Russian oil trade with India faces snags

One of Russia's most lucrative oil trade routes since the imposition of Western sanctions over the Ukraine conflict faces a major challenge because of the drawbacks of payment in currencies other than US dollar, with no short-term solution in sight.

For decades, the US dollar has been the currency of international oil trade and efforts to find alternatives have been thwarted by the difficulties of conversion, as well as political obstacles.

The problems flared when India - which has become Russia's biggest buyer of seaborne oil since European customers retreated - insisted in July on paying in rupees and the trading activity nearly fell apart, according to three sources familiar with the matter.

The sources, who requested anonymity, said the Russian oil suppliers - who also could not be named because of the issue's sensitivity - could not do deals in Indian rupees because of informal guidance from the Russian central bank it would not accept the currency.

One Russian banking source close to the Russian central bank said receiving revenue in a non-convertible currency with little value outside India was pointless. Russia has limited opportunities to spend rupees as its imports from India are insignificant, another source said.

Around mid-August, at least two major Russian oil companies threatened to divert around a dozen tankers carrying up to a million ton oil that was heading to India and other destinations.

As a temporary solution to the clash involving Indian deals, the cargoes were paid for in a combination of the Chinese yuan, the Hong-Kong dollar as a transition currency into the yuan and the UAE dirham, which is pegged to the US dollar.

However, the problem remained of finding a viable alternative to the dollar, and that the problems affect buyers in Africa, China and Turkey which have become top buyers of Russian oil.

The biggest issue, however, concerns India, which has been buying more than 60% of Russian seaborne oil. It is the biggest overall buyer of seaborne Russian crude after China.

The problems are likely to worsen as scrutiny on the trade increases. Washington imposed the first sanctions on owners of tankers carrying Russian oil priced above a Western price cap in recent weeks, the first enforcement of the cap since it was introduced late last year.

Since Western sanctions imposed on Russia in February 2022, Moscow has shifted from transactions in US dollars and euros, the world's dominant currencies, and is largely locked out of the international banking system.

According to five traders involved, less than 10% of Russia's output of roughly 9 million barrels of oil per day (bpd) is sold in dollars and euros.

The Russian central bank cannot operate in dollars because of sanctions, and while Russian exporters theoretically can use the currency, avoiding it has the advantage of making it harder for the United States and other Western governments to monitor their trade.

The alternatives lead to high levels of risk for both parties to a deal.

India in the first months of this year owed about US$40 billion to Russia for oil and other supplies.

India encourages rupees to be spent on its territory and has imposed punitive exchange rates on converting rupees into other currencies, amounting on occasions to over 10% of the amount converted.

The situation could ease if Russia imported more goods from India, which could be paid for in rupees.

Instead, India has been importing more from Russia, while Russia has been a major importer of cars, equipment and other goods from China.

India's imports from Russia reached US$30.4 billion in April-September, with its trade deficit with Moscow widening to US$28.4 billion as compared to about US$17 billion in the same period last year, according to the data posted on the Indian commerce ministry website.

Ivan Nosov, head of the Indian branch of Russia's top state bank Sberbank, said Russian exporters will have to help India to increase its exports.

"If you help increase Indian exports, there will immediately be a lot of help from various Indian associations. You create a company in India, do a small localization and you will get more opportunities," he said.

India's top refiner Indian Oil Corp is struggling to settle some payments, mainly for the purchase of Russia's light, sweet Sokol grade from the Sakhalin 1 project.

The IOC has said it has been unable to pay for the Sokol deliveries because the company supplying the grade has yet to open an account in UAE dirhams to receive payment, a source said.

Russian officials and oil executives have pressed Indian buyers to pay in Chinese yuan, which for Russia is a more useful currency.

For India, using the currency of a regional rival is highly sensitive, although Indian private refiners have switched back to the yuan due to the lack of other options since the clash earlier this year.

Indian state refiners have turned to the UAE dirham, but that has been complicated by additional clearing requirements as Washington's tougher line makes other governments wary.

From October, several UAE banks have tightened control over Russia-focused clients to ensure compliance with the price cap, according to five oil trading and bank sources.

At least two UAE banks have introduced price cap compliance declarations for the clients involved in Russian crude, oil products and commodity trading, the sources said.

BRICS an evidence of failure of Modi Doctrine

According to, Alan Paul Varghese, an independent foreign affairs and geopolitical analyst based in New Delhi, it became clear that India continues its alignment with the West and Israel.

At the BRICS Plus extraordinary meeting hosted by South Africa on the conflicts in West Asia, it became clear that India continues its alignment with the West and Israel. While most of the members reiterated how Israel’s settler colonialism is the root cause of the conflict, Indian external affairs minister S. Jaishankar stood firm on blaming Hamas. He also stated that there can be no compromise to terrorism.

The Modi doctrine of diplomacy for the past nine years has stagnated India’s internal reputation and aspirations. Narendra Modi had skipped the online meeting due to the election campaigns in poll-bound states.

Though the officials stated that Modi was preoccupied with the campaign schedules, it is obvious that the outcome of the extraordinary meeting was anticipated.

In a close examination of recent diplomatic events by India, one can categorically see how the Modi doctrine is failing to capture its promised achievements.

While the economy is trailing and seldom benefitted through trade agreements, the only resort of Narendra Modi and Jaishankar was their self-projection as the leader of the Global South.

It is noteworthy that the extraordinary meeting succeeded the Voice of Global South Summit which had references to ongoing genocide in Palestine.

BRICS Plus comprising of mostly countries from the global south has proved that India is isolated for its stand on the Israel-Palestine issue. This isolation has a serious impact on the future geo-political prospects of India.

In evaluating the BRICS extraordinary meeting Iran urged the members to cease economic and military interactions with Israel. Vladimir Putin who attended the meeting criticized the US monopolization of mediation efforts. He urged the international community to unite in an effort to achieve a speedy de-escalation and a ceasefire in Gaza, as well as a political solution to the Israeli-Palestinian conflict, and added that the BRICS nations and regional actors could play a leading role in this process.

This can be a possible indication of Argentina’s disassociation from BRICS as Milie, a far-right economist is a proactive supporter of dollarizing the economy. 

Xi Jinping in his address said “The root cause of the Palestinian-Israeli situation is the fact that the right of the Palestinian people to statehood, their right to existence, and their right of return have long been ignored. It has been often reiterated that the only viable way to break the cycle of Palestinian-Israeli conflict lies in the two-state solution, in the restoration of the legitimate national rights of Palestine, and in the establishment of an independent State of Palestine. There can be no sustainable peace and security in the Middle East without a just solution to the question of Palestine. China calls for early convening of an international peace conference that is more authoritative to build international consensus for peace and work toward an early solution to the question of Palestine that is comprehensive, just, and sustainable.”

Saudi Arabia called for the cessation of arms and ammunition supplies to Israel.

Argentina’s newly elected President Javier Milie condemned Hamas and demanded that Israel must adhere to international humanitarian law.

India had three diplomatic events before this extraordinary meeting. The ICC World Cup, Voice of Global South Summit, and ministerial dialogue between India and Australia.

During the World Cup Modi tried for cricket diplomacy by inviting his counterparts of the UK and Australia. Though Rishi Sunak expressed his readiness, due to some reasons he didn’t make his presence.

A sideline discussion with Anthony Albanese prior to the 2+2 ministerial dialogue was expected to boost talks in favour of India. But Albanese prioritized the Asia Pacific Economic Cooperation Summit over his QUAD partner.

The core weakness of Modi doctrine – neglecting the neighbours was visible in the failed innings of cricket diplomacy. In the interview given to The Hindu, Australian finance minister Penny Wong in reply to a question on whether India’s urge to take action against the Khalistan group was fulfilled, she said “ ….In relation to that I’d say is we respect your sovereignty. And we also are very clear about the line between peaceful protests, freedom of expression, and violence and vandalism.”

She has already clarified that the cooperation with India is for the balancing of power to counter China. The failed cricket diplomacy, Australia’s stand on the India-Canada standoff, and the statements by Wong proved how India has turned into a vassal of the Western countries under the Modi doctrine.

The current stand of the union government has isolated India in the Global South. Meanwhile, China is on the verge of emerging as the new dominant player in West Asian geopolitics. In the background of the Saudi-Iran peace deal that was brokered by China, Arab countries held direct talks with Beijing.

The officials holding meetings with China were from Saudi Arabia, Jordan, Egypt, Indonesia, Palestinian authorities, and the Organization of Islamic Cooperation, among others. Succeeding this South Africa, one of the strongest allies of China in the African continent hosted the virtual meeting of BRICS. Joining the dots, China is set to emerge in the role of mediator. Arab countries met Chinese diplomats to give a strong message to the USA too.

With the BRICS extraordinary meeting, China was able to successfully entrap the United States between the Zionist pressure for continuous aggression and the Middle East pressure for a ceasefire. One will not be mistaken to assume that China is working to diminish the outreach of US in West Asia.

Though, a joint declaration was not issued from the statements of various leaders except Jaishankar all others demanded a ceasefire and held Israel’s settler colonialism as the reason for the conflict. They endorsed the initiatives of Arab countries for establishing peace. South African parliament has voted for the closure of the Israel Embassy in Pretoria.

Undoubtedly India has trailed from its glorious legacy of being the voice of global south. China emphasized on the strategy that India forgot during the Modi era. In the past, India’s diplomacy focused on creating a New Economic World Order based on the liberation of Asian, African, and Latin American countries from neo-colonialism. The Non-Aligned Movement led by India comprised countries that gained independence from colonial regimes.

These were not powerful countries but had the potential of multiple dimensions. It was never the service or submission to power that helped India and NAM to develop their influences. China has built deep economic cooperation with African and Asian post-colonial countries than with the Western countries.

Bharath Karnad assessed Modi’s foreign policy as “bowing to the powerful and bullying the weak.” Such policies only result in the rupture of the country’s power.

In an article written by Rahul Nath Choudhary in East Asia Forum, he noted that the majority of free trade agreements signed by India failed to cater better results. In the period between 2017 and 2022, India’s exports to its FTA partners increased by 31%, while its imports increased by 82%. India’s FTA utilization remains very low at around 25%, while utilization for developed countries typically is 70% to 80%. 

The alternative for this – bilateral agreements and multilateral forums can be achieved if India could revamp another NAM based on multipolarity and de-dollarization. If the escalation continues in West Asia the future of India’s Middle East Corridor will be forever at a crossroad. Even a peace treaty based on the intervention of China and BRIC countries will bring the same fate.

 

Al-Aqsa Storm reaction to 75 years of Israeli occupation

Iranian Deputy Foreign Minister for Political Affairs Ali Bagheri Kani has said that the massive anti-Israeli operation carried out by Hamas was a logical response by the Palestinian people to the ongoing Israeli occupation.

During a news conference at the Iranian embassy in Bangkok on Sunday, Bagheri Kani told reporters that Hamas’s October 07 Operation Al-Aqsa Strom was a legitimate reaction to Israel’s brutality against Palestinians.  

“The crisis in the occupied Palestinian territories did not erupt as the result of the developments that took place on October 07. The operation launched by Hamas was the Palestinians’ natural and legitimate reaction to the 75-years-long occupation of their land by the Zionist regime,” he said.

He also expressed worry about the fate of foreign captives, particularly Thai nationals, imprisoned in Gaza as a result of the Hamas operation. 

According to Bagheri Kani, Iranian Foreign Minister Hossein Amir Abdollahian took the subject of Thai detainees seriously during his recent travels to Lebanon and Qatar, where he spoke with key officials of Palestinian resistance groups.

Bagheri Kani met a variety of high-ranking Thai officials during his brief visit in Bangkok, including Wan Muhamad Noor Matha, the president of the National Assembly, Anutin Charnvirakul, the deputy prime minister, and Chatchai Bangchuad, the acting chairman of the National Security Council.

The two parties emphasized the long-standing friendly relations between the two countries and the necessity of fostering bilateral connections, particularly in the areas of business and tourism.

Following seven weeks of bombing, a four-day truce in the Gaza Strip has allowed Hamas to free 26 Israeli prisoners, including women and children, along with 14 Thai nationals and a Filipino on two separate occasions.

78 Palestinian women and children were released from Israeli jails in response.

Iran assumed a key mediation role in the recent conflict in Gaza, successfully facilitating the release of 10 Thai nationals who were captured and brought to the Gaza Strip during the Hamas operation on October 07. 

Following a request from Thailand's government, Iran offered its good offices for the captives' release, resulting in the unconditional freedom of the individuals. 

Over a dozen Thai captives are still held in the besieged Gaza Strip. Iran has reportedly supplied Bangkok with vital information regarding their current conditions.

Since October 07, Iran has embarked on an extensive diplomatic campaign aimed at averting the loss of innocent lives in the region.

The Iranian foreign minister undertook three regional tours, engaging with leaders in Qatar, Lebanon, Iraq, and Turkey to discuss the ongoing situation.

 

Israeli-linked tanker seized in Gulf of Aden

Reportedly, unidentified armed individuals have seized a tanker carrying a cargo of phosphoric acid in the Gulf of Aden on Sunday, the vessel's managing company and a US defense official said.

The incident, involving the chemical tanker Central Park, is the latest in a series of attacks in Middle Eastern waters since a brutal war between Israel and the Palestinian militant group Hamas broke out on October 07.

It followed a seizure of an Israeli-linked cargo ship by Yemen Houthis, allies of Iran, in the southern Red Sea last week. The group, which also fired ballistic missiles and armed drones at Israel, vowed to target more Israeli vessels.

"US and coalition forces are in the vicinity and we are closely monitoring the situation," the US official said.

Central Park, a small chemical tanker (19,998 metric tons), is managed by Zodiac Maritime, a London-headquartered international ship management company owned by Israel's Ofer family. The Liberian-flagged vessel was built in 2015 and is owned by Clumvez Shipping Inc, LSEG data showed.

Zodiac Maritime said in a statement Central Park, which is carrying a full cargo of phosphoric acid, was involved in a suspected piracy incident while crossing international waters, approximately 54 nautical miles off the coast of Somalia.

Phosphoric acid is mostly used for fertilizers.

"Our priority is the safety of our 22 crew onboard. The Turkish captained vessel has a multinational crew consisting of a crew of Russian, Vietnamese, Bulgarian, Indian, Georgian and Filipino nationals," the statement added.

Britain's Maritime Trade Operations agency (UKMTO) said on Sunday it was aware of a possible attack in southwest Aden and called on other vessels to exercise caution.

The US has blamed Iran for unclaimed attacks on several vessels in the region in the past few years. Tehran has denied involvement.

A container ship managed by an Israeli-controlled company was hit by a suspected Iranian drone in the Indian Ocean, causing minor damage to the vessel but no injuries, a US defence official said on Saturday.

Hamas fighters rampaged into Israel on October 07, killing 1,200 people. Since then, Israel has rained bombs on Gaza, killing about 14,000 people, roughly 40% of them children, Palestinian health authorities say.

Bangladesh Election: Awami League and others

According to reports, besides finalizing candidates for its own party and alliance partners, the ruling Awami League (AL) is considering providing some seats to parties willing to join the next election amid boycotts by major opposition parties.

The ruling party is now passing a busy time to select its own contestants while working with seat-sharing mechanisms to create opposition as the last date of filing nominations is approaching for the January 07, 2024 election.

Candidates for the election can submit nomination papers until November 30, 2023. The AL is likely to announce candidates for 300 constituencies on Sunday.

The AL-led alliance partners are now adamant about joining the election as a coalition and are now lobbying for more seats than the 11th parliamentary polls amid uncertainty over the participation of the main opposition BNP.

During the past general election held in 2018, the AL candidates contested for 261 seats and refrained from participating for 26 seats in favour of the Jatiya Party, five seats in favour of the Workers Party of Bangladesh, three each in favour of Jatiya Samajtantrik Dal-Jasod and Bikalpa Dhara Bangladesh, and one each in favour of the Bangladesh Tarikat Federation and Jatiya Party.

“We are negotiating with AL for more nominations for our party in the forthcoming election. We are pressing for more seats than in the previous elections,” Workers Party president Rashed Khan Menon told New Age.

He said that there was time until the withdrawal of nomination papers to settle the issue.

AL joint general secretary AFM Bahauddin Nasim said that they would declare the party candidates first and then think about nominating candidates from partners.

Asked about the AL’s negotiation with other lesser-known political parties, he said that it was part of the party’s policy.

“We believe that any registered political party can join an election if they want. Anyone can create alliances with anyone having similar ideologies,” he said.

He said that there might be many political strategies, and nothing could be guaranteed.

In addition to regular partners, some small parties, including the newly formed Trinamool BNP, are also lobbying the Awami League for seats in exchange for promising to join the polls.

Leaders of Trinamool BNP and some Islamic parties, including Islami Oikya Jote, Bangladesh Islami Font, Bangladesh Khelafat Andolan, Bangladesh Muslim League, Islamic Font Bangladesh, Bangladesh Supreme Party, Bangladesh Islami Oikya Jote, and Jamiat-e-Ulama-e-Islam Bangladesh, met Prime Minister Sheikh Hasina in recent days to discuss their respective election strategies.

Neither the prime minister’s office nor AL or the parties made any formal statements about the outcome of those meetings.

The allegation has it that the Trinamool BNP and Bangladesh Nationalist Movement, labelled as King’s Party by many, are negotiating with AL to become the opposition in the parliament.

The newly-formed alliance Jukta Front, led by the Kalyan Party, demanded a few seats, although AL insiders said they could end up with one seat for Kalyan chairman Syed Muhammad Ibrahim, a retired major general.

BNM, Bangladesh Supreme Party, Bangladesh Muslim League, and Bangladesh Khelafat Andolan may also get one seat, party insiders said.

Jasod, a partner of the Awami League, finalized 181 candidates, said the party general secretary, Shirin Akhter.

“We want to join the polls with the alliance. The alliance is not only for joining polls but also a place of ideology”, she added.

Shirin said that many parties were now willing to join their alliance, creating difficulties.

At a briefing on Friday, AL general secretary Obaidul Quader said that they were not thinking so seriously about the political alliance in terms of sharing seats.

“The party will not give nominations to anyone who cannot win an election and does not have popularity among the people”, he added.

AL presidium member Abdur Rahman told New Age that the party’s seat-sharing plan has no connection with BNP’s joining or boycotting elections.

‘Our leader, Prime Minister Sheikh Hasina, will give nominations to eligible candidates from the alliance. The party will give candidates for 300 seats, and then our leader will decide about other alliances,’ he said.

According to AL insiders, there is a possibility that its alliance partners may participate in the polls independently with their own party electoral symbols.

In that case, the AL may not give nominations to any of its aspirants in some constituencies to create a pathway for them to win.

The ruling AL has decided to participate in the 12th Jatiya Sangsad election in alliance in some constituencies and alone in other consultancies, AL office secretary Biplob Barua told reporters on October 18, 2023.

The AL-led alliance was formed in 2005 and came to power for three consecutive terms in 2009, 2014, and 2018.

The Workers Party, Jasod, Ganatantri Party, and Jatiya Party-JP are among the most active parties in the alliance.

Ganatantri Party president Shahadat Hossain hoped that prime minister Sheikh Hasina would make it suitable for all.

“The prime minister will meet with the alliance soon. We can tell it only after the meeting”, he added.

AL’s preparation for the forthcoming election is underway at a time when the leaders and activists of the main opposition BNP and its allies keep facing arrest, raids, prosecution, and conviction.

 

An illustration of corrupt US political system

Recent news out of Michigan, where actor and union organizer Hill Harper is running for US Senate and Rashida Tlaib has recently angered pro-Israel lawmakers and donors for her staunch support for Palestinian rights, offered an illustration of the corruption of the American political system, said one progressive House member late Wednesday.

As Politico reported, Harper recently rejected US$20 million from an anti-Palestinian rights entrepreneur, Linden Nelson, who offered the money in exchange for Harper dropping out of his Senate race and running instead against Tlaib for her House seat.

The offer came on October 16; the day Tlaib joined Cori Bush in introducing a resolution to back an immediate de-escalation and cease-fire in Gaza. The blockaded enclave was then nine days into a relentless bombardment by Israel, which was launched October 07 in retaliation for Hamas' attack on southern Israel but had already killed nearly 3,000 Palestinian civilians, including 1,000 children, at the time.

The death toll has now grown to more than 14,500 people, including 6,000 children.

Tlaib, the only Palestinian American member of Congress, has been the subject of vitriol from lawmakers who believe the US should continue supporting Israel regardless of what human rights groups and the United Nations have warned may amount to war crimes in Gaza. Earlier this month, 22 Democrats joined Republicans in voting to censure Tlaib for using the rallying cry for Palestinian rights, "From the river to the sea, Palestine will be free."

Pro-Israel Democrats are reportedly searching for a candidate to primary Tlaib, and last month, according to Politico, Nelson reached out to Harper offering US$10 million in bundled donations directly to his campaign and US$10 million in independent expenditures—if he would agree to be that House candidate instead of continuing his Senate run.

"The fact that in the US just one wealthy person can make a call and offer millions to unseat an official they dislike tells you everything about the corruption of our politics," said Rep. Alexandria Ocasio-Cortez.

Nelson has been involved with the powerful American Israel Public Affairs Committee (AIPAC) in the past, and has donated to both Democratic and Republican lawmakers.

AIPAC told The Hill that it "was absolutely not involved in any way in this matter" and said Nelson has not donated to the organization in over a decade, but considering the group's efforts to defeat other pro-Palestinian rights progressives in recent elections, Ocasio-Cortez expressed skepticism.

Harper, who is running for Debbie Stabenow's seat against the more conservative Elissa Slotkin, echoed Ocasio-Cortez, saying Nelson's rejected offer exemplifies a "broken political and campaign finance system that's tilted towards the wealthy and powerful."

"I'm running to be a voice for the people," said Harper. "I'm not going to run against the only Palestinian American in Congress just because some special interests don't like her. I'm running because I want to break the stranglehold wealthy special interests have on our politics, whether it's the Israel lobby, the NRA, or Big Pharma."

Harper himself has called for a "humanitarian cease-fire" in Gaza this month, saying in a statement, "The answers to ensure long-term peace and security for Israelis and Palestinians are neither simple nor pain-free, but one truth stands firm: violence against defenseless children, trapped and frightened, is abhorrent, regardless of who is behind it."

Saurav Ghosh, director for federal reform at the Campaign Legal Center, told Politico that Harper and Nelson would have broken the law if they had moved forward with the deal.

Nelson's offer, said Jewish-led anti-Zionist group IfNotNow, is "a clear example of how groups like AIPAC and its super PAC, Democratic Majority for Israel try to undermine the will of voters and attack representatives who truly represent our values."

Production of medicinal plants in Iran

Reportedly over 400,000 people are working in the production of medicinal plants in Iran. Also, 32,000 people are working in packaging of these plants.

As stated by Ministry of Health, Iran holds some 40% share of the market for medicinal plants in the neighboring countries.

“A large volume of pharmaceuticals, supplements, food products, and beverages are exported to Iraq, Turkey, Georgia, Armenia, and Afghanistan,” IRNA quoted Hamidreza Banafsheh as saying in late October.

Iran is among the leading countries in the field of medicine and health technology, supplying 98% of pharmaceutical items to the domestic market, the official noted.

“Nearly 450 out of 1,400 knowledge-based companies are active in the field of herbal medicines, biotechnology, and food industries.”

He went on to say that the National Institute for Medical Research Development aims at expanding exports of medicinal products.

Since most of the raw materials for the production of herbal medicines are native to the country, these products can internationally compete with those of the other countries, he added.

Besides, some 15 to 20 percent of Iran's herbal medicines are unique in the world. Iran has the capacity to introduce new herbal medicines to the world, he highlighted.

Producing and commercializing pharmaceutical plants are the best ways to introduce the rich resources of herbal medicines which, in addition to making foreign currency revenues for the country, will lead to the scientific authority of Iran in this field, he concluded.

According to the chairman of the Union of Medicinal Plants Exporters of Iran, the country’s export of medicinal plants can be increased through compliance more with the world standards.

Mohammad-Ali Rezaei Kamal-Abad stated that world standards are increasing due to the health-oriented consumption of herbal products, and failure to comply with these standards will lead to the return or destruction of these products.

“In the past years, poisons have entered the country, which are not only not used in other countries, but have also caused water and soil pollution in our country”, he lamented.

Referring to the importance of agricultural product export standardization, he added, “Standardization is done in our country, but this standardization is not up-to-date. With the coordination of ministries, expenditure and updating of information can help to standardize agricultural products and develop the export of these products”, he commented.

He said that having more than 11 climates out of 13 climates, Iran has 8,000 varieties of medicinal plants, which is at least twice as much as Europe.