Citi said referring to a US anti-trust bill against OPEC.

Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries and allied producers (OPEC Plus) have said they seek to prevent volatility rather than to target a particular oil price.

The West has accused Russia of weaponizing energy as Europe suffers from a severe energy crisis and may face gas and power rationing this winter in a blow to its industry.

Moscow accuses the West of weaponising the dollar and financial systems such as SWIFT in retaliation for Russia sending troops into Ukraine in February. The West accuses Moscow of invading Ukraine while Russia calls it a special military operation.

A significant cut is likely to anger the United States, which has pressured Saudi Arabia to pump more to pressure oil prices and reduce revenue for Russia.

Saudi Arabia has not condemned Moscow's actions and relations are strained between the kingdom and the administration of US President Joe Biden, who travelled to Riyadh this year but failed to secure any firm cooperation commitments on energy.

Saudi Aramco CEO and President Amin Nasser said that the spare production capacity is not the responsibility of Saudi Arabia alone.

Nasser made the remarks on Tuesday during his speech at the Energy Intelligence Forum 2022 in London. He added that the spare capacity amounts to 1.5% of global demand.

The oil market does not focus on the fact that global spare capacity to increase oil production is very low, Nasser said.

He clarified that the market focuses on what will happen to demand if there is recession in different parts of the world. He also added that they do not focus on the supply fundamentals.

Nasser stressed that Aramco maintained its market in Asia despite European demand, while he pointed out that the problem of Europe lies in gas and liquefied gas due to the lack of spare capacity.

During his speech, Nasser expected that the demand for oil would increase until 2030 and beyond. He also added that Aramco is on track to raise its capacity to 13 million barrels per day by 2027, which would cost billions of dollars.

The Aramco's CEO remarks came about 24 hours before the meeting of the OPEC Plus meeting that will be held on Wednesday in Vienna, which is its first attendance meeting since March 2020.

The alliance is expected to reduce production by at least 500,000 barrels per day, while other expectations indicate the possibility of reducing by more than one million barrels per day.

 

 

Is US behind Nord Stream gas pipeline blasts?

Since the outbreak of the Ukraine war and many years before the conflict even erupted, the signs were clear. The United States was and continues to wage economic war against Russia and all other countries, such as China and Iran that pursue independent foreign and economic policies. 

On Russia, Congress loathed the idea of Moscow sending 40% of Europe's gas supplies mostly through the Nord Stream 1 pipeline. Over the years, the US imposed so much diplomatic pressure on Europe to abandon the implementation of another pipeline: Nord Stream 2. 

It was supposed to be a major energy project in Europe, perhaps the biggest but also of major concern in Washington, where officials tried their best at scaremongering their counterparts in Europe.

Nord Stream 2 is designed by Russian energy giant Gazprom and the aim of the new pipeline was to double the amount of gas flowing from Russia straight to Germany.

The concern in Washington was the US sitting on an excess amount of gas supply from the shale gas boom but unlike Russia, there were little buyers.

The US has been eager to export the surplus to Europe on tankers in the form of liquefied natural gas (LNG) and essentially replace Russian supplies. 

What stood in the way of the LNG companies was Nord Stream 2, which all but ended the European Union's interest in building the more expensive LNG gas terminals that are needed to import American gas. The logistics of the whole operation did not make sense when there was a much cheaper option from Russia. 

As the momentum for Nord Stream 2 was gaining speed, former US President Donald Trump, in his last year in office, signed into law sanctions from the US Congress against companies involved in the construction of the new gas pipeline between Russia and Germany. 

However, many said at that time the sanctions came too late and would do little to end the project’s completion. Too much money had already been spent on Nord Stream 2, something to the tune of US$11 billion.

The layout of the new pipeline followed the route of the existing Nord Stream 1 pipeline under the Baltic Sea. While the Russian gas would serve most of Europe's energy needs the main countries involved, Russia and Germany, accused the US of using energy security concerns as a smokescreen for its own economic interests. 

Former German Chancellor Angela Merkel even condemned the American sanctions, with then Foreign Minister Heiko Maas saying they amounted to "interference in autonomous decisions taken in Europe. European energy policy is being decided in Europe, not in the US” he said. An EU spokesperson said the 27-nation bloc “opposes the imposition of sanctions against EU companies conducting legitimate business”.

To the huge frustration of the American Congress, Moscow and Brussels brushed aside the sanctions and it was obvious that the pipeline was almost complete. Denmark gave the final approval needed for the project. The company constructing Nord Stream 2 said it was putting the final touches with over 2,000 kilometers already laid at the bottom of the Baltic Sea. The pipeline was expected to start pumping gas earlier this year.

NATO's eastward military buildup toward Russian borders was met with the following threat by US President Joe Biden: "If Russia invades (Ukraine), then there will be longer Nord Stream 2. We will bring an end to it.” Before adding "I promise you we will be able to do it."

Moscow says the NATO military buildup on Russian borders, the abandonment of the Minsk agreement and Washington’s refusal to answer Russian security guarantees forced it to conduct what the Kremlin describes as a “special military operation” in Ukraine.

Three unexplained gas leaks, preceded by two explosions, occurred on the Baltic Sea’s Nord Stream 1 and 2 pipelines last Monday. Did the US force Russia into military action to exchange Russian gas to the EU with US gas in the aftermath of the Covid-19 pandemic that battered the American economy?

In the aftermath of the Ukraine conflict, the US offered a quick commitment to deliver its own LNG to the EU telling Brussels this is a big step towards making Europe less dependent on Russian gas.

EU Commission Head Ursula von der Leyen said, "We aim to reduce this dependency on Russian fossil fuels and get rid of it. This can only be achieved through... additional gas supplies, including LNG deliveries."

"The US commitment to provide the European Union with additional at least 15 billion cubic meters of LNG this year is a big step in this direction because this will replace the LNG supply we currently receive from Russia."

The United States has committed to providing the EU with an additional 15 billion cubic meters (bcm) of LNG this year, with both sides aiming to ramp up deliveries to 50 bcm per year over time.

"Looking ahead, the United States and Europe will ensure stable demand and supply for additional at least 50 billion cubic meters of US-LNG until 2030," Von der Leyen said, adding this would replace one-third of Russian gas supplies to the EU today.

"We need to secure our supplies not just for next winter but also for the years ahead", she added. "Our partnership aims to sustain us through this war."

The timing of the leaks and explosions has raised many eyebrows. It occurs just as Europe is getting restless with skyrocketing energy bills that are making voters topple one government after the other. While Nord Stream 1 was filled with gas when the explosions occurred, it was not pumping to Europe as a result of Western sanctions that had led to technical issues.

However, such is the severity of the European energy crisis. The sanctions could have been lifted on the pipeline, the maintenance issues resolved and the energy flows resumed. Not just Nord Stream 1 but gas could have been delivered through Nord Stream 2 as well to get to Europe by the winter.

Russia has said that the ruptures appear to be the result of state-sponsored "terrorism".

Russian President Vladimir Putin has accused the West of organizing the blasts that led to numerous gas leaks.

“Sanctions are not enough for the West. They have switched to sabotage. Unbelievable, but it is a fact!” Putin said during a televised speech.

“By organizing explosions on the Nord Stream international gas pipelines that run along the bottom of the Baltic Sea, they actually started destroying European energy infrastructure,” Putin said. “It is clear to everyone who benefits from this,” he added.

The Kremlin says the incidents on two major undersea gas pipelines from Russia to Germany look like acts of state-sponsored "terrorism".

"This looks like an act of terrorism, possibly on a state level," Kremlin spokesman Dmitry Peskov told reporters.

"It is very difficult to imagine that such an act of a terrorism could have happened without the involvement of a state of some kind, this is a very dangerous situation which requires an urgent investigation," Peskov said.

There have been many protests against energy price hikes across Europe which has put pressure on governments to return Russian energy. The German chancellor visited Persian Arab Gulf countries to try to secure energy supplies.

The Russian Foreign Ministry says US President Joe Biden is “obliged” to answer if Washington is behind the gas leaks. “On February 7, 2022, Joe Biden said that Nord Stream would be finished if Russia invaded Ukraine,” foreign ministry spokeswoman Maria Zakharova said on social media, posting a video of Biden saying “we will bring an end” to Nord Stream 2 if Russian tanks cross Ukraine’s border.

“Biden is obliged to answer the question of whether the US carried out its threat,” Zakharova added.

“A statement of intent was backed by a promise. We must be responsible for our words... Europe must know the truth,” Zakharova added.

The ministry says the ruptures to the pipelines occurred in territory that is "fully under the control" of US intelligence agencies.

 

OPEC Plus mulling largest cut since 2020

The OPEC Plus group of oil producers is discussing output cuts of more than one million barrels per day (bpd). Voluntary cuts by individual members could come on top of that, making it their largest cut since 2020.

The group is set to meet on October 05, 2022 in Vienna in person for the first time since March 2020, against a backdrop of falling oil prices and months of severe market volatility which prompted top OPEC Plus producer, Saudi Arabia, to say the group could cut production.

The cartel, which combines OPEC countries and allies such as Russia, has been gradually raising its output target to unwind the record cuts it made in 2020.

Now faces a sharp fall in prices, which have dipped below US$90/barrel from as high as $120 in recent months due to fears about the global economy and a rally in the US dollar after the Federal Reserve raised interest rates.

"It may be as significant as the April 2020 meeting," the source said, referring to when the cartel agreed record supply cuts of around 10 million bpd, or 10% of global supply, as the COVID-19 pandemic slashed demand.

A significant cut is likely to anger the United States, which has been putting pressure on Saudi Arabia to continue pumping more to help oil prices soften further and reduce revenue for Russia as the West seeks to punish Moscow for sending troops into Ukraine.

Saudi Arabia has not condemned Moscow's actions amid difficult relations with the US administration under President Joe Biden.

Last week, a source familiar with Russian thinking said Moscow would like to see OPEC Plus cut its output target by one million bpd or 1% of global supply.

On Sunday, sources said the cut might exceed one million bpd.

On Monday, one OPEC source said voluntary cuts by individual members would come on top of that figure.

It was not yet clear what levels of voluntary cuts Saudi Arabia or any other top Gulf OPEC producers could contribute.

In the past few years, only Saudi Arabia has offered voluntary cuts to give additional boost to the markets.

"My instinct is that if they (OPEC Plus) have suggested a cut and prices are still going down, they will have to do it and a bigger one than they wanted," said Raad Alkadiri, Managing Director at Eurasia Group.

Stephen Brennock at PVM said fears of a demand-sapping recession have rattled OPEC Plus and hence they are set to take preemptive action.

"It must be noted that OPEC Plus is already pumping more than 3 million bpd below its target, hence any further cuts will only exacerbate the existing supply tightness," he said.

 

Saudi Arabia to host World Petroleum Congress

The organizing committee of the World Petroleum Congress has accepted Saudi Arabia’s bid to host the 25th edition of the congress and its accompanying exhibition in 2026. This was announced on the sidelines of the Youth Forum that World Petroleum Council (WPC) organized in Almaty, Kazakhstan.

Saudi Arabia has received big international support after the Ministry of Energy has recently extended the bid to host the congress and the exhibition.

WPC Director General Dr. Pierce Riemer has congratulated Saudi Arabia on being selected to host the 25th edition of the congress in Riyadh, for its being the biggest oil-exporting country in the world and owning one of the world’s biggest oil reserves. This highlights Saudi Arabia’s importance globally and worthiness to host one of the most important energy meetings of energy in the world.

Riemer expressed aspiration to work with the Kingdom to organize a successful congress in 2026 that matches the status of Saudi Arabia in its capacity as a global pioneer in the energy field, in addition to its being among the most active economies in the world.

The World Petroleum Congress, along with its accompanying exhibition, is considered a prominent global event that brings together countries and international organizations every three years to enhance cooperation in energy fields and provide solutions to the main challenges facing the development of this vital sector.

The congress and exhibition received much attention from specialists and visitors. The 24th edition of the event was held in Calgary, Canada, between September 17 and 21, 2023. 

Need to explore causes of floods in Pakistan

Large areas of Pakistan were inundated in 2010 by heavy floods, resulting in the displacement million of people. Experts had termed it one of the worst humanitarian catastrophes the country has suffered.

Twelve years later, massive flooding has forced analysts and political leaders alike to search for new adjectives that can describe the devastation caused by monsoon rains, appropriately.

It may be recalled that the Metrological department had warned about the intensity of rain and resulting devastation, but it was too late to avert the situation. Now the government has declared a national emergency and has desperately sought urgent aid from the international community.

While the UN promised US$160 million and other countries pledged aid, government officials say the floods have inflicted an estimated loss of at least US$30 billion.

Pakistan having more than 220 million populations faces the greatest humanitarian crisis. More than 1,200 people have died, one-third of the country is still submerged and at least 33 million people are affected. The National Disaster Management Authority (NDMA) puts the number of affected districts at 72 out of a total 160.

The NDMA estimates damage to more than 5,000km of roads, 10 million houses partially or fully destroyed, and the death of 700,000 livestock, often people’s only livelihood.

The southern province of Sindh remains the worst affected. As of August 30, more than 14 million people in the province are badly affected, of which only 377,000 are living in camps right now.

The Global Climate Risk Index puts Pakistan as the eighth most vulnerable country because of disasters caused by climate change, yet the country is responsible for less than 1 percent of the world’s planet-warming gases.

Extreme weather conditions have left the country precariously placed, where weather patterns are no longer predictable.

Earlier this year, the country faced unprecedented heat waves and months-long drought in Sindh and Balochistan. Only a few months later, Pakistan broke its decades-long rainfall record with the two provinces receiving 500 percent more rain than the annual average.

Sara Hayat, a Lahore-based climate change lawyer and policy specialist said, to ascertain what has caused the devastating floods, it needs to be seen as a pyramid of factors with the foundational one being global climate change.

Hayat said the flooding was caused by excessive torrential rain, as well as glacial melt in the north of the country.

“Pakistan generally gets three to four cycles of monsoon rains,” she said. “This year we have received eight already and there are predictions that rain will go on till October. This is extremely unusual.”

Ali Tauqeer Sheikh, an Islamabad-based climate change analyst aid, unlike the 2010 floods that were riverine in nature, this year saw multiple types overlapping each other that resulted in heavy destruction across the country.

The urban flooding, flash flooding, glacial lake bursts as well as cloud bursts as some of the different types of flooding to hit the country, all linked to climate change activity.

These are not routine floods. In fact, Pakistan has not had riverine floods at all this year. This is perhaps the first time the country saw climate change affecting patterns of monsoon. Only time will tell if it was a freak event of nature, or it will become a routine.

It is easy to pin blame on the government, preparing for this scale of flooding was always going to be a difficult job.

At a time when the country is already reeling from back-breaking inflation and barely averted a default after the International Monetary Fund (IMF) released US$1.17 billion funds, an once-in-a-lifetime flood was the last thing Pakistan needed. Added to this volatile mix is perpetual political instability, exacerbated since the removal of the Pakistan Tehreek-e-Insaf (PTI) government in April.

It is imperative that political warmongering stop and priorities be adjusted to face the daunting challenge of rebuilding.

One of the biggest challenges Pakistan will face is when the country goes into election cycle. It is necessary to say that flood relief efforts and rehabilitation of the affected population must accompany all political conversation in the country.

Pakistan faces catastrophic economic repercussions because of the floods. There is an immediate impact on destroyed food crops, homes, roads, and livestock. This affects both people who are directly impacted by the flood by wiping out their household wealth, but also people in major cities through increasing the cost of food.

Pakistan faces a very difficult winter ahead as it needs money for a nationwide rebuilding effort post-floods, meeting the demands set up by the IMF program, competing with Europe to secure gas imports, and cushioning the impact of increasing food inflation.

Worst case scenario would be if Pakistan gets multiple kinds of floods it had this year plus the riverine flood together, the devastation would be unimaginable. Flood management strategies must be reoriented to become more robust and climate-smart.

There is a conflict between the urgent and long term plans. Those affected by the floods don’t have a roof over their heads and their standing crops have been destroyed. They need urgent help, and it is in the interest of the government to provide them that.

More often than not, building back better gets forgotten; meanwhile, some other crisis hits which diverts the policymakers’ attention.

In Pakistan, if someone becomes homeless due to floods, the government says, ‘take 15,000 rupees and rebuild’. But the house will be destroyed next year again due to floods as it’s in the same fragile areas. The government should enforce rules and make cash reimbursement conditional with living in safe zones.

There is a need to create a balance between relief and rehabilitation. Pakistan needs guidelines that will help mud houses become stronger, and help their roofs withstand climate change instead of collapsing. Whether plazas, or houses in rural areas and shanty towns, there is a need to have a standard for building them. For infrastructure the country needs guidelines that respond to the growing need to deal with floods and disasters.

So far, we have not increased our adaptation, and as a result have not reduced our vulnerability to floods and other disasters. At the heart of it, we are a climate-vulnerable country, and we desperately need adaptation strategies to avoid this level of loss and damage.