OPEC+ sticks to modest oil output rises, ditches IEA data
Press TV – March 31, 2022
OPEC and allies including Russia agreed on Thursday to another modest monthly oil output boost, resisting pressure to pump more, and ditched the Paris-based International Energy Agency as a data source in a sign of a hardening standoff with the West.
The group has resisted repeated calls by the United States and the IEA to pump more crude to cool prices that climbed close to an all-time high after Washington and Brussels imposed sanctions on Moscow following its invasion of Ukraine.
“Saudi Arabia will be keen to avoid falling out with Russia by adding extra barrels at a time when Russian production is struggling,” said Callum Macpherson at Investec.
Saudi Arabia and the United Arab Emirates, which hold the bulk of spare production capacity within OPEC, have resisted calls for higher output, saying the group should stay out of politics and focus on balancing oil markets.
OPEC+, which consists of the Organization of Petroleum Exporting Countries (OPEC) and other producers including Russia, will raise output by about 432,000 barrels per day in May.
Global oil supply disruptions are approaching 5 million to 6 million bpd, or 5% to 6% of world demand, according to Reuters’ calculations, as sanctions, conflicts and infrastructure failures hit supply.
OPEC+ has been unwinding record output cuts in place since 2020, as demand has been recovering from the coronavirus pandemic, but not boosting production as fast as the West and other consumers want.
US President Joe Biden’s administration is weighing the release of up to 180 million barrels of oil from the Strategic Petroleum Reserve (SPR) and the IEA, a group which includes 31 mostly industrialized nations but not Russia, is set to meet on Friday to decide on a collective oil release.
Brent crude futures were down 6% towards $107 per barrel on Thursday.
OPEC+ has warned the global economy would see a major blow from a prolonged conflict in Ukraine.
“Consumer and business sentiment is expected to decline not only in Europe, but also in the rest of the world, when only accounting for the inflationary impact the conflict has already caused,” OPEC+ said in an internal report, seen by Reuters.
Ditching the IEA
Just as the IEA was working on a new stocks release, OPEC+ decided to stop using IEA’s data, replacing it with reports from consultancies Wood Mackenzie and Rystad Energy.
OPEC+ uses the data to assess crude oil production and the conformity of participating countries with agreed output curbs.
The IEA advises Western governments on energy policy and has the United States as its top financier.
The IEA said in an emailed statement its data and analysis was “rigorous and objective” and its monthly update on OPEC+ oil production would be made available to the public to support transparency.
In February, the IEA surprised the market by revising its baseline estimate of global demand by nearly 800,000 barrels per day, just under 1% of the 100 million bpd global oil market.
Some OPEC+ members have criticized IEA data, saying it has been inaccurate on several occasions. They have also said the IEA has advised against further investment in the hydrocarbons sector. The IEA has predicted reduced future oil demand as the world seeks to shift to lower carbon fuel.
UAE energy minister Suhail al-Mazrouei told an industry conference this week that institutions such as the IEA needed to be “more realistic” and not issue misleading information.
Mazrouei said top producers were treated like outcasts at the COP26 climate conference last year but were now sought out like “superheroes” as supply has waned.
Ahead of the climate conference, the IEA issued a groundbreaking recommendation for no new fossil fuel projects beyond 2021, while Rystad Energy projected the need for hundreds of new oilfields to meet demand.
Russia responds to claims of mines in the Black Sea
Samizdat | March 31, 2022
Ukraine’s President Volodymyr Zelensky lied to Norwegian lawmakers when he accused Moscow of deploying mines in the Black Sea to block foreign civilian ships from leaving Ukrainian ports, the Russian defense ministry said on Thursday, accusing Ukraine of being the culprit.
The rebuke came in response to Zelensky’s Wednesday address to the Norwegian parliament, during which the Ukrainian leader accused the Russian military of “creating the worst threat to international security since World War II” through its “insidious” operations in the Black Sea.
“About a hundred ships cannot leave to the Mediterranean. Some ships have been simply seized in acts of piracy aimed at stealing the cargo. Some ships were attacked,” Zelensky said.
“But the blockade of the ports was done by Russia not only through use of naval forces. They have deployed mines in the sea. And now the mines set up by the Russian forces are drifting in the sea. They pose a threat to anyone, to ships and ports of every nation in the Black Sea region.”
Mining its shores and territorial waters has long been part of Ukraine’s strategy of defending against a Russian attack from the Black Sea, which it started implementing after the hostilities broke out. On March 5, its armed forces warned residents of the Odessa region to stay away from the sea because of the mines being deployed by the military.
“We call on fishermen and owners of boats not to move near the shore of the Odessa region to avoid the risk of being fired upon or contacting mine barriers,” the message said.
According to the Russian defense ministry, Ukraine deployed some 420 old YaM-1 moored naval mines along its shores, including 370 in the Black Sea. About ten of them went adrift after their cables snapped during a storm earlier this month, the Russian military believes.
At least two apparent mines were reported found and have since been destroyed: one by the Turkish military and one in Romanian territorial waters. “Nobody knows where the rest of them are drifting,” the Thursday statement said, adding that Kiev’s mining operations created a major threat to shipping in the Black Sea.
The Russian ministry said that the second charge voiced by Zelensky during his video address was likewise “a lie”. The reality is that Ukraine is preventing 68 foreign ships from sailing from its ports of Chernomorsk, Odessa, Nikolaev and Yuzhny, while the Russian Navy is offering daily opportunities of safe passage to them.
“Crews of the ships radioed us and said any attempt by a foreign vessel to depart the Ukrainian ports is banned by the authorities under a threat of immediate sinking,” General Igor Konashenkov, the spokesman for the defense ministry, said.
Zelensky is currently on a virtual tour to whip up support for his nation, with addresses made to various Western nations each day. On Tuesday, he told the Danish parliament that transition to renewable energy is a moral imperative for the EU, because otherwise it would not be able to punish Russia by stopping buying its energy.
Is Russia the REAL target of Western sanctions?
Soaring oil prices, energy and food crises on the horizon… is it possible the REAL target of this economic war is us?
By Kit Knightly | OffGuardian | March 30, 2022
The first tweet I saw when I checked my timeline this morning was from foreign policy analyst Clint Ehlirch, pointing out that the Russian ruble has already started recovering from the dip created by Western sanctions, and is almost at pre-war levels.
Ehrlich states, “sanctions were designed to collapse the value of the Ruble, they have failed”.
… to which I can only respond, well “were they?”
… and perhaps more importantly, “have they?”
Because it doesn’t really look like it, does it?
If anything, the sanctions seem to be at best rather impotent, and at worst amazingly counterproductive.
It’s not like the US/EU/NATO don’t know how to cripple economies. They have had years of practice starving the people of Cuba, Iraq, Venezuela and too many others to list.
Now, you could argue that Russia is a larger, more developed economy than those countries, and that’s true, but the US and its allies have previously managed to hurt the Russian economy quite drastically.
As recently as 2014, following the “annexation” of Crimea, Western sanctions were tame compared to the recent unprecedented measures, but crucially the US massively increased its own oil production, then later that year (following a visit by US Secretary of State John Kerry) Saudi Arabia did the same.
Despite objections from other members of OPEC – Venezuela and Iran chiefly – the Saudis flooded the market with oil.
The result of these moves was the biggest fall in oil prices for decades – collapsing from $109 a barrel, in June 2014, to $44 by January 2015.
This kicked Russia into a full recession and saw Russia’s GDP shrink for the first time under Putin’s leadership.
Again, just two years ago, allegedly as part of competing with Russia for a share of the oil market, Saudi Arabia once more flooded the market with cheap oil.
So, the West does know how to hurt Russia if it really wants to – by increasing oil production, flooding the market and tanking the price.
But has the US increased its oil production this time round? Have they leant on their Gulf allies to do the same?
Not at all.
In fact, in a point of beautiful narrative synchronicity, the US claims it’s “unable” to increase its oil production due to “staff shortages” caused by that gift that keeps on giving – Covid.
Similarly, Saudi Arabia is not tanking the oil market, but deliberately increasing prices.
Yes, right now, with the Western allies locked in an alleged economic war with Russia the price of oil is soaring, and may continue to do so.
This is good news for the Russian economy, to the point it may even make up for the damage done by the brutal sanctions.
The high price of oil and need “not to rely on Putin’s gas” or “de-Russify” our energy supply will doubtless result in millions being poured into “green” technology.
Those Western sanctions are targeting other Russian exports too, including grains and food in general.
Russia is a net exporter of food, meaning they export more food than they import. Conversely, many countries in Western Europe rely on imported food, including the UK which imports over 48% of its food supply.
If Europe refuses to buy Russian food, the net effect is that Russia has food… and the West doesn’t.
And, just as with oil, increasing food prices will help rather than hinder the Russian economy.
Take wheat for example, of which Russia is the biggest exporter in the world. The vast majority of this wheat is not even sold to Western countries – but instead to China, Kazakhstan, Egypt, Nigeria and Pakistan – and so is not even subject to sanctions.
Nevertheless, the sanctions, and the war, have actually driven the price of wheat up almost 30%.
This is good for the Russian economy.
Meanwhile, according to CNN, the US is likely to enter a full-blown recession by 2023, France is considering food vouchers and countries all over the world are expected to begin rationing fuel.
So, the sweeping sanctions imposed against Russia by the West, allegedly in response to the invasion of Ukraine, are not having their stated aim – tanking the Russian economy – but they are driving up the price of oil, creating potential energy and food shortages in the West and exacerbating the “cost of living” crisis created by the “pandemic”.
You should always be wary of anybody – individual or institution – whose actions accidentally achieve the exact opposite of their stated aim. That’s a simple rule to live by.
Remember how Orwell described the evolution of the concept of war in 1984:
War, it will be seen, is now a purely internal affair. In the past, the ruling groups of all countries, although they might recognize their common interest and therefore limit the destructiveness of war, did fight against one another, and the victor always plundered the vanquished. In our own day they are not fighting against one another at all. The war is waged by each ruling group against its own subjects, and the object of the war is not to make or prevent conquests of territory, but to keep the structure of society intact.
Recall that “the worst food shortages for fifty years” were predicted as a result of Covid. But they never materialised.
Likewise, we were due to experience Covid-related energy disruptions and power cuts. Short of the UK’s damp squib of a “petrol crisis”, they never really arrived.
But now they are heading our way after all – because war and sanctions
Increased food prices, decreased use of fossil fuels, lowering standards of living, public money poured into “renewables”. This is all part of a very familiar agenda, isn’t it?
Regardless of what you feel about Putin, Zelensky, the war in general or Ukrainian Nazis, it’s time to confront the elephant in room.
We need to be asking: What exactly is the real aim of these sanctions? And how come they align so perfectly with the great reset?
UK refuses to pay for gas in rubles
Samizdat | March 30, 2022
The UK prime minister’s spokesman said on Wednesday the nation would not pay for Russian gas in rubles as Moscow demands. London is liaising with British companies who might be concerned about the issue or its impact on industries and manufacturers across Europe, he added.
The statement comes as the Kremlin indicated on Wednesday that all of Russia’s energy and commodity exports could soon be priced in rubles.
“[Business minister] Kwasi Kwarteng, working with his counterparts, have made clear that they won’t be paying in rubles,” Johnson’s spokesman told reporters, adding, “[The business ministry] is obviously in contact with any UK businesses that may have concerns.”
Unlike other countries in Europe, the UK is less dependent on Russian gas supply. Russia only provides around 5% of Britain’s gas imports. However, surging energy prices have been affecting the economy.
According to the Office for National Statistics, 51% of Britons currently spend less on non-essential goods due to rising energy costs, 34% are saving gas and electricity at home, while 31% spend less on food and essential goods. Overall, some 83% of those surveyed pointed to the growth of everyday expenses amid rising gas and electricity prices.
Germany Scrambles To Ration Gas After Refusing To Make Payments In Rubles
By Tyler Durden | Zero Hedge | March 30, 2022
Now that Moscow has doubled down on its demands that its European “partners” pay for its oil and gas in rubles instead of euros (which, as the bloc already demonstrated, can be easily confiscated in the name of “sanctions”), the German government is digging in its heels as the payment dispute threatens to precipitate problematic energy shortages in Europe’s largest economy.
The FT reported Wednesday that German Energy Minister Robert Habeck has activated the “early warning phase” of Germany’s gas emergency law, which was adopted to help ration supplies in the face of a severe shortage. The decision will alert German consumers and businesses to do what they can to conserve energy.
Too bad President Biden and the US will take years to reroute their promised LNG exports (and even so, they will likely never be able to fully compensate for Russian supplies).
Habeck issued the warning for fear that Moscow would swiftly move to cut off energy exports to one of its biggest customers in Europe over its refusal to make payment in rubles, which Habeck has insisted would be a violation of the two sides’ contract.
The move was triggered by German concern that Russia might cut supplies to the country and its neighbors because they are rebuffing Moscow’s efforts to force payment for gas imports in rubles.
After demanding last week that “hostile states” pay for its gas and oil in rubles (although it hinted that gold and cryptocurrency might also be considered), Moscow said it wouldn’t share its resources “for free” after the G-7 aggressively repudiated the Russians’ request.
“We will definitely not supply oil and gas for free, that’s for sure. It’s hardly possible and reasonable to engage in charity in our situation,” Putin spokesman Dmitry Peskov said earlier this week.
As Germany scrambles to address a looming shortfall in energy supplies, analysts are warning that the government’s refusal to meet Moscow’s request for payment in rubles could create a “substantial” risk.
During the early warning phase – the first of three stages in Germany’s emergency response – a crisis team from the economics ministry, the regulator and the private sector will monitor imports and storage.
If supplies fall short, and less draconian attempts to lower consumption do not work, the government would cut off certain parts of German industry from the grid and give preferential treatment to households.
Volker Wieland, a professor of economics at Frankfurt University and a member of the German council of economic advisers, on Wednesday warned that a halt in Russian energy supplies would create a “substantial” risk of a recession and bring Europe’s largest economy “close to double-digit rates of inflation.”
Already, the German economy is facing its most brutal inflation in decades, with an annual headline inflation rate that could top 6% by the end of the year. The dire situation has already prompted the government to subsidize citizens’ energy costs with a round of energy stimmies.
Further restrictions on Russian supply could have even more dire consequences.
Of course, if Berlin doesn’t play ball, gas won’t be the only commodity in short supply. The Kremlin said on Wednesday that demanding ruble payments for exports of oil, grain, fertilizers, coal, metals and other key commodities in addition to natural gas was a good idea, Russia’s top lawmaker Vyacheslav Volodin said on Wednesday, per Reuters.
“If you want gas, find rubles,” Volodin, the speaker of the lower house of parliament, said in a post on Telegram.
Peskov, meanwhile, said the dollar’s global reserve currency was already diminishing, and that pricing Russia’s biggest exports in rubles would be “in our interests and the interests of our partners.”
Now, if the leaders of Europe don’t play ball, then President Biden’s prediction of devastating food shortages could become a self-fulfilling prophecy.
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.
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.
London Mayor Advises People Not To Exercise Outside
By Richie Allen | March 24, 2022
Sadiq Khan has urged Londoners not to exercise outside because warm weather in Europe is leading to high pollution levels in the capital. According to The Telegraph :
As temperatures reached 20C in the capital on Wednesday, older people and those with heart and lung problems were told to limit “strenuous physical exertion” due to high pollution levels.
Anyone else “suffering discomfort” should also consider reducing their activity, official advice said.
A forecast from Imperial College London said that levels of fine particulate pollution, or PM2.5, would reach “high” levels on Wednesday and Thursday, causing health problems for vulnerable people.
The alert was the first issued by the Met Office since August 2020. Alerts were also broadcast in London train stations and to travellers at bus stops around the capital.
Despite the health warning, Sadiq Khan, the mayor of London, also urged people to walk or cycle to limit the air pollution from vehicles…
Mr Khan said: “I’m urging Londoners to look after each other by choosing to walk, cycle or take public transport, avoiding unnecessary car journeys, stopping engine idling and not burning wood or garden waste, all of which contributes to high levels of pollution.
“This is particularly important in order to protect those who are more vulnerable to high pollution.
“While this alert is in place people with heart and lung problems should avoid physical exertion.”
Did you note the use of the term “vulnerable people” by Imperial College? Did you note the language used by Sadiq Khan?
The Mayor said that he’s urging Londoners “to look after each other by choosing to walk, cycle, take public transport and avoid unnecessary car journeys.” Londoners should do this, said Khan, to “protect those who are more vulnerable to high pollution.”
The message is a stark one.
“Citizens! Driving your car is affecting the most vulnerable in society! Walking or cycling saves lives and protects the NHS!” Exercising indoors protects you and protects the NHS!”
I said it two years ago didn’t I? Climate lockdowns featuring initiatives like personal driving allowances are coming soon. I predicted that at some point the government would attempt to place legal limits on driving.
I imagined a day when people would be told that they could only take their cars out on the first and third Sunday’s of the month depending on their postcode. Others would be permitted to drive on the second and fourth Sunday’s.
SKY News ran a hit-piece on me for predicting climate lockdowns.
I’ve emailed the journalist to ask her if she still thinks the notion is preposterous.
Silence.
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.
Whither US Oil Production?
By Paul Homewood | Not A Lot Of People Know That | March 13, 2022
This single chart from the US EIA explains just why oil prices are shooting up there:
https://www.eia.gov/petroleum/production/
The oil boom initiated by Trump saw crude oil output increase by a half between 2016 and 2019.
Output naturally collapsed in early 2020 as a result of the pandemic, which affected both supply and demand. But since then output has only slowly recovered, and is still 9% below 2019 levels.
It is worth pointing out that demand in 2021 was still not back to 2019 levels. Assuming it recovers this year, it is likely to put further upward pressure on prices, unless production increases as well.
To put the numbers into perspective, the US produces a sixth of the world’s crude oil. The increase in US output between 2016 and 2019 was 205 million tonnes, and represents 5% of global output.
Small changes in supply have a disproportionate effect on international oil prices, because demand is so inelastic. An extra 5% on world production would have a significant impact on prices.
Oil price hikes hit poor countries the hardest
By Vijay Jayaraj | American Thinker | March 13, 2022
The fighting in Ukraine has intensified with Russian forces showing no signs of retreating and residents are fleeing cities.
What does this have to do with the lives of billions of people living far away from the war? Oil price increases.
The conflict has caused an increase in international oil prices, which have now crossed $130 per barrel, a 13-year high. As a result, gas prices at pumps across the globe are set to rise even further.
Being the largest consumers of automobile fuels, motorists in the U.S. and Europe are feeling significant economic pain. However, the situation is far more serious for populations of developing countries who have a much smaller buffer against life-threatening deprivation.
Take Nigeria, for example, the largest economy in Africa with $514 billion GDP. Neither the size of the economy nor the presence of crude reservoirs was sufficient to protect the country from the price shock. Nigerians already were grappling with a month-long fuel shortage due to quality-related import restrictions. While government subsidies soften the effect on users of gasoline, there is no such support for diesel.
Diesel is selling for 625 naira per liter in Lagos and Abuja, 30 percent higher than two weeks ago. Diesel prices are expected to touch 650 soon and are disrupting everyday lives. Nigeria is infamous for its energy poverty, with only 40 percent of the country’s 193 million population having access to electricity. The rising fuel costs will force many more millions into energy poverty.
In the neighboring West African country of Ghana, which is a net exporter of oil, fuel prices have risen dramatically in the first quarter and are affecting all kinds of businesses. For a country that is already in an ongoing economic crisis caused by debt distress, rising gasoline and diesel prices have become a nightmare.
Though Ghana exports high-quality crude, it has inadequate refinery capacity to convert domestic oil into finished petroleum products. Like Nigeria, it depends on imports of refined products. Currently, 80 percent of all finished petroleum products are imported. Inflation rates will be driven up by fuel prices that may increase by 6 percent, sending households into further chaos in what was originally supposed to be the fastest growing major economy in Africa.
In Asia, less-developed economies that were caught up with the decade-long green movement failed to invest in fossil-fuel technology and now face extraordinary import bills due to the rise in international crude prices.
Last month, Thailand’s inflation rose to its highest level in 13 years at 5.28 percent. Speaking to Al Jazeera, the chairman of the Thai National Shippers Council said: “The geopolitical situation, global inflation, the pandemic – Thailand still has a high number of cases – and freight costs are still very high. All of that is certain to damage our growth.”
Neighboring Philippines is in murky waters as well, with gasoline prices set to rise by 11 Phillipine pesos and eventually increase by a further 20 pesos by the end of March. A record high of 100 pesos per liter for gasoline will send small businesses and households into great distress.
In the abstract, the victims of higher energy prices are economic growth and the long-running fight against poverty, which translates into harder lives for billions of people struggling to fend off malnutrition and disease.
A simple solution would be to reverse anti-fossil fuel policies that cause shortages and to make the well-being of citizens the first priority.
Vijay Jayaraj is a Research Associate at the CO2 Coalition, Arlington, Va., and holds a Master’s degree in environmental sciences from the University of East Anglia, England. He resides in Bengaluru, India.
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Former Insiders Criticize Iran Policy as U.S. Hegemony
By GARETH PORTER | CounterPunch | February 27, 2013
“Going to Tehran” arguably represents the most important work on the subject of U.S.-Iran relations to be published thus far.
Flynt Leverett and Hillary Mann Leverett tackle not only U.S. policy toward Iran but the broader context of Middle East policy with a systematic analytical perspective informed by personal experience, as well as very extensive documentation.
More importantly, however, their exposé required a degree of courage that may be unparalleled in the writing of former U.S. national security officials about issues on which they worked. They have chosen not just to criticise U.S. policy toward Iran but to analyse that policy as a problem of U.S. hegemony. … continue
Blog Roll
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