#Iran oil embargo

[wezgworld]

Happy 100th Birthday Henry Kissinger

Henry Kissinger meeting Chairman Mao Zedong Henry Kissinger is a political heavyweight. Of that there can be no doubt. Even the harshest of this US politician-come-guru, Henry Kissinger’s critics will have to admit that he is just that – a veteran in the ring of international geopolitics.  Today, 27th May 2023, Henry Kissinger celebrates his 100th birthday. He is the only surviving member of the…

[argumate]

It's embarrassing to ask this so late in the game, but: can someone explain to me, as if I'm a particularly dumb space alien, what exactly the USA gains from supporting Israel? I thought it was "something something oil", but the USA went from being an importer to an exporter, and that didn't change anything.

we (that is to say, pseudo-intellectual tumblr) have talked about this a few times, and I think it came down to a few reasons like:

there used to be a strategic interest (oil, Cold War)

countries change course very very slowly

vested interests still support current approach

US antagonism with Iran practically demands it

gotta support someone 🤷

"the US" is not a coherent singular entity of course, and you can ask the same question for how it benefits from the embargo of Cuba or the war on drugs or many other policies.

[zvaigzdelasas]

Joe Biden campaigned in 2020 on the promise of new ideas, more competence, and a “return to normality.” But when it comes to economic sanctions, President Biden has chosen instead to maintain the path that his predecessor set. From Venezuela to Cuba to Iran, the Biden administration’s approach to sanctions has remained remarkably similar to Trump’s. On the campaign trail, candidate Biden promised to rejoin the Iran deal and to “promptly reverse the failed Trump policies that have inflicted harm on the Cuban people and done nothing to advance democracy and human rights.” Yet two and a half years after taking office, the Biden administration has made little progress towards fulfilling these promises. While economic sanctions may not seem important to the average American, they have strong implications for the global economy and America’s national interests. President Biden initially showed promise by requesting that the Treasury Department conduct a swift review of U.S. sanctions policies. However, the review’s publication in October 2021 was underwhelming. It produced recommendations such as adopting “a structured policy framework that links sanctions to a clear policy objective,” and “ensuring sanctions are easily understood, enforceable, and, where possible, reversible.” If the U.S. was not already undertaking these measures, it is fair to ask what exactly was taken into consideration when prior sanctions were implemented. The failure to reenter the Iran deal is the most egregious error of Biden’s sanctions policies. Apart from harming American credibility and acting as a strong deterrent to any future countries looking to enter diplomatic agreements with the U.S., Trump’s “maximum pressure” strategy has been a complete failure. As the United States Institute of Peace notes, Iran’s “breakout time” —the time required to enrich uranium for a nuclear bomb — stood at around 12 months in 2016. As of today, Iran’s breakout time stands at less than a week. It did not have to be this way. Although Iran violated segments of the JCPOA after American withdrawal, it never left the deal completely, signaling potential for a reconciliation. Yet the Biden administration declined to lift sanctions initially. As Javad Zarif, Iran’s foreign minister, told CNN in early 2021, “It was the United States that left the deal. It was the United States that violated the deal.”[...]

Biden has shown similar hesitancy on Cuba. Although the administration has taken certain steps to undo Trump’s hardline stance, there remains much room for progress. Six decades of maximum pressure on Cuba have failed completely, serving primarily to harm Cuban civilians and exacerbate tensions with allies who wish to do business with Cuba. The U.S. embargo of Cuba is incredibly unpopular worldwide. A U.N. General Assembly Resolution in support of ending the embargo received 185 votes in support, with only two against — the U.S. and Israel. Steps such as reopening the American embassy in Havana and removing restrictions on remittances are positive developments, yet the Biden administration could do much more. Primary among these are removing Cuba from the State Sponsors of Terrorism list and ending the embargo once and for all. This would not only improve daily life for Cuban civilians, but increase business opportunities for Cubans and Americans alike. Trump also attempted his maximum pressure strategy with Venezuela, but failed to achieve anything resembling progress. In one of his final actions in office, he levied even more sanctions on Venezuela, further isolating one of the region’s largest oil producers. Venezuela is another country where the Biden administration has taken mere half-measures. Easing some sanctions in late 2022 is a positive sign, but there is no serious justification for keeping any of the Trump-era sanctions in place. All of these actions have had major consequences, not only for the citizens of the sanctioned countries, but also for Americans. As oil prices spiked following Russia’s invasion of Ukraine, the fact that Iran and Venezuela, two of the world’s largest oil producers, were unable to sell on the U.S. market no doubt led to higher gas prices for American consumers. And the millions of Americans with family in sanctioned countries face serious difficulties in visiting and sending remittances to their family members. Despite these measures, none of these countries are considered serious threats to the U.S. In a March 2023 Quinnipiac poll, Americans rightly ignored Iran, Venezuela and Cuba when asked which country “poses the biggest threat to the United States.” Just two percent chose Iran as the biggest threat, with zero choosing Cuba or Venezuela.

These sanctions are unpopular, ineffective and quite often counterproductive to American interests. While changing the course of U.S. foreign policy can take quite some time, the dangers of hesitancy are quite clear. Rather than maintaining the Trump status quo on sanctions, which saw record increases, President Biden should fulfill his campaign promises and end the ineffective and costly sanctions on countries such as Iran, Cuba, and Venezuela, and return to the use of diplomacy to further American national interests.

You know things are bad when The Hill is coming after you as a democrat (note the lack of mention about sanctions on China or DPRK)

22 Jun 23

[beardedmrbean]

DUBAI, United Arab Emirates (AP) — Yemen's Houthi rebels likely fired an Iranian-made anti-ship cruise missile at a Norwegian-flagged tanker in the Red Sea in December, an assault that now provides a public, evidence-based link between the ongoing rebel campaign against shipping and Tehran, the U.S. military says.

A report by the U.S. Defense Intelligence Agency released Wednesday linked the attack on the Strinda, which set the vessel ablaze, to Tehran, the Houthi's main backer in Yemen's nearly decadelong war. The findings correspond with those of a Norway-based insurers group that also examined debris found on the Strinda.

It comes as the Houthis continue their monthslong campaign of attacks over the Israel-Hamas war, targeting ships in the Red Sea corridor, disrupting the $1 trillion flow of goods passing through it annually while also sparking the most intense combat the U.S. Navy has seen since World War II.

Iran's mission to the United Nations, responding to questions from The Associated Press, again denied arming the Houthis despite the reports.

“We are aware that (the Houthis) have significantly developed their military capabilities relying on their very own sources,” the mission said. "The prolonged war against them is the primary factor behind the expansion of their military prowess.”

The Strinda was coming from Malaysia and was bound for the Suez Canal and then on to Italy with a cargo of palm oil when it was struck by a missile Dec. 11. The attack sparked a major fire on board that the crew later extinguished without anyone being hurt.

Debris found on board later was analyzed by the U.S. military. The DIA compared the pieces of the engine from the missile found on board to the Iranian Noor anti-ship ballistic cruise missile.

“The Iranian Tolu-4 turbojet engine, used in the Noor (missile), has unique features — including the compressor stage and stator — that are consistent with engine debris recovered from the ... Houthi attack on the M/T Strinda,” the DIA report said. A stator is the stationary portion of an engine.

Those pieces match images of a Tolu-4 engine that Iran displayed at the International Air and Space Show in Russia in 2017, the DIA said. Visually, the engines bore similarities in the photographs.

The Noor was reverse engineered by Iran from the Chinese C-802 anti-ship missile, which Iran purchased from Beijing and began testing in 1996 before transfers stopped over a U.S. pressure campaign. The Iranian version is believed to have a range of up to 170 kilometers (105 miles), with an upgraded version called the Qader having a range up to 300 kilometers (185 miles). The Houthis have a look-alike missile to the Qader called the Al-Mandeb 2 with a similar range.

The Norwegian Shipowners’ Mutual War Risks Insurance Association, known by the acronym DNK, also examined the debris following the Strinda attack. The association assessed it was “highly likely” the vessel had been hit by a C-802 or Noor anti-ship cruise missile.

Before the Houthis swept into Yemen's capital, Sanaa, in 2014, the country did not have an arsenal of C-802 missiles. As the Saudi-led coalition entered Yemen’s conflict on behalf of its exiled government in 2015, the Houthis’ arsenal was increasingly targeted. Soon — and despite Yemen having no indigenous missile manufacturing infrastructure — newer missiles made their way into rebel hands.

Iran long has denied arming the Houthis, likely because of a yearslong United Nations arms embargo on the rebels. However, the U.S. and its allies have seized multiple arms shipments bound for the rebels in Mideast waters. Weapons experts as well have tied Houthi arms seized on the battlefield back to Iran.

While the U.S. has previously accused Iran of supplying the missiles the Houthis use in their attacks at sea, Wednesday's report provided photographic evidence for the first time. The report pointed to a seizure stemming from a Jan. 11 nighttime raid of an Iranian dhow traveling near the coast of Somalia, which saw two Navy SEALs killed. The Navy seized parts related to the Noor anti-ship cruise missile, the report said.

The Houthis have launched seaborne attacks since 2016, when they hit the Emirati vessel SWIFT-1 with a missile as it sailed back and forth in the Red Sea between an Emirati troop base in Eritrea and Yemen. They also tried to attack the USS Mason, an Arleigh Burke-class guided missile destroyer, around the same time.

But the Houthi attacks have rapidly escalated since November over the Israel-Hamas war in the Gaza Strip. The rebels have targeted more than 70 vessels by firing missiles and drones in their campaign that has killed four sailors. They have seized one vessel and sank two in the time since.

The Houthis maintain that their attacks target ships linked to Israel, the United States or Britain as part of the rebels’ support for the militant group Hamas in its war against Israel. However, many of the ships attacked have little or no connection to the war — including some bound for Iran, which backs the Houthis.

“The Houthis probably have used Iran-supplied weapons to conduct more than 100 attacks against land-based targets in Israel, Saudi Arabia, the United Arab Emirates, and Yemen and dozens of attacks targeting ships in the Red Sea and Gulf of Aden,” the DIA report said.

Meanwhile early Friday, the private security firm Ambrey reported that a ship traveling in the southern Red Sea saw what appeared to be a missile splash into the sea and another explode in the air nearby.

The U.S. military's Central Command meanwhile reported that it destroyed five Houthi drone boats and two airborne drones in the Red Sea, while destroying another drone in Houthi-controlled territory.

The Houthis did not immediately acknowledge either incident, though it said U.S.-led airstrikes had targeted the Hodeida region Thursday.

[taraross-1787]

This Day in History: Operation Eagle Claw

On this day in 1980, a special operations team attempts to rescue 53 American hostages in Iran. That mission would unfortunately end in tragedy.

The Iran Hostage Crisis had been ongoing for months, ever since revolutionary Iranians stormed the American embassy in November 1979. Jimmy Carter’s administration had tried economic sanctions, freezing Iranian assets, and embargoing oil—and yet the hostage crisis continued. Something had to be done! In April 1980, Carter approved a military attempt to extract the hostages—Operation Eagle Claw.

The story continues here: https://www.taraross.com/post/tdih-operation-eagle-claw

[victusinveritas]

Here's the full piece (pulled from https://www.armeniapedia.org/index.php?title=Understanding_Oil without any edits.

The brutal attacks/bombings this week in New York, and Washington D.C., along with threats of attacks there and elsewhere in the country have changed our times forever. While the mass media concentrates on the details of the destruction, and the blanketed words of politicians, I will attempt to understand and explain the events from the fence. BOMBING AND BEING BOMBED ARE THE SAME THINGS ON DIFFERENT SIDES OF THE FENCE.

Terror is not a spontaneous human action without credence. People just dont hijack planes and commit harikari (suicide) without any weight of thought to the action. No one in the media seems to ask WHY DID THESE PEOPLE DO THIS HORRIFIC ACT OF VIOLENCE AND DESTRUCTION?

To be able to understand the answer to this, we must first look at our U.S. Mideast Policy. During most of the 20th century, U.S. businesses have worked on attaining oil rights and concessions from countries in the Middle East and Eastern Europe. After WWI, secret back door deals by our State Dept. yielded oil rights from then defeated Turkey to fields in what is now Iraq and Saudi Arabia, in return for looking the other way at a crime against humanity, the Genocide of the Armenians by the Turks. Oil profits have been the motivating factors behind many attempts at counterinsurgency of democratic regimes by the CIA and the U.S in the Middle East (such as Iran in the 1950s, where the Shah replaced the Prime Minister who refused to give up oil rights to the U.S., and since the people couldnt deal with the Shah, an extremist government headed by the Ayatollah Khomeini ultimately prevailed). During the Iran-Iraq war, America supplied both sides with weapons and advice. These are not the actions of a rich superpower wanting peace. Lets not forget that Saddam Hussein, before being Americas vision of the Anti-Christ, was a close ally of the U.S., and the CIA. So what was the firm belief system of consecutive American administrations that caused all this to occur ? PEACE IN THE MIDDLE EAST WILL LEAD TO HIGHER OIL AND GASOLINE PRICES. Lets not also forget the power of the Arms industry, disguised as defense, that still sells billions of dollars of weapons to the area. Therefore it has not been in the short-term economic interest of the U.S. to foster Peace in the Middle East. Using the above reasoning, the U.S. has encouraged extremist governments, toppled democracies, as in the case of Iran to replace it with a monarchy, rigged elections, and many more unspeakable political crimes for U.S. businesses abroad. Lets not also forget the Red Scare. During the war between the then Soviet Union and Afghanistan, the U.S. armed and supported the Taliban, a fundamentalist Muslim organization, and allowed them to export opium and heroin out of their country to pay for those weapons. Therefore the Taliban rose to power and control with the help of the U.S.A. Today, the bombing of Iraq still continues, no longer covered by the media, the economic embargo still remains, killing millions of children, and recently, while the world and the U.N. General Assembly have cried out to bring in peacekeeping forces into Israel and Palestine, to end the escalated war and recent assassinations, the U.S. has vetoed the rest of the Security Council and has halted the possibility of peace, there, in the most volatile place in the world.

People in Serbia, Lebanon, Iraq, Sudan, and Afghanistan to name a few have seen bombs fall, not always at military targets and kill innocent civilians, as the scene in New York city yesterday. The wars waged by our government in our names has landed smack in the middle of our living room. The half hour of destruction closed down all world financial markets, struck the central headquarters of our military, and had our leaders running into bunkers, and our citizens into fear and frenzy. What scares me more than what has occurred is what our reactions to the occurrences may cause. President Bush belongs to a long generation of Republican Presidents who love war economies. The media has only concentrated on the bombings, if you will, and what type of retaliations are looming for the perpetrators. What everyone fails to realize is that the bombings are a reaction to existing injustices around the world, generally unseen to most Americans. To react to a reaction would be to further sponsor the reaction. In other words, my belief is that the terror will multiply if concrete steps are not taken to sponsor peace in the middle east, NOW. This does not mean that we should not find the guilty party(s), Bin Laden, or whoever they may be, and not try them. Put simply, as long as a major injustice remains, violence precipitates to the surface of life.

Native American folklore, the Bible, Nostradamus, and many other major religious beliefs point to this era with the visuals of yesterdays disasters, and conditions of ecological disasters we experience daily in our lives today. War, rumors of war, famine, long burning fires, etc., are at our doorstep. We can prevail over this possible vision with the power of the human spirit, understanding, compassion, and peace. ITS TIME TO PUT OUR NEEDS FOR SECURITY AND SURVIVAL, ACHIEVED ONLY THROUGH PEACE, ABOVE AND BEYOND PROFITS, ESPECIALLY IN THESE TIMES.

SOLUTION:

The U.S. should stop sidestepping the U.N. Security Council, and allow U.N. Peacekeeping troops and missions to the Middle East. Stop the violence first.

Stop the bombing and patrol of Iraq.

With todays gains in the use of alternative fuels, develop them to full usage with autos and other utilities, to make the country less dependant on an already depleting natural reserve, oil.

By initiating peace, we would have already shaken the foundations of support for Bin Laden, and/or all those that sponsor activities like those we saw yesterday, and break the stronghold of extremists on the world of Islam. On the other hand, if we carry out bombings on Afghanistan or elsewhere to appease public demand, and very likely kill innocent civilians along the way, wed be creating many more martyrs going to their deaths in retaliation against the retaliation. As shown from yesterdays events, you cannot stop a person whos ready to die.

Source: http://donce.awardspace.com/esej.html [dead link]

[cinemafromcinema]

'Hollow hegemon': IRGC chief says Islamic Republic cripples US power

The chief commander of the Islamic Revolution Guards Corps (IRGC) says Iran has over the past decades eroded the power of the US and turned it into a “small and weak” state.

Speaking in the northeastern holy city of Mashhad on Monday, Major General Hossein Salami said that the United States’ situation today is not comparable with its condition two or three decades ago.

He also referred to the takeover of the US embassy, better known as Den of Espionage, by a group of Iranian students in November 1979, saying it was beyond imagination.

“We eroded the US’s power. The United States has become small and weak, and it has gradually lost its power because of the erosion caused by [Iran’s] Islamic Revolution,” he said.

Salami also noted that enemies have failed to isolate Iran through imposing economic sanctions on the country and stealing its oil tankers as Iran has taken retaliatory measures.

“They seized our ships in Gibraltar; We confiscated their ships here and made them regret what they had done,” he said. “The embargo [imposed on us] was broken with [our] power. If you are strong, you will overcome isolation,” he asserted.

The Islamic Republic, he added, proved that “the world is much bigger than the US and that the US is much smaller than the world.”

Touching on claims about voter apathy in Iran’s recent presidential election, the IRGC chief said that the nation disrupted the enemies’ calculations by increasing its participation from 40 percent in the first round to 50 percent in the second round.

“The Iranian nation is very skillful and experienced in defeating the enemy and proving that its calculations are wrong,” he pointed out. (PRESSTV.IR)

[mightyflamethrower]

Iranian-backed militias have attacked American installations and forces in Syria, Iraq, and Jordan some 170 times.

Ostensibly, these terrorist groups claim they are hitting US forces to coerce America into dropping its support of Israel and demanding a cease-fire in the Gaza war.

In reality, these satellite terrorists are being directed in a larger effort by Iran to pry the US. out of the Middle East, in the manner of the 1983 Marine barracks bombing.

That way, Iran will be free to fulfill its old dream of becoming a nuclear shield for a new Shiite/Persian terrorist axis from Tehran to Damascus to Beirut to the West Bank and Gaza—surrounding Israel and intimidating the Gulf regimes and more moderate states like Jordan and Egypt into concessions.

These Iranian appendages have made a number of unfortunately correct assumptions about America in general and the Biden administration in particular.

One, after the recent serial humiliations of the flight from Afghanistan, the passivity of watching a Chinese spy balloon traverse with impunity the continental United States, the mixed American signals on the eve of the Ukraine war, the troubled Pentagon’s recruitment and leadership lapses, and the destruction of the US southern border, both Iran and its surrogates feel that the United States either cannot or will do much of anything in response to their aggression.

They see the U.S. military short thousands of recruits, its leadership politicized, its munition stocks depleted by arms shipments to Ukraine and Israel, and the massive abandonment of weapons in Kabul.

Two, they view Joe Biden’s serial appeasement as a force multiplier of these perceptions of American weakness. After entering office, the Biden administration begged for a renewed Iran deal from a preening theocracy. It sought to ensure calm by delisting the Houthis from global terrorist designations and sending hundreds of millions of dollars to Hamas and radical Palestinians to buy good behavior.

Biden may have agreed that Iran was the spider in the center of the Middle East Islamic terrorist web, but only thereby to win over it with bribes such as lifting embargoes and sanctions to ensure an Iranian windfall of $90 or more billion in oil sales revenue.

Biden greenlighted a bribery payment of $6 billion to Iran to return American hostages, thereby ensuring more will be taken. It loudly distanced itself from the Netanyahu government. The gulf encouraged radicals to believe they could coerce Israel into accepting radical Islamic states on the West Bank and Gaza.

Three, after hitting American stations and bases 170 times and seeing little sustained, much less disproportionate, responses, Iran and its satellites now feel they are winning proxy wars with the US.

They have all but shut down the Red Sea as an international shipping route—damaging Europe, Egypt, and Israel, which all depend on Red Sea commerce for vital imports and exports.

Iran has forced Biden to publicly alienate the Netanyahu government and push a ceasefire down Israel’s throat. And it has helped to spark international pro-Hamas protests throughout Europe and the US that timid and compliant left-wing governments fear could lose them close elections.

But most damaging are administration spokesmen who mouth the same empty script after each serial attack: 1) The US will respond at the time and place of its own choosing. 2) The US finds no direct evidence of Iranian involvement, although it clearly has supplied the attackers; 3) The US does not wish a wider war and has no plans to attack Iran itself.

Translated to our enemies, it means an 80-year-old non-compos-mentis president is in no position to prevent, much less win, a theater-wide Middle East war that his own serial appeasement has now nearly birthed.

Biden and the Democratic Party know, as National Security Advisor Jake Sullivan pointed out just prior to the October 7 attacks on Israel, that the administration inherited a deterred and quiet Middle East. And then it blew up on their appeasing watch.

Now they are terrified of a theater-wide conflict breaking out during an election year—a fact known to all of America’s Middle East enemies.

Biden and company have forgotten the ancient wisdom that preparing loudly only for peace guarantees war. To prevent war, it should return to oil sanctions on Iran, embargo its banking transactions, slap a travel ban on Iran and its allies, cut off all aid to Hamas and the West Bank, and restore a true terrorist designation for the Houthis.

US officials must stop aimlessly babbling. If the administration must speak, Washington should do so by conveying disproportionality and unpredictability. And if, and when, America were to strike, it should do so in silent and devastating fashion.

When serially attacked, loudly responding that we will only proportionally strike back and wish no wider war will only ensure a big, ugly one.

[cadavidson]

Branco Cartoon: Israel vs. Iran, Hamas, and BLM terrorists

Branco Cartoon: Israel vs. Iran, Hamas, and BLM terrorists A.F. Branco Cartoon – Overreach   Most people now realize that Iran is directly involved with Hamas and the recent attacks on Israel through the funding they have received from Biden, the $6 billion, and $58 billion through oil revenue when Biden ignored the embargo placed on their production by Trump. This can even be traced back to…

[lethimfertilise]

Will Brent hit $100 in Q2?

Over the last couple of days, I've been reading a lot of differing analytics referring to recent spikes in oil prices. I can't say that oil prices are constantly on my radar, but I do check them at least once a week. So, below are some of my thoughts and numbers I have found.

Brent oil prices have been trading in the range of $85 to $90 per barrel for a month now, which is a record since September 2023. At the same time, there is occasional market discussion about the possibility of prices rising to $100 per barrel.

The price increase is partly due to the introduction of new OPEC+ quotas since the beginning of this year, which have led to market tightening: while in Q4 2023 global supply exceeded demand by 400 thousand barrels per day (b/d), in Q1 2024 demand already exceeded supply by 250 thousand b/d (Energy Information Administration (EIA) data).

This deficit has led to a reduction in commercial oil and petroleum product inventories in oil-consuming countries: according to the EIA, as of the end of March 2024, their volume decreased by 0.5%, reaching 2735 million barrels - the lowest level in a year and a half. Also impacting is the rise in logistical costs due to the need to bypass the Red Sea, which increases the transportation time from the Middle East to Europe from 19 to 34 days.

So, what shall we expect now?

The emergence of a deficit alongside the reduction in commercial inventories and increased tension in the Middle East has led to oil prices trading at six-month highs. However, prices are unlikely to reach $100 per barrel, partly due to increased supply in Iran, where production reached 3.23 million b/d in Q1 2024 - the highest level since the US embargo.

Iran is not part of the OPEC+ deal, while its key participant countries have faced a record surplus of oil production capacities: according to the EIA, the surplus in oil production capacities in Middle Eastern OPEC countries reached 4.1 million b/d by March 2024, comparable to the current production volume in Iraq, the second-largest oil producer among OPEC countries.

In addition to the surplus (i.e., the potential for rapid production growth), the market will also be influenced by the slowdown in the Chinese economy, which will be associated with the exhaustion of recovery potential after the COVID-19 pandemic. According to IMF forecasts, China's GDP growth will slow from 5.2% in 2023 to 4.6% in 2024.

So, I don’t think that oil prices will reach $100 per barrel: Brent prices by the end of Q2 2024 will balance in the range of $80 to $90 per barrel.

[zvaigzdelasas]

[Arab News is Saudi Media]

[The New Arab is Saudi Media]

Members of the Organisation of Islamic Cooperation (OIC) should impose an oil embargo and other sanctions on Israel and expel all Israeli ambassadors, Iranian Foreign Minister Hossein Amir-Abdollahian said on Wednesday.

18 Oct 23

[hello-bechnaseekhocom-fan]

Navigating the Storm: Middle East Crisis and Oil Prices in the Modern Context

Middle East Crisis and Oil Prices. Explore the intricate link between the ongoing Middle East crisis and the volatile ebb and flow of global oil prices in this insightful article

Introduction: Middle East Crisis and Oil Prices

In the intricate dance of global economics, the price of oil stands as a crucial barometer, reflecting the delicate balance between supply, demand, and geopolitical uncertainties. This article delves into the historical dynamics of oil prices, drawing parallels to contemporary challenges, particularly the ongoing Middle East crisis.

also read : Tracking Systems: Addressing the Auto Theft Surge by Insurers

The Evolution of Oil Prices: A Historical Perspective

In the 19th and early 20th centuries, the global oil market experienced a semblance of stability, characterized by a relatively consistent oil price. During this period, the dynamics of the industry were relatively straightforward, with supply and demand playing primary roles in determining prices. However, the tranquility of this era underwent a seismic shift in the 1970s, ushering in a new chapter marked by turbulence and geopolitical upheavals.

The catalysts for this transformation were two pivotal events that sent shockwaves through the global oil landscape. The first, the OPEC (Organization of the Petroleum Exporting Countries) oil embargo in 1973, was a strategic move by oil-producing nations to retaliate against those that had supported Israel during the Yom Kippur War. This deliberate reduction in oil supply had far-reaching consequences, leading to what became known as the 1973 oil crisis.

Shortly thereafter, the Iranian Revolution in 1979 further intensified the volatility. The toppling of the Shah of Iran and the subsequent establishment of an Islamic republic not only disrupted oil production in the region but also added a new layer of complexity to global geopolitics. The combination of these structural drivers and historical shocks served as a harbinger of the modern-day complexities we grapple with in the realm of oil prices.

To truly understand the intricacies of the current oil market, it is essential to delve into the profound impacts of these 20th-century events. The OPEC oil embargo and the Iranian Revolution were watershed moments that not only shaped the trajectory of oil prices but also laid the groundwork for the intricate dance between geopolitical events and the energy market that persists to this day. (more to read)

[safdarrizvi]

Israel is moving towards a total naval blockade from all sides

The commander of Iran's Revolutionary Guard said:

"They will soon face the closure of the Mediterranean Sea, the Strait of Gibraltar and other waterways"

The port of Eliat, which lies on the Red Sea, is already completely blocked. Those ships that continued to cooperate with Israel bypass Africa and arrive at Israel's shores in the Mediterranean via Gibraltar. The question is how can these ships be blocked?

Today an Israeli ship was hit deep in the Arabian Sea near India. News that showed that the Red Sea is not the only place where Israeli ships can be targeted.

Iran possesses kamikaze drones with long range, high explosive power and invisible to anti-aircraft systems due to their electric motor.

These drones can easily target commercial ships moving in the Mediterranean towards Israel's ports, launched from Lebanon. A very short distance and a very easily achievable stage. In this case, a total naval blockade of Israel will occur.

An incredibly precise plan for a total embargo on Israel by Iran. To make the situation even more complicated for Israel, of the land routes, Jordan is the only country that is currently helping Israel bypass the Houthi blockade in a small percentage. But drones may also be flown here by Islamic militant organizations in Iraq targeting US military bases.

Israel will be completely blocked commercially, from all sides. And as the situation with the Houthis has shown, the United States has no answer to this threat. If they decide to attack Yemen and Lebanon, then the war will escalate to such an extent that not only ships to Israel but all ships passing through the Suez Canal will be stopped.

This will cause a big blow to the economy of Europe, an increase in the prices of goods and oil and a big inflation.

[mariacallous]

Since the Israel-Hamas war began on Oct. 7, voices in Washington have increasingly chastised the Biden administration for what they say is an inadequate enforcement of oil sanctions against Iran. Bills have now been proposed in the U.S. Congress to prod the administration to better enforce sanctions against Iranian oil.

The broad embargo imposed on the Iranian economy after former U.S. President Donald Trump’s decision to abandon the Iran nuclear agreement, known as the Joint Comprehensive Plan of Action (JCPOA), is still in place. But Iranian oil sales have spiked. According to domestic reporting, Iran’s hydrocarbon export income was $42 billion in 2022—a significant increase from $25 billion in 2021 and $19 billion in 2020.

Republicans have charged that the Biden administration has willfully ignored Iran’s evasion of U.S. extraterritorial sanctions. Sen. Ted Cruz, a Republican who opposes the Iran nuclear deal, accused the Biden administration of walking back the Trump administration’s efforts to stop Iran from exporting petroleum. A lobbying group that championed the Trump administration’s maximum pressure campaign against Iran accused the Biden administration of selectively enforcing oil sanctions and derided its strategy as “maximum deference.” The Wall Street Journal editorial board recently accused Biden of “choosing not to enforce” Iran-related oil sanctions.

Indeed, the notion that the Biden administration is intentionally allowing Iran’s oil sales has gone mainstream even among seasoned Iran and energy experts. Bloomberg’s Javier Blas said in January that Biden had walked away from the maximum pressure campaign, and that the “conspiracy theorist inside” him believed that Biden is ignoring Iran’s oil exports to contain commodity inflation. Sara Vakhshouri, the president of energy consultant SVB International, claimed that there hasn’t been a serious crackdown on Iran’s oil sales since the Trump administration. And the Washington Institute for Near East Policy’s Henry Rome argued that while the maximum pressure campaign is still in place, Biden has not systemically enforced it. All three understandably pointed to the rise in Iran’s oil exports during the Biden presidency as the basis for their analyses.

But while Iran’s oil exports have grown significantly during the Biden administration, this trend may have predated his tenure. There is data that indicates that the recovery of Iranian oil sales from their very low levels in early 2020 actually started while the Trump administration was still in office.

In late 2020, firms monitoring the global oil trade reported significant jumps in Iran’s exports. Three prominent firms that monitor the global energy trade reported to the Wall Street Journal that Iran’s oil exports in the fall of 2020 had more than doubled from earlier that year— although their estimates varied widely—as Iran developed more sophisticated evasion capacities and Chinese demand grew.

One must also consider that the decline in the rate of sanctioning does not mean that the U.S. approach has softened under Biden. While the Trump administration’s public foreign-policy pronouncements could, at times, be painfully vague and confounding, the defining of the Iran sanctions effort as a maximum pressure campaign was actually apt. The idea was to sanction entire sectors and key economic nodes of the Iranian economy to induce a shock effect.

Obama administration officials, by contrast, favored a process by which sanctions are ratcheted up over time. They argued that this strategy is best for inducing policy modification in the target state. But the architects of Trump’s maximum pressure campaign on Iran abandoned this approach in favor of an immediate scorched-earth strategy. This involved a breathless pace of sanctions designations by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), usually several rounds a week, that blanketed Iranian economic interactions with the world.

The Trump administration imposed so many sanctions on Iran that, in its last year in office, the administration acknowledged coming up short on targets to designate, with National Security Advisor Robert O’Brien stating that the problem with countries such as Iran is that “we have so many sanctions on those countries right now that there’s very little left for us to do.”

In fact, in the final months of the Trump administration, OFAC seemed to be designating already-targeted entities under additional nonnuclear authorities. This was seen by many as an effort to make rejoining the JCPOA difficult for a future administration. Since that agreement was premised on the removal of nuclear sanctions specifically, the imposition of terrorism or other designations on major economic entities in Iran would create new barriers to the resumption of mutual JCPOA compliance.

Considering this, it is unreasonable to expect that the Biden administration would carry out the feverish pace of designating targets that the Trump administration did. But that does not mean that the Biden administration has not tried to slow the pace of Iranian oil sales. Aside from multiple rounds of new sanctions targeting Iranian hydrocarbon exports, petrochemical networks, and sanctions evasion, the Biden administration has also convinced countries to revoke the privilege of flying their flags from ships accused of carrying Iranian oil.

To understand why Iranian oil exports are growing, one must consider both the market and sanctions contexts. Admittedly, the natural opacity of sanctioned trade and China’s petroleum imports makes coming to hard conclusions rather difficult. The nonreporting and lack of transparency  have long been key countersanctions strategies that Iran and its business partners exercise with vigor.

That being said, several factors provide greater explanatory value on why Iran’s oil sales have expanded so much.

First, Iranian oil exports during the years of the Trump administration were heavily depressed, not just because of sanctions but also because of the COVID-19 pandemic and the associated slowdown in the global economy. China’s aggressive zero-COVID policies meant that its importation of petroleum slowed down more than most other countries, and for longer periods of time. So while the anemic Iranian export figures during this time were credited to the Trump administration’s maximum pressure campaign, much of the success, in hindsight, was due to the broader slowing of global demand.

Second, the rise of demand after the pandemic receded created new price pressures that likely led China’s small, independent “teapot” refiners, eternally looking to compete with larger, state-run refining behemoths, to seek cheaper oil. The fact that Iran is offering oil at a discount is far more attractive when per-barrel prices are higher.

Third, Iran and China have taken various steps to enhance their economic cooperation in recent years. The two countries signed a 25-year economic cooperation agreement in March 2021 and recently inked a set of deals to operationalize this pact. Iran has also joined both the Shanghai Cooperation Agreement and the BRICS group of countries (which consists of Brazil, Russia, India, China, South Africa, and six recently added countries, including Iran). There is some healthy skepticism about the future of Sino-Iranian economic relations, including from this author, but if China wanted to more aggressively serve as Iran’s white knight, encouraging the greater purchase of Iranian oil would likely be the first step toward accomplishing that.

Fourth, for most of the past two decades, China has pursued a cautious strategy in the Middle East that calls for Beijing not to present itself as a major impediment to U.S. designs in the region. This has undoubtedly put downward pressure on Sino-Iranian trade, including in hydrocarbons. This strategy was meant to delay a serious deterioration of Sino-U.S. relations. With that becoming fait accompli, one key reason for Beijing to limit oil imports from Iran was removed.

Commenting on the signing of the 25-year economic cooperation agreement, Hua Liming, the former Chinese ambassador to Tehran, stated that “[s]ince the Carter administration, the US has often reminded China of its relations with Iran, which was seen by Americans as an impediment to the US-China relationship. But with fundamental changes in China-US relations in recent months, that era has gone.”

Finally, since the start of the sanctions campaign against Russia, many new actors have become involved in sanctioned trade. Russia is by far the largest economy to be so thoroughly targeted by a Western sanctions campaign. There has also been a significant expansion of export controls against China during the Biden administration, which forebodes a future sanctions campaign as Washington tries to halt what is seen in many Western capitals as Beijing’s revisionism. As sanctions become the West’s weapon of choice in this new era of great-power competition, there will be a significantly greater financial incentive for Beijing, Moscow, and their business partners around the world to facilitate sanctioned trade.

Obviously, due to the mentioned lack of transparency, we can largely only speculate about the extent to which the natural tendency of states and firms to avoid sanctioned trade has been watered down, but there is some evidence that this is occurring.

The degree to which countries that are usually considered Western allies have allowed their jurisdictions to be used for Russian sanctions evasion shows a pattern that is unlikely to be strictly limited to Russia. The fact that a country such as India would lower its port insurance requirement and resort to nontraditional financing structures to facilitate deliveries of Russian oil shows that the world is adapting to the new environment of heightened sanctions risk, but not always in a way the West would prefer.

Ultimately, the increase in Iran’s oil sales or the slower rate of OFAC designations are not adequate to argue that the Biden administration has taken a softer approach to Iran. It’s not clear that the Trump administration’s more aggressive posture would have fared better against the factors laid out above. As sanctions practitioners have stated, targeted states tend to adapt to sanctions over a period of time, and while they may not recover fully, the impact of sanctions tends to hit a peak and then decline to some extent. Playing a never-ending game of whack-a-mole with target adaptation has limits.

For example, if Biden really wanted to take on Iranian oil sales, he could aggressively target the “ghost fleet” of vessels carrying Iranian crude, as well as regional intermediaries in Southeast Asia (which he has done, to a point) and the Chinese teapot refineries that are reported to be the primary purchasers of Iranian oil.

But it’s not clear whether these intermediaries have any exposure to Western markets or financial institutions, and the ghost vessels and teapot refiners definitely have almost none. Thus, OFAC designations may not be particularly effective. If sanctions are deployed against various Chinese companies involved in Iran’s oil industry to no avail, would that make other similar actors more or less likely to engage Iran? Various Chinese entities, such as logistics firms with greater sanctions exposure, have been targeted, but they seem to be continuing their trade in Iranian oil.

Perhaps a broader campaign targeting the financial institutions that serve the teapot refineries can be more effective, but that would require a wider targeting of the Chinese financial system than Washington is ready for at this time. Yet it’s also important to point out that the Trump administration had opportunities to take all of these steps���but it did not do so, either.

[noisynutcrusade]

If the Arab brothers dump Gaza

At the Riyadh summit, Iran asked for an oil embargo against Israel but Saudi Arabia said no, the opposite of what it had done in ’73. Arab countries abandon their “brothers” once again Source link