Uncertainties plague oil market

According to the Seatrade Maritime News, energy analysts point to a range of uncertainties that could influence oil demand, supply and price in the months ahead.

Unexpectedly weak oil demand in China so far this year is one of the factors that OPEC Plus members will be considering when they meet at the next Joint Ministerial Monitoring Committee at the beginning of October.

But there are a number of other factors which could affect their decision on whether or not to ease the 2.2 million barrels a day (bpd) of production cuts that are currently in place.

These cuts were originally agreed in 2020 when COVID struck and oil demand fell sharply. These were steadily eased as the pandemic passed but restrictions on output were introduced again in April 2023, which will be the subject of discussion at the October meeting.

Softer Chinese demand is mirrored elsewhere as geopolitical tensions and slower growth affect many regions. Global oil demand growth has slowed down over recent quarters even as some OPEC Plus members, notably Russia, exceed OPEC Plus output quotas.

Shipbroker Gibson notes that OPEC Plus recently cut oil demand growth expectations to 2.11 million bpd this year, but so far this increase has not materialized.

Further downward revisions to projections may be required and the issue casts doubt on the cartel’s forecast of a 1.78 million bpd demand increase in 2025.

The broker notes that the International Energy Agency has a more moderate demand growth forecast of 0.95 million bpd for next year.

Meanwhile, Poten notes that more non-OPEC production has come on stream since the pandemic, with the United States, Canada, Guyana, and Brazil increasing output and eating into OPEC’s share.

More non-OPEC crude will hit the market in 2025, as the International Energy Agency forecasts that supply is likely to rise by 1.75 million bpd, significantly more than likely demand growth of 1.0 million bpd.

Owners of smaller tankers will be closely watching developments in these non-OPEC countries where output is rising.

For VLCC owners, what happens in China is the most important factor because of the long-haul nature of the trade.

But the strategy that OPEC Plus members adopt at the October meeting is a key factor too.

If the cartel members decide to ease the present production restrictions, the process will take place gradually over time.

Poten observed, “If they start to roll back their production cuts, it will be very slow and in small increments, so as not to flood the market and undermine oil prices.”

Airlines cancel flights to Israel

Ten foreign airlines canceled their flights to Israel on Sunday amid escalating cross-border tensions with the Lebanese group Hezbollah.

According to Israeli public broadcaster KAN, major carriers, including Air France and the Dutch airline Transavia, have suspended their operations in Israel.

Other airlines that canceled flights include Hungary's Wizz Air, Malta-based Corendon, Ethiopian Airlines, and Greece's Aegean Airlines and Universal Airlines.

Air France, which canceled its flights between Paris and Tel Aviv, was one of the few major international airlines operating in Israel until now.

Since late July, 20 international airlines have canceled their flights to Israel, driven by growing concerns over a potential regional war in the Middle East.

On Sunday, Israeli warplanes launched over 40 airstrikes on southern Lebanon, marking the most severe attack since cross-border clashes with Hezbollah began on October 08, 2023. The Israeli army stated that the strikes aimed to prevent an impending Hezbollah attack.

In response, Hezbollah claimed it had launched hundreds of missiles and drones deep into Israel as part of the "first phase" of its retaliation for last month’s assassination of its commander Fouad Shukr in Beirut.

Since October 08, 2023, Hezbollah has engaged in daily exchanges of fire with the Israeli army across the Lebanese-Israeli border, resulting in hundreds of casualties, mostly on the Lebanese side.

Kamala Harris and her heap of lies

All week long, the US citizens watched as the true base of the Democratic Party – billionaires, celebrities, national security figureheads and moderate Republicans – repeatedly assured us that Kamala Harris will be a different kind of president. A president of “joy.” But many found little room for joy in her speech Thursday night.

Instead, it revealed a great deal about what we can expect if Kamala becomes president – and none of it is good.

In a speech that could have easily been delivered by Joe Biden himself, Kamala promised to:

Sign Biden’s inhumane, militarized “bipartisan border bill” with 80% of the funding allocated to hardening border security and doubling the number of border patrol agents.

“Ensure America always has the strongest, most lethal fighting force in the world” with unchecked resources for the Pentagon to continue waging “wars around the world”.

Unconditionally supply Israel with endless weapons, as she repeated Israel’s discredited propaganda around the October 07 attacks and pointedly ignored the widespread reports of Israeli soldiers using sexual violence, physical and psychological torture against illegally incarcerated Palestinian prisoners.

Kamala absurdly claimed that she and Biden are “working around the clock” to secure a ceasefire for Gaza – even as they’ve authorized another US$23 billion in arms for Israel in August alone.

Now we learn that the Joe-Kamala administration has appointed Mira Resnick, perhaps the most hands-on State Department official involved in speed-running weapons to Israel since October 07, to replace Andrew Miller – the 1st official to resign in protest over Gaza.

Kamala’s heap of lies delivered on Thursday night firmly established that nothing will fundamentally change.

Kamala made it clear that she intends to continue this reckless path of capitalistic exploitation and global militarism, even fanning the flames with China and Iran as tens of thousands of the party faithful waved signs and shouted “USA! USA!”

The world finds no joy in any of this.

There are material conditions that must be urgently addressed for this country to meet the basic needs of its citizens and take the citizens off this death march into World War III and climate collapse. None of those policy solutions were present in her speech.

Instead citizens were promised more of the same. And much like Biden before her, that may prove to be the one promise that Kamala Harris keeps.

Kamala has shown her true colors, and we have a prudent choice to make this November.

There has to be a campaign to the White House this November that could set the US citizens on a radically different course – one that ends the genocide in Gaza and implement an immediate arms embargo on Israel.

There has to be a campaign with the credibility to address the climate emergency with the urgency it demands. There has to be a campaign with a radically transformative economic vision that will lift millions out of poverty and build a society free of injustice, inequity, hunger, and want.

There has to be a campaign that could challenge the empire both at home and abroad. In just over two months, Americans will have to make their voice heard at the ballot box.

 

Global leaders congratulate Abbas Araqchi

Several prominent international figures, including the European Union's foreign policy chief Josep Borrell, as well as the foreign ministers of Germany and Iraq, have extended their congratulations to Abbas Araqchi on his appointment as Iran's Minister of Foreign Affairs.

Araqchi, known for his previous role as a nuclear negotiator, was appointed by President Masoud Pezeshkian and successfully secured a vote of confidence from the Iranian parliament, receiving 247 out of 288 votes.

In a phone call on Thursday, Borrell conveyed his congratulations to Araqchi, expressing optimism that political discussions and consultations between Iran and the European Union would not only continue but also expand under Iran's new government. 

The two officials also discussed ongoing negotiations aimed at lifting international sanctions against Iran and addressed recent developments in the Israeli-Palestinian conflict, particularly the situation in Gaza.

Araqchi announced Iran's willingness to manage tensions with the United States and restore relations with European nations, contingent upon these countries ceasing what he described as hostile actions against the Islamic Republic. 

He emphasized that a key priority for the new administration would be the removal of sanctions, which would help normalize Iran's trade relations globally. 

Araqchi reiterated that reviving the 2015 nuclear deal remains a central objective, provided that Western nations show a willingness to engage constructively.

The signing of the 2015 nuclear agreement, also known as the Joint Comprehensive Plan of Action (JCPOA), with six world powers showcased Iran's commitment to demonstrating the peaceful nature of its nuclear program. However, the unilateral withdrawal of the United States from the JCPOA in May 2018 and the subsequent re-imposition of sanctions against Tehran have cast uncertainty over the future of the agreement.

German Foreign Minister Annalena Baerbock also congratulated Araqchi, expressing hope that Germany and Iran could deepen their bilateral relations by overcoming existing challenges. 

During their conversation, Araqchi stressed the importance of mutual respect and focusing on common interests to strengthen ties between the two nations. 

The two diplomats also exchanged views on regional and international issues, emphasizing their shared commitment to resolving current problems through dialogue.

In another diplomatic outreach, Foreign Secretary of the United Kingdom David Lammy extended his congratulations to Araqchi on his recent appointment as Iran’s foreign minister. 

During a phone call, Lammy expressed that the formation of Iran’s 14th government presents a fresh opportunity to enhance diplomatic consultations between the United Kingdom and the Islamic Republic of Iran. 

Lammy also addressed the ongoing conflict in Gaza, urging Iran to play a constructive role in de-escalating tensions in the region. He emphasized the importance of dialogue and diplomatic efforts in achieving stability, highlighting the potential for cooperation in easing the humanitarian crisis.

Responding to his British counterpart, Araqchi acknowledged the ups and downs in bilateral relations over the years. He reiterated that while Iran does not seek to widen the conflict or increase tensions, it will not relinquish its right to respond to the "criminal and terrorist actions" of the Zionist regime.

The conversation between the two ministers also covered other areas of mutual interest, including the ongoing negotiations concerning the lifting of sanctions on Iran. Both sides reaffirmed their commitment to continue these diplomatic consultations, signaling a desire for constructive engagement moving forward.

Franch Foreign Minister, Stéphane Séjourné, also reached out to Araqchi in a separate phone call to offer his congratulations. 

Séjourné conveyed France’s readiness to continue diplomatic consultations with Iran, focusing on both bilateral relations and broader regional and international issues. 

He highlighted the ongoing diplomatic efforts aimed at securing a ceasefire in the Gaza conflict, stressing the need for dialogue with all involved parties to reduce tensions and achieve lasting peace.

Araqchi expressed appreciation for the French foreign minister’s congratulations and emphasized the longstanding historical relationship between Iran and France. He reiterated Tehran’s willingness to engage in constructive dialogue to expand cooperation between the two nations.

He urged France and other Western countries to focus on holding the Zionist regime accountable for these actions to prevent further escalation of the conflict.

The phone call between Araqchi and Séjourné also included discussions on other topics of mutual interest, such as consular issues, with both ministers agreeing on the importance of continued dialogue to address these concerns.

Iraqi Foreign Minister Fuad Mohammed Hussein was among the other leaders who reached out to congratulate Araqchi. 

He expressed hope that Iran and Iraq would continue their close cooperation on bilateral, regional, and international issues. 

Hussein also conveyed an invitation from Iraqi Prime Minister Mohammed Shia' Al Sudani to President Pezeshkian to visit Iraq. 

Araqchi, in turn, highlighted the new Iranian government's commitment to deepening relations with its neighboring countries, particularly Iraq.

Araqchi received congratulations from Ararat Mirzoyan, the Armenian Foreign Minister, who expressed his country’s commitment to expanding relations with Iran. 

The two officials discussed issues related to the agenda of bilateral relations between Armenia and Iran, emphasizing the readiness of both sides to make continuous efforts towards further strengthening of friendly ties and strong partnership in areas of mutual interest. Reference was made to upcoming programs.

They also discussed the importance of supporting Armenia’s territorial integrity and the ongoing regional developments. 

Lebanese Foreign Minister Abdallah Bou Habib offered his congratulations, expressing hope for continued cooperation between Iran and Lebanon, especially in resisting Israeli aggression.

In response, Iranian foreign minister thanked Bou Habib for his congratulations and emphasized his desire for fruitful collaboration to advance the interests of both the Lebanese and Iranian people, as well as the broader region. 

Araqchi confirmed his intention to visit Lebanon soon and expressed eagerness to host the Lebanese Foreign Minister in Tehran at the earliest opportunity.

Syrian Foreign Minister Faisal Mekdad joined in the congratulations, reaffirming Syria's dedication to strengthening strategic relations with Iran. 

Both Araqchi and Mekdad emphasized the importance of ongoing consultations and coordination between their countries in the face of regional challenges, particularly regarding Israeli actions in the region.

These diplomatic engagements highlight the broad international response to Araqchi’s appointment, reflecting both the opportunities and challenges that lie ahead for Iran's foreign policy under his leadership.

 

Why Gwadar airport opening was postponed?

According to media reports, Pakistan has postponed the opening of a nearly US$250 million airport over security fears, dealing another blow to efforts to boost Chinese investment in its crisis-hit economy.

Prime Minister Shehbaz Sharif was due to perform the inauguration of New Gwadar International Airport (NGIA), close to a port at the center of the US$50 billion China Pakistan Economic Corridor (CPEC).

The planned opening on August 14 — Pakistan’s Independence Day — was suddenly halted over what local officials said were security concerns after mass protests brought southwestern Gwadar to a near standstill this month.

No new opening date has been announced for the US$246 million China funded project, which got off the ground following a grant deal with Beijing in 2015.

“All the required work and prerequisite arrangements on the New Gwadar airport have been completed and it’s ready for flight operations,” a government official familiar with the situation told Nikkei on condition of anonymity.

The delayed opening — after an initial postponement last year — comes amid concerns that lower-than-expected demand for flights into the region, beset by deadly militant attacks and a separatist insurgency, would quickly turn it into a white elephant.

The single-runway airport, about 45 kilometers from Chinese-controlled Gwadar port, is spread over 4,300 acres (1,740 hectares) and can handle large-body planes like the Airbus A380. That will make it the country’s largest airport by size, ahead of Islamabad’s gateway.

Gwadar’s faltering efforts to kick off as a major hub have led to just three weekly scheduled flights to a smaller airport in the area from Pakistan’s commercial capital Karachi — and some of those trips are routinely canceled.

Even with Chinese airlines expected to start running direct flights once the new airport opens, analysts warn there’s little chance of a surge in demand.

“The inauguration of NGIA is symbolic in nature because it is not commercially viable for any airline in the short term,” Afsar Malik, an expert in airline economics, told Nikkei Asia.

Successive Pakistani governments have claimed that the multibillion-dollar investment framework with China would help turn Gwadar into the next Singapore.

The country’s prime minister ordered that half of all sea cargo for government agencies, originally destined for southern Karachi, instead be unloaded at Gwadar’s port — highlighting its underuse.

Some fear the area’s newest transport hub will become the next Mattala Rajapaksa International, a large Sri Lankan airport built with a Chinese loan that’s been dubbed the “world’s emptiest international airport” due to a lack of flights.

“Vanity projects are not new for the Chinese, they have built similar projects back home which have limited use,” said Mohammad Shoaib, an assistant professor at Quaid-i-Azam University Islamabad. “The Chinese are biding their time and the NGIA can be of use once Gwadar kicks off. … In the meantime, NGIA and old Gwadar airport can be used by other support missions from China.”

This month, Gwadar saw huge protests staged by groups pushing for civil, political and economic rights for locals in resource-rich Baluchistan province, home to the China-funded port.

Beijing has grown increasingly wary about future investment after its nationals working in Pakistan were targeted in a series of deadly attacks. The country is grappling with a rise in militant activity ranging from Islamists aiming to topple the government to separatists seeking to carve out a homeland in Baluchistan.

Islamabad, already struggling with a shattered economy, has pledged to boost security for workers and, in June, said it would launch fresh counterterror operations nationwide.

Despite hopes the new airport will draw more Chinese money, some are not convinced it would mean much for a local population of mostly poor fishermen.

“Air travel is quite expensive for the majority of people in Gwadar,” said Mariyam Suleman, a local now based in Canada. “The airport is more to accommodate the government officials, diplomats and international delegations rather than the local population.”

 

Yuan attains record share in global payments

According to the South China Morning Post, share of Chinese yuan in global payments hit a record high in July 2024, a milestone in Beijing’s efforts to fend off the hegemony of the US dollar and increase its say in the global monetary system.

The yuan kept its fourth-place spot in the ranking of payment currencies last month, with its share of global transactions rising to 4.74% from 4.61% in June. The increase was observed in data from the Society for Worldwide Interbank Financial Telecommunication (Swift), the world’s largest interbank messaging service.

It was the ninth consecutive month the Chinese currency has stayed above 4%.

Swift payment data is a major indicator for the relative status of international currencies. Other metrics include frequency of use in foreign exchange markets, commodity trading and governments’ foreign reserves.

The data shows the value of payments settled in yuan increased by 13.4% as compared to June, outpacing the 10.3% growth recorded across all currencies.

The world’s second-largest economy first encouraged the use of its currency in international trade settlements in 2009, part of its response to the global financial crisis.

Yuan usage has been on the rise since Russia was ejected from the US dollar system after its invasion of Ukraine in February 2022. A vast majority of China and Russia’s US$240 billion trade last year was settled in either yuan or roubles.

Beijing’s policymakers have continued to promote the yuan as an alternative currency in international trade, as the perceived weaponisation of the US dollar against Russia has sent chills through emerging markets. In response, countries such as Brazil have expressed a greater openness to accepting Chinese currency.

“Despite depreciation pressures, the yuan’s internationalization has advanced this year, with its overseas use on the rise,” said Ding Shuang, chief Greater China economist at Standard Chartered Bank.

Standard Chartered’s renminbi globalization index, which also tracks the yuan’s international use, continued to grow this year after a strong 33 per cent% increase in 2023 in alignment with Swift data.

The yuan surpassed the Japanese yen as the world’s fourth most active currency in global payments in November 2023, following the US dollar, euro and pound sterling.

In July 2024, the US dollar accounted for 47.8% of global payments, followed by the euro at 22.5% and the pound sterling at 7.0%, Swift data showed.

The yuan also secured the No. 2 position in the trade finance market with a 6% stake, higher than the euro’s 5.8% and second to the US dollar’s considerable share of 83.2%.

As the Global South looks to avoid overreliance on the US dollar amid rising geopolitical tensions, Ding said, the yuan is well-positioned to expand its global role.

But he also pointed out the inherent difficulty of further breakthroughs after the yuan’s internationalization reaches a certain level, considering the state of the country’s capital controls.

“To strengthen confidence in the yuan, the currency’s exchange rate but also the openness of cross-border capital flow must play a role,” he said, stressing the latter was not being prioritized sufficiently by Beijing.

“Currently, China is more focused on stability amid growing external uncertainties. But in the long term, Beijing will need to further relax its controls over capital accounts.”

 

Ships carrying Israeli cargo being targeted

An oil tanker has been forced to change route after coming under attack by Yemen’s Ansarallah in the Red Sea. The Greek-flagged SOUNION has been accused of violating the Ansarullah decree banning entry to the ports of occupied Palestine.”

In a televised statement, Yahya Sare’e said the oil tanker “belongs to a company that has ties with the Israeli enemy”. 

The ship was accurately and directly struck while sailing in the Red Sea and is at risk of sinking, according to the senior Yemeni military official. 

Global maritime monitors say the SOUNION was targeted by multiple projectiles off Yemen’s port city of Hodeidah. 

The European Union’s naval forces in the region, deployed to prevent Ansarullah’s operations, said the tanker was carrying 150,000 tons of crude oil, and the attack from Yemen led to the loss of engine power while causing a fire on board. 

The SOUNION is now reportedly anchored near Eritrea amid plans to move it to a safer destination for checks and repairs. 

None of the crew members who were evacuated have been harmed. 

Sare’e also declared that Ansarullah staged a second operation, which targeted the SW NORTH WIND I, reiterating that this vessel also belongs to a company that “deals with the Israeli enemy” and “violated the decision to ban entry to the ports of occupied Palestine.” 

This ship, too, was directly and accurately hit while sailing in the Gulf of Aden and the Red Sea, the Ansarullah military spokesman said. 

Maritime monitors say the SW NORTH WIND I suffered damage after an encounter with an uncrewed vessel 57 nautical miles south of Yemen’s port of Aden. 

Ansarullah said the attacks in the Aden Gulf and the Red Sea were carried out with unmanned boats, ballistic missiles, winged missiles, and drones. 

“Our operations will continue until the aggression ceases and the siege on Gaza is lifted, and we will continue to prevent all ships heading to Israel until the blockade on the Gaza Strip is lifted,” Ansarullah added. 

Since November, the Sana’a government forces have carried out scores of attacks against Israeli and Israeli-affiliated vessels in the Red Sea and beyond. 

The arrival of American and British destroyers in the region has failed to deter the Yemeni forces. Bombing attacks by United States and British forces have seen ships and warships belonging to America and Britain also come under attack. 

Ansarullah has waged more than 184 attacks against Israeli, American and British ships in solidarity with Gaza. 

The Sana’a government has informed mediators that its operations will end once a ceasefire is reached in the Gaza Strip and the blockade on the enclave is lifted. 

According to experts, Ansarullah’s military actions have proven very effective amid a significant drop in the number of US and British ships, and ships bound for Israeli ports in the Red Sea. 

The presence of Western warships and the regular bombings on Yemen by America and Britain have failed to weaken or stop Ansarullah’s maritime ban on ships docking at Israeli ports. 

Analysts have said the US-led military failure to end the Red Sea maritime disruption for Israeli-linked ships is all the more embarrassing for the United States, considering that Ansarullah has been subject to almost a decade of war. 

On Friday, Yemenis heeded a call by Ansarullah leader, Abdul-Malik al-Houthi, in a remarkable show of support. People flooded the streets of the capital as well as the governates of Sa’ada, Hodeidah, Hajja, Dhamar, Amran, al-Bayda, Rima, al-Dhalea, Lahij, Ibb, al-Mahwit, al-Jawf and Marib with million-man marches voicing their approval of the government’s policies on Palestine. 

The huge weekly turnout on Fridays, across Yemen has led critics to accuse other Arab states of failing to organize a similar level of street protests against the Israeli massacres in the occupied Palestinian territories. 

The popular domestic support in Yemen has also helped strengthen the determination of Ansarullah to continue its military operations in support of the people and resistance in Gaza.