Rising gas and crude oil prices not a good omen

Meteorologists are predicting a cold winter, and it could send international energy prices even higher. Record high natural gas prices have forced some utilities to switch to oil, boosting demand for crude. It is feared that oil prices may witness further rise, though not likely to stay there for long.

The spike in oil prices to the highest in years came after OPEC plus decided not to add more barrels than the initially agreed 400,000 bpd monthly. Analysts say that prices could witness further increase. Now, some forecast price may rise to US$100/barrel. The good news is that even if it happens, it won’t last. 

Goldman Sachs recently updated its oil price forecast for the final quarter, saying it now expect Brent crude to reach US$90/barrel by end December 2021. The bank believes oil demand could jump by 900,000 bpd if the winter gets harsher.

“While we have long held a bullish oil view, the current global supply-demand deficit is larger than we expected, with the recovery in global demand from the Delta impact even faster than our above-consensus forecast and with global supply remaining short of our below consensus forecasts,” the bank’s commodity analysts said in late September this year.

Then Bank of America said oil could hit US$100/barrel because of the energy crunch that has now gone global. US Energy Secretary, Jennifer Granholm said last week that the government may release oil from the country’s emergency reserve to lower gasoline prices.

The record-high natural gas prices have forced some utilities to switch to oil derivatives instead, boosting demand for crude and, like Goldman, noted the prospect of a cold winter as another bullish factor for oil.

“If all these factors come together, oil prices could spike and lead to a second round of inflationary pressures around the world,” BofA analysts wrote in a note. “Put differently, we may just be one storm away from the next macro hurricane.”

Yet even if Brent hits US$100/barrel, it is unlikely to stay there for long, according to John Driscoll, chief strategist at JTD Energy Services. And it would take a lot of things to happen for the benchmark to reach this price level.

“I see that as kind of a lower probability scenario. That is, if everything goes wrong, if we have Arctic weather, if we’ve got glitches, breakdowns in the deliverability, the supply chains. That is a possible scenario but I don’t see that likely to be sustainable,” Driscoll told CNBC last week.

Yet the weather is impossible to predict with any accuracy over longer periods of time, and indeed, current forecasts for the winter season differ dramatically among meteorologists, as Bloomberg reported earlier this month. 

The rational thing to do, of course, is to plan for the worst possible scenario, which would be a very cold winter. Indeed, this was what Europe and China tried to do and what became one big reason for the gas price spike. 

Yet some of that spike, at least, was the result of speculation rather than fundamentals. Gas prices dropped after Russian President Vladimir Putin said the country will supply additional gas to Europe.

Kamala comes under heavy criticism after address at George Mason University

There are moments, often quite fleeting, when the masks put on by politicians briefly fall away, revealing the true person who lies beneath the carefully cultivated layers of spin and sophistry. Kamala Harris had just such a moment last week. And it wasn’t pretty.

Speaking at George Mason University in Fairfax, Virginia, to mark National Voter Registration Day, the vice president of the United States took a question from a student that was as fallacious as it was foolish.

 The student, who identified herself as Iranian and Yemeni, said that “just a few days ago there were funds allocated to continue backing Israel, which hurts my heart because it’s an ethnic genocide and a displacement of people, the same that happened in America, and I’m sure you’re aware of this.”

Rather than denouncing or contradicting this appalling accusation of “ethnic genocide” against America’s best friend in the Middle East, Harris chose instead to nod respectfully and then failed to counter the antisemitic libel.

Worse yet, Harris proceeded to praise the student, saying she was “glad” she had raised the subject, before adding, “this is about the fact that your voice, your perspective, your experience, your truth, should not be suppressed and it must be heard, right?”

This is what Barack Obama must have meant by the term “a teachable moment,” for we just learned a heck of a lot about Kamala Harris.

To begin with, her failure to rebut the assault on Israel’s legitimacy speaks volumes in and of itself. In carefully crafted press releases and speeches put together by her staff, Harris will, of course, mumble mantras of support for the Jewish state. But when left bare and unscripted, her instinct is not to refute the slandering of Israel but, rather, to affirm it as a form of “truth.”

It’s no wonder that the Iranian government-owned Press TV was quick to tweet out a video of Harris’s performance.

No less appalling was her suggestion that there are many truths, which is a form of moral relativism that serves only to muddy the waters and confer an air of legitimacy on outright falsehoods.

Back in January 2017, when Kellyanne Conway, an adviser to President Donald Trump, used the term “alternative facts” in a Meet the Press interview when describing the size of the crowd at the presidential inauguration, she was widely ridiculed.

Yet that is precisely what Harris did, effectively saying that to view Israel as a murderous, genocidal entity is as valid as any other opinion.

Moreover, in telling the student that her position should “not be suppressed,” she seemed to suggest that the Palestinian side of the story goes unheard.

Sherman lauds Pakistan for helping Afghan refugees over last 42 years

US Deputy Secretary of State Wendy Sherman on Friday expressed appreciation for Pakistan's efforts to provide humanitarian assistance to Afghanistan, saying that it should be "very proud of 42 years of helping Afghan refugees" and the US, as well as the world, was grateful for that. 

Sherman lauded Pakistan's role during an exclusive interview on PTV News program 'Shahrah-e-Dastoor'.

In response to a question, Sherman said she had visited a United Nations High Commissioner for Refugees Documentation Renewal and Information Verification Exercise centre earlier in the day, where registration cards were being issued to Afghan refugees so that they could have access to facilities such as healthcare in Pakistan.

"It is an extraordinary system," she said, commending Pakistan for persistently helping Afghan refugees over a long period of time.

Sherman was also asked about her comments about relations between the US and Pakistan during her visit to India.

"It’s for a very specific and narrow purpose, we don’t see ourselves building a broad relationship with Pakistan," she had said, according to Indian publication The Indian Express.

In response to the question, Sherman clarified that by "specific steps" she meant that the purpose of her trip to Pakistan was to predominantly focus on the aftermath of events in Afghanistan and review bilateral relationships between the US and Pakistan.

"The US and Pakistan have had longstanding relations for decades," she said.

She went on to say, "This is a time of great change in the region because of the events in Afghanistan", and the US and the world was reassessing what the future would look like and how to ensure a better future for Afghans and ensure that no country remained a safe haven for terrorists.

Sherman also assured that the US was willing to engage with Pakistan on the wide-ranging agenda we have and the aftermath of recent events in Afghanistan.

She added that the US was glad that Pakistan had called for an inclusive government in Afghanistan and progress on this front should be made so as to "create a better life for the people of Afghanistan".

"And we also agree that humanitarian assistance to Afghanistan should continue," Sherman said, sharing details of measures taken by the US for this purpose.

When asked about the Quad, a recently formed group that includes India, United States, Japan and Australia as members and perceived to be an alliance against China in the region, Sherman described it as a cooperative effort on matters such as energy and people-to-people exchange.

In this connection, she also clarified that the US didn't ask countries to choose between itself and China.

Acknowledging that China was a large economy and growing world power, she added, "What we do ask is that China plays by rules" in the international order.

"We urge countries to insist on that so that everyone has a level-playing field".

When she was asked about America's stance on the Kashmir dispute, Sherman said she realized that it was a long-standing, complex and historical issue, but "it is between India and Pakistan".

The US would urge for dialogue on the matter, she added.

Sherman also lauded initiatives taken by Prime Minister Imran Khan's government to mitigate climate change.

Sherman appreciates Pakistan's efforts to evacuate foreign citizens from Afghanistan

US Deputy Secretary of State Wendy Sherman on Friday appreciated Pakistan's efforts to evacuate foreign citizens from Afghanistan as well as its efforts for regional peace. The US official also praised the progress in talks between the US and Pakistan on climate change and alternate sources of energy.

The meeting between US Deputy Secretary of State Wendy Sherman  and Pakistani Foreign Minister Shah Mahmood Qureshi was also attended by US Assistant Secretary of South and Central Asian Affairs David Lu and Pakistani Foreign Secretary Sohail Mahmood.

In a tweet later in the day, Sherman said she discussed Afghanistan's future and the important and long-standing US-Pakistan relationship with Qureshi during the meeting.

"We look forward to continuing to address pressing regional and global challenges," she added.

Qureshi said that Pakistan wants broad-ranging, long-term and stable relations with the United States to promote economic cooperation and establish peace in the region.

He made the comments during a meeting with Wendy Sherman, currently on a two-day visit to Pakistan. The two sides discussed bilateral relations, Afghanistan and the regional situation during the meeting.

Qureshi stressed that a proper dialogue between the two countries was "necessary" for mutual benefit of the US and Pakistan as well as the promotion of regional objectives, the FO statement said.

The foreign minister said Pakistan and US had similar perspectives and stressed the importance of a peaceful solution to the situation in Afghanistan.

He further said Pakistan hoped the interim Taliban government in Afghanistan would work for the betterment of all Afghan citizens alongside peace and stability.

"A representative and inclusive Afghan government can be a trustworthy partner for the international community. In the current situation, there is a need for proper steps by the international community to ensure positive inclusion, provision of humanitarian aid and financial resources to set up a stable economy to solve the problems of the Afghan public," the statement quoted Qureshi as saying.

The foreign minister also stressed on a solution to the Kashmir dispute for lasting peace and stability in the South Asian region while apprising the US delegation of the human rights violations in Indian-occupied Kashmir.

He also thanked the US deputy secretary of state for the country's donation of Covid-19 vaccines to Pakistan.

Meanwhile, Sherman offered condolences on the lives lost in the earthquake in Baluchistan’s Harnai district a day earlier.

On Thursday, National Security Adviser (NSA) Moeed Yusuf, in a meeting with the US Deputy Secretary State, stressed that the international community "must maintain contact" with the interim Taliban government in Afghanistan.

According to a report by Radio Pakistan, during the meeting both sides expressed the desire to promote bilateral relations between the two countries.

They also discussed economic cooperation as well as the security situation in the region, it added.

In his remarks, Yusuf said that blatant human rights violations in Indian-occupied Kashmir also posed a threat to regional peace.

Sherman and her seven-member team arrived in Islamabad on Thursday for a two-day visit to the country.

She had earlier visited India and attended a series of bilateral meetings, civil society events, and the India Ideas Summit.

"The visit is taking place at a very critical time, both in the context of Afghanistan and developments in the wider region," said a senior diplomatic source when asked to explain why Islamabad sees this as an important visit.

Iran Taliban alliance may delay recognition of new Afghan government

The Taliban victory and the American exit from Afghanistan have shuffled the pack in the region in multiple ways. Several of Afghanistan’s neighbours with major stakes in the country have reacted to these developments with ambivalence. 

Pakistan, the Taliban’s major external source of support and its primary advocate in the international community, has exulted over the Taliban coming to power in Afghanistan because it serves its strategic objectives vis-à-vis its nemesis India.

At the same time, the Pakistani military and civilian establishments have met these developments with a degree of trepidation. They’re worried that the Taliban’s return to power could reenergize the extremist Islamist elements in Pakistan that are committed to changing the country’s political system to a ‘pristine’ Islamic one. The military is especially concerned that the Taliban would extend support to the Pakistani Taliban who have fought major battles against the Pakistani army in the past and could once again pose a major challenge to the country’s security.

Similarly, the Chinese and the Russians are happy to see the Americans humiliated because it undermines Washington’s status, thus strengthening their standing internationally. However, both Beijing and Moscow are concerned about the impact of the Taliban’s victory on their own restive Muslim populations in Xinjiang and the Caucuses. Insurgent groups consisting of Uyghurs and Chechens are active in Afghanistan and have received support from the Taliban and other Islamist formations. Rebel groups from Uzbekistan and other Central Asian states allied to Russia have also found succour in Afghanistan in areas controlled by the Taliban.

Iran falls in the same category as China and Russia but with a major difference. While China and Russia perceive the US as a competitor, Iran sees America as an unquestionably hostile power—‘the Great Satan’—committed to not only destroying the regime but also driving the nation into destitution and incapacitating the state to such a degree that it can’t assume its rightful place in the comity of nations. It also perceives the US to be the proxy for Israel, Iran’s primary regional adversary, which is bent on destroying any semblance of Iranian nuclear capability by launching clandestine attacks on Iranian nuclear installations and assassinating its nuclear scientists.

This is why Iran has been far more enthusiastic than either China or Russia in welcoming the Taliban victory. It’s not because Tehran loves Taliban but because they drove US forces out of Iran’s neighbourhood. The Iranian regime believes that the abrupt and disorderly US withdrawal is bound to affect America’s credibility among its allies, principally Saudi Arabia and the United Arab Emirates, which are Iran’s major adversaries in the Gulf, thus weakening their resolve to compete with it in the region.

Iran also perceives the American withdrawal as a sign of President Joe Biden’s weakness, from which it could benefit during the continuing negotiations aimed at reviving the Joint Comprehensive Plan of Action (JCPOA) abandoned by Biden’s predecessor Donald Trump in 2018. The new Iranian government under President Ebrahim Raisi has already made clear that, while it’s willing to return to the limits imposed on its nuclear program by the JCPOA, it will do so only if its three principal demands are met. The US must immediately lift all sanctions imposed by the Trump administration, must give an ironclad undertaking that it won’t unilaterally withdraw from the agreement in the future, and must not seek to tie any other issues, such as Iran’s missile program or its regional policies, to the revival of the JCPOA. Iran is in no hurry to return to the agreement. It is in fact using the threat of an imminent nuclear breakout to pressure the Biden administration to accept its preconditions for a return to the JCPOA.

Positive Iran–Taliban relations could also contribute to weakening the American bargaining position on the JCPOA. While Tehran may be underplaying its religio-ideological antipathy towards the Taliban, it hasn’t forgotten the atrocities committed on the Shia Hazara population under the first Taliban regime. It also hasn’t forgotten the Taliban’s massacre of 10 Iranian diplomats in Mazar-i-Sharif in 1998, an event that brought Iran and Afghanistan to the brink of war. However, the two parties’ shared objective of forcing the US out of Afghanistan has trumped Iran’s ideological hostility towards and religious detestation of the Taliban.

Iran’s pragmatic approach to the Taliban is also driven by its interest in securing its eastern borders against drug traffickers, refugees and, above all, hostile groups such as Baluchi irredentists. Tehran sees the Taliban regime as indispensable in providing such security. Iran is also keen on selling fuel to Afghanistan and has in fact ramped up supplies since the Taliban capture of Kabul. Finally, Iran considers its presence in Afghanistan to be essential for countering what it sees as the malign influence of Saudi Arabia and Pakistan on the Taliban regime.

The Iranian policy of live and let live when it comes to the Taliban is a part of its larger regional policy of consolidating and expanding its influence to ensure its security and keep hostile powers at bay. It has been doing so across its western borders, where Iranian-financed and -trained militias have become significant political and military players in Iraq. Hezbollah, Iran’s oldest ally in the Arab world, plays an even larger political role in Lebanon and has become an indispensable partner in any governing coalition in the country.

Taliban may not be as pliant a partner as the Iraqi Shia militias, but maintaining good relations will provide Iran with much greater security on its eastern borders and constrain other powers such as China, Russia and Pakistan from harming Iranian interests in Afghanistan, a country strategically located at the junction of the Middle East, Central Asia and South Asia.

McMaster proposes to remove Pakistan’s status as a major non-NATO ally

According to media reports, testifying before a powerful Congressional Committee on Afghanistan, former General H. R. McMaster, said that the United States needs to hold the Pakistan Prime Minister accountable for some of his comments after the fall of Kabul in August.

It is also delusional, he said, to think that any of the money that would go to the Taliban or through the Taliban for humanitarian purposes would not immediately be used by the Taliban to solidify their power and to become an even greater threat. “So, we're in a situation where we're facing a really extraordinary dilemma that it's going to be tough for us to mitigate the humanitarian crisis without empowering the Taliban,” he said in response to a question.

“I don't think we should give any assistance to Pakistan at all. I think Pakistan has had it both ways for way too long. I think Pakistan should be confronted with its behavior over the years that have actually resulted, I think, in large measure in this outcome,” McMaster said.

It was during the Trump Administration that the US had blocked all security assistance to Pakistan. The Biden Administration has not resumed the security aide yet.

“I think we ought to hold Imran Khan responsible for his comments when Kabul fell and he said that the Afghan people have been unshackled. Why should we send a dime to Pakistan under any conditions? I think that they should be confronted with international isolation because of their support for jihadist terrorists, who are threats to humanity, including the Haqqani network, the Taliban, and groups like Lashkar-e-Taiba,” he said.

Responding to a question from Congressman Scott Perry, during the Congressional hearing convened by the House Foreign Affairs Committee, McMaster said that it is a good idea to remove Pakistan’s status as a major non-NATO ally.

“I would say the only time I think we have ever laid out a very clear and realistic assessment of South Asia and prioritized the strategy was President Trump's speech in August of 2017. Now, he abandoned it and he doubled down on the flaws of the Obama administration. I don't know how that happened. But I think if you go back to that August 2017 speech, that was the proper approach to Pakistan as well, which called for a suspension of all assistance to Pakistan until Pakistan fundamentally changed its behaviour,” McMaster said.

Congressman Bill Keating said Pakistan remains a problem and the US needs to assess it.

“Its long-standing activities, by many accounts, have been negative. I think that's putting it mildly. For decades, though, for decades, whether you go back to'96 when the Taliban took control, Pakistan was one of the first to recognize them,” he said.

“When you go through the change in 2001 in Afghanistan and then the reconstruction of the Taliban starting around 2005, they were there giving assistance, by all accounts, and I believe those accounts are accurate. And indeed, right up into this current change in the government, Pakistan, there were many people that suggested their intelligence was embedded with them,” Keating said.

Pakistan’s relationship with the Haqqani network is one that is of great concern.

“That may indeed affect our relations with India in that respect. But can you comment on that? I think they have been duplicitous, not just recently, not just in the few months of this administration, but for decades in this with many administrations, Republican and Democratic alike,” he said.

Former US Ambassador to Pakistan Ryan Croker acknowledged that Pakistan worked against the US in some very fundamental aspects with their support for the Taliban.

“Earlier, I tried to present their narrative as to why. We were going to walk out, and they did not want to be left with the Taliban as a mortal enemy. They may get that anyway. And as satisfying as it would be to a lot of us, myself included, to do something to punish Pakistan for this, I don't think we have the luxury. They are already worried over the repercussions inside their own country of the Taliban's so-called victory in Afghanistan,” he said.

“Now, we can say, ‘Yeah. Well, they deserve whatever they get.’ But again, a blow-up in Kashmir is going to bring a regional war. So, I think reassessment is always good, but let's reassess with a clear eye on the dangers now that the Taliban takeover of Afghanistan has created throughout the region. We do not need a completely destabilized Pakistani state with nuclear weapons,” Croker said.

McMaster told the lawmakers that the Taliban was backed by ISI and that’s why they recaptured Afghanistan.

“The Taliban's differential advantage was the backing by the ISI of other groups. But it was the unscrupulous units who are willing to terrorize. They didn't give up their differential advantage. And so, I don't think it's a mystery at all why they collapsed. And I think it should be unacceptable, to disparage the Afghans who did fight, and over 60,000 of them made the ultimate sacrifice to preserve the freedoms we're now seeing,” he said.

The Taliban, he said, went around to the Afghan units, and they said, "Hey, here's how this is going to go."

With the backing of the Pakistani ISI, intertwined with the Haqqani network and Al-Qaida, what they did is they told those commanders, "Hey, listen. You accommodate with us. We give you the signal, or we kill your family. How does that sound?" he said.

And that's why the Afghan forces collapsed in addition to the withdrawal of US intelligence support, the withdrawal of our airpower, which was the Afghan forces differential advantage, McMaster said.

Has Wendy Sherman got a recipe to mend deteriorating US-Pakistan relations?

US Deputy Secretary of State, Wendy Sherman is scheduled to reach Islamabad on Thursday for talks aimed at bridging the widening breach between the United States and Pakistan on the Afghan issue, according to a note issued by the office of the department’s spokesperson.

 “The visit is taking place at a very critical time both, in the context of Afghanistan and developments in the wider region,” said a senior diplomatic source.

The source pointed out that the Biden administration did “not seem to be reluctant to travel to both India and Pakistan in a go, which was the case in the past.”

“This is an important visit, and we look forward to engaging with Ms. Sherman,” said Pakistan’s Ambassador, Asad Majeed Khan while talking to Dawn. “Together, we would explore ways to strengthen and expand our bilateral cooperation in areas of mutual interest and concern.”

According to the sources, Biden administration is focusing on four major points in its talks with Pakistan linked to Afghanistan these are: 1) recognition of Taliban government, 2) imposition of sanctions in case Taliban don’t behave as per the US expectations 3) access to Afghanistan and 4) counter-terrorism cooperation with Pakistan.

The sources say that the United States does not want Pakistan to recognize Taliban regime before the rest of the international community. Instead, it wants Pakistan to continue its efforts for softening Taliban position on controversial issues, such as inclusive governance, human rights, girls’ education and allowing women to work.

The Americans believe that a change of position on these issues could have a positive impact on Taliban image and pave the way for their acceptance in the United Nations. Individual nations, like Pakistan, should delay their recognition till then.

To begin with, analysts are of the opinion that Pakistan is a sovereign country and its foreign policy should not be dictated by the United States.

They also say that Pakistan has emerged at total loser after joining ‘war against terror’. Though, Americans were never tired of terming Pakistan ‘frontline allay’, India emerged as their major partner in economic development in Afghanistan. This created anti-Pakistan sentiment among Afghans living in the areas under the control of ‘Northern Alliance’.

While ‘do more mantra’ was common, many Pakistanis just can’t condone the US troops for their attacks on Pakistani check posts, worst being Salala tragedy

‘Arm twisting has been common’ in negotiations with the IMF, Americans mostly followed ‘carrot and stick’ policy.

Pakistanis have not forgotten delays the delivery of F-16.