Iran to launch direct shipping line to South Africa and Latin America

Iran has expressed its plan to launch a direct shipping line to South Africa and Latin American countries in near future; this was stated by an official with the Iranian Chamber of Cooperatives (ICC). Babak Afghahi, Head of non-oil trade and export development committee of ICC stated that the proposed shipping line will connect Southern Iranian ports to the ports of South Africa and then to Latin American countries, specifically Brazil.

He said, shipping line is going to be launched with the support of the Islamic Republic of Iran Shipping Lines (IRISL) and is aimed at developing Iranian non-oil trade with the countries in the mentioned regions.

“With the support of the Islamic Republic of Iran Shipping Lines, considering the capacity of Iran's cargo export to the mentioned destinations, the chambers of commerce across the country, the Trade Promotion Organization (TPO) of Iran and other export bodies have been informed about the new development,” Afghahi said.

As reported by IRNA, the Islamic Republic’s trade with South Africa reached US$43 million in the first six months of the previous Iranian calendar year, while the figure stood at US$27 million in the same period a year ago.

Following a new strategy for boosting non-oil trade and distancing the country’s economy from oil, Iran has been launching several direct shipping lines to its major trade destinations over the past few years.

Earlier this month, the Head of Iran-Syria Joint Chamber of Commerce Keyvan Kashefi announced the establishment of a direct shipping line between Iran’s southern port of Bandar Abbas and Syria’s Mediterranean port of Latakia.

Iran has also launched five direct shipping lines to Oman and is planning to establish direct routes to Qatar, India, Turkmenistan, and Russia as well.

Crude oil outlook remains gloomy

Oil prices declined after climbing to the highest in more than a year. Prices fell for a second day on Friday, retreating further from recent highs, as Texas energy companies began preparations to restart oil and gas fields shuttered by freezing weather and power outages. 

US energy firms during this past week cut the number of oil rigs operating for the first time since November 2020.

Brent crude futures ended the session down 1.6% at US$62.91/barrel, while US benchmark, West Texas Intermediate (WTI) fell 2.1%, to settle at US$59.24. For the week, Brent gained about 0.5% while WTI fell about 0.7%. This week, both benchmarks had climbed to the highest in more than a year.

Price pullback thus far appears corrective and is slight within the context of this month’s major upside price acceleration. Unusually cold weather in Texas and the Plains states curtailed up to 4 million barrels per day (bpd) of crude production and 21 billion cubic feet of natural gas, analysts estimated.

Texas refiners halted about a fifth of the nation’s oil processing amid power outages and severe cold. Companies were expected to prepare for production restarts on Friday as electric power and water services slowly resume.

While much of the selling relates to a gradual resumption of power in the Gulf coast region ahead of a significant temperature warm-up, the magnitude of this week’s loss of supply may require further discounting given much uncertainty regarding the extent and possible duration of lost output.

A point worth noting is that oil prices fell despite a surprise drop in the US crude stockpiles, before the big freeze hit. Inventories fell 7.3 million barrels to 461.8 million barrels, their lowest since March last year, the Energy Information Administration reported on Thursday.

Vaccines and the impressive rollouts have delivered strong gains, as have the efforts of OPEC plus - Saudi Arabia, in particular - and the big freeze in Texas, which gave oil prices one final kick during the week. With so many bullish factors now priced in, it seems some of these positions being unwound.

The United States on Thursday said it was ready to talk to Iran about returning to a 2015 agreement that aimed at preventing Tehran from acquiring nuclear weapons. Still, analysts did not expect near-term reversal of sanctions on Iran that were imposed by Trump administration.

This breakthrough increases the probability of Iran returning to the oil market soon, although there is much to be discussed and a new deal may not be a carbon-copy of the 2015 nuclear deal.

Lately, oil prices climbed on hopes that the US stimulus package will boost the economy and fuel demand, as supplies tighten due largely to output cuts by top producing countries. The rally was also in anticipation of the US President Joe Biden meeting with a bipartisan group of mayors and governors as he keeps pushing for approval of a US$1.9 trillion coronavirus relief plan to bolster economic growth and help millions of unemployed workers.

Oil prices have risen due to production cuts from the Organization of the Petroleum Exporting Countries (OPEC) and allied producers in the group OPEC+. Oil prices remained buoyed by further signs that crude stocks, particularly in the US were falling. Analysts anticipate that inventories will fall further later this year as transport fuel demand revives in tandem with the easing of virus-related restrictions on travel.

OPEC this week ratcheted down expectations for global oil demand to recover in 2021, trimming its forecast to 5.79 million bpd. The International Energy Agency (IEA) said oil supply was still outstripping global demand, though COVID-19 vaccines are expected to support a demand recovery.

The (IEA) report paints a more pessimistic picture than market participants have presumably been envisaging given the current high prices. Demand data from the world’s biggest oil importer also paints a bleak picture.

The number of people who travelled in China ahead of Lunar New Year holidays plummeted by 70% from two years ago as coronavirus restrictions curbed the world’s largest annual domestic migration, official data showed.

The US drillers this week added oil and natural gas rigs for a 12th week in a row, the longest streak of additions since June 2017.

According to secondary sources, OPEC crude oil production averaged 25.50 million bpd in January 2021, up 180,000 bpd from December 2020, with output rising in top producer Saudi Arabia, as well as in Venezuela and Iran, which are exempt from the OPEC+ cuts.

Satellite images reveal Israel expanding Dimona nuclear site

Recently released satellite images reveal that Israeli — the sole possessor of nuclear arms in West Asia — is conducting significant activities at the highly secretive Dimona nuclear facility in the Negev Desert. The construction site is located in the immediate vicinity of the buildings that house the nuclear reactor and the reprocessing plant.

Citing commercial satellite imagery of the facility, the International Panel on Fissile Material (IPFM), a group of independent nuclear experts from 17 countries, reported that significant new construction had been underway at the Dimona complex.

The IPFM’s website said the construction had “expanded and appears to be actively underway with multiple construction vehicles present.”  However, it added, the purpose was not known.

It was unclear when the construction work began, but Pavel Podvig, a researcher with the program on science and global security at Princeton University, told The Guardian that the project had apparently been launched in late 2018 and 2019.  “But that’s all we can say at this point,” he added.

Reportedly, Israel has tightly withheld information about its nuclear weapons program, but the regime is estimated to be keeping at least 90 nuclear warheads in its arsenal, according to the non-profit organization Federation of American Scientists (FAS).

The warheads, FAS said, had been produced from plutonium obtained at the Dimona facility’s heavy water reactor.

According to reports, Dimona, which is widely believed to be the key to Israel’s nuclear arms manufacturing program, was built with the assistance from the French government and activated sometime between 1962 and 1964.

Israel has acknowledged the existence of the Dimona nuclear reactor, but neither confirms nor denies the purpose of the facility, which is assumed to be the manufacturing of nukes.

Meanwhile, environmentalists have warned that Dimona — one of the world’s oldest nuclear facilities — could pose enormous environmental and security threats to those living in the area and to the entire West Asia region, calling on the regime to shut down the complex.

Turning a deaf ear to international calls for nuclear transparency, Israel has so far refused, with the US support, to join the Non-Proliferation Treaty (NPT) that is aimed at preventing the spread of nuclear weapons.

 

Iran agro products export terminal inaugurated

President Hassan Rouhani inaugurated the first phase of Iran’s biggest agricultural products export terminal. It has been constructed with an investment of US$171 million in the Northern Mazandaran province. The terminal spread over 31,000 hectares of land is situated in Jouybar city.

Marketing, exporting products, creation and introduction of Iranian brands in global markets, reforming the distribution system and regulation of the market of agricultural products are the primary goals of the export terminal.

Speaking in the opening ceremony, the terminal’s Head Khalil Gholizadeh said, the first phase of this export terminal with a capacity of more than 364,000 tons has different sections for sorting and packing fruits, producing carton boxes, freezing protein materials that has created direct jobs for 300 people.

The export terminal includes 57 cold storage halls and has the capacity for freezing 80 tons of agricultural products and producing 6,000 tons of carton boxes every day, as well as the annual packaging of 274,000 tons of various agricultural products and the storing of 90,000 tons of vegetable and protein products at above and below zero temperatures.

The regulation of the market of agricultural products, especially horticulture products, as one of the most important advantages of this terminal and call for the support of public and private banks in providing working capital for the country’s agricultural units.

Offering complete supply chain, including the packaging industry is one of the main requirements of the country’s export terminals for agricultural products. Supporting the chain needs of this export terminal and setting up export terminals for similar agricultural products in other provinces are the requirements for boosting export of Iran

As announced by an official with the Islamic Republic of Iran Customs Administration (IRICA), the value of the country’s agricultural products export has risen 8.4 percent during the first ten months of the current Iranian calendar year as compared to the same period in the past year. Mehrdad Jamal Orounaqi, the IRICA deputy head for technical and customs affairs, put the value of exported products at US$4.9 billion in the ten-month of the present Iranian calendar.

The official said the weight of agricultural products exported in the mentioned period has risen by almost 26% to 7.085 million tons. Iran had exported 5.6 million tons of agricultural products worth US$4.5 billion during the first ten months of the previous year.

Details of agricultural exports in the period under review show that 2.4 million tons with a value of more than US$2.1 billion comprises of 10 major agricultural products, among these pistachio is at the top of the list.

The share of pistachios with fresh or dried skin is 147,000 tons worth more than US$920 million, and the export of fresh or dried pistachio kernels is about 15,000 tons worth more than US$170 million.

Eight countries were the export destinations of the 10 major exported products which shows that there is a wider distribution than before in the export of these items between countries.

Iran exported over US$5.8 billion worth of agricultural and foodstuff products in the previous Iranian calendar year (ended on March 19, 2020), the Head of Agriculture Ministry’s Planning and Economic Affairs Department Shahrokh Shajari has announced.

Watermelons, apples, tomatoes, potatoes, onions, and shallots were the top five exported products in the previous year in terms of weight, while in terms of value, pistachios, apples, tomatoes, pistachio kernels, and watermelons were the five major exported items.

WTO appoints first woman and African head

Nigerian economist, Ngozi Okonjo-Iweala has been appointed to head World Trade Organization (WTO), becoming the first woman and first African to take on the role amid rising protectionism and disagreement over how the body decides cases involving billions in sales and thousands of jobs.

Ms Okonjo-Iweala, 66, was named Director General by representatives of the 164 countries that make up the WTO, which deals with the rules of trade between nations based on negotiated agreements.

She said during an online news conference that she was taking over at a time when the WTO was "facing so many challenges".

"It's clear to me that deep and wide-ranging reforms are needed … it cannot be business as usual," she said.

Her first priority will be quickly addressing the economic and health consequences of the COVID-19 pandemic.

Strategies may include lifting export restrictions on supplies and vaccines, and encouraging the manufacturing of vaccines in more countries.

Other big tasks include reforming the organization’s dispute resolution process and finding ways for trade rules to deal with change like digitalization and e-commerce.

She takes over after four turbulent years in which former United States president Donald Trump used new tariffs, or import taxes, against China and the European Union to push his America-first trade agenda.

"It will not be easy because we also have the issue of lack of trust among members which has built up over time, not just among the US and China and the US and the EU … but also between developing and developed country members and we need to work through that," she said.

I absolutely do feel an additional burden, I can't lie about that ‑ being the first woman and the first African means that one really has to perform.

"All credit to members for electing me and making that history, but the bottom line is that if I want to really make Africa and women proud I have to produce results, and that's where my mind is at now."

The appointment, which takes effect on 1st March 2021, came after United States President Joe Biden endorsed her candidacy, which had been blocked by Trump.

Biden's move was a step toward his aim of supporting cooperative approaches to international problems after Trump's go-it-alone approach that launched multiple trade disputes.

But unblocking the appointment is only the start in dealing with US concerns about the WTO that date back to the Obama administration.

The US had blocked the appointment of new judges to the WTO's appellate body, essentially freezing its ability to resolve extended and complex trade disputes.

The US Government has argued the trade organization is slow-moving and bureaucratic, ill-equipped to handle problems posed by China's state-dominated economy, and unduly restrictive on US attempts to impose sanctions on countries that unfairly subsidies their companies or export at unusually low prices.

Chad P. Bown, senior fellow at the Peterson Institute for International Economics, said unblocking Ms Okonjo-Iweala's appointment was "a very good first step" in re-engaging with the WTO.

In particular, the WTO faces "a ticking time-bomb" in the form of other countries' challenges to Trump's use of national security as a justification for imposing tariffs, a little-used provision in US law rejected by key US trading partners in Europe.

Ms Okonjo-Iweala has been Nigeria's finance minister and, briefly, foreign minister, and had a 25-year career at the World Bank as an advocate for economic growth and development in poorer countries.

She rose to the number two position of Managing Director, where she oversaw US$104.1 billion in development finance in Africa, South and Central Asia, and Europe.

In 2012 she made an unsuccessful bid for the top post with the backing of African and other developing countries, challenging the traditional practice that the World Bank is always headed by an American.

She has a bachelor's degree in economics from Harvard University and a PhD in regional economics and development from the Massachusetts Institute of Technology.

South Korean Trade Minister Yoo Myung-hee withdrew her candidacy, leaving Ms Okonjo-Iweala as the only choice.

Her predecessor, Roberto Azevedo, stepped down on 31st August 2020, a year before his term expired.

Netanyahu first leader in Middle East to get a call from Biden

US President, Joe Biden and Israeli Prime Minister Benjamin Netanyahu spoke on phone; nearly a month after Biden assumed the charge. Netanyahu was the first leader in the Middle East to get a call from Biden. The conversation lasted for nearly an hour. 

The two leaders noted their personal ties of many years and said they will work together to continue bolstering the strong alliance between Israel and the US.

The leaders agreed to continue a dialogue between them to promote peace agreements between Israel and states in the region, the Iranian threat and regional challenges.

Biden congratulated Netanyahu for his leadership in fighting the COVID-19 pandemic and they exchanged opinions on the matter.

Biden affirmed his personal history of steadfast commitment to Israel's security in call with Israeli Prime Minister Netanyahu.

Biden emphasized US support for recent normalization of relations between Israel and countries in the Arab and Muslim word and underscored importance of working to advance peace throughout the region, including between Israelis and Palestinians.

“It was a good conversation,” Biden later told reporters in the Oval Office, where he was meeting US labor leaders.

The phone call came a day before US Secretary of State Antony Blinken is expected to hold a video conference with his counterparts in UK, France and Germany that are party to the 2015 Iran deal. The meeting comes after Tehran announced it would not allow snap inspections by the International Atomic Energy Agency if the US does not lift sanctions imposed since 2018 by February 21.

The Biden administration seeks to rejoin the nuclear deal, which former US president Donald Trump left in 2018, as long as Tehran returns to full compliance with its limitations.

Israel is opposed to the deal, which would eventually permit Iran to enrich high levels of uranium that could lead to the development of a nuclear weapon. In recent weeks, Iran has begun enriching uranium to 20%, far beyond the limitations of the 2015 deal, and developing uranium metal.

The delay in Biden’s call sparked speculation that the president was distancing himself from Netanyahu, possibly in light of the prime minister’s tense relationship with former US President Barack Obama, under whom Biden was vice president, and his especially warm one with Trump, including after Biden won the 2020 election.

Netanyahu rejected those theories, most recently in an interview with Army Radio on Wednesday afternoon hours before the call, in which he said “Joe Biden is my personal friend for 40 years” and that he believes Biden will advance further peace agreements between Israel and Arab and Muslim states.

Blinken and US National Security Advisor Jake Sullivan each called their Israeli counterparts twice in recent weeks.

Advisers for some of Netanyahu’s political rivals said officials in the Biden administration told them they were maintaining the strong US-Israel relationship while relaying a message that there would be “no special relationship” between Netanyahu and Biden.

Quad seeking collaborative defence arrangement to counter China

The effectiveness with which Russia and China have been able to exploit situations to make territorial gains has exposed a chronic vulnerability for collective defence regimes. Collective defence risks are becoming weaker for an era of strategic competition in the grey zone. The Quad implicitly acknowledges this and has developed as a collaborative defence arrangement that has the capacity to respond to the sorts of threats China poses.

For the Quad to succeed, Australia, India, Japan and the United States need to work together using force—or tactics that is either above or slightly below the threshold of armed conflict to block Chinese attempts to seize territory. They members need a coherent strategy to counter China’s other activities below the threshold of armed conflict.

This requires broad understanding of the defence using different elements of national power to counter a range of coercive threats. Each member needs to understand which levers should be pulled at what times in a coherent strategy that thwarts Beijing’s ability to achieve its political objectives at each stage of competition or conflict.

The more coercive the power China mobilizes, the fewer levers of national power the Quad members would need to pull. In a hypothetical example in the first part of this series, let us explore how Quad members might develop an effective military response to a Chinese attempt to seize Pratas Island from Taiwan. In that case, the four members of the Quad would be pulling down heavily on the military levers of national power—albeit at different stages of the conflict and in different theatres.

Responding to the most coercive of China’s threats is the easiest part of the Quad’s job. It gets harder if China mobilizes less coercive power when threatening the Quad’s interests in the Indo-Pacific. This is where the distinction between collective defence and collaborative defence becomes the key.

Over time, China has reclaimed land and transformed islands into military facilities that have increased its ability to project power across the Western Pacific. This has raised the costs for the US to defend its treaty allies, which undermines its presence in Asia.

For Japan and Australia, China’s South China Sea facilities pose a threat to the freedom of navigation each relies on for trade.

In India, the stakes may not be as high, but any erosion of international norms in the South China Sea would set an unwelcome precedent as the Chinese military increases its presence in the Indian Ocean. The differing stakes for each country in the Quad have made a collective response impossible.

However, an effective response to China’s grey-zone coercion need not be ‘collective’. In 2017, Ely Ratner, Biden’s top China adviser at the Pentagon, argued in Foreign Affairs that the US should ‘abandon its neutrality and help countries in the region defend their claims’.

Ratner suggested that the US help treaty allies such as the Philippines with joint land-reclamation projects, increased arms sales and improved basing access. Other Quad members would also need to draw upon their own bilateral partnerships to help claimant states build resilience to Beijing’s grey-zone operations. The Quad would be a subtle means of helping Southeast Asian claimants defend their sovereignty against China’s creeping expansionism.

Ratner’s proposal shows collaborative defence in action with the aid of the Indo-Pacific’s established great power. While Washington is laying the groundwork to compete with China in the grey zone, Australia could strengthen its maritime capacity-building initiatives and joint naval exercises with Malaysia and Indonesia in archipelagic Southeast Asia.

India and Japan could each increase the frequency of their bilateral naval exercises with Vietnam. The Quad could agree to conduct Exercise Malabar in the South China Sea, while members of the ‘blue dot network’ could jointly finance critical infrastructure projects in littoral states. An effective strategy would require each Quad member to use a mix of diplomacy, aid, military exchanges, arms sales, joint exercises and new basing infrastructure.

None of these initiatives will achieve results immediately, but nor did China’s island-building campaign. Over time, each initiative will shift the burden of escalation back to China. With each Quad member working independently and collaboratively to embolden claimant states to defend their maritime rights, Beijing will incur new risks when rotating new fighters on Fiery Cross Reef or contemplating further incursions into the Natuna Islands.

Collaboration will allow each Quad member to find out how best to draw on its bilateral partnerships to embolden claimant states to defend their interests. The Quad will be invisible, but omnipresent in Southeast Asia. That’s precisely the threat that Beijing doesn’t want to deal with.

To succeed as a collaborative defence arrangement, the Quad needs to be guided by three principles. Its members need to work independently on their bilateral relationships to improve claimant states’ ability to defend their interests; they must exercise together whenever strategic circumstances require it; and they need to share notes on regional strategy, knowing it will be much harder for China to secure further territorial gains if it’s on the back foot.