Iranian oil exports to China triple

Iranian oil shipments to China have more than tripled over the past three years despite the US sanctions on the country and the increase in Russia’s shipments to the Asian country, data released by data analytics firm Kepler show.

According to the data Iranian crude exports to its major trade partner have been hovering around one million barrels per day (bpd) in 2023, while the figure was roughly 325,000 bpd in 2020.

Iranian oil shipments to China have been on upward trajectory since 2019. In 2021 the exports reached 585,000 bpd and in 2022 the figure was reported at 766,000 bpd.

The International Energy Agency (IEA) in a recent report titled "Oil 2023" confirmed Iran's daily export of one million barrels oil to China saying, “Despite severe financial restrictions, Iran managed to increase its crude oil production by about 140,000 barrels per day in 2022 to an average of 2.5 million barrels per day. It seems that Tehran has maintained its crude sales to China, which has been around one million barrels per day since the third quarter of last year.”

Iranian oil production also increased in the current year, in May the country’s oil output reached 2.9 million bpd, 350,000 bpd more than in 2022.

Back in April, Bloomberg reported that Chinese private refineries are buying more Iranian oil despite the rising competition for supplies from Russia.

“The teapot refineries are prioritizing the flows, with Russian supplies getting more pricey as mainstream buyers such as state-owned Chinese refiners and Indian processors take a greater share,” the report read.

In March, Chinese import of Iranian crude and condensate jumped 20%MoM to 800,000 barrels a day, and are on track to extend gains in coming months, Emma Li, an analyst with data intelligence firm Vortexa told Bloomberg.

While Iranian oil has long been sanctioned by the US, refiners in China have proved to be a consistent outlet.

Most Iranian oil used to go to state-owned refineries but the private refiners in Shandong especially are now running the show, said Homayoun Falakshahi, senior crude oil analyst at Kpler.

Earlier this year, Iranian President Ebrahim Raisi said that the oil and gas sector experienced a growth of 9% in the Iranian calendar year 1401.

Oil Minister Javad Oji has also said recently that a new record high will be reached in the country’s oil export in the current Iranian calendar year.

Despite the negative impacts of the US sanctions, Iran has been ramping up its oil production and exports over the past few months.

In his remarks in November 2022, President Raisi highlighted the failure of the enemy’s policy of maximum pressure, saying the country’s oil export has reached the pre-sanction levels.

Back in January, the EIA in a report put Iran’s average oil production in 2022 at 2.54 million bpd, 140,000 bpd more than a year ago.

Iran's oil production in 2021 was about 2.4 million bpd.

Benjamin Netanyahu’s day of infamy

I have selected this write up from The Jerusalem Post, the leading newspaper of Israel. I want every Pakistani to read this and share with other fellow Pakistanis. According to The Jerusalem Post, on Monday, July 24, 2023 is a date that will live in infamy – the Zionist enterprise was attacked by enemies from within, led by an emperor of lies. 

At midday, Israel’s legislature fired a cannonball at the Jewish state’s Supreme Court. As civil wars often begin, it was actually a limited attack – a single shell with a lightweight payload. Even so, it was announced as a broad offensive’s prelude, and absorbed like a declaration of war. 

Yes, the original plan, a legislative blitzkrieg, was abandoned. It had to be abandoned because the war’s prospective victims – multitudes who gave the Zionist project their best years – took to the streets, shouted in anger, and shook their fists. 

That’s why the assault’s mastermind – the justice minister, of all people – was forced by his emperor to veer to blitzkrieg’s alternative, the strategy of indirect approach. The redesigned assault would target one outpost at a time, while the war’s victims were to be sedated by fake peace talks. 

For several months, the strategy worked. The victims really thought they prevented civil war and saved the court. But then came Monday’s cannonball, and the prime minister’s implied statement: My civil war is here. 

The civil war was sowed three years ago, when our Netanyahu emerged at the courthouse where his trial was set to begin, and publicly attacked the judiciary, libeling its prosecutors for having allegedly conspired with the press and the police to unseat him. 

That was the battle cry. Behind the scenes, a battle plan was being devised. The idea was to conquer the courts in a pincer movement: from one flank, the judges would be appointed directly by the ruling coalition’s politicians; and from the opposite flank, the courts’ wings were to be clipped. That’s how the judges would become subservient to the politicians.

 

Israel Settlers considering returning to their countries of origin

According to a survey more than a quarter of Israelis in the occupied Palestinian territories are considering returning to their countries of origin. The survey comes as credit rating agencies reported that the mounting domestic uncertainty will reduce Israel's economic growth this year. 

The Times of Israel has cited a poll conducted by the regime's channel 13 as saying 28% of respondents were weighing a move abroad while an additional 8% were unsure.

“The survey reflected the impact of the coalition passing the law, despite sustained mass protests, vehement opposition from top judicial, security, economic and public figures, and thousands of Israeli military reservists vowing to quit service,” the newspaper reported.

Highlighting the strong opposition against Netanyahu's cabinet and signs of protests to continue, only 33% respondents said they believe the Israeli prime minister's claim that he wants to compromise on the rest of the judicial overhaul law. 

Among other aspects that the poll found was that 54% of Israelis fear that the judicial overhaul will harm the security of the occupation regime.

Another 56% said that they were worried about a civil war erupting between opponents and supporters of Netanyahu's cabinet judicial reforms. 

The newspaper, also citing the same poll, indicated that “Gantz’s National Unity party would win 30 seats in the 120-seat Knesset, the most of any party, if elections were held today, surpassing Likud, which ranked next with 25 seats.”

Netanyahu - who is facing corruption charges - has resisted pressure from the occupation's staunchest allies, including the United States, which is looking with concern at the crisis unfolding in the occupied Palestinian territories, to drop his judicial overhaul measures.

The plan has also seen the biggest polarization among Israeli settlers in the regime's history with more than seven months of mass protests that saw violent clashes between the Israeli police and settlers after Netanyahu passed the bill on July 24. 

It comes as protests against the bill saw a forum of around 150 of the regime's largest companies holding a strike on Monday. Two of the largest Israeli malls also closed the stores in their shopping centers. 

Israeli President Isaac Herzog and the head of the occupation’s largest labor union failed to mediate a compromise between the coalition and opposition ahead of the vote in a bid to ease the crisis. 

After news emerged that the compromise talks had collapsed the early gains for the Israeli currency were and sent the shekel weaker, with losses deepening further after the vote.

In a sign that the situation could get worse, the head of Israel's Histadrut labor federation has declared that he will be consulting with union officials about declaring a general strike.

"From this moment on, any unilateral progress in the reform will have serious consequences ... Either things will progress with broad agreement, or they will not progress at all," he said.

That has all sent Israeli financial markets tumbling with economists predicting there could also be an effect on inflation and interest rates. 

The shekel has weakened by around ten percent versus the dollar since late January, when the cabinet unveiled its controversial judicial overhaul plan, which harmed foreign inflows.

A report on Thursday by the S&P Global Ratings said the controversy over Netanyahu’s plans to limit the powers of the judiciary is increasing domestic political uncertainty and will lead to lower economic growth for the entity this year. 

"If government and opposition do not achieve an agreement on the topic, this could further exacerbate domestic political confrontation and weigh on medium-term economic growth," S&P said. 

With a deep divide in Israeli society and strained loyalties by thousands of army reservists and foreign investors have been left frightened.

Political watchdog groups have appealed to the Supreme Court to overturn a new law passed by parliament in the first of the changes to trim Supreme Court powers, paving the way to a showdown among branches of government when it hears the arguments in September.

Israeli Finance Minister Bezalel Smotrich, a strong supporter of the judicial changes, pinned the blame on the Israeli protesters and not the cabinet for the warning by the rating agencies.

"S&P, like Moody's ... does not warn of damage to the economy due to the legal reform, but because of the protest that creates instability," Smotrich said in a statement.

S&P said that its ratings for the regime have in the past been consistently constrained by domestic and regional political and security risks. 

Israel, it added, has a history of frequent elections and changes in cabinet composition, which makes future policy direction harder to predict.

The calls by Israeli settlers and unions for further strikes, in addition to more than 10,000 reservists joining the protest movement, have split the regime. 

Experts believe the economic outlook is likely to slow further, adding more fuel for settlers to leave the occupied Palestinian territories where they fear of the possibility of a civil war amid a rise in violent protests on one hand and the increasing retaliatory operations

carried out by the resistance on the other. These have added to the woes of their security concerns. 

On Friday, the Israeli Air Force chief warned that enemies may exploit the internal crisis, saying his forces need to remain vigilant and prepared.

Tomer Bar said, "It is possible that at a time like this, they (Israel's enemies) will try to test the frontiers, our cohesion, and our alertness," he said without elaborating. 

As the crisis escalated further after the July 24 vote, Israeli media have reported that Netanyahu had received at least four letters from the regime's military intelligence warning of serious security ramifications and historic weaknesses as a result of his judicial overhaul measures.
 

 

Hydropolitics: A new term coined in Asia

Most of Asia's major rivers originate in China and flow into countries like India, Bangladesh and Vietnam. China has earned the title of "upstream superpower," but concerns over the weaponization of water, the responses of nations downstream, and climate change are stirring up water politics and stoking tensions.

The visually rich three-part Nikkei Asia series titled Asia's Age of Hydropolitics explores the effects that the actions of upstream nations -- exacerbated by climate change -- have on countries downstream.

The first story focuses on Asia's rivers that originate in the Indo-Tibetan plateau in China. They flow into 18 other nations, delivering water to a quarter of the world's population.

As China gets ambitious about managing its own water shortages by drawing on these rivers -- and allows its foreign policy to dictate its actions upstream -- many nations downstream are feeling its presence.

The second story frames Bangladesh -- and the geopolitically significant Brahmaputra River -- as a proxy of Sino-Indian conflict. The story follows the Brahmaputra as it enters India through the disputed border with China, and explores the effects of dams and upstream politics on the region's most disenfranchised.

As the Brahmaputra makes its way into Bangladesh, the lowest riparian country in the region finds itself at the center of China-India hydropolitical hostility.

The third and final piece in the series focuses on the Mekong -- one of the world's longest and most biodiverse rivers. Dams being built upstream, 22 by China alone, combined with climate change and human activity, have contributed to the sinking of the Mekong Delta. Half of the river-strewn region could be underwater before the century is through.

But locals are adapting -- and emerging innovative strategies offer hope of mitigating the worst.

Courtesy: Nikkei Asia

 

 

 

Iranian LPG export to exceed 9 million tons

Iran's average monthly LPG export in the first half of this year was 784,833 tons. It is expected that if the loading rate is at the current level or more, the total export this year will reach 9.42 million tons.

Iran’s LPG exports mostly go to China despite the US sanctions, facilitated by Chinese shipowners who have developed an armada of very large gas carriers since sanctions were imposed on Iran in 2014 and then in 2018.

Iran’s LPG exports could be higher without the restrictions that international shipping and trading firms face due to the sanctions and allow Iranian exporters to resume access to the global markets.

Iran exported 4.71 million tons of liquefied petroleum gas (LPG) in the first six months of 2023, according to the data released by S&P Global Platts.

Based on the Platts data, Iran's LPG exports loading in June were estimated at around 696,000 million tons, 28.5% less than May when 973,260 million tons of LPG was shipped.

 

 

 

Pakistan-Saudi Arabia to create a refinery

Four Pakistani state-owned petroleum companies (SoEs) have signed on Thursday a memorandum of understanding (MoU) to facilitate US$10 billion Saudi investment in a new oil refinery at Gwadar, Baluchistan with a refining capacity of 300,000 barrels per day – the first in more than a decade and the largest in the country.

The government is reportedly in the advanced stages of negotiations with Saudi giant Aramco to execute the Greenfield refinery project at the strategic Gwadar Port and wanted to complete the initial paperwork before its tenure ends in two weeks.

Oil and Gas Development Company (OGDCL), Pakistan State Oil Company (PSO), Pakistan Petroleum (PPL), and Government Holdings (GHPL) signed the MoU to join hands and provide comfort to the Saudi firm to enter Pakistan with a major investment. The four SoEs would join the project through equity participation.

The project envisions setting up an integrated refinery petrochemical complex with a crude oil processing capacity of a minimum 300,000 bpd along with a petrochemical facility. The integrated complex shall comprise various components such as marine infrastructure, petrochemical complex, storages for crude oil and refined products, pipeline connectivity etc.

According to the Petroleum Division, despite being integral to the growth of the economy, no new refinery project has materialized in Pakistan for more than a decade and only two refineries have been added in the last 40 years. Compared to the 20 million tons of refining capacity, the actual capacity utilization is at around 11 million tons.

This is mainly due to the decreasing furnace oil demand in the country as a result of a change in the energy mix in the power sector and the fixed production slate of refineries that cannot produce just petrol and high-speed diesel and all products are produced simultaneously. Thus, as furnace oil demand declines, refineries have to lower their overall production and struggle to maintain their throughput at optimal levels.

This is despite the fact that independent consultants forecast Pakistan’s demand for petrol and diesel to grow beyond 33 million tons per annum by 2023.

To facilitate the Saudi investment in refining, the government has recently passed a new policy under which a new deep conversion oil refinery of a minimum 300,000 bpd achieving financial close of the project within five years shall be eligible for a customs duty of 7.5% for 25 years on petrol and diesel of all grades produced effective from the date of commissioning of the refinery.

The said refinery shall also enjoy a 20-year tax holiday and would also be entitled to exemption from levy of customs duties, surcharges, withholding tax, general sales tax, any other ad valorem tax or any other levies and duties on import of any equipment to be installed, or material to be used in the refinery projects without any precondition for obtaining certification by the Engineering Development Board.

These fiscal incentives and other facilitation would be recorded and protected under the project agreements between the project company, the key sponsors, investors and the concerned government and would be protected through a grant to Special Economic Zones Act.

Minister for State Musadiq Malik, who witnessed the MoU signing ceremony, said the Saudi oil firm showed a willingness to inject the entire equity into the multibillion-dollar refinery project, leading the Pakistani government to decide on a joint venture with key SoEs.

 

 

Can Wang Yi improve US-China relations?

According to Nikkei Asia, Chinese President Xi Jinping's decision to recall senior diplomat Wang Yi to head the Ministry of Foreign Affairs reflects a misstep, but it could be a crucial move ahead of US-China summit in November 2023.

"Qin Gang's fall from grace was as unexpected and abrupt as his elevation over the heads of many experienced diplomats," said Daniel Russel, a former diplomat who now is an expert at the Asia Society Policy Institute, United States. "Since both moves are attributed to China's leader, this episode will be seen as an embarrassing lapse in judgment at the top."

By and large, analysts do not expect any change to the direction of China's foreign policy, guided by Xi's thinking on diplomacy, aimed at seeking to assert global influence in line with the country's development achievements.

"Whether this is, in fact, effectively a placeholder appointment until a younger official gets the nod is unclear, but for now Wang is the most dominant foreign affairs official in China for a very long time," said Bill Bishop, a China expert at sinocism.com.

Known for his tough-talking style, the 69-year-old Wang held the ministerial portfolio for a decade before being promoted in October last year to head the Communist Party's Foreign Affairs Commission in charge of policymaking. He is also a member of the party's top decision-making body, the Politburo.

"Wang's oversight of policy implementation is therefore likely to strengthen the consistency of Beijing's diplomatic messaging and actions, while further cementing the party's already strong guidance of foreign affairs," US consultancy Eurasia Group wrote in a note.

His return, while signaling a comeback for more aggressive "wolf warrior" diplomacy, is seen as crucial ahead of a series of international events, notably the Asia Pacific Economic Cooperation summit to be hosted by the United States later this year.

"A key agenda item in US-China relations is whether the working and ministerial level can set the conditions for a successful visit of Xi to San Francisco for APEC in November," said Rorry Daniels, a senior fellow at the Asia Society Policy Institute's Center for China Analysis.

Reappointing Wang also reflects Xi's preference for someone with a track record of defending China's positions, such as its stance on Taiwan, well as asserting the country's interests amid geopolitical tensions with the United States and its allies.

"This could complicate the Biden administration's efforts to maintain and build on the recent detente in the bilateral relationship," Eurasia Group wrote.

Wang's reappointment has been broadly welcomed in Indonesia. "Wang Yi's return could even be bringing a sense of predictability and ease to Indonesian ministers, who already have good relations with him for a long time," said one analyst, who spoke on condition of anonymity.