Wednesday, 7 December 2022

Iran delivers 2 million barrels oil to Venezuela

An Iranian tanker carrying about two million barrels of ultra-light oil has reportedly arrived in Venezuelan waters this week, Reuters reported on Tuesday.

Venezuela and Iran, both under United States sanctions, have recently expanded cooperation mainly through a swap that provides Venezuela's state-run oil company PDVSA with light oil for refining and diluents to produce exportable crude grades. PDVSA in return supplies Iran with Venezuelan heavy oil and fuel.

The Iran-flagged tanker Dore was seen in satellite images near PDVSA's Jose terminal on Monday, according to Reuters. It was previously seen near Asaluyeh, in the Iranian province of Bushehr, in October.

Dore's transponder was offline in late October after loading the condensate cargo, Refinitiv Eikon vessel monitoring data showed.

In November, two supertankers linked to Iran departed from Venezuelan waters carrying Venezuelan crude and fuel oil for Iran's state firm Naftiran Intertrade Co (NICO), according to internal PDVSA's exports schedules.

Including the cargo onboard the Dore, Iran has provided PDVSA with over 26 million barrels of crude oil and condensate so far this year, according to the internal company documents.

In exchange, Venezuela has so far delivered about the same volume to Iran and it plans to ship a 1.9 million barrel fuel oil cargo onboard another supertanker, the Huge, scheduled to depart from PDVSA's Jose terminal this month, the documents showed.

Iran also is involved in several refining projects in Venezuela aimed at helping PDVSA revive its motor fuel production.

Earlier this month, Iranian Oil Minister Javad Oji discussed the latest developments in the oil market in a phone conversation with his Venezuelan counterpart Tareck El Aissami.

The officials also talked about the development of energy cooperation between the two countries and followed up on the recent agreements reached between the two sides.

 

France: strong sugar prices help Tereos offset high production costs

French sugar group Tereos reported strong first-half results on Tuesday, including a net profit and a sharp rise in earnings, as high sugar and ethanol prices helped offset an increase in production costs.

Tereos, the world's second largest sugar maker by volume, posted a net profit of 133 million euros in the year ended September 30, 2022 as compared to with a year-earlier loss of 50 million euros, helped by higher prices that compensated for a sharp rise in energy and raw materials costs.

Over the same period, adjusted earnings before interest, tax, depreciation and amortization (EBITDA) rose 132% to 464 million euros.

In a presentation to bond holders the group said it expected strong results at its sugar Europe branch to continue in the second half due to higher selling prices reached in its annual fixed-price contracts for B2B sales.

In Brazil, where Tereos is among the largest sugar and ethanol producers, the group should benefit from expected high prices and a higher sugarcane crushing volume, at 17.3 million tons, up from 15.6 million tons in 2021.

Tereos's decision to hibernate a plant in Brazil to maximize its margins amid lower yields led to a fall in daily production capacity but full year 2022/23 output and sales volumes were still expected to rise above 2021/22, it said.

The group's net debt fell 128 million euros from a year earlier and 131 million euros from the end of the first quarter on June 30 to 2.24 billion euros.

However, Tereos expects its net debt at March 31, 2023 to be higher than at March 31, 2022 as higher costs led to a rise in working capital.

Tereos said in October it would raise the price at which it will buy sugar beet from its members by 40% from last year.

The group anticipated its sugar processing season by about a week ahead of possible energy restrictions this winter if Russia cuts off gas supplies.

Tereos did not announce the name of a new managing director following the departure of Ludwig de Mot late September this year, the third chief executive to leave the group in two years. Pending recruitment, Gerard Clay will continue to perform the role in his capacity as Chairman of the Board of Directors, it said.

 

Indian food grain subsidy to surge to US$33 billion this year

Indian spending on subsidized food grain to the poor may rise to 2.7 trillion rupees (US$32.74 billion) this fiscal year, as the government continues to provide support to the poor at least until December 2022, according to a report by Reuters.

Federal government food subsidies will likely increase by 30% over the 2.07 trillion rupees (US$25.14 billion) estimated in the budget.

Increased subsidies on food grain and fertilizer are likely to strain the federal budget, even though the government has seen strong tax collections this year. That could prompt it to cut other expenses to meet the budgeted fiscal gap of 6.4% of gross domestic product (GDP).

As of end November, the Department of Expenditure has already released food grain subsidies worth about 1.5 trillion rupees to the state-run Food Corporation of India and states, according to a government document seen by Reuters.

India’s food grain subsidy bill has jumped sharply since the government announced a scheme in April 2020 to provide free rice or wheat to about 800 million people to reduce the pressure on household incomes from the COVID-19 pandemic.

The scheme has been slated to run from April 2020 to December 2022, leading to a total expenditure of 3.9 trillion rupees (US$47.25 billion).

India's finance ministry has opposed an extension of the measures, citing pressure on government finances.

But the costs could rise further if the government extends the program beyond December 31, 2022 when it is set to end.

If the scheme is extended until March 2023, the cost will shoot up to nearly 3.1 trillion rupees -- the second highest ever, the official added.

India’s food grain subsidy bill totaled 2.9 trillion rupees in 2021/22, when the government’s free food grain distribution scheme was operational throughout the year.

For 2020/21, the government had spent about 5.3 trillion rupees on food grain subsidies but this was partly because it chose to settle past borrowings of the Food Corporation of India.

The Ministry of Finance and the Ministry of Consumer Affairs, Food and Public Distribution did not immediately respond to emailed queries from Reuters.

India's total federal government expenditure is estimated at 39.4 trillion for 2022/23.

The government is also staring at a high fertilizer subsidy bill, over the estimated 1.05 trillion rupees in the budget, as the war in Ukraine has led to a surge in prices.

 

Tuesday, 6 December 2022

United States Joins hands with Britain to control energy trade

The United States and Britain announced on Wednesday an energy partnership aimed at sustaining a higher level of liquefied natural gas (LNG) exports to Britain and collaborating on ways to increase energy efficiency.

Britain and other European countries have turned to the United States as they try to reduce their reliance on Russian energy supplies following Moscow's invasion of Ukraine begun in February.

This partnership will bring down prices for British consumers and help end Europe's dependence on Russian energy," British Prime Minister Rishi Sunak said in a statement.

The "UK-US Energy Security and Affordability Partnership" will also aim to drive investment in clean energy and exchange ideas on energy efficiency and reducing demand for gas.

Household energy bills have hit record highs this year following Russia’s invasion of Ukraine forcing the UK government to cap costs and subsidize the difference a measure analysts forecast could cost up to 42 billion pounds or US$51 billion over the 18 months the cap is in place.

Western countries are also attempting to cap how much Russia can profit from the rise in energy costs that has followed its invasion of Ukraine.

The G7 - which includes Britain and the United States - has agreed a $60 per barrel price cap on Russian seaborne crude oil.

The United States became the world's largest LNG exporter in the first half of 2022, US Energy Information Administration data showed as the country rapidly increased its export capacity and high prices, particularly in Europe led to higher exports.

Britain said the United States would aim to export 9-10 billion cubic metres of LNG over the next year under the agreement, maintaining the increase in exports seen this year.

Refinitiv Eikon data showed Britain has imported around 11 billion cubic metres (bcm) of gas from the United States so far in the first 11 months of 2022, up from 4 bcm in 2021.

Sunak met US President Joe Biden at the G20 in Indonesia last month, where Sunak highlighted the importance of the United States as an economic partner even without a free trade deal. Talks on a free trade agreement are suspended.

On Wednesday, Junior Trade Minister Greg Hands will begin a visit to the United States, where he is announcing a memorandum of understanding on trade with South Carolina, the third such agreement with a US state aimed at boosting trade missions and sharing expertise.

 

 

 

 

 

 

 

 

 

Oil tankers passing Turkish straits face delays

According to a Reuters report, at least 20 oil tankers queuing off Turkey to cross from Russia's Black Sea ports to the Mediterranean face further delays as operators race to adhere to new Turkish insurance rules added ahead of a G7 price cap on Russian oil.

Turkish maritime authorities issued a notice in November 2022 asking for additional guarantees from insurers that the transit through the Bosphorus would be covered starting from the beginning of December 2022.

The new rule was announced before a US$60 per barrel price cap was imposed on Russian seaborne crude. Western insurers are required to retain proof that Russian oil covered is sold at or below that price. The industry has a 90-day grace period to comply with the G7 plan.

"Extra coverage from Russian P&I seems to be the way out for tanker operators," the shipping source said, referring to protection and indemnity insurance providers.

We'll see further delays if owners (or) operators can't provide the required guarantees."

Norway's Skuld, among the top tier of P&I clubs, said such insurers cannot provide the level of detail that has been required.

"The Turkish government's requirements go well beyond the general information that is contained in a confirmation of entry letter," Skuld said in a note.

Millions of barrels of oil per day move south from Russian ports through Turkey's Bosphorus and Dardanelles straits into the Mediterranean.

The shipping agency GAC said on Tuesday that 13 vessels were waiting to transit the Bosphorus strait southbound, all of them oil tankers and 10 of them holding Kazakh crude after loading at the Russian port of Novorossiisk.

One tanker which loaded oil at the port cleared the straits over the weekend after providing proof of insurance. Coverage for the Liberia-flagged Vladimir Tikhonov tanker came from Russian insurer.

Only two vessels were scheduled for departure on Tuesday, both coming from Russia.

Tribeca shipping agency said nine oil tankers were waiting to transit the Dardanelles southbound on Tuesday.

GAC also said that average waiting times southbound at the Bosphorus on Tuesday was four days for vessels longer than 200 meters, up from one day in mid-November.

For the Dardanelles strait, average waiting times southbound were also around four days, up from 1-1/2 days in mid-November, Tribeca said.

Monday, 5 December 2022

Why are United States assets not being frozen?

The European Union (EU) is planning to use frozen Russian assets to finance the reconstruction of Ukraine. A question arise, why United States and NATO countries having indulged in wars, invasions, and carpet bombings have not met the similar fate?

The EU’s plans include an attempt to re-invest the international reserves of the Russian Central Bank in Ukraine. 

Moscow’s assets frozen under sanctions imposed by the EU can be divided into two main sections. Private assets are worth nearly €19 billion while public assets held by state entities are about €300 billion of international reserves owned by the Russian Central Bank.

"Russia must also pay financially for the devastation that it caused,” European Commission Ursula von der Leyen said. Moscow has “to compensate Ukraine for the damage and cover the costs for rebuilding the country." she added.

In the midst of rising inflation across Europe, freezing and selling Russian assets is being viewed as an avenue by the 27-member bloc to raise funds for Ukraine.

However, EU sanctions are always temporary, so the assets at the end of the day must be returned to their original owners.

It seems that before this happens the EU is working hard to move the goalposts and ensure the frozen assets become a solid, bulletproof solution to make Russia pay, as von der Leyen put it.

NATO could have prevented this war by not expanding its military equipment and troops eastwards toward Russian borders in the years prior to the war.

The US could have avoided the crisis in Ukraine and the suffering of Ukrainians by choosing to negotiate rather than reject the Kremlin’s proposals of security guarantees, which were sent to Washington months before the conflict erupted.

The Minsk agreements which began in 2014 after fighting erupted between ethnic Russian forces and the Ukrainian army in the eastern Donbas region could have been implemented to avoid a war.

Experts have questioned the double standards of the EU asking why such efforts have not been applied to the US-led wars, proxy wars, invasions, and carpet bombings that have led to the complete destruction of many countries over the past decades.

The US invasion and 20-year occupation of Afghanistan saw an unprecedented rise in terrorism (ironically Washington invaded the country under the pretext of its war on terror). During the two-decade occupation, Afghans witnessed nothing but destruction, terror, violence, mass killings, and other atrocities.

As a result of the spike in terrorism and regular US attacks, the destruction of the country’s infrastructure and the damage caused to Afghan public sectors has left a humanitarian catastrophe after the US fled Afghanistan in 2020.

The Afghanistan Country Director of Save the Children said in mid-February: “I’ve never seen anything like the desperate situation we have here in Afghanistan. We treat frighteningly ill children every day who haven’t eaten anything except bread for months. Parents are having to make impossible decisions – which of their children do they feed? Do they send their children to work or let them starve? These are excruciating choices that no parent should have to make.”

America’s longest war killed at least 66,000 Afghan national military and police as well as tens of thousands to hundreds of thousands of Afghan civilians, with different monitoring groups providing different death tolls.

In an ideal, just world, US assets should have been frozen and used to finance the reconstruction of Afghanistan. American assets should have also been frozen and used to compensate the families of Afghans killed as a result of the US invasion.

Following its embarrassing and chaotic withdrawal, Washington seized Afghanistan’s assets leading to further humanitarian suffering for Afghans, the majority of whom now live in poverty.

Likewise, the US invasion and subsequent occupation of Iraq saw widespread damage to the country’s infrastructure. Damage that has yet to be rebuilt.

Washington claims it waged war against Iraq to remove the former Iraqi dictator Saddam Hussein from power. Everyone wanted to see the end of Saddam, but very few wanted the US to be involved, especially considering the widespread hatred of America among Iraqis.

Even before the American invasion, US-backed UN sanctions against Baghdad killed at least half a million Iraqi children, with some studies putting the number at around 1.5 million Iraqis, primarily children, who died as a direct consequence of the imposed sanctions, citing UNICEF estimates.

During the US war itself from 2003 to 2011, hundreds of thousands of Iraqis died, again because of an unprecedented rise in terrorism as a result of the US war on terror and many other civilians were killed because of attacks by the US military.

The damage to Iraq's infrastructure as a result of US interference in the country (in the form of sanctions, airstrikes, and wars) from 1991 until its occupation which is ongoing until this day is estimated to have cost the nation trillions of dollars.

How many Iraqi civilians have been killed because of terrorist groups that did not exist before Washington’s 2003 invasion and US carpet bombings in cities such as Mosul?

With such vast oil wealth, Iraqi infrastructure has been damaged to such an extent that the country still relies on Iranian energy exports for its electricity.

Why are US assets not being frozen and used to finance the reconstruction of Iraq? Why are US assets not being frozen and used to compensate the families of civilians murdered because of terrorism that came with the US invasion?

As many reports have emerged over the years, NATO killed civilians when it waged war on Libya to allegedly help overthrow longtime ruler Muammar al-Gaddafi. The US-led military alliance’s bombing campaign had a devastating toll but, more than a decade after the war, NATO has yet to take any responsibility.

There was no terrorism before NATO bombed Libya. Since then, the country has been embroiled in terror with Daesh and other Takfiri groups wreaking havoc in the North African country.

The US military is occupying regions in eastern and northeastern Syria and looting the country’s oil in an attempt to prevent Damascus from restoring its own infrastructure and services following a decade of US-backed war on the country.

Yemen, the poorest country in West Asia, has faced an eight-year, US-backed bombing campaign that has destroyed the country’s entire infrastructure. Hundreds of thousands of Yemenis have been killed because of US-made bombs that have been dropped using US intelligence with warplanes whose pilots were trained by the US and UK military.

Rights groups accuse the US and its allies, including Canada and European countries of being directly complicit in the war. Yemeni officials say Saudi Arabia was used as a proxy by Washington and that the US was the one that waged war on it in March 2015.

Such is the damage inflicted on Yemen, which is too difficult to estimate, and U.S. assets should be frozen and used to finance the reconstruction of Yemen.

Yemen is a country that the United Nations has described as having the worst humanitarian crisis in the world.  

Washington’s support for the Israeli regime’s ethnic cleansing, and genocidal terrorism campaign against the Palestinians is well documented.

The list of US wars is long. Washington economically survives on waging wars, and invasions and using proxies to trigger violence, unrest, terrorism, and civil wars in regions well beyond its borders.

From the Vietnam War to the shadow wars in Somalia, Pakistan, and the African continent, why isn’t the US being held accountable? Why are US assets not being frozen? Why are there no punitive actions against Washington? 

 

Saudi Arabia Announces Arab Light crude prices for January 2023

Saudi Arabia, the world's top oil exporter has cut January 2023 official selling price (OSP) for its flagship Arab Light crude for Asian buyers to a 10-month low, on concerns over faltering demand and a potential increase in Russian competition.

The OSP for January-loading Arab Light to Asia was trimmed by US$2.20 a barrel from December to US$3.25 a barrel over Oman/Dubai quotes, state oil producer Saudi Aramco said on Monday.

The new OSP is just above the previous low of US$2.80 per barrel, set for March 2022.

The change was in line with market forecasts for a cut of about US$2 a barrel.

The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, known as OPEC+, on Sunday decided to keep their plan to cut production unchanged.

The backwardation in the Dubai market structure narrowed during trading last month, implying that fears over near-term supply tightness for crude were easing.

The premium for front-month Dubai over the price for the third-month averaged US$2.76 a barrel in November 2022, down from US$4.73 in October 2022.

Saudi Arabia's OSP adjustment also came after the Group of Seven (G7) nations and Australia agreed to a US$60 per barrel price cap on Russian seaborne crude oil.

"Although the market remains cautious on lifting Russian crude as the price cap is just set, there is no doubt that more cargoes will flow to Asia and compete with the Middle Eastern crude," said a Singapore-based trader.

Saudi Arabia cut its January Arab Light OSP to northwest Europe by US$1.80 a barrel from December and kept the price to the United States unchanged.