Saudi Arabian embassy in Sudan attacked

The attacks by armed groups on the diplomatic missions of Saudi Arabia and Bahrain in Sudan are a cause of grave concern. It is believed that these attacks have been made by the proxies of those who are annoyed by the role being played by Saudi Arabia to end animosities among the Muslim countries.

Saudi Arabia’s Ministry of Foreign Affairs has strongly condemned the sabotage and tampering carried out by some armed groups in the Kingdom’s embassy building and its annexes in Khartoum, capital of Sudan, on Wednesday.

The ministry also voiced its denunciation over the sabotage of the residence and properties of Saudi staff working in the embassy, the Saudi Press Agency reported on Thursday.

The ministry also expressed the Kingdom’s total rejection of all forms of violence and sabotage on diplomatic missions and representations. It also stressed the importance of confronting these armed groups that are trying to undermine the return of security and stability to Sudan and its brotherly people.

The Sudanese army confirmed last month that the circumstances of the war prevented the security forces from providing protection for diplomatic missions, refusing to hold it responsible for the looting of embassies in Sudan.

The army added in a statement that accusing the Rapid Support Forces of attacking embassies is based on reports and eyewitness accounts.

Meanwhile, the Bahraini Ministry of Foreign Affairs reported that the headquarters of the Bahraini embassy and the ambassador’s house in the Sudanese capital had been stormed and vandalized by an armed group.

The ministry renewed its call to the Sudanese parties to give priority to wisdom and the supreme national interest, and to respond seriously to the Saudi-American initiative to halt military operations.

 

crude oil prices fall on potential Iran deal

Oil prices fell US$3 a barrel on Thursday as demand weakness and a report that the United States and Iran may be approaching a deal on oil exports outweighed expectations of tighter Saudi supply and a potential pause to US interest rate hikes.

Oil fell on a news report, citing sources, that Iran and the US are nearing a temporary deal that would trade some sanctions relief in exchange for reducing Iran's uranium enrichment.

Brent crude was down US$2.2, or 2.86%, at US$74.64 a barrel by 1644 GMT, having earlier dropped as much as US$3.  WTI fell by US$2.40, or 3.3%, to US$70.12.

A larger than expected rise in US gasoline inventories also raised concern over demand, while US crude stockpiles registered a small decline of 451,000 barrels.

At an OPEC Plus meeting on Sunday, Saudi Arabia said it will cut its crude output by one million barrels per day in July on top of a broader deal to limit supply into 2024 as the producer group seeks to boost flagging prices.

"With the OPEC Plus meeting out of the way, focus is now shifting towards the next move the Fed will make when it meets next week," said Tamas Varga of oil broker PVM.

There is growing consensus that the central bank will skip a rate hike, which could lift oil prices even before falling supply starts draining global oil inventories, Varga added.

Economists polled by Reuters expect that the US Fed will not raise interest rates at its June 13-14 meeting. But a significant minority expects at least one more increase this year.

Still, a surprise rate increase in Canada gave investors their second reminder of the week, following the Australian central bank's monetary policy tightening, that the surge in global interest rates is not done yet.

The US dollar was slightly weaker on Thursday, making oil cheaper for buyers holding other currencies.

Both oil benchmarks settled up about 1% on Wednesday, supported by the Saudi plan, though gains remained capped by rising US fuel stocks and weak Chinese economic data.

Biofuels to play significant role in decarbonizing shipping

Biofuels face short-term production limitations but look set to play a significant role in the decarburization of shipping, according to a new DNV report.

The report titled ‘Biofuels in Shipping’ covers the current state of biofuel production, considerations for using biofuels on vessels, the regulatory status of biofuels, the potential for the fuel type and an outlook for biofuel production.

Short-term production constraints currently limit the adoption of biofuels, according to the report, and in the longer-term shipping may face challenges in securing biofuels as demand from other industries increases.

Extrapolating from bunkering of biofuel blends in Singapore and Rotterdam, DNV estimates that biofuels current account for around 0.1% of maritime energy consumption.

The potential production of advanced biofuels is limited by the supply of feedstocks such as used cooking oil and municipal waste; combined with other restrictions, DNV estimated biofuel production from the theoretical potential, down through the technical potential, economical potential, and sustainable potential.

 “We estimate that the global sustainable and economical biofuel potential lies between 400 – 600 Mtoe (million tons of oil equivalent) per year in 2030, after converting biomass to biofuel assuming a 50% conversion efficiency. This could grow to 500 – 1,300 Mtoe per year in 2050,” said the report.

DNV noted that its estimates were lower than those seen in other reports due to the report applying sustainability requirements in line with the EU Renewable Energy Directive II (RED II).

Combining two extreme scenarios – where shipping maximizes the use of biofuels and biofuel use across other sectors is low – shipping could account for 50% of biofuel energy use by 2050, said the report.  

The report noted that bio-emthanol and bio-LNG are drop-in fuels, whereas biodiesel and other liquid fuels may require some modifications to the ship, depending on the feedstock used for fuel production; operational changes may also be necessary, for instance avoiding leaving certain fuels in tanks for too long as some biofuels degrade more quickly than their fossil-derived equivalents.

On the regulatory front, biofuels can impact CII ratings, emissions under the EU MRV and EU ETS regimes, and FuelEU Maritime, all depending on various approvals and certifications of each particular fuel.

The findings of the report underlined the prevailing expectation in the industry that the future will involve a multi-fuel approach. “Biofuels are unlikely to be the only solution to shipping’s goal of transitioning to zero GHG emissions in the future,” said the report.

 

 

Whom to blame for current economic turmoil of Iran? United States or ruling regime of Iran

Middle East Institute has scheduled a discussion on the energy sector of Iran and the title is “Iran's Under-Developed Energy Sector, Faltering Economy, and the Looming Climate Crisis” on June 08, 2023.

The opening lines are extremely anti Iran and its ruling regime, dominated by religious clerics. It says, “Iran’s combined oil and gas reserves are the largest of any country in the world. And yet the government has long failed to generate policies that would enable the country to benefit from its huge natural resources”.

A pertinent question is some of Iran’s oil and gas-exporting neighbors have invested much in preparing their economies for the post-hydrocarbon era. In this regard, how does Iran compare in regional and global contexts?

The reply is simply, the ruling clergy just can’t be held responsible for the present dismal state. On the contrary it may be said that Iran has survived over four decades of the US sanctions, equally supported by the European and even some of the Arab countries.

Soon after the Islamic revolution, Iraq attacked Iran and the war continued for about a decade. President of Iraq, Saddam Hussein was a US tout, but when he became redundant, the US attacked Iraq and ultimately he was hanged.

To topple Saddam, the United States raised a hoax call that Iraq was busy in manufacturing weapons of mass destruction (WMD), British Prime Minister toed this line to mobilize opinion to support attack on Iraq. Even after two decades Iraq is still inferno.

The best efforts were made by the United States and its allies to destroy oil and gas infrastructure of Iran and Iraq, to push the two largest oil exporting countries out of oil and gas business. The latest targets are Venezuela and Russia, two of the other large oil exporting countries.

The world must salute the brave Iranians for enduring more than 10 years long war and more than four decades of economic sanction.

To put the record straight, the world must commend Iran rather than maligning the rulers for the dismal economy of the country.

Turkish lira drops 7%

Turkish lira plunged 7% to a record low on Wednesday in its biggest daily selloff since a historic 2021 crash, a move traders said was a strong signal that Ankara was moving toward a freely traded currency, away from state controls.

The lira has come under increasing pressure since President Tayyip Erdogan was re-elected on May 28. It slipped to a record low of 23.17 against the US dollar at 1023 GMT on Wednesday, bringing its losses this year to more than 19%.

For much of this year, authorities have taken a hands-on role in foreign exchange markets, using up tens of billions of dollars of reserves to hold the lira steady. The bank's net foreign exchange reserves touched a record low of negative US$4.4 billion last month, after forex demand surged during the election process.

Four traders said the decline in the central bank's forex and gold reserves had stopped as of last week, and that they could enter an upward trend, along with signs of the change in forex policies.

"There are many regulations and changes that need to be made but the destination we are headed in is becoming clearer every day. We are going towards the lira's value being determined by market conditions," one trader said.

Erdogan announced his new cabinet at the weekend and named Mehmet Simsek, a former deputy prime minister who is well regarded by foreign investors, as finance minister. Simsek later said economic policy needed to return to rational ground.

Markets are also waiting for the appointment of a new central bank governor to replace Sahap Kavcioglu, who spearheaded rate cuts under Erdogan's unorthodox policies.

"We are seeing policy normalization play out," said Tim Ash at BlueBay Asset Management. "I think we are seeing the impact of Simsek pushing the Turkish central bank for rational policy."

Another trader said the lira was nearing expected levels with sharp intraday losses, adding these would continue for some time. The lira is getting closer every day to a level that will not need to be defended with reserves.

Some analysts expect the lira to weaken towards a range of 25-28 against the dollar.

Under pressure from Erdogan, a self-described enemy of interest rates, the central bank slashed its policy rate to 8.5% from 19% in 2021 to boost growth and investment. But it sparked a historic lira crisis in December of 2021 and sent inflation to a 24-year high above 85% last year.

The return of Simsek, who was finance minister and deputy prime minister in 2009-2018, signalled a move away from the unorthodox rate cuts despite high inflation that have sparked a more than 80% erosion in the lira's value in five years.

Erdogan is considering appointing Hafize Gaye Erkan, a senior finance executive in the United States, as central bank governor, Reuters reported on Monday. Erkan met with Simsek in Ankara on Monday.

Erkan would be the country's fifth central bank chief in four years, after Erdogan fired previous governors as part of frequent policy pivots.

Turkish authorities are now hoping foreign investors will return after a years-long exodus, but market watchers cautioned that Erdogan turned to conventional policies in the past only to change his mind shortly after.

Turkey's sovereign dollar-denominated bonds gave away early gains to trade slightly negative on the day. ,

The premium demanded by investors to hold the country's hard-currency bonds over safe-haven US Treasuries widened again to 472 bps after tightening nearly 200 bps in the second half of May, data from JPMorgan showed.

"Even without political interference, the process of getting Turkey onto a sustainable path is going to be turbulent, and likely involves substantial devaluation and higher yields," said Paul McNamara, director of emerging market debt at asset manager GAM.

"We think fair value for the lira is probably 15% or so lower, but containing a devaluation without substantial external support is going to be a desperately difficult task," he said before Wednesday's decline.

"Orthodoxy would involve (above all) allowing the lira to find a sustainable level without intervention and abandoning the de facto capital controls currently in place."

 

China supports regional naval alliance plan

China pledges to strive for peace and stability in West Asia, including Persian Gulf, by promoting plans for a regional maritime alliance.

A question regarding Iran’s intention to create a naval alliance with Saudi Arabia, the United Arab Emirates, and other Persian Gulf nations that will also include India and Pakistan to protect regional stability was addressed by Wang Wenbin, the spokesperson for the Chinese Foreign Ministry.

Speaking at regular press briefing, Wang also noted that “upholding the peace and stability of the Persian Gulf region in the Middle East (West Asia) bears on the wellbeing of countries and people in the region.”

Rear Admiral Shahram Irani, the commander of the Iranian navy, had announced earlier that Iran will create new intra- and extra-regional partnerships to improve security.

“Today, regional countries have realized that the establishment of security in the region requires synergy and cooperation,” Irani stressed.

The Chinese spokesperson stressed the vital importance of peace and stability in the region at the news conference in order to preserve world peace, accelerate global economic growth, and maintain a steady supply of energy.

“China supports regional countries in resolving disputes and cultivating good-neighborliness and friendship through dialogue and consultation,” Wenbin added.

Beijing, he declared, will continue to contribute positively and constructively to the cause of regional peace and stability.

US authorities were not pleased with Admiral Irani’s announcement of the formation of a joint naval alliance.

Tim Hawkins, the spokesman for the 5th Fleet and Combined Maritime Forces, purportedly said that Iran’s participation in a regional naval alliance defies reason and that the Islamic Republic is the primary cause of maritime instability in the Persian Gulf region.

The parameters of the regional alliance are taking shape a year after the Israeli regime claimed that it, along with the United States and regional Arab allies, would form a Middle East NATO to fight Iran's dominance in the region.

American and Israeli military leaders touted the notion ahead of President Joe Biden’s July visit to West Asia.

The goal was to improve cooperation among allies in order to defend each other against envisioned Iranian threats.

Israel’s hopes for a coalition against Iran, however, have been dashed as a number of Persian Gulf Arab nations, led by Saudi Arabia, have started to change their allegiances and normalize ties with Iran.

Iran has recently made maritime breakthrough that can shake the US position in the world including the 86th Naval Fleet, which included the home-built Dena Destroyer, and came home last month after the first round of the world in a mission dubbed 360-Degree.

The flotilla sailed across the Indian, Pacific, and Atlantic oceans without needing assistance from land for the first time in Iran’s naval history.

It departed from Bandar Abbas, a port city on the Persian Gulf, on September 20, 2022. It finally anchored at Oman’s Salalah harbor on the 236th day of its journey. The flotilla traveled 63,000 kilometers and four times crossed the equator.

Last month, Admiral Farhad Fattahi, the commander of Iran’s 86th Naval Fleet, outlined achievements of the flotilla after a round-the-world voyage.

Admiral Fattahi emphasized that the first achievement of the voyage can be mentioned as the design, production and operationalization of the all-Iranian meteorological software, which was developed by Iranian youths in the army and yielded fruitful results.

“Secondly, we have proven that the Iranian products are totally trustworthy and reliable. It means that the Dena destroyer is an Iranian product that is 100% reliable,” he added.

The admiral continued, “Given the maritime diplomacy, one of the achievements is that the flotilla docked in the port of Rio de Janeiro to mark the 120th anniversary of the establishment of diplomatic relations between Iran and Brazil.”

“Another remarkable achievement is that Iran’s flag was waved in the world’s four major oceans, seven seas and seven strategic straits,” he noted.

The admiral also said that a unique phenomenon emerged in the cultural sphere as the flotilla’s commanders and staff were representatives of Iranian-Islamic cultural values.

Admiral Fattahi remarked that during the mission, we used the home-built Dena destroyer, whose capabilities grabbed the attention of other countries’ naval commanders and forces. This came as no surprise that all naval commanders expressed congratulations over building such a military feat.

 

Iran embassy opens in Riyadh

Iran opened its embassy in its old headquarters in the Diplomatic Quarter in Riyadh. Those who attended the opening ceremony included Deputy Minister of Foreign Affairs for Saudi Consular Affairs Ali Al-Youssef, Iranian Deputy Foreign Minister for Consular Affairs Ali Reza Bekdli, and the Iranian Chargé d’Affairs Hassan Zarnegar.

The embassy opening comes about three months after a bilateral agreement was reached between Saudi Arabia and Iran to resume bilateral relations, brokered by China. Last month, Iran appointed Alireza Enayati, a veteran diplomat, as its ambassador to Saudi Arabia.

The Iranian Foreign Ministry had announced on Monday that the country would re-open diplomatic missions in Saudi Arabia in the next two days. Nasser Kanaani, spokesman of the ministry, said in a statement earlier that the Iranian embassy in the Saudi capital Riyadh and consulate general and representative office to the Organization of Islamic Cooperation (OIC) in Jeddah would officially re-open on Tuesday and Wednesday.

Kanaani stated that the embassy in Riyadh and its consulate-general in Jeddah had already begun operating to help Iranian pilgrims heading to Saudi Arabia to perform Hajj, set to start by the end of June.

Under a Chinese-brokered deal reached in March, Saudi Arabia and Iran agreed to re-establish relations, which were severed in 2016 following an attack on the Saudi embassy in Tehran and consulate in Mashhad.