Trump wants EU to buy more US oil and gas or face tariffs

According to Reuters, US President-elect Donald Trump said on Friday that the European Union (EU) may face tariffs if the bloc does not cut its growing deficit with the United States by making large oil and gas trades with the world's largest economy.

The EU is already buying the lion's share of US oil and gas exports, according to US government data, and no additional volumes are currently available unless the United States increases output or volumes are re-routed frm Asia - another big consumer of US energy.

"I told the European Union that they must make up their tremendous deficit with the United States by the large scale purchase of our oil and gas," Trump said in a post on Truth Social.

"Otherwise, it is tariffs all the way!!!," he added.

The European Commission said it was ready to discuss with the president-elect how to strengthen an already strong relationship, including in the energy sector.

"The EU is committed to phasing out energy imports from Russia and diversifying our sources of supply," a spokesperson said.

The United States already supplied 47% of the European Union's LNG imports and 17% of its oil imports in the first quarter of 2024, according to data from EU statistics office Eurostat.

Trump has vowed to impose tariffs on most if not all imports, and said Europe would pay a heavy price for having run a large trade surplus with the US for decades.

Trump has repeatedly highlighted the US trade deficit for goods, but not trade as a whole.

The US had a goods trade deficit with the EU of 155.8 billion euros (US$161.9 billion) last year. However, in services it had a surplus of 104 billion euros, Eurostat data shows.

Trump, who takes office on January 20, 2025 has already pledged hefty tariffs on three of the United States' largest trading partners - Canada, Mexico and China.

Most European oil refiners and gas firms are private and the governments have no say on where the purchases are coming from unless authorities impose sanctions or tariffs. The owners usually buy their resources based on price and efficiencies.

The EU has steeply increased purchases of US oil and gas following the block's decision to impose sanctions and cut reliance on Russian energy after Moscow invaded Ukraine in 2022.

The United States has grown to become the largest oil producer in recent years with output of over 20 million barrels per day of oil liquids or a fifth of global demand.

US crude exports to Europe stand at over two million bpd representing over a half of US total exports with the rest going to Asia. The Netherlands, Spain, France, Germany, Italy, Denmark, and Sweden are the biggest importers, according to the US government data.

The United States is also the world's biggest gas producer and consumer with output of over 103 billion cubic feet per day (bcfd).

The US government projects that US exports of liquefied gas (LNG) will average 12 bcfd in 2024. In 2023, Europe accounted for 66% of US LNG exports, with the Britain, France, Spain and Germany being the main destinations.

EU exports are dominated by Germany with key goods being cars, machinery and chemicals.

 

Netanyahu eyes Iran, his arch foe

According to Reuters, 2025 will be a year of reckoning for Israeli Prime Minister Benjamin Netanyahu. He is set to cement his strategic goals: tightening his military control over Gaza, thwarting Iran's nuclear ambitions and capitalizing on the dismantling of Tehran's allies - Palestinian Hamas, Lebanon's Hezbollah and the removal of Syrian president Bashar al-Assad.

Assad's collapse, the elimination of the top leaders of Hamas and Hezbollah and the destruction of their military structure mark a succession of monumental wins for Netanyahu.

Without Syria, the alliances Tehran has nurtured for decades have unraveled. As Iran's influence weakens, Israel is emerging as the dominant power in the region.

Netanyahu is poised to zero in on Iran's nuclear ambitions and missile program, applying an unyielding focus to dismantling and neutralizing these strategic threats to Israel.

Iran, Middle East observers say, faces a stark choice: Either continue its nuclear enrichment program or scale back its atomic activities and agree to negotiations.

"Iran is very vulnerable to an Israeli attack, particularly against its nuclear program," said Joost R. Hiltermann, Middle East and North Africa Program Director of the International Crisis Group. "I wouldn't be surprised if Israel did it, but that doesn't get rid of Iran."

"If they (Iranians) do not back down, Trump and Netanyahu might strike, as nothing now prevents them," said Palestinian analyst Ghassan al-Khatib, referring to President-elect Donald Trump. Khatib argued that the Iranian leadership, having demonstrated pragmatism in the past, may be willing to compromise to avert a military confrontation.

Trump, who withdrew from a 2015 agreement between Iran and six world powers aimed at curbing Tehran's nuclear goals, is likely to step up sanctions on Iran's oil industry, despite calls to return to negotiations from critics who see diplomacy as a more effective long-term policy.

Amid the turmoil of Iran and Gaza, Netanyahu's long-running corruption trial, which resumed in December, will also play a defining role in shaping his legacy. For the first time since the outbreak of the Gaza war in 2023, Netanyahu took the stand in proceedings that have bitterly divided Israelis.

With 2024 coming to an end, the Israeli prime minister will likely agree to sign a ceasefire accord with Hamas to halt the 14-month-old Gaza war and free Israeli hostages held in the enclave, according to sources close to the negotiations.

But Gaza would stay under Israeli military control in the absence of a post-war US plan for Israel to cede power to the Palestinian Authority (PA), which Netanyahu rejects. Arab states have shown little inclination to press Israel to compromise or push the decaying PA to overhaul its leadership to take over.

"Israel will remain in Gaza militarily in the foreseeable future because any withdrawal carries the risk of Hamas reorganizing. Israel believes that the only way to maintain the military gains is to stay in Gaza," Khatib told Reuters.

For Netanyahu, such a result would mark a strategic victory, consolidating a status quo that aligns with his vision: Preventing Palestinian statehood while ensuring Israel's long-term control over Gaza, the West Bank and East Jerusalem -- territories internationally recognised as integral to a future Palestinian state.

The Gaza war erupted when Hamas militants stormed into Israel on October 07, 2023, killing 1,200 people and taking 250 hostages, according to Israeli tallies. Israel responded with an air and land offensive that has killed 45,000 people, health authorities there say, displaced 1.2 million and left much of the enclave in ruins.

While the ceasefire pact would bring an immediate end to the Gaza hostilities, it would not address the deeper, decades-old Palestinian-Israeli conflict, Arab and Western officials say.

On the ground, prospects for a Palestinian state, an option repeatedly ruled out by Netanyahu's government, have become increasingly unattainable, with Israeli settler leaders optimistic that Trump will align closely with their views.

A surge in settler violence and the increasing confidence of the settler movement - highway billboards in some West Bank areas bear the message in Arabic "No Future in Palestine" - reflect a growing squeeze on Palestinians.

Even if the Trump administration were to push for an end to the conflict, "any resolution would be on Israel’s terms," said Hiltermann of the Crisis Group.

"It's over when it comes to a Palestinian state, but the Palestinians are still there," he said.

In Trump's previous term, Netanyahu secured several diplomatic wins, including the “Deal of the Century,” a US-backed peace plan which Trump floated in 2020 to resolve the Israeli-Palestinian conflict.

The plan, if implemented, marks a dramatic shift in US policy and international agreements by overtly aligning with Israel and deviating sharply from a long-standing land for peace framework that has historically guided negotiations.

It would allow Israel to annex vast stretches of land in the occupied West Bank, including Israeli settlements and the Jordan Valley. It would also recognize Jerusalem as the "undivided capital of Israel" - effectively denying Palestinian claims to East Jerusalem as their capital, a central aspiration in their statehood goals and in accordance with UN resolutions.

SYRIA AT CRITICAL CROSSROADS

Across the border from Israel, Syria stands at a critical juncture following the overthrow of Assad by Hayat Tahrir al-Sham (HTS) rebel forces, led by Ahmad al-Sharaa, better known as Abu Mohammed al-Golani.

Golani now faces the monumental task of consolidating control over a fractured Syria, where the military and police force have collapsed. HTS has to rebuild from scratch, securing borders and maintaining internal stability against threats from jihadists, remnants of the Assad regime, and other adversaries.

The greatest fear among Syrians and observers alike is whether HTS, once linked to al-Qaeda but now presenting itself as a Syrian nationalist force to gain legitimacy, reverts to a rigid Islamist ideology.

The group’s ability or failure to navigate this balance will shape the future of Syria, home to diverse communities of Sunnis, Shi'ites, Alawites, Kurds, Druze and Christians.

"If they succeed in that (Syrian nationalism) there's hope for Syria, but if they revert to their comfort zone of quite strongly ideologically-tainted Islamism, then it's going to be divisive in Syria," said Hiltermann.

"You could have chaos and a weak Syria for a long time, just like we saw in Libya and Iraq."

Pezeshkian to focus Makran coast development

Iranian President Masoud Pezeshkian announced a major initiative to develop Iran's Makran coast, stating that necessary coordination has been made to employ top international consultants to prepare a comprehensive plan and roadmap for the development of the Makran region.

Speaking at a cabinet meeting on Wednesday, Pezeshkian emphasized the need to catch up with neighboring countries in exploiting the Makran coast's potential, aiming to "achieve a superior position in the region in line with the goals of the 20-Year Vision Document." 

He highlighted the lack of a previous overarching plan, noting, “We have not had a comprehensive and all-encompassing plan as a roadmap for the development of Makran, and various bodies have taken actions based on their missions and responsibilities in this regard.” 

Pezeshkian described the Makran coast as “the most important foundation for sustainable and long-term development in Iran,” asserting that the country's future is inextricably linked to its development. 

The new plan, he explained, will follow thorough studies and assessments to define the responsibilities of administrative bodies and ensure coordinated action.

The strategic importance of the Makran coast, located on the Oman Sea, has been underscored by Leader of the Islamic Revolution Ayatollah Seyyed Al Khamenei, prompting significant attention from Iranian decision-makers and military officials.

The Makran coast provides Iran with access to vital shipping lanes and crucial maritime trade routes connecting the Indian Ocean to the Persian Gulf.

 

Iran: Biggest loser after Assad’s fall

Among the central factors that led to the ouster of Bashar al Assad was Iranian and Russian decisions not to intervene yet again to prop him up. While Syria’s trajectory remains highly uncertain, its post-Assad posture is likely to be inimical to both the countries.    

Tehran had long used Syria as vector to project influence in the region and marshalled significant resources and manpower to keep Assad in power when the Syrian civil war erupted in 2011.

Moscow similarly saw its ties with Assad as a source of regional influence, and its 2015 intervention in Syria was decisive in Assad maintaining his stranglehold on power.

But with Russia bogged down in Ukraine, and Iran — and its allies like Hezbollah — severely weakened by the post October 07, 2023 conflict with Israel, neither patron was willing to rescue Assad once again.

USIP’s Garrett Nada explains what Assad’s ouster means for Iran: 

The toppling of the Assad regime is a major loss for Iran, which has not been so isolated or vulnerable in the region since the 1980-1988 war with Iraq. Syria was Iran’s only close state ally in the Middle East. It was a frontline against Iran’s archenemy Israel and the linchpin of Tehran’s ability to project power in the Levant. For four decades, Syria was the main conduit for Iran’s supply of weapons and equipment to Hezbollah in Lebanon, which became the world’s most heavily armed non-state actor.

Iran’s extensive support to Assad during the Syrian civil war, which broke out in 2011, reflected the country’s importance for Tehran’s regional strategy. Iran deployed thousands of military advisers and troops, mobilized tens of thousands of foreign Shiite fighters from as far away as Afghanistan and Pakistan to bolster regime forces, and organized a new Syrian paramilitary and provided billions of dollars in aid. Iran’s efforts, coupled with Russian air support, helped keep Assad in control of much of Syria until late 2024.  

Iranian officials quickly accepted the fate of the Assad regime despite all the blood and treasure invested. “It is the Syrian people who must decide on the future of their country and its political and governmental system,” President Masoud Pezeshkian said on December 08, 2024.

Iran’s foreign ministry expressed a willingness to engage with a new government. “The Iranian and Syrian nations have always had long-standing and friendly relationship,” it said on December 08.

“It is expected that this relationship will continue with a wise and forward-looking approach by both nations, based on mutual interests and adherence to international legal obligations.”

Iran asked HTS to protect Shiite holy sites in Syria, and HTS confirmed that it would protect the Sayyida Zeinab shrine in Damascus.

Yet Iran’s future relationship with Syria is dubious. Many of the players poised to play key roles in the transition hold Iran responsible for propping up the brutal Assad regime.

“This new triumph, my brothers, marks a new chapter in the history of the region, a history fraught with dangers (that left) Syria as a playground for Iranian ambitions, spreading sectarianism, stirring corruption,” Abu Mohammed al-Jolani, the leader of Hayat Tahrir al Sham, said in his victory speech on December 08.

On the same day, Iran’s embassy in Damascus, previously evacuated, was vandalized and looted. Posters of the supreme leader and other Iranians were torn and discarded on the floor.

The fall of Assad may push Iran to reconsider its “forward defense” strategy. For decades, Iran has relied on the “Axis of Resistance,” including Syria and militia allies across region, to pressure Israel and deter strikes on Iranian soil. The goal was to keep conflicts far from Iran’s borders. But the axis already faced severe setbacks before Assad’s departure.

Israel significantly weakened both Hamas in Gaza and Hezbollah in Lebanon during the war that erupted after the Hamas-led October 07 terrorist attacks. Israeli forces killed senior leaders and thousands of fighters and degraded both groups’ abilities to wage war. Iran will face significant logistical challenges to resupplying Hezbollah without the Syrian land bridge.

Meanwhile, Iran lacks credible mechanisms to deter Israel. Tehran launched unprecedented direct attacks on Israel, one in April 2024 including 170 drones, at least 30 cruise missiles, and more than 120 ballistic missiles, and one in October 2024 including more than 180 ballistic missiles. But neither caused significant damage or dissuaded Israel from launching counterattacks, the second of which crippled Iran’s air defenses and damaged missile production capabilities.

The remaining members of the “Axis of Resistance” are not much help in terms of deterring Israel. The Houthis in Yemen have proven resilient despite attacks by the US and Israel but have only carried out sporadic long-range missile and drone attacks.

The Iraqi militias backed by Iran, such as Kataib Hezbollah and Harakat Hezbollah al Nujaba, are also relatively peripheral and have not caused much damage to Israeli targets.

With limited options, a growing number of Iranian officials have called for revising the country’s nuclear doctrine to allow the production of nuclear weapons. As of late 2024, Iran could produce enough highly enriched uranium to fuel one nuclear bomb in as little as one or two weeks.

Tehran would need several months or more than a year to assemble a warhead and marry it to a delivery system, such as a ballistic missile. But moving to weaponize would come with its own serious risks.

 

How would WTO brace Donald Trump?

The World Trade Organization (WTO) held the last of its 2024 meetings this week, and for anyone rooting for the institution to conclude long-discussed agreements just ahead of its 30th anniversary, the results were a little hard to watch. Here’s a recap of what came out of gatherings of the WTO’s General Council and its Dispute Settlement Body.

Here’s a recap of what came out of gatherings of the WTO’s General Council and its Dispute Settlement Body:

·        Dispute settlement reform was unresolved and there was a pledge to continue talking next year

·        On the second fisheries agreement, India and Indonesia were granted more time to air their concerns. “Fish 2” was at the decision stage but was demoted to a “discussion” item

·        India, South Africa and Turkey blocked a deal known as Investment Facilitation for Development. That left it short of the needed consensus, even though 126 members backed its incorporation into WTO bylaws

·        Progress was made on two administrative issues: picking dates for the next ministerial conference (March 26-29, 2026, in Cameroon) and approval of WTO Secretariat pension reforms

Newly re-appointed Director General Ngozi Okonjo-Iweala tried to maintain a positive outlook, saying she hopes members return in the new year with a “spirit of compromise, ready to do deals.”

For an organization that needs everyone to agree, that’s going to be a challenge when US President-elect Donald Trump takes office January 20, 2025. His threatened tariffs and “America First” trade agenda run counter to the mission of the Geneva based WTO.

Trump promised 60% duties on Chinese imports and at least 10% for the rest of the world. In November, he threatened to impose further 10% tariffs on Beijing and 25% on Mexico and Canada if they fail to stop the flow of fentanyl and undocumented migrants to the US.

All of that violates the commitments that more than 160 nations make to join the WTO, said Bill Reinsch, a Commerce Department official during the Clinton administration and now a senior adviser at the Center for Strategic and International Studies.

Trump is known to dislike multilateral institutions, having withdrawn the US from a trade deal for the Indo-Pacific, the Paris Climate Agreement and the World Health Organization in his first term.

He could quit the WTO, too. Or he could stay in it, heap more scorn on the rules-based international order and ignore other countries complaining about Washington’s protectionism.

In Trump’s first term, US Trade Representative Robert Lighthizer watched the WTO’s appellate body grind to a standstill by preventing the appointment of new judges as terms expired, leaving it short of the number needed to function.

This week Biden administration delegates blocked a move by 130 WTO member countries that called for a restart of the process to fill vacancies on the appellate body — the 82nd time that that proposal failed.

The outlook for the WTO to free itself of paralysis under the incoming Trump administration isn’t favorable. 

Jamieson Greer, Trump’s nominee for USTR, was a close adviser to Lighthizer. His views on WTO relevancy are unclear, but he did say in testimony in May that “efforts to hold China accountable under WTO dispute mechanisms were largely unfruitful.”

The WTO also irked some Trump allies by accelerating the process this year of approving Okonjo-Iweala for another four-year term at its helm.

That was “almost certainly designed to prevent the incoming Trump administration from having a say in the matter,” said Dennis Shea, Trump’s ambassador to the WTO in his first term.

“The WTO already has diminished reputation in the United States,” he said. “This unprecedented action only diminishes it further.”

According to a Geneva-based trade source, Trump’s name wasn’t mentioned during this week’s General Council session.

Courtesy: Bloomberg

Mari Petroleum Company downgraded

One of Pakistan’s leading brokerage houses, Intermarket Securities has downgraded its stance on Mari Petroleum Company (MARI) from Neutral to Sell. The recent rally of 169% in FYTD has more than priced in the potential upside from new fields and production growth.

Recent discovery in the much-hyped Waziristan block (Bannu West) is likely to commence production by the end of FY25. While the market has high hopes from the block, the brokerage house has assumed initial production of 70mmcfd which could rise to 250mmcfd by FY28.

Following the rally of 91% over the past two months, the stock seems overvalued. MARI has more than priced in the positives while the market has disregarded that near-term earnings will decline due to additional royalty on Mari D&P.

The updated earnings estimates for FY25and FY26 stand at PKR57.00 and PKR62.07, respectively. The Sell stance reflects the view that the recent rally appears to have overestimated the positives, in particular the potential of its recent discoveries.

The recent rally seems to have been partly driven by speculation surrounding potential heavy mineral resource discoveries and the company’s rebranding to "MARI Energy," though no concrete developments have yet materialized. Furthermore, high expectations around Bannu West remain unrealized, adding to the downside risk.

MARI, in partnership with OGDC and another E&P (OPL), has made a significant discovery in the Waziristan block (Bannu West), reporting a cumulative find of 70mmcfd from two exploratory wells, Shewa-1 and Shewa-2. A third exploratory-cum-appraisal well is currently in the drilling phase.

While market expectations for the block remain elevated, the brokerage house estimates production to commence by the end of FY25 with initial flows of 70mmcfd, gradually peaking at 250mmcfd by FY28. However, the market’s exuberance appears overdone: the present stock price of PKR729/ share would be justified by production of 600mmcfd from Bannu West—almost similar to the Mari field. This disconnect between expectations and realistic production forecasts underpins the Sell call on the stock.  

 

Need for unity among Muslim countries

A senior military adviser to the Leader of the Islamic Revolution, Ayatollah Seyyed Ali Khamenei, has proposed that unity among Muslim nations could play a transformative role in reshaping global dynamics.

“The convergence and unity of Muslim countries, forming a Muslim power bloc, is the only way to liberate Muslim nations from the hegemony of global arrogance, particularly the United States and Israel,” Major General Yahya Rahim Safavi asserted.  

The Iranian general accused the United States and Israel of being key drivers of instability, war, and human suffering across the region and the globe.

Safavi argued that Muslim nations must prioritize sustainable security, regional peace, and self-reliance to achieve true progress and independence.  

Safavi emphasized that the world is undergoing a profound geopolitical transformation, leading to the emergence of a new global order.

Speaking on the subject, he stated, “The current world is in a geopolitical transitional phase, and we are witnessing the shaping of a new world order on both regional and international scales.”  

According to Safavi, this evolving order is marked by the gradual decline of Western dominance and the rise of Eastern powers. He explained, “The global power system is slowly but surely shifting from the West to the East.”  

Safavi highlighted the growing influence of Asian and Eurasian powers, such as China, India, Russia, and Iran.

He noted that these nations are increasingly collaborating within frameworks like the Shanghai Cooperation Organization (SCO) and BRICS to challenge the unilateral dominance of the United States and its NATO allies.

Their objectives, he said, include reducing global reliance on the US dollar in trade and countering Western-centric policies.  

The general also underscored the chaotic state of the world, attributing recent conflicts and wars to a 200-year long struggle among global and regional powers for political, economic, and cultural dominance over strategically significant regions.  

He stressed the need for greater collaboration and recognition among Muslim countries, stressing that their collective efforts could pave the way for a stronger, unified presence on the global stage.