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UAE: There is no substitute for Russian oil

Samizdat | March 28, 2022

The world’s energy markets need Russian oil and no producer can replace it, United Arab Emirates (UAE) Minister of Energy Suhail al-Mazrouei said on Monday.

Russia produces some 10 million barrels of oil a day, which makes it a critical member of the OPEC+ energy alliance, al-Mazrouei explained during an energy forum in Dubai.

“Leaving the politics aside, that volume is needed today,” he insisted, adding that “unless someone is willing to come and deliver that amount, we don’t see that someone can substitute Russia.”

Russia is the world’s second biggest crude exporter after Saudi Arabia. Following Russia’s military operation in Ukraine, some nations, led by the US, have pledged to stop buying Russian oil and gas. The United States, Europe, and others have been calling on Gulf Arab oil producers to ramp up production and help bring down crude prices, which at one point shot above $120 a barrel.

The International Energy Agency announced earlier this month that it had decided to release 60 million barrels of oil from its emergency reserves, saying that global oil markets were already tight with highly volatile prices and commercial inventories at their lowest level since 2014.

Many have expressed doubts, however, about whether it was possible to ditch Russia’s energy resources.

Last week, the EU stepped back from imposing an embargo on Russian crude and petroleum products, despite pressure from the US. An immediate embargo on Russia’s fossil fuels “from one day to the next would mean plunging our country and the whole of Europe into a recession,” German Chancellor Olaf Scholz said last week. Europe gets nearly 30% of its crude and roughly 50% of its petroleum products from Russia.

Reducing dependence on natural gas – something that the EU hopes to achieve over the next few years – may prove difficult as well. Qatar – which holds the third-largest natural gas reserves in the world – said last week that it was practically impossible to replace Russian gas on the European market, as between 30 and 40% of the total volume of gas supplied to the world market comes from Russia.

March 28, 2022 Posted by | Economics | , , | Leave a comment

Iran draws up gas field development plan after Saudi-Kuwaiti move

Some 23 Iranian hydrocarbon fields lie in border areas and are shared between Iran and adjacent countries
Press TV – March 28, 2022

An official says Iran has worked out a plan to develop its part of the Arash natural gas field shared with Saudi Arabia and Kuwait after the two Arab states announced having signed a document to build the reservoir without Tehran’s participation.

Last week, Kuwait said it planned to extract 1 billion standard cubic feet per day of gas and 84,000 barrels per day of condensate from the field under an agreement signed with Saudi Arabia. Iran dismissed the agreement as “illegal”, saying it breached their discussions to build the field together.

Ahmad Asadzadeh, deputy petroleum minister for international and commercial affairs, said Sunday Iran believes shared fields should be carried out jointly, adding this would lead to the strengthening of economic ties among the countries.

“Even if the border is not demarcated, the field can be developed jointly using internationally tested models,” he said. “The Ministry of Petroleum declares its readiness to negotiate in this regard,” Asadzadeh added.

Iran began talks with Kuwait in 2000 to develop the field but no agreements were reached. In 2013, the National Iranian Oil Company said it had jackets and rigs ready to develop the field and that if talks did not lead to a development plan, it would have the right to go ahead alone.

Iran, Asadzadeh said, has delayed developing the shared field in anticipation of a decision on the demarcation of the border with Kuwait.

“But given that the other side, regardless of the previous talks, is unilaterally moving to develop the field, there is no reason for delay,” Asadzadeh said.

“The Ministry of Petroleum has made necessary preparations and carried out studies to develop and exploit the shared field of Arash,” he added.

Arash was discovered in 1962 in the Persian Gulf with around 13 trillion cubic feet of natural gas.

On Saturday, the Ministry of Petroleum said parts of the Arash gas field which Kuwait and Saudi Arabia call al-Durra are located in areas between Iran and Kuwait whose water borders have not yet been defined.

“The Islamic Republic of Iran also reserves the right to exploit the gas field,” it said in a tweet in reaction to the Kuwait Petroleum Corporation’s statement on its bilateral agreement with Saudi Arabia.

Iran’s Foreign Ministry spokesman Saeed Khatibzadeh said: “The recent move by Kuwait and Saudi Arabia in the framework of a cooperation document is contrary to what was previously discussed, and illegal.”

“Any action on the operation and development of this field should be in the coordination of all three countries,” he added.

Some 23 Iranian hydrocarbon fields lie in border areas and are shared between Iran and adjacent countries, including Kuwait, Iraq, Qatar, Bahrain, the UAE, Saudi Arabia and Turkmenistan.

Most of Iran’s oil and gas fields lie in a belt running along its maritime boundary in the Persian Gulf and the foothills of the Zagros Mountains – an extensive folded zone which is geologically the result of the Arabian plate’s collision with the central Iranian plateau.

The collision has trapped thick layers of ancient limestone and sandstone and turned them into some of the world’s biggest oil and gas accumulations.

The Zagros basin covers more than 550,000 square kilometers, stretching from Turkey and Syria through the Iraqi Kurdistan into Iran where its sediments are ideally up to 12,000 meters thick.

March 28, 2022 Posted by | Economics | , , | Leave a comment

G7 rejects Russian demand to pay for gas in rubles

Samizdat | March 28, 2022

The Group of Seven major economies have collectively agreed to reject Moscow’s demand to pay for energy imports from Russia in rubles, according to German Energy Minister Robert Habeck.

“All G7 ministers agreed completely that this [would be] a one-sided and clear breach of the existing contracts,” Habeck told journalists on Monday.

The minister added that “payment in rubles is not acceptable” and that the nations will urge the companies affected “not to follow” the demand issued by Russian President Vladimir Putin last week.

On Monday, Putin ordered the government, the central bank, and Gazprombank to develop the necessary tools to switch all payments for Russian natural gas from “unfriendly states” to rubles from March 31.

This includes countries that have targeted Russia’s financial system and seized its foreign reserves in response to the crisis in Ukraine.

Kremlin spokesperson Dmitry Peskov said Russia will stop shipping natural gas to countries that reject the demand.

March 28, 2022 Posted by | Economics, Malthusian Ideology, Phony Scarcity, Russophobia | , | Leave a comment

Most Brits expect problems paying heating and energy bills

Samizdat | March 27, 2022

More than 67% of UK residents expect problems paying bills for heating and electricity, according to the latest poll carried out by Techne, a London-based market and data research company.

The survey, reported by the Sunday Express on Saturday, shows that the cost of living is the top concern for 58% of British citizens.

More than 80% of 1,642 surveyed individuals said they are going to avoid large purchases, while 55% are planning to decrease spending on leisure activities. Some 37% said they will try to save on clothes.

Meanwhile, only 31% of respondents cited Ukraine as a key reason for concern. Nearly a third of those surveyed said the crisis in the Eastern European country and Western anti-Russia sanctions will push back the date they can retire.

Only 7% of respondents were worried about climate change, and only 3% of respondents mentioned the coronavirus pandemic as a cause for concern.

Over the past six months, Europe has been struggling with an unprecedented energy crisis that has been sending prices for gas, petrol and electricity to record high levels.

The latest sanctions imposed on Russia over its military operation in Ukraine has worsened the situation as concerns over energy security in the region deepened as Russia remains the continent’s biggest energy supplier.

March 27, 2022 Posted by | Economics, Malthusian Ideology, Phony Scarcity | | Leave a comment

Dissecting the Ukraine imbroglio

By Former Ambassador MK Bhadrakumar | The Tribune | March 21, 2022

A successful war is invariably a popular one. The paradox is, to be a success, the war has to be popular, but not necessarily vice versa. This is where American policymakers, especially in the state department, and a big chunk of political elite, find themselves carousing in some fantasyland pinning hopes on a colour revolution in Russia due to the leadership’s decision to go to war in Ukraine. It must have come as a surprise and huge disappointment to them that according to even independent (rather, unfriendly) polls conducted in Poland, President Vladimir Putin’s rating has only soared to over 70 per cent during these past three weeks.

The unusual form of Russian action is because of its focus on restoring security of Donbass region and its boundaries.

For Putin himself, it is nonetheless a double challenge, as the statesman in him is defending Russia’s national security from the predatory mindset of the US and NATO while the politician in him is not only sensing and responding to the expectations of the people regarding the war but getting them to adjust to a painful (but historic) economic transition in the country due to its decoupling from the western economies. That involves switching attention from one planet to another on a sustainable 24X7 basis.

These nuances also explain the anatomy of Russia’s war in Ukraine — its ponderous progress, interspersed with lulls like a slowcoach of a provincial passenger train from time immemorial. In reality, though, in about half the time that the Pentagon took to seize control of Iraq during the 2003 invasion (with all the advantages that it was fighting an emaciated enemy degraded through a decade), Russia’s special operation appears to have more or less achieved its core military objective, which is to secure the Donbass region that has a big Russian population with extensive family kinships within Russia — an emotive issue, no doubt, given the genocide that followed the CIA-backed coup in Ukraine in 2014.

New kids on the block wouldn’t know that unspeakable atrocities were perpetrated by extreme nationalist and fascist groups against the Russian population through the past 8-year period. Over 14,000 civilians were killed, albeit in the American eyes, that didn’t qualify as “war crimes” because those fascist, neo-Nazi groups were largely mentored by them. Most of the 3.6 million people living in the Donetsk and Luhansk regions who survived the genocide speak Russian and one-fifth of them are Russian citizens. Arguably, the security of Donbass region and the restoration of its original administrative boundaries (as of 2014 before Ukrainian forces attacked pro-Russian separatists) is a salience of the Russian operation. That explains why the operation took an unusual form with the Russian forces avoiding fighting as far as possible and instead surrounding the Ukrainian forces and encouraging them to surrender. An estimated 60,000 Ukrainian troops are under siege and the effort is to make them surrender rather than take the easy route to vanquish them.

This has been the pattern of the Russian operation elsewhere too, which confused most Western analysts who expected sound and fury like General MacArthur’s in Japan — amphibious landings, frontal assaults on towns and cities and outright occupation. If we look at the map from northern Belarus border, clockwise, major cities — Chernihiv, Sumy and Kharkiv — have been surrounded. While Russian columns from Chernihiv and Sumy advanced toward the outskirts of Kyiv, those from east of Kharkiv moved south to link up with the forces in Luhansk and are currently engaged in taking control of the strategic Izium-Severodonetsk axis, which would establish Russian control of entire eastern region and virtually secure the Donbass region — that is, except for Mariupol port city on the Sea of Azov (which was originally part of Donetsk).

Mariupol will give the two independent Donbass republics a major port head that would provide them access to the world market, which is hugely significant for future development of that entire resource-rich region, straddling Ukraine’s rust belt. Mariupol is not only a centre for grain trade, metallurgy and heavy engineering but also higher education and business. Sensing Mariupol’s centrality to Russian strategy, the neo-Nazi Azov Brigade has been deployed to the port city. That explains the residual resistance.

The other focal point of the Russian operation currently is Kyiv, which is now surrounded on the west, north and east. On the face of it, Russian forces are not planning to launch a frontal assault on the capital city but that option remains. Again, Odessa, jewel in the crown of Black Sea and the legacy of Catherine the Great to Mother Russia, could be in Russian sights.

Clearly, the operation is limited to the eastern side of Dnieper river. The tactic is to target convoys of western arms with missile strikes. Lviv in western Ukraine witnessed an attack on Friday. Two days earlier, a large base 20 km from the Polish border and a major depot for weapons and training ground for mercenaries were also targeted. But the operations are not targeting Ukrainian cities and Moscow has no intentions of occupying the country, but is concentrating on limited surgical strikes to incapacitate Ukrainian military infrastructure.

Moscow seeks a peace agreement. But the catch is, the incumbent leadership of Volodymyr Zelenskyy is highly unstable and the ex-comedian himself is manipulated by folks in Washington who are wedded to the notion that the longer the conflict lasts, the more Russia ‘bleeds’. The global information field, which is traditionally dominated by American and British media — and the Anglo-Saxon countries in general — is creating self-serving narratives. Even in America, only Fox News presents some alternative point of view. To borrow from the Prussian General and strategist Clausewitz, the Ukraine war is veritably ‘a continuation of policy with other means’.

March 26, 2022 Posted by | Economics, Timeless or most popular | , , , , | Leave a comment

Biden’s reality check in Europe

BY M. K. BHADRAKUMAR | INDIAN PUNCHLINE | MARCH 26, 2022 

The takeaway from the US President Joe Biden’s European tour on March 25-26 is measly. Dissenting voices are rising in Europe as western sanctions against Russia start backfiring with price hikes and shortages of fuel and electricity. And this is only the beginning, as Moscow is yet to announce any retaliatory measures as such. 

The unkindest cut of it all is that the Russian Defence Ministry chose Biden’s trip as the perfect backdrop to frame the true proportions of success of its special operation in Ukraine. The US and NATO’s credibility is perilously close to being irreparably damaged, as the Russian juggernaut rolls across Ukraine with the twin objectives of ‘demilitarisation’ and ‘denazification’ in its sights. 

The Russian General Staff disclosed on Friday that the hyped up Ukrainian Armed Forces, trained by NATO and the US, have sustained crippling losses: Ukrainian air force and air defence is almost completely destroyed, while the country’s Navy no longer exists and about 11.5% of the entire military personnel have been put out of action. (Ukraine doesn’t have organised reserves.) 

According to the Russian General Staff’s deputy head Colonel General Sergey Rudskoy, Ukraine has lost much of its combat vehicles (tanks, armoured vehicles, etc.), one-third of its multiple launch rocket systems, and well over three-fourths of its missile air defence systems and Tochka-U tactical missile systems. 

Sixteen main military airfields in Ukraine have been put out of action, 39 storage bases and arsenals destroyed (which contained up to 70% of all stocks of military equipment, materiel and fuel, and more than 1,054,000 tons of ammunition.)

Interestingly, following the intense high-precision strikes on the bases and training camps, foreign mercenaries are leaving Ukraine. During the past week, 285 mercenaries escaped into Poland, Hungary and Romania. Russian forces are systematically destroying the Western shipment of weapons. 

Most important, the mission to liberate Donbass is about to be accomplished. Simply put, the main objectives of the first phase of the operation have been achieved.

Apart from Kiev, Russian troops have blocked the northern and eastern cities of Chernigov, Sumy, Kharkov and Nikolaev, while in the south, Kherson and most of Zaporozhye region are under full control — the intention being to not only to shackle Ukrainian forces but to prevent their grouping in Donbass region. (See my article Dissecting Ukraine imbroglio, Tribune, March 21, 2022)  

“We did not plan to storm these cities from the start, in order to prevent destruction and minimise losses among personnel and civilians,” Rudskoy said. But, he added, such an option is not ruled out either in the period ahead.

It stands to reason that Washington and European capitals are well aware that the Russian operation is proceeding as scheduled and there is no stopping it. Thus, NATO’s extraordinary summit on March 24 confirmed that the alliance is unwilling to get into a military confrontation with the Russian Army. 

Instead, the summit decided to strengthen the defence of its own territories! Four additional multinational NATO combat groups of 40,000 troops will be deployed in Bulgaria, Hungary, Romania and Slovakia on a permanent basis. Poland’s proposal to deploy NATO military units in Ukraine was outright rejected.

However, Poland has certain other plans, namely, to deploy contingents to the western regions of Ukraine to support the ‘fraternal Ukrainian people” with the unspoken agenda of reclaiming control over the historically disputed territories in the those regions. What Faustian deal has been struck in Warsaw on March 25 between Biden and his Polish counterpart Duda remains unclear. Clearly, vultures are circling Ukraine’s skies. (See my blog Biden wings his way to the borderlands of Ukraine, March 24, 2022) 

Indeed, if Poland makes a bid for Ukrainian territory (with Biden’s tacit support), would Belarus be far behind to take control of the regions of Polesie and Volyn in Ukraine? Possibly not. Suffice to say, in the period since the CIA-backed coup in Kiev in 2014 when the US moved into the driving seat, Ukraine has lost its sovereignty and is now perilously close to vanishing altogether from Europe’s map! 

Washington — Biden personally, having been the Obama administration’s point person in Kiev in 2014 — should carry this heavy cross in history books. 

As for European leaders, they find themselves in a surreal world, out of touch with the stunning realities of a new world order. Eighty-year old Biden with limited grasp of the torrential flow of events, made an astounding proposal in his press conference in Brussels on Thursday that Ukraine should replace Russia in the G20! 

But Biden has a soulmate in the European Commission chief Ursula von der Leyen whose latest threat is that Russian oil and gas companies “will not be allowed to demand payment for fuel in rubles.” She is blissfully unaware that the EU has no more effective means to pressure Russian companies! 

Russian President Vladimir Putin caught the western leaders huddled in Brussels by surprise with his announcement that Russia will promptly start charging “unfriendly” countries in rubles for gas supplies. There are over 45 unfriendly countries on the list — the US and EU members plus the UK, Australia, Canada, Singapore, Montenegro and Switzerland. (See the RT’s explainer What buying gas in rubles means for Russia and the West.)

Effectively, Moscow is on the one hand strengthening the weakened ruble, while on the other hand, messaging that it is pioneering a new wave internationally to bypass the dollar as  commodity currency. 

Yet, Moscow is also continuing to routinely supply Russian gas for transit to Europe through Ukraine to meet the requests of European consumers (109.5 mln cubic meters as of March 26!) The point is, despite rhetoric and grandstanding, Europe recently increased its gas purchases from Russia significantly against the backdrop of astronomically high spot prices! 

The European Council meet at Brussels on March 25 with Biden in attendance failed to adopt any concrete measures to address the energy price growth, and could not come up with a unified approach to Russia’s decision to receive payments for its gas only in rubles. 

Apropos the European Commission’s proposal to establish a new system of common purchase of gas to prevent outbidding, the final statement of the European Council merely says that the leaders agreed to “work together on voluntary common purchase of gas, LNG and hydrogen,” meaning that common purchases may be carried out only by those EU countries who are willing to unite. [Emphasis added.] 

It is a long haul for Europe to dispense with Russian gas. Serbian President Aleksandar Vucic said yesterday:  “There are gas shortages, and that is why we need to talk to Russians. Europe will move towards reducing its dependence on the Russian gas, but can this happen in the coming years? This is very difficult.”

“Europe consumes 500 billion cubic meters of gas, while America and Qatar can offer 15 billion, up to the last molecule… That is why German and Austrian politicians told me: “We cannot just destroy ourselves. If we impose sanctions on Russia in the oil and gas domain, we will destroy ourselves. It’s like shooting yourself in the foot before rushing into a fight. This is how certain rational people in the West see it today.” 

With the doomsday predictions of Russian military failure in Ukraine coming unstuck and the blowback from Russia sanctions beginning to bite, Europeans are caught in a bind. They will be resentful as time passes. 

March 26, 2022 Posted by | Economics | , , , | Leave a comment

Russia’s ruble payment plan leaves European gas buyers confused

Samizdat | March 23, 2022

German gas industry group Zukunft Gas said on Wednesday it was confused by the statement of Russian President Vladimir Putin about the switch of payments for Russian natural gas supplies to rubles.

“We took the message that Russia wants [us] to pay for gas supplies only in rubles with great confusion,” Timm Kehler, the director general of Zukunft Gas, told DPA agency. “We can’t predict at this moment what specific implications this will have for the gas trade,” Kehler said.

Meanwhile, Austrian OMV said it was going to continue to pay for Russian gas in euros. According to the head of the company, they have no other contractual basis.

President Putin announced earlier in the day that Russia will now accept payment for gas exports to “unfriendly countries” in rubles only.

The measure is the first serious response from Moscow to sanctions imposed on Russia by the US and its allies over the conflict in Ukraine. A number of mostly Western countries have taken steps to isolate Russia from their financial systems. Major Russian banks have been cut off from the SWIFT payment network, making it difficult for the country to continue transactions in euros and US dollars.

March 23, 2022 Posted by | Economics | , | Leave a comment

Putin wants rubles for Russian gas

Samizdat | March 23, 2022

Russia will now accept payment for gas exports to “unfriendly countries” in rubles only, President Vladimir Putin said at a meeting with the government on Wednesday.

The president explained that Russia plans to abandon all “compromised” currencies in payment settlements. He added that illegitimate decisions by a number of Western countries to freeze Russia’s assets destroyed all confidence in their currencies.

“I have decided to implement in the shortest possible time a set of measures to change the payments for – yes let’s start with this – for our natural gas supplied to the so-called unfriendly countries in Russian rubles, that is to stop using all compromised currencies for transactions,” the Russian president said.

“It doesn’t make sense to deliver our goods to the EU and the US and get paid in dollars and euros,” he added.

Putin gave the Central Bank and the government a week to determine the procedure for operations for buying rubles on the domestic market for importers of Russian gas.

The president added that Russia will continue to supply gas in accordance with the volumes and pricing principles of the contracts. Only the currency of payment will change.

The announcement caused a spike in the cost of contracts for gas supply at the TTF European hub, Forbes Russia quoted data from the Intercontinental Exchange as indicating. During Wednesday’s trading, the gas price rose from €97 per megawatt hour (MWh) to approximately €108.5 per 1MWh, but after the president’s speech, it jumped by another €10 to €118.75 per 1MWh, before retreating to €114 per 1MWh as of 1pm GMT.

In the past month, Russia has been hit with several rounds of unprecedented international sanctions over its military operation in Ukraine. The US, EU, and their allies have cut off the country from their financial systems, limited dollar and euro transactions, and froze roughly $300 billion in Russian forex reserves abroad, among other measures. At the same time, they have continued to buy Russian oil and gas.

March 23, 2022 Posted by | Economics | , | Leave a comment

India, US have different priorities

BY M. K. BHADRAKUMAR | INDIAN PUNCHLINE | MARCH 23, 2022

An extraordinary week has passed for the Modi government’s dalliance with the Quad. Call it a defining moment, a turning point or even an inflection point — it has elements of all three. 

The last week saw a 2-day visit to Delhi by Japanese prime minister Fumio Kishida, virtual summit between Prime Minister Narendra Modi and Australian PM Morrison, and foreign ministry level consultations with the visiting US Undersecretary for Political Affairs Victoria Nuland. The leitmotif was the situation around Ukraine. 

Biden has since taken a jab that India has a “somewhat shaky” stance on Ukraine. Who would have imagined that the geopolitics of Ukraine was going to shake up Quad? 

Certainly, India had a premonition. The Indian foreign-policy establishment has had no misconceptions about what began unfolding in Ukraine in the last week of February. It had spotted as far back as November/December at least, like Elijah in the Bible, a small cloud like the palm of a hand coming up from the sea. 

Unlike the Indian media, academia or think tanks at large, the Indian leadership could sense that an epochal global struggle for ascendancy by the US and its western allies versus Russia and China was breaking out in Ukraine. Modi sensed that there would be collateral damage to India unless it saddled up to get down from the mountain, as the sky began to grow black with wind-driven clouds, before the huge cloudburst of rain arrived.

There is a background to it. Any perceptive observer would have noticed that Modi has been in a reflective mood as regards foreign affairs for the past several months. His participation in the Summit for Democracy last December discernibly had a fin-de-siècle air about it — the closing of one era and onset of another. One could attribute it to the sobering effect of the pandemic. 

The point is, India struggled with the pandemic all by itself. No matter the hype about it, India realised that it has no real partnership with the US or EU, that it was a mere transactional relationship — and that in the final analysis, India lived in its region. 

Indeed, India handled the pandemic far better than most countries. International experts acknowledge it today, and those who threw stones at that time grudgingly accept it, too.

However, with the economy ravaged beyond recognition, the government is picking up the pieces and staggering forward. There is still so much of uncertainty in the air about yet another “wave” of the pandemic stealthily advancing to drown all ceremonies of repair and reconstruction of life. 

Succinctly put, the big-power struggle in faraway Europe, precipitated by the Biden administration for geopolitical purposes to isolate and weaken Russia, erupted at a most critical juncture when India has been increasingly sceptical about American policies and statesmanship. The picture that the US is presenting of itself is far from convincing either: a battleground of tribalism and culture wars, an ageing superpower in decline with dwindling influence globally. 

In the Indian economy’s tryst with destiny, the US is of no help. On the other hand, the waning multilateralism and the new constraints imposed on growth by the US’ growing propensity to weaponise the dollar, threaten to blight the shoots of post-pandemic growth in the Indian economy. 

On Monday, Biden celebrated a Business Roundtable with the CEOs of the largest corporations in the American economy. He boasted: “6.7 million jobs last year –- the most ever created in one year; more than 7 million now.  678,000 created just last month, in one month.  Unemployment down to 3.8 percent.  Our economy grew at 5.7 percent last year, and the strongest in nearly 40 years… We reduced the deficit by $360 billion last year…  And we’re on track to reduce it by over $1 trillion this year.” 

Biden is understandably thrilled beyond words. Yet, when he deliberately orchestrated a confrontation with Russia at this juncture, it didn’t occur to him what crippling impact and downstream consequences his draconian “sanctions from hell” against a major G20 economy would have on the developing economies. 

A UNCTAD report on March 16, titled The Impact on Trade and Development of the War in Ukraine, concludes, “The results confirm a rapidly worsening outlook for the world economy, underpinned by rising food, fuel and fertiliser prices, heightened financial volatility, sustainable development divestment, complex global supply chain reconfigurations and mounting trade costs.

“This rapidly evolving situation is alarming for developing countries, and especially for African and least developed countries, some of which are particularly exposed to the war in Ukraine and its effect on trade costs, commodity prices and financial markets. The risk of civil unrest, food shortages and inflation-induced recessions cannot be discounted…” 

Does Biden even know that at least 25 African countries depend on Russia for meeting more than one-third of their wheat imports? Or, that Benin actually relies 100% on Russia for its wheat imports? And that Russia supplies wheat at concessional prices for these poor countries? 

Now, how do these meek and wretched countries of the planet import from Russia when Biden and EU chief Ursula Gertrud von der Leyen join hands to block the banking channels for trading with Russia? Can Delaware find a solution?

The cruelty and cynical complacency with which the Biden Administration and the EU conduct their foreign polices is absolutely stunning. And, mind you, all this is happening in the name of “democratic values” and “international law”! 

India cannot agree with the US and EU’s reckless attempt to weaponise global economic links. The fact of the matter is that the US and EU may not even win this war in Ukraine. Russia has almost completed 90 percent of its special operations. Unless Biden allows Kiev to agree to a peace settlement, the division of Ukraine along the Dnieper river is in the cards. 

The US is destabilising the European security order while the western sanctions are destabilising the global economic order. The US and EU must bear responsibility for this collateral damage. The West is in panic that the world is living in the Asian century already. 

“One reason for the optimism across the heart of Asia is the immense natural resources of the (Asian) region,” writes the famous Oxford historian Peter Frankopan in his recent book The New Silk Roads: The Present and Future of the World. For, the Middle East, Russia and Central Asia account for almost 70% of global proven oil reserves, and nearly 65% of proven natural gas reserves. 

Prof. Frankopan writes: “Or there is the agricultural wealth of the region that lies between the Mediterranean and the Pacific… which account for more than half of all global wheat production… (and) account for nearly 85% of global rice production.” 

“Then there are elements like Silicon, which plays an important role in microelectronics and in the production of semiconductors, where Russia and China alone account for three-quarters of global production; or there are rare earths like yttrium, dysprosium and terbium that are essential for everything from super magnets to batteries, from actuators to laptops — of which China alone accounted for more than 80% of global production… Resources have always played a central role in shaping the world… This makes the control of the Silk Roads more important than ever.”    

The West still seems to want to “return to ‘normal’”, Frankopan writes, “and expects the newcomers to resume their old positions in the world order.” Clearly, India, an erstwhile British colony, understands the real agenda behind Washington and Brussels’ geopolitical struggle with Russia. Principally, India is looking in all directions — Russia and China included — for partnerships.

If the Chinese news website Guancha is correct, which it mostly is, “China-India diplomatic relations will significantly ease and enter a recovery period. China and India will realise the exchange of visits of diplomatic officials in a relatively short time. Chinese officials will go to India first, and Indian Foreign Minister Jaishankar will come to China.” 

This is good news. Modi’s unique stature in Indian politics enables him to take difficult decisions. The renewed mandate he secured from the heartland puts him in a position to break fresh ground in foreign policy. 

March 23, 2022 Posted by | Economics, Malthusian Ideology, Phony Scarcity | , , , , , , | Leave a comment

Striking truckers reject Spain’s half-billion euro offer

Samizdat | March 22, 2022

Striking truckers have rejected Madrid’s offer of a hefty subsidy to offset rising diesel prices, which the government had hoped would shut down a work stoppage that has snarled traffic across the country.

Transport Minister Raquel Sanchez pledged to introduce a $551.35 million (€500 million) subsidy in direct aid to the industry on Tuesday after meeting with the National Road Transport Committee.

However, while Sanchez pointed out the measure was similar to moves taken by France, Portugal, and Italy to shore up their own industries in the face of skyrocketing fuel prices, there will be no reduction in the value-added tax (VAT) on fuel, and strike organizers the Platform for the Defense of Transport did not attend the meeting, calling the government’s announcement “insufficient.”

Three Spanish truckers’ unions opted to join the Platform’s strike on Tuesday, potentially aggravating a food shortage across the country as trucks are already having difficulty making deliveries on time. The unions denounced the plan, scheduled to be approved March 29, in a joint statement, pointing out that it “doesn’t specify what it will comprise, how it will work, and, more importantly, how much aid each trucker would get.”

Drivers loosely allied under the banner of the Platform stopped work last Monday, faced with a surge in diesel prices, demanding the government lower taxes and roll back regulations. “Until we negotiate the real problems faced by small truck drivers, there will be no suspension [of the strike],” Platform president Manuel Hernandez told Reuters on Monday, saying drivers must be protected from taking on losses or else they faced “total bankruptcy”.

Finance Minister Nadia Calvino, however, told reporters that the truckers should not reject the offer and that those who would “are clearly showing they do not defend the interests of this sector.”

The government’s plan was offered up following a European Commission meeting on a draft proposal for temporary crisis aid aimed at propping up the continent’s ailing economy as inflation and fuel prices soar, in part due to the sanctions imposed on Russia in the wake of its ongoing military offensive in Ukraine.

While the EU receives more than 40% of its natural gas supply from Russia, the alliance is reportedly considering an embargo on oil from the country as part of the latest round of sanctions aimed at economically crippling the country. More than half of Russia’s oil exports are sent to Europe. However, several European countries, including Germany and Bulgaria, have suggested a total ban on Russian fuel is a bridge too far.

Madrid has dismissed the truckers, branding them as unorganized and attempting to link them to far-right extremists. Spain has mobilized a reported 23,000 police in an effort to crush the strike.

March 22, 2022 Posted by | Economics, Solidarity and Activism | , | Leave a comment

Russia settles another dollar debt

Samizdat | March 22, 2022

Russia’s coupon payment on a sovereign bond maturing in 2029 has been processed by correspondent bank JPMorgan Chase, Reuters reported on Tuesday, citing sources. The country was due to make a $66 million payment to bondholders on Monday on the bond.

According to a source familiar with the situation, JPMorgan worked on Monday with the US Treasury Department on necessary approvals. The payment reportedly moved on to the next stage before the money is handed over to bondholders.

Last week, JPMorgan, as a correspondent bank, processed Russia’s payment on two sovereign bonds, handing the funds to payment agent Citigroup. The latter distributed the funds to the bondholders.

Making this payment means Russia has avoided a widely expected external bond default. There was speculation in the media that the nation could default for the first time in a century, as much of its foreign currency holdings have been frozen by the US, EU, and a number of other countries.

Moscow has used money from frozen accounts to pay its external debt, daring Western countries to try to block the payments. Russia has accused the US and its allies of trying to engineer an artificial default in the country by not allowing it access to its estimated $300 billion in foreign reserves held abroad.

Russia has 15 international bonds outstanding with a face value of around $40 billion. Prior to the Ukraine crisis, roughly $20 billion was held by investment funds and money managers outside Russia.

The country now has to make a $102 million payment on March 28, followed by a $447 million payment that must be made in dollars on March 31. The biggest payment of the year of $2 billion is due on April 4.

March 22, 2022 Posted by | Economics | , | Leave a comment

Russian FM: We never betray friends, Iran very close to us

Press TV – March 20, 2022

Russian Foreign Minister Sergei Lavrov says his country, unlike the US, is not seeking “selfish interests” by the restoration of the 2015 Iran nuclear deal.

Lavrov made the remarks on Saturday when he was asked whether the revival of the Joint Comprehensive Plan of Action (JCPOA) was advantageous to Moscow, given that it could lead to the resumption of Iran’s oil supply to the global market.

“We never betray our friends in politics. Venezuela is our friend, and Iran is a state that is very close to us. Secondly, we do not pursue selfish interests, unlike the Americans,” he told reporters.

“You can see what they [the Americans] are actually doing, trying to spite Russia and teach it a lesson. Ah, well, let the regime in Caracas be. Let Iran be, let us reinstate the program as soon as we can just to punish Russians.”

Earlier this month, US President Joe Biden announced a ban on all Russian oil, gas and energy imports over the military operation in Ukraine.

The measure sent the already skyrocketing oil and gasoline prices ever higher, with reports saying that Washington is potentially looking at Iran and Venezuela for oil talks

Biden also tried to contact Persian Gulf Arab countries to seek help amid rising energy prices.

“So, the Americans have been contacting Saudi Arabia, the Emirates and Qatar regarding oil and gas. All of those countries, just like Venezuela and Iran, clearly said: when we discuss issues pertaining to the appearance of new actors in the oil market, all of us are committed to the OPEC+ format, where quotas for every actor are discussed and agreed upon by consensus,” Lavrov said.

“For now, I see no reason to believe that this mechanism may somehow be dismantled. No one is interested in that.”

Ireland says JCPOA revival can ease oil prices

In another development on Saturday, Irish foreign minister Simon Coveney said a revival of the JCPOA could help ease global oil prices by bringing a major producer back into the market.

“Certainly having a big new player in the market, if you like, Iranian crude oil coming back into the market with the removal of sanctions, would be a very attractive prospect in terms of reducing pressure on oil prices, because of sanctions on Russia, which are likely, I think, to remain for quite some time,” he said.

“I think that is an added incentive to try to get a deal done now.”

Earlier this month, the talks in Vienna, aimed at resurrecting the JCPOA, were paused for an undetermined period of time despite reports suggesting that they were in final stages.

Iranian officials have repeatedly said the United States should remove all illegal sanctions against the Islamic Republic in a verifiable manner and guarantee that a new US administration would not breach the JCPOA once again.

Former US president Donald Trump unilaterally left the JCPOA in May 2018 and re-imposed the anti-Iran sanctions that the deal had lifted. He also placed additional sanctions on Iran under other pretexts not related to the nuclear case as part of his “maximum pressure” campaign.

In May 2019, following a year of strategic patience, Iran decided to let go of some of the restrictions on its nuclear energy program, resorting to its legal rights under the JCPOA, which grants a party the right to suspend its contractual commitments in case of non-compliance by the other side.

The Biden administration says it is willing to compensate for Trump’s mistake and rejoin the deal, but it has retained the sanctions as leverage.

March 20, 2022 Posted by | Economics, Solidarity and Activism | , , , | Leave a comment

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