Thursday, 29 June 2023

Mohammed Bin Salman holds annual reception for foreign dignitaries performing Hajj

On behalf of King Salman, Crown Prince and Prime Minister Mohammed Bin Salman held his annual reception on Thursday for heads of state, Islamic dignitaries, guests of Custodian of the Two Holy Mosques, government bodies, and heads of delegations and pilgrim affairs offices performing Hajj this year.

At the Royal Court of Mina Palace in Makkah, the guests were led Malaysia’s King Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah, Senegalese President Macky Sall, Pakistan’s President Arif Alvi, Bangladesh’s President Mohammed Shahabuddin, Vice President of Maldives Faisal Naseem, Prime Minister of Egypt, Dr. Mustafa Madbouly, Prime Minister of Lebanon Najib Mikati, Prime Minister of Somalia Hamza Abdi Barre, Prime Minister of Niger Ouhoumoudou Mahamadou, Prime Minister of Palestine Mohammad Ibrahim Shtayyeh, and the Speakers of the House of Representatives of several Islamic countries.

In his speech, Crown Prince Mohammed Bin Salman said, “The Kingdom of Saudi Arabia, since its founding, is honored to serve the Two Holy Mosques and take care of them, and has made this at the forefront of its interests.”

“The Kingdom has taken all efforts and harnessed all capabilities to provide comfort and reassurance to pilgrims.”

He added: “We ask Allah to perpetuate safety and security for us and the Islamic Ummah.”

Crown Prince Mohammed wished pilgrims success to complete their rituals in these blessed days and to return them to their homes safely.

Current status of Iran-China Trade

Trade became increasingly difficult to track as China underreported its purchases of Iranian oil to avoid US sanctions. Its companies reportedly continued to buy Iranian oil through intermediaries, many in Malaysia and the United Arab Emirates.

The biggest obstacle to Iran’s trade with China in the 21st century has been the United States—for its economic might and wealth, massive consumer base, and diplomatic clout.

Lately, Iran’s oil exports to China notably trended upward.  But Tehran was forced to sell its petroleum exports at discounted prices to lure businesses that feared US financial penalties on third parties.  

In March 2021, during the final months of Rouhani’s presidency, Iran signed a 25-year strategic agreement focused largely on strengthening economic and security cooperation – with China. “China is a friend for hard times,” said Foreign Minister Mohammad Javad Zarif.  

Chinese Foreign Minister Wang Yi said that China firmly supports Iran in safeguarding its state sovereignty and national dignity. During the announcement in Tehran, he called on the United States to abandon the Iran sanctions and remove its long arm of jurisdictional measures that have been aimed at China, among others.

Iran’s turn to the East accelerated after the election of hardliner President Ebrahim Raisi. Raisi and his team think that the 21st century belongs to Asia and rising powers there, Nasser Hadian, a University of Tehran political scientist, told The Iran Primer. 

Amid the shifting world order, they see China as the leader of an emerging Eastern bloc that includes Russia, Pakistan, and Iran. 

In 2021, Iranian oil exports to China reportedly averaged 818,000 barrels per day, although Beijing did not issue official numbers. For the first five months of 2023, it averaged about 1 million barrels per day.  

By 2023, Tehran sought a strategic relationship with Beijing because of its status as a rising global power and a potential partner in offsetting the impact of Western sanctions. But China primarily viewed Iran as an energy source. Beijing also viewed Tehran as a way to balance its ties—and diversify energy sources—in the volatile Middle East. 

Deepening ties with the Islamic Republic was also a means of ensuring stability in the Middle East, which China relied on for more than half its oil. Beijing worried that extraordinary economic pain in Iran may translate into more aggressive behavior on the international stage, which was a part of the reason for trade with Tehran, Murphy told The Iran Primer. 

Economically, the United States became China’s largest trade partner in the 2000s. By 2022, trade between the world’s two largest economies totaled US$759 billion—or 12% of China’s global trade. In contrast, China’s trade with Iran was slightly less than US$16 billion—or 0.25% of China’s global trade.  

Diplomatically, more than 1,000 US sanctions on Iran—for its nuclear program, missile proliferation, support for terrorism, and human rights abuses—also deterred China from deeper economic integration. Chinese companies face third-party sanctions if they are caught buying goods from Iran.  

Due to both factors, China has increasingly turned to trade with other Middle East countries. Its trade in 2022 with Saudi Arabia, Iran’s biggest rival in the Muslim world, was US$67 billion—or four times larger than the almost US$16 billion trade with Iran.

China’s trade with Israel, Iran’s nemesis in the Middle East, was US$25 billion—or 60% higher than trade with Iran.

“The Iran-China relationship was still quite transactional,” Murphy said. “It is a decreasingly important economic relationship in comparison to other powers in the region. China wants Iran to feel included and not engage in destabilizing behavior.”  

 

UECC, GoodFuels and NYK complete biofuel bunkering

According to Seatrade Maritime News, UECC has successfully completed the first biofuel bunkering of one of its chartered vessels in partnership with NYK and GoodFuels.

Emerald Leader received 470 tons of the B30 blend of biofuel and VLSFO at the port of Vlissingen, Netherlands, on 27 May, 2023. The fuel was delivered by Dutch biofuel company GoodFuels.

UECC joint-owner NYK offered technical support for the operation and will continue to monitor performance of the fuel with UECC. The vessel connects the Easter Mediterranean and Northern Europe on UECCs North South trade.

"This momentous delivery of next-generation biofuel represents another significant step forward in our sustainability journey," said Daniel Gent, Energy and Sustainability Manager for UECC.

GoodFuels claims its biofuels can reduce CO₂ emissions by up to 90% as compared to fossil fuels, and that it sources sustainable feedstocks that do not compete with food production, do no cause deforestation and are 100% waste or residue.

"We are proud to partner with GoodFuels and NYK to bring this innovative and environmentally friendly solution to our customers.”

Bernard van Haeringen, Commercial Manager at GoodFuels said, "We are thrilled to partner with UECC and NYK to deliver our advanced sustainable biofuel for the first time to m/v Emerald Leader. This collaboration showcases the commitment of all parties involved to combating climate change and accelerating the energy transition in the shipping industry. We are confident that biofuels will play a crucial role in decarburizing the maritime sector."

 

Wednesday, 28 June 2023

Quick end to Wagner insurrection upsets West

A short-lived armed mutiny in Russia was a well thought out and planned operation aiming to take over power in the country, says Russian deputy head of the Security Council Dmitry Medvedev.

When a country backed by the US-led NATO, with upwards of US$100 billion in sophisticated weapon shipments cannot counter Russian forces, it is quite impossible to imagine a single unit succeeding in a coup attempt. 

Life has returned to normal in Russia to the disappointment of NATO and its allies. 

Western media had always referred to Wagner PMC, whose members have been fighting in Ukraine as part of Russia's special military operation as mercenaries.

During the quick mutiny attempt, they were no longer referred to as mercenaries anymore in the Western news narrative, as Yevgeny Prigozhin and some of his forces had switched from battling NATO-backed Ukrainian forces to fighting against the Russian Federation. 

The US news outlets have cited sources as saying US intelligence agencies had known in advance that Prigozhin was planning a major move against the Russian government. 

The US is said to have deliberately avoided informing Russian authorities about the plan in an attempt to see how far Wagner PMC can go to inflict internal strife in Russia. 

Throughout the day of unrest in Russia, not a single drop of blood was shed. 

Many observers are of the belief that Prigozhin had been in touch with foreign intelligence agencies that have been trying to carry out the same mission as Prigozhin, but through other measures, in what Russian Foreign Minister Sergey Lavrov has called all-out hybrid warfare against his country. 

Western leaders have also been left frustrated as during the attempted coup, Russian military leaders, politicians, senior officials and the public came out in support of Putin and rallied around him in a strong sign of support for the Russian leader. 

Senior Russian officials had warned the West against using the mutiny attempt to advance their Russophobic goals, saying this would prove futile.

Prigozhin, head of the Russian private military company Wagner group, and his aides began the insurrection early on Saturday and ended by night. It was ended in a deal brokered by Belarus. 

The Wagner leader's adventure came to a swift halt following an agreement with the Kremlin, and Prigozhin called off his mutiny plans in return for security guarantees. 

As part of the agreement, it has been reported that Prigozhin has left Russia for Belarus while his Wagner fighters will be absorbed into the Russian military.
The Russian Federal Security Service has also dropped a criminal case over charges of a call for an armed rebellion.

Prigozhin ended the mutiny with the knowledge that his Wagner unit was heavily outmatched by the Russian military. His mission against Russia was similar to that of the US-led NATO military alliance, which has so far sent about US$100 billion worth of weapons to Ukraine to fight Russia. 

The armed contractors, who take their military orders from the commander of chief of the Russian armed forces, managed to seize several army headquarters in the southern Russian border city of Rostov-on-Don, while others forces tried to make their way to Moscow.

Sergey Surovikin, the deputy commander of the Russian joint forces in Moscow's special military operation, called on Wagner PMC to comply with President Putin’s order and to resolve all issues peacefully.

Wagner PMC has been leading the fight for the Ukrainian city of Bakhmut, in what has been the longest and deadliest battle between Russian and Ukrainian forces since the conflict erupted in February 2021.

Some analysts believe it showed the combat expertise that the Wagner armed forces lacked by stretching out the battle for too long and allowing Ukraine the time to carefully plan for its counter-offensive. 

Prigozhin began the attempted mutiny by claiming that his forces had been hit with an airstrike, accusing the Russian military leadership of killing members of his unit in Ukraine with the air attack. He failed to present any evidence to back up his allegation. Medvedev described the accusation as nonsense. 

The former Russian President pointed out that given the high degree of the attempted mutiny's preparedness, the professional coordination of action and the quality management of troop movements, it is possible to speak of a thought-out military plan and the participation in the mutiny of the individuals who earlier served in the elite units of the Russian Armed Forces or, quite possibly, of foreign specialists as well. 

Russian presidential spokesman Dmitry Peskov told journalists that an agreement was reached that PMC Wagner troops would return to their camps and places of deployment. Some of them, if they wish to do so, can later ink contracts with the Defense Ministry," Peskov said. "It also applies to fighters, who decided against taking part in this armed mutiny”.

"They have even requested the assistance of the traffic police as well as other help to return to their permanent places of deployment," Peskov added in remarks published by TASS.

Over the past six months, Prigozhin had been building a feud with Russia's Defense Minister Sergey Shoigu and Russia's chief of the general staff Valery Gerasimov. 

Putin had called on the businessman behind Wagner to settle any of his differences in a peaceful manner. Prigozhin chose the opposite, and that has raised eyebrows about what his true intentions had been and who was acting behind him.

A convoy of his forces crossed the border from the battlefield in Ukraine to a Russian border city, at one point taking full control of it, before the Russian military swiftly regained authority. 

His units have no aircrafts so there was no chance of success by his armed mutiny. The Russian military could have wiped out all his forces when they crossed the border, with Moscow enjoying powerful air superiority. 

Since the conflict in Ukraine, officials in Kyiv have repeatedly complained about a lack of advanced warplanes to match Russia's Air Force. 

 

Israel needs to do more against settlers committing violence, says Blinken

Israel needs to do more to counter violence by settlers against Palestinians, US Secretary of State Antony Blinken told Foreign Minister Eli Cohen in a phone call on Tuesday.

Blinken said the US appreciates messages from Cohen, Prime Minister Benjamin Netanyahu, and Defense Minister Yoav Gallant against the violent incidents that took place over the weekend, but that more action must be taken.

Blinken's call came after repeated arson and other attacks by Jewish extremists on Palestinian villages last weekend, in apparent revenge for recent deadly Palestinian terror attacks on Israelis. The heads of the IDF, police and Shin Bet (Israel Security Agency) called the incidents nationalist terror.

Cohen said that the government of Israel fully condemns events in which citizens take the law into their own hands.

The escalation of violence in the West Bank comes from “proxies of the Iranian Ayatollahs regime,” Cohen stated. “Iran is directing terrorism across the Middle East, from Lebanon to Syria, via Iraq and Yemen, to Hamas and Islamic Jihad.

Cohen also called on the international community to act aggressively and unequivocally to prevent Iran from obtaining a nuclear weapon, which would be a danger to the world and mark the start of a regional nuclear arms race.

Cohen and Blinken also discussed the possibility of Israel establishing diplomatic relations with more Arab and Muslim countries, and a new date for the foreign ministers’ meeting of the Negev Forum.

The Negev Forum gathers the US, Israel and the Arab states with which Israel has peace, except for Jordan, to discuss multilateral matters, including security. A foreign ministers’ meeting set to take place in Morocco this year has been postponed multiple times, in part because of the Israeli government’s policies in Judea and Samaria.

“Expanding the circle of normalization and peace in the Middle East, led by the US, will advance the entire region and bring security, growth and stability,” Cohen said. “We will continue to act to build and strengthen our relations with additional countries in the Middle East and beyond.”

Cohen also expressed his appreciation for departing US Ambassador Tom Nides, who ends his tenure in Israel at the end of June.

The State Department did not release a readout of the call by press time.



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World leading currencies out of sync

Leading global currencies are rarely on different paths. Yet Japan's yen and China's yuan are slumping against the US dollar, while in Europe the euro is outperforming and sterling is on a tear, says a Reuters report.

"We've got a one in a 100 years pandemic and once in 75 years war and a once in 25 years energy crisis all thrown into the mix together," said SocGen's Juckes. "You’ve got to be 120 years old to have any understanding of this."

With economic and monetary policy outlooks varying, currency moves are increasingly out of sync with each other. This is making the US$7.5 trillion a day global FX market - operating in the aftermath of COVID-19 and the face of war in Ukraine and an energy crisis - more volatile and more unpredictable.

"It used to be the case that if you got the direction of euro/dollar right, you had a good chance of getting everything else right, but now it's a bit harder," said Nomura's G10 FX strategist Jordan Rochester.

The differences between currencies are widening.

Last year alone, the euro fell to a 20-year low versus the US dollar, sterling hit its lowest on record and the yen its weakest in 32 years, as the greenback soared broadly on sharp increases in US interest rates to curb inflation that other major central banks lagged.

The Bank of Japan has dashed expectations that a change to its ultra-dovish monetary policy would come early in 2023, sending the Japanese yen down 9% so far this year, on top of a 12% decline in 2022. That has raised the chance of intervention to stem weakness.

More pain is also anticipated for the yuan, trading near seven-month lows, as well as smaller Asian currencies.

Meanwhile the euro is up 2.5% this month against the US dollar and expected to rise further given a hawkish European Central Bank - and sterling has meanwhile risen over 5% so far in 2023, leaving it set for its biggest annual gain since 2017.

Rochester said Nomura forecast the euro moving to US$1.12 over coming months, implying a further 2% gain from US$1.095 now, and expected the yuan to weaken to 7.30 per dollar versus 7.2 now.

The yuan has slid almost 5% so far this year, hurt by a weak economy and a wide interest-rate gap with the United States.

This week Chinese authorities set a stronger than expected trading band for the currency, a sign that Beijing is increasingly uncomfortable with its quickening slide.

Lee Hardman, senior FX strategist at MUFG, said the dollar's rebound against Asian currencies reflected a reversal of the trades put in place late last year with the post lockdown reopening of China's economy, as pessimism about the growth outlook there grew.

Elsewhere the dollar is not performing as well. It's continuing to weaken against some European currencies and also Latin American currencies.

Hardman said that, as market volatility slows compared to recent years, investors were focusing more on carry trades, exploiting the variances in interest rates and monetary cycles between different central banks.

Kit Juckes, head of FX strategy at Societe Generale, said the focus on monetary policy differences was also a result of uncertainties elsewhere.

"What strikes me at the moment about FX markets is they are more short-term interest rate sensitive than I can remember them being.

"Because we are so uncertain about so many things in this most unusual of economic cycles, we're just going to focus on what the next central bank policy move is."

This is not good news for the yen, near seven-month lows against the US dollar and 15-year lows versus the euro, as the Bank of Japan holds fast to its ultra-loose monetary policy.

Of course given what the world has endured in the past few years, it is maybe not surprising that currency markets have gone a little strange.

 

Tuesday, 27 June 2023

West Bank rockets from lone wolf, not Hamas

The rockets fired by a Palestinian in the Jenin area of the West Bank on Monday and which failed to fly beyond the launch area were launched by a lone wolf and not by Hamas, The Jerusalem Post has reported.

This confirmed finding comes despite Hamas' claims that it was linked to the incident and despite the fact that the IDF has not yet revealed who launched the rocket.

Further, the Post understands that the IDF does not regard the launching of the two rockets (both which lacked any explosive materials and flew less than 100 meters from the launch site) as a major new threat of its own. 

Rather, the IDF believes its past and ongoing actions to eliminate Palestinian Islamic Jihad officials who were trying to build more sustained and systematic rocket firing capabilities on Israel have been and will continue to be successful.

West Bank rocket launches were a TikTok incident, not a serious threat

In addition, the IDF views the incident as being primarily a TikTok incident, or an exercise in public relations not all that different from the dummy rocket that the IDF recently found.

The IDF is even disappointed in the media depiction of the rocket launches as a serious threat, as this depiction may have achieved other terror groups' broad goals of creating fear and instability among the general population.

In contrast, the IDF is extremely concerned by the recent succession of Hamas and other terror organizations shooting attacks in places like Eli, Hermesh and against the Dee family.

The IDF absolutely views these incidents as a dangerous escalation which could get out of hand.

After all of these IDF perspectives, the fact is that in 2005 terror groups succeeded in firing multiple rockets from the West Bank and Shin Bet (Israel Security Agency) director Ronen Bar warned of the threat as a serious one in recent months.