Monday, 5 December 2022

Xi Jinping visit to Saudi Arabia

When Chinese President lands in Saudi Arabia this week, he will be touching down in an energy-rich region with a growing interest in being a part of the Beijing-led Shanghai Cooperation Organization, says a report by South China Morning Post.

Xi Jinping’s expected arrival in the Gulf state for a China-Arab summit comes as the kingdom and other members of the OPEC Plus alliance are at odds with the United States over oil supplies and Russia’s war in Ukraine.

Observers say Xi’s trip could be another step in the westward expansion of the SCO, with China growing not only as a trade partner but also an investor in the Gulf’s lucrative energy sector.

“It’s going to be a very, very energy-focused meeting,” said Raffaello Pantucci, a senior fellow at the S. Rajaratnam School of International Studies in Singapore.

“It’s also going to be another meeting that’s focused in this direction because what we’ve seen with the Saudis is a clear reticence by them towards the United States.”

The US ties with Saudi Arabia, the world’s biggest crude oil exporter, and other suppliers in the OPEC Plus alliance, soured after they decided to sharply cut production to support prices.

The US said the decision would worsen global inflation and support Russia’s oil revenue from China and other markets that is used to fund war efforts in Ukraine

Nevertheless, Saudi Arabia remained China’s biggest source of oil in October, according to Chinese customs data. It is also an SCO dialogue partner interested in an upgrade to observer status.

Pantucci said the Gulf’s tensions with the US presented an opportunity for China in Riyadh.

“The Chinese want to capitalize on that and highlight the fact that Saudi Arabia is a great independent country who works with us happily. I think that’s one narrative they want to push out,” Pantucci said.

Elsewhere in the Middle East, Egypt and Qatar have also become SCO dialogue partners, and sanctions-battered Iran – whose largest petroleum customer is China – passed a bill late November to join the group.

Russia, China’s second-biggest oil supplier, is a founding member.

Li Lifan, head of the SCO centre at the Shanghai Academy of Social Sciences, said that once Iran joined the group, it could help the SCO expand its energy club – a Moscow-led platform for SCO countries to discuss energy trade without binding commitments.

SCO leaders have already identified the transition towards renewable energy sources as an area for cooperation, with ambitions of developing a common energy strategy across Eurasia.

Beijing has touted the 3,666km (2,280-mile) Central Asia-China pipeline that supplies natural gas from Turkmenistan to China as a success, and in November Chinese Premier Li Keqiang called on SCO counterparts to advance cooperation over energy security.

However, there are questions about the SCO’s role beyond dialogue on securing energy for China and counterbalancing Western energy interests in the region.

Pantucci said the focus in the West was more on tangible outcomes, which the SCO did not appear to generate.

“I think the problem in the West, at least the Western analysis, is an obsession with things, doing things, and this organization doesn’t do much,” Pantucci said. “Our collective response in the West is, ‘Well, it doesn’t do much then it can’t be important.’”

But he said the SCO membership would help Iran rhetorically, and practically, allowing it to take part in regular talks with other countries.

“Who knows what benefits might come from there?

“For Iran, to be able to associate itself with such a structure and be a member of it shows the Iranian people, for one thing, and it shows the world that Iran isn’t an isolated country.”

Li, the SCO researcher in Shanghai, agreed that Iran could use the group as a platform to grow its influence against what it sees as hegemony from the West.

“Even if it is being squeezed out in the United Nations, at least the SCO can give it a platform every year for its ministers, department heads, state leaders and prime ministers. That way, it can have a say in the international arena,” he said.

Li said the SCO could play a further role in reducing the use of US dollars in energy trade by promoting local currencies, pointing to a Russia-China gas deal denominated in the rouble and the yuan.

Sana Hashmi, a postdoctoral fellow at Taiwan-Asia Exchange Foundation in Taipei, said that while the SCO was not developed as an “anti-West coalition”, China had become an economic guarantor to SCO countries, and the group could keep US influence out of Central Asia.

One advantage China had over the US was its willingness to cooperate with no strings attached, she said. “Every country has a very different reason why they are becoming anti-West, but at least they have a common reason to be a part of something like SCO.”

 

 

 

Sunday, 4 December 2022

More Europeans will perish from energy crisis than Ukraine war

The most vulnerable people in Europe, the elderly and those living alone or on low pay to medium paychecks will pay the highest price: Death.

More people will perish in Europe this winter because of unaffordable household energy costs than those who have died on the battlefield in the Ukraine war, according to research by the British weekly newspaper The Economist.

Last week, the United Nations said the official civilian death toll from the Ukraine war has risen to nearly 6,900, with civilian injuries topping 10,000. Whilst the death of military forces in Ukraine has been difficult to verify, the number of soldiers thought to have died in Ukraine is estimated at 25,000-30,000 for each side.

The Economist modeled the effect of the unprecedented hike in gas and electricity bills this winter and concluded that the current cost of energy will likely lead to an extra 147,000 deaths if it is a typical winter.

Should Europe experience a particularly harsh winter, which is something likely when considering the growing effects of climate change, that number could rise to 185,000. That is a rise of 6.0%. It also reports that a harsh winter could cost a total of 335,000 extra lives.

Even in the rare case of a mild winter, that figure would still be high with tens of thousands of extra deaths than in previous years. If it is a mild winter, research by The Economic indicates the death toll would be 79,000.

The Economist's statistical model included all 27 European Union member countries along with the United Kingdom, Switzerland, and Norway.

It is anticipated that Governments across Western Europe would be alarmed and concerned by these shocking figures published by the study.

But it remains to be seen what measures these governments will take to prevent so many extra fatalities in their own countries because of the energy shortage.

The energy crisis itself began when Europe, which was heavily reliant on Russian gas, imposed heavy sanctions on Russian energy exports following Moscow’s war in Ukraine. Before the war, Russia supplied 40-50% of the EU’s natural-gas imports. One of Europe’s strongest economies, Germany for example, had become dependent on Moscow’s gas flows and had no Plan B.

The move clearly backfired on Western economies, with inflation reaching record levels not seen in decades, mainly as a result of the soaring energy prices. That has left pensioners and other poorer as well as middle-class income households facing a choice of putting food on the table this winter or heating their homes.

The study by The Economist says that despite European attempts to stockpile as much gas as possible to fill their storage facilities, many consumers are still being hurt by the rise in wholesale energy costs.

Even as market prices for fuel have slightly declined from their peaks, the real average residential European gas and electricity costs are 144% and 78% above the figures for 2000-19.

As it is being hurt the most, Europe could take serious and concrete efforts to push both Kyiv and Moscow to the negotiating table and hold peace talks that would bring an end to the war.

That would ease a lot of problems facing the continent – and the world – from energy shortages to the global food supply chain disrupted by the war. However, critics argue, this would backfire on many Western arms manufacturers who are making lucrative profits from their weapons shipments to the warzone.

There are many officials and other influential figures in the West, especially the U.S. congress (despite America not being included in a study by The Economist), who have links to arms manufacturers; which makes the possibility of peace somewhat unlikely.

While the United States has sent weapons to the tune of US$40 billion dollars, European countries show no sign of opting for peace with the new British Prime Minister Rishi Sunak, the latest to announce plans of maintaining or increasing military aid to Ukraine next year

The other course of action is for Western governments to ease the cost-of-living crisis by spending more on social welfare and hiking the tax rates for the rich.

This would save lives by allowing families to heat their homes but many Western governments are taking the opposite route, by claiming they need to cut spending in order to strengthen economic growth in the long run. 

As things stand, the new research by the Economist will add to the fears already facing families in Europe ahead of the winter season. The lower the temperatures will be in Western Europe, the more likely it will be that higher-than-usual death tolls are going to hit the continent. 

As The Economist notes, although heatwaves get more press coverage, cold temperatures are usually deadlier than hot ones. Between December and February, 21% more Europeans die per week than from June to August.

The report says that in the past, changes in energy prices had a minor effect on mortality rates in Europe. But this year’s hikes to household bills are remarkably large.

The Ukraine conflict has exposed other massive costs that have accompanied the violence. The Organization for Economic Co-operation and Development estimates that the world economy in 2023 will be US$2.8 trillion smaller than was estimated in December 2021, before the fighting erupted in February.

The British weekly newspaper, which built a statistical model to assess the effects of the sharp rise in energy prices, forecasts deaths based on weather, demography, influenza, energy efficiency, incomes, government spending, and electricity costs, which are closely correlated to prices for a wide variety of heating fuels.

It used data from 2000-19, (excluding 2020 and 2021 because of covid-19) and says the model was highly accurate, accounting for 90% of the variation in death rates.

High fuel prices can exacerbate the effect of low temperatures on deaths, by deterring people from using heat and raising their exposure to cold.

It says that with average weather, the study found a 10% rise in electricity prices is associated with a 0.6% increase in deaths, though this number is greater in cold weeks and smaller in mild ones.

In recent decades’ consumer energy prices have had only a modest impact on winter mortality, because energy prices have moved or swung back and forth in a regular rhythm.

In a typical European country, increasing fuel prices from their lowest level in 2000-19 reduce the temperature from the highest level in that period to the lowest which means colder weather increases the death rate by 12%.

The study cites the case of Italy, where electricity bills have surged to nearly 200% since 2020, extending the situation, which it said was a linear relationship that yields extremely high death estimates. It has been reported that the country will suffer the most extra deaths. The results show that Italy, which has an older population along with soaring higher electricity prices makes it the most vulnerable. 

Other countries such as Estonia and Finland are also expected to suffer from higher fatalities on a per-person basis. People in Britain and France will also be affected. The model for the effects of fatalities from high energy costs did not include Ukraine.

However, damage to the energy infrastructure in Ukraine as a result of the war, will also certainly have a dire humanitarian effect on Ukrainians as well.

Over the past weeks, many reports have emerged citing Europeans as saying they will be forced to switch the heating off because of the high fuel prices, essentially exacerbating the effect of cold temperatures on deaths by raising people’s exposure to low temperatures.

The most vulnerable people in Europe, the elderly and those living alone or on low pay to medium paychecks will pay the highest price: Death.

 

OPEC Plus sticks to oil output targets

OPEC Plus agreed to stick to its oil output targets at a meeting on Sunday as the oil markets struggle to assess the impact of a slowing Chinese economy on demand and a G7 price cap on Russian oil on supply.

The decision comes two days after the Group of Seven (G7) nations agreed a price cap on Russian oil.

OPEC Plus which comprises the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, angered the United States and other Western nations in October when it agreed to cut output by 2 million barrels per day (bpd), about 2% of world demand, from November until the end of 2023.

Washington accused the group and one of its leaders, Saudi Arabia, of siding with Russia despite Moscow's war in Ukraine.

OPEC Plus argued it had cut output because of a weaker economic outlook. Oil prices have declined since October this year due to slower Chinese and global growth and higher interest rates, prompting market speculation the group could cut output again.

On Sunday the group of oil producers decided to keep the policy unchanged. Its key ministers will next meet on February 01, 2023 for a monitoring committee while a full meeting is scheduled for June 03-04, 2023.

On Friday, G7 nations and Australia agreed a $60 per barrel price cap on Russian seaborne crude oil in a move to deprive President Vladimir Putin of revenue while keeping Russian oil flowing to global markets.

Moscow said it would not sell its oil under the cap and was analyzing how to respond.

Many analysts and OPEC ministers have said the price cap is confusing and probably inefficient as Moscow has been selling most of its oil to countries like China and India, which have refused to condemn the war in Ukraine.

Neither an OPEC meeting on Saturday nor the OPEC Plus meeting on Sunday discussed the Russian price cap.

Russia's Deputy Prime Minister Alexander Novak said on Sunday Russia would rather cut production than supply oil under the price cap and said the cap may affect other producers.

Sources have told Reuters several OPEC Plus members have expressed frustration at the cap saying the anti-market measure could ultimately be used by the West against any producer.

The United States said the measure was not aimed at OPEC.

JP Morgan said on Friday that OPEC Plus could review production in the New Year based on fresh data on Chinese demand trends and consumer compliance with price caps on Russia crude output and tanker flow.

 

Peace in Palestine must for regional stability, says King of Bahrain

Bahrain supports a just peace for the Palestinians as an important step in maintaining regional stability, the country’s monarch, King Hamad bin Isa Al Khalifa, told Israel's President Isaac Herzog when the two met at Al-Qudaibiya Palace in Manama on Sunday.

There is firm support in Bahrain for “achieving a just, comprehensive and sustainable peace that guarantees the legitimate rights of the Palestinian people and that will lead to stability, development and prosperity for both the Palestinian and Israeli people as well as for the people of the region," Khalifa said.

Herzog said his visit to Bahrain symbolized a message of peace for the region and was a historic step that expanded Israeli ties with the Arab world.

He spoke at first on the tarmac at Ben-Gurion Airport on Sunday morning, then repeated the message as he sat with Bahrain's Minister of Foreign Affairs Abdullatif bin Rashid Al Zayani. 

This trip marks the first time that an Israeli president has visited Bahrain.

Herzog recalled that Zayani signed the Abraham Accords, who in turn said it had been a "bright day."

"This is another historic step in the relationship between Israel and Arab states, signed with the Abraham Accords, and another step toward more and more nations joining the circle of peace with the State of Israel," Herzog said earlier that day. "I will be the guest of the King of Bahrain and his government, and I hope to discuss issues of mutual interest."

Herzog will then be flying to the UAE to attend a space conference. "Israel and the UAE are both regional powers in this field, and if one looks ahead, one sees an incredible vista of cooperation between so many industries of Israel, the UAE, Bahrain, and other nations that have signed the Abraham Accords, with the hope of including more and more nations in future," he said.

 

US shale producers just can’t beat OPEC Plus

Shale oil drillers turned from scrappy wildcatters into multi-millionaires over the past two decades, propelling the United States to become the world's largest producer, but now they are running out of runway. Oil output gains are slowing and executives from some of the largest firms are warning of future declines from overworked oilfields and less productive wells.

On Sunday, the Organization of the Petroleum Exporting Countries (OPEC) meets to decide whether to hold the line or cut its output, no longer afraid that their policy decisions might provoke a surge in shale production in the way they did in the years before the pandemic.

The sidelining of US shale means consumers around the world may face a winter of higher fuel prices. Russia has threatened to block oil sales to countries supporting a European Union price cap, and the United States is winding down releases from emergency oil stockpiles that helped cool energy inflation.

US shale production costs are soaring and there is no sign that tight-fisted investors will change their demands for returns rather than investment in expanding drilling.

During a decade of stunning growth, shale consistently defied production forecasts, and opposition from environmentalists, as technology broke open more and more shale plays and revolutionized the global energy industry.

But there appears to be no new industry-transforming technologies in the works or cost-savings that could change the picture this time around. Inflation has pushed up costs by up to 20%, and less productive wells are crimping the industry's ability to produce more.

Industry spending on new oil projects, said analysts last week at Morgan Stanley is modest at best and the absolute level of investment is still historically low.

Shale has proven naysayers wrong in the past. After the 2014-2016 OPEC price war put hundreds of oil companies into bankruptcy, shale innovated with less expensive ways of operating. Their subsequent gains gave the United States by 2018 the title of world's largest crude producer, a distinction it still holds.

Shale can't come back to become a swing producer, because of the investors' unwillingness to finance growth. The demand for payouts and repeated price busts has forced oil producers and service companies to cut back on science projects that fed past production breakthroughs.

The industry also has less time to regain its former leadership, said Hess Corp CEO John Hess. He estimates rivals have about a decade of running room before they fizzle out. Shale is no longer in the driver's seat with OPEC regaining control over the market, said Hess.

Shale's waning influence is clear in North Dakota. Once the vanguard of the US shale oil industry, poor well productivity in the state's Bakken region and labor shortages have left it far from its boom days.

As the number of prime drilling locations decline across all shale fields, the outlook is grim. Shale production declines rapidly after peaking compared to conventional oil wells, falling about 50% after the first year.

The Permian Basin of west Texas and New Mexico, the largest and most important US oilfield, is the only US shale region to exceed its pre-COVID-19 pandemic oil production levels, according to US Energy Information Administration data. Even that field is showing signs of stress.

Saturday, 3 December 2022

Chinese Zero Covid Policy Hinders Global Supply Chain, says Powell

China’s stringent zero-Covid restrictions have affected the American economy by dragging on global supply chains, the top central banker of the United States said, reports South China Morning Post.

When China has shutdowns in regions that are deeply connected to the world economy, supply chains are less efficient, less effective and the prices of goods manufactured or assembled in the country are affected, said US Federal Reserve chairman Jerome Powell.

“It does have an implication for the US,” he said at an event where he gave a closely watched speech before policymakers enter a quiet period before the December 13-14 gathering on the next interest rate decision.

Powell added, “It’s hard to say how big that will be without knowing how persistent, how long the lockdowns will last”.

He spoke as signs increased that Beijing’s zero-Covid policy was taking a toll on the world’s No 2 economy, leading to weaker consumer demand, disrupted production and sluggish expectations.

The latest official surveys showed that both China’s factory and services activities contracted to seven-month lows and worse than market estimations in November.

Experts warned that the inevitable costs of Chinese cities being forced to impose restrictions amid a surge in coronavirus cases have already started to appear.

The International Monetary Fund last week urged Beijing to recalibrate its Covid-19 policy to the economy while relying on market reforms to raise productivity and deliver medium and long-term growth.

Analysts now expect the Chinese economy to grow only 3.3%YoY in 2022, far below the official target of around 5.5% set by the central authorities in March.

The investment bank Nomura said that weaker demand from China would exacerbate the export downturn and add to disinflationary pressures for the rest of Asia.

On November 23, Nomura cut its forecast for China’s fourth quarter growth rate to 2.4% from its previous estimate of 2.8%. It also trimmed the forecast for China’s annual economic growth rate in 2023 to 4.0% from 4.3%.

After protests in several major Chinese cities over the weekend, the country’s central and local authorities appeared to have taken steps to improve their coronavirus strategy.

The cities of Guangzhou and Chongqing announced an easing of Covid restrictions on Wednesday; a move also seen in Shijiazhuang, which at one point was expected to be a pilot city for reopening.

When meeting with health officials and experts on Wednesday, Chinese Vice-Premier Sun Chunlan, the most senior official in-charge of Covid response, uncommonly highlighted that the pathogenicity of the Omicron variant weakens and said the country was facing a new situation and new tasks in pandemic controls.

 

Football World Cup a slap in the face of Israel

With the world cup in Qatar well underway, Israel occupying Palestine got an opportunity to try and further extend its occupying hand toward the Arab and Islamic world. But events at the world's most popular sporting event have painted a completely different picture, reports Tehran Times.

The few Arab countries officially normalizing relations with Israel over the past several years stands in contrast with a growing lack of public support for the Abraham Accords in the Persian Gulf. The reality is even some monarchies in some Kingdoms have embarrassed themselves by normalizing ties with Israel, despite strong opposition from their citizens. There would have been no normalization if the people of these monarchies have the right to voice their opinion on such controversial matters.

 Such is the disgust toward Israeli policies at the prestigious occasion that even reporters dispatched by the apartheid regime have been investigating and reporting on the 'Cup of Hatred' (as one Hebrew newspaper headline put it) towards Israelis on the streets of Doha. 

Instead, soccer fans in particular Arabs, at the first World Cup in West Asia are steering well clear of Israeli journalists in Qatar who have been trying to interview them in an attempt to send home attractive headlines to the war criminals in Israeli-occupied Palestinian territories.

Before the event even kicked off, Israeli officials had expressed hope that the US-brokered Abraham Accords reached with the United Arab Emirates and Bahrain in 2020, and later Sudan and Morocco, would inspire further normalization, with a lot of that hope pinned on one of the region's influential player Saudi Arabia.

Attempts to try and even interview some Arab fans have fallen flat with Israeli reporters from the regime's biggest news broadcasters saying they are being snubbed reflecting the strong boycott and opposition by the people of the rulers of Arab and Islamic countries that normalized ties over the past two years.

One Israeli reporter said Palestinian fans held a protest next to him, waving their flags and chanting "go home", in reference to the European and American countries from which Israeli settlers migrated to Palestine over the past decades, prompting the brutal Israeli ethnic cleansing campaigns against the native Palestinians.

The widespread support for the oppressed Palestinian people has been displayed with Palestinian flags being waved inside and outside stadiums despite the fact that Palestine did not qualify for the tournament. Fans from many Arab and Islamic countries have carried Palestinian flags prominently at matches and worn them as capes around their necks. 

Saudi national Khaled al-Omri, who works in the oil industry and was in Qatar to support his home team, told Reuters, “Some "countries in the Arab world are heading towards normalization – but that's because most of them don't have rulers who listen to their people," 

Aseel Sharayah, a 27-year-old Jordanian at the tournament, said he would have also refused to talk to Israeli journalists, though Amman signed a peace deal with the regime in 1994.

"If I did see any of them, there'd be absolutely no time of interaction," said Sharayah, who works for the European-Jordanian Committee in Amman. "Israeli policies are closing the door on any opportunity for more ties between the countries."

An Israeli journalist also claims that security guards were sent to remove him and his filming crew from a Qatari beach. The report says security guards were sent to remove him and his filming crew from a Qatari beach after he asked a local restaurant to film on its premises. "The owner asked to know where we're from...he called for security guards to escort us away after finding out we were Israeli," the journalist said.

The restaurant beach owner also took the journalist's phone, demanding he deletes every photo taken in his restaurant; the reporter claimed "I felt threatened."

One video circulating online shows an Egyptian football fan smiling serenely as an Israeli broadcaster introduces him live on air. Then he leans into the microphone with a message: “Viva Palestine.”

Another clip that has gone viral from the streets of Doha this week shows a group of Lebanese men walking away from a live interview with a reporter after they learned he is Israeli. One shouts over his shoulder: “There is no Israel. It’s Palestine.”

During the opening ceremony before the first match, a phalanx of Qatari men came to the Al Bayt Stadium chanting, “Everyone is welcome,” carrying with them a large Palestinian flag. “We are taking care of people in Palestine, and all Muslim people and Arab countries are holding up Palestinian flags because we’re for them,” the flag bearer told the media.

One Israeli man, who gave only his first name, told the Guardian newspaper “the majority of the masses here do not accept the presence of Israelis.”

"The Iranian team will be in the World Cup and we estimate that tens of thousands of fans will follow it, and there will be other fans from [Persian] Gulf countries that we don’t have diplomatic relations with,” said Lior Haiat, a senior Israeli official.

“Downplay your Israeli presence and Israeli identity for the sake of your personal security,” Haiat added, addressing the Israeli fans.

With the extent of so many other incidents involving Israeli settlers going viral at the tournament, it appears that things are not going as "smoothly" as the Israeli regime had anticipated. 

It also shows the immense show of solidarity with Palestinians and the resentment toward Israeli war crimes and massacres against children. Qataris themselves have a history of support for the Palestinian cause.

More importantly, what has been highlighted in Doha is that despite a few Arab rulers and monarchies normalizing ties with Israel, the people of those countries are against any form of normalization with the regime.

Palestinian flags have been waved in matches involving even Western teams who play Israel, perhaps most notably in the stands at Celtic Park in Scotland. This is despite rules introduced by the UK authorities to ban Palestinian flags inside the stadium in the Scottish city of Glasgow.

At times, entire sections of fans at Glasgow Celtic's stadium displayed Palestinian flags to protest Israeli occupation. During games against Israeli teams, Scottish fans turned whole sections of the stadium into a sea of Palestinian flags, ignoring the official ban.

Demonstrations for Palestine in Scottish football matches have been organized by several groups including one that usually posts on social media platforms the words “Fly the flag for Palestine, for Celtic, for Justice.”

Research conducted by the Qatar-run Arab Center for Research and Policy Studies shows how large majorities across the Arab world have disapproved of and are strongly opposed to any form of the normalization process. 

It found that an overwhelming majority of Arabs disapprove of recognition of Israel by their home countries, with only 6% accepting formal diplomatic recognition.

The study also finds powerful support for the Palestinian cause among ordinary Arabs, who identify the conflict as an Arab issue. “Over three-quarters of the Arab public agree that the Palestinian cause concerns all Arabs, and not the Palestinians alone,” the report says. 

“When asked to elaborate on the reasons for their positions, respondents who were opposed to diplomatic ties between their countries and Israel focused on several factors, such as Israeli racism towards the Palestinians and its colonialist, expansionist policies,” 

The study confirms how much the colonialist past and the Western hegemony over the Arab world following World War I have driven the political sentiments of the Arab and Islamic worlds toward the aggression and expansionist policies Israel is committing today.

Many other polls over the past two years show a similar pattern after the signing of the controversial "Abraham Accords" between Israel and some Arab states.

A poll by The Washington Institute shows the already shaky support for normalization among Arab public opinion has dropped further.