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Ed Webb

The Coronavirus Oil Shock Is Just Getting Started - 0 views

foreignpolicy.com/...-shock-is-just-getting-started

energy oil economy pandemics Russia China US USA KSA Saudi Iran Iraq Algeria Angola Nigeria markets climate

shared by Ed Webb on 05 Jul 20 - Cached
  • People in the West tend to think about oil shocks from the perspective of the consumer. They notice when prices go up. The price spikes in 1973 and 1979 triggered by boycotts by oil producers are etched in their collective consciousness, as price controls left Americans lining up for gas and European governments imposed weekend driving bans. This was more than an economic shock. The balance of power in the world economy seemed to be shifting from the developed to the developing world.
  • If a surge in fossil fuel prices rearranges the world economy, the effect also operates in reverse. For the vast majority of countries in the world, the decline in oil prices is a boon. Among emerging markets, Indonesia, Philippines, India, Argentina, Turkey, and South Africa all benefit, as imported fuel is a big part of their import bill. Cheaper energy will cushion the pain of the COVID-19 recession. But at the same time, and by the same token, plunging oil prices deliver a concentrated and devastating shock to the producers. By comparison with the diffuse benefit enjoyed by consumers, the producers suffer immediate immiseration.
  • In inflation-adjusted terms, oil prices are similar to those last seen in the 1950s, when the Persian Gulf states were little more than clients of the oil majors, the United States and the British Empire
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  • Fiscal crises caused by falling prices limit governments’ room for domestic maneuver and force painful political choices
  • The economic profile of the Gulf states is not, however, typical of most oil-producing states. Most have a much lower ratio of oil reserves to population. Many large oil exporters have large and rapidly growing populations that are hungry for consumption, social spending, subsidies, and investment
  • In February, even before the coronavirus hit, the International Monetary Fund was warning Saudi Arabia and the United Arab Emirates that by 2034 they would be net debtors to the rest of the world. That prediction was based on a 2020 price of $55 per barrel. At a price of $30, that timeline will shorten. And even in the Gulf there are weak links. Bahrain avoids financial crisis only through the financial patronage of Saudi Arabia. Oman is in even worse shape. Its government debt is so heavily discounted that it may soon slip into the distressed debt category
  • Ecuador is the second Latin American country after Argentina to enter technical default this year.
  • Populous middle-income countries that depend critically on oil are uniquely vulnerable. Iran is a special case because of the punitive sanctions regime imposed by the United States. But its neighbor Iraq, with a population of 38 million and a government budget that is 90 percent dependent on oil, will struggle to keep civil servants paid.
  • Algeria—with a population of 44 million and an official unemployment rate of 15 percent—depends on oil and gas imports for 85 percent of its foreign exchange revenue
  • The oil and gas boom of the early 2000s provided the financial foundation for the subsequent pacification of Algerian society under National Liberation Front President Abdelaziz Bouteflika. Algeria’s giant military, the basic pillar of the regime, was the chief beneficiaries of this largesse, along with its Russian arms suppliers. The country’s foreign currency reserves peaked at $200 billion in 2012. Spending this windfall on assistance programs and subsidies allowed Bouteflika’s government to survive the initial wave of protests during the Arab Spring. But with oil prices trending down, this was not a sustainable long-run course. By 2018 the government’s oil stabilization fund, which once held reserves worth more than one-third of GDP, had been depleted. Given Algeria’s yawning trade deficit, the IMF expects reserves to fall below $13 billion in 2021. A strict COVID-19 lockdown is containing popular protest for now, but given that the fragile government in Algiers is now bracing for budget cuts of 30 percent, do not expect that calm to last.
  • Before last month’s price collapse, Angola was already spending between one fifth and one third of its export revenues on debt service. That burden is now bound to increase significantly. Ten-year Angolan bonds were this week trading at 44 cents on the dollar. Having been downgraded to a lowly CCC+, it is now widely considered to be at imminent risk of default. Because servicing its debts requires a share of public spending six times larger than that which Angola spends on the health of its citizens, the case for doing so in the face of the COVID-19 crisis is unarguable.
  • Faced with the price collapse of 2020, Finance Minister Zainab Ahmed has declared that Nigeria is now in “crisis.” In March, the rating agency Standard & Poor’s lowered Nigeria’s sovereign debt rating to B-. This will raise the cost of borrowing and slow economic growth in a country in which more than 86 million people, 47 percent of the population, live in extreme poverty—the largest number in the world. Furthermore, with 65 percent of government revenues devoted to servicing existing debt, the government may have to resort to printing money to pay civil servants, further spurring an already high inflation rate caused by food supply shortages
  • The price surge of the 1970s and the nationalization of the Middle East oil industry announced the definitive end of the imperial era. The 1980s saw the creation of a market-based global energy economy. The early 2000s seemed to open the door on a new age of state capitalism, in which China was the main driver of demand and titans like Saudi Aramco and Rosneft managed supply
  • The giants such as Saudi Arabia and Russia will exploit their muscle to survive the crisis. But the same cannot so easily be said for the weaker producers. For states such as Iraq, Algeria, and Angola, the threat is nothing short of existential.
  • Beijing has so far shown little interest in exploiting the crisis for debt-book diplomacy. It has signaled its willingness to cooperate with the other members of the G-20 in supporting a debt moratorium.
  • In a century that will be marked by climate change, how useful is it to restore profits and prosperity based on fossil fuel extraction?
  • The shock of the coronavirus is offering a glimpse of the future and it is harsh. The COVID-19 crisis drives home that high-cost producers are on a dangerously unsustainable path that can’t be resolved by states propping up their uncompetitive oil sectors. Even more important is the need to diversify the economies of the truly vulnerable producers in the Middle East, North Africa, sub-Saharan Africa, and Latin America.
Ed Webb

The Oil for Security Myth and Middle East Insecurity - MERIP - 0 views

merip.org/...h-and-middle-east-insecurity-2

opinion analysis MENA oil energy security US USA war military

shared by Ed Webb on 03 Jul 20 - No Cached
  • Guided by the twin logics of energy security and energy independence, American actions and alliances in region became a self-fulfilling prophecy. The very thing the United States sought to eliminate in the Middle East—insecurity—became a major consequence of America’s growing and increasingly militarized entanglement.
  • In effect, the essential relationship of dependency between the United States and the Middle East has never been “oil for security.” It has in fact been oil for insecurity, a dynamic in which war, militarization and autocracy in the region have been entangled with the economic dominance of North Atlantic oil companies, US hegemony and discourses of energy security.
  • Although the destabilizing contradictions of this dependency have now undercut both American hegemony and the power of the North Atlantic hydrocarbon industries, the oil-for-insecurity entanglement has nonetheless created dangerously strong incentives for more conflict ahead.
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  • Oil’s violent geopolitics is often assumed to result from the immense power its natural scarcity affords to those who can control it. Recent developments in global hydrocarbon markets, which saw negative prices on April 20, 2020 have once again put this scarcity myth to bed
  • In a series of studies that began in late 1980s, economists Jonathan Nitzan and Shimshon Bichler charted the extent to which the world’s leading oil companies enjoyed comparatively handsome rates of returns on equity—well ahead of other dominant sectors within North Atlantic capitalism—when major wars or sustained unrest occurred in the Middle East.
  • When oil prices began to collapse in the mid-1980s, the major oil companies witnessed a 14-year downturn that was only briefly interrupted once, during the 1990-1991 Gulf War.
  • The events of September 11, 2001, the launching of the global war on terror and the 2003 Anglo-American invasion of Iraq reversed the fiscal misfortunes of the North Atlantic oil companies in the previous decade. Collectively, they achieved relative returns on equity several orders of magnitude greater than the heyday of 1979 to 1981. As oil prices soared, new methods of extraction reinvigorated oil production in Texas, North Dakota, Pennsylvania and elsewhere. In effect, war in Iraq made the shale oil revolution possible
  • fracking—not only benefitted from sky-high oil prices, generous US government subsidies and lax regulation, but also the massive amounts of cheap credit on offer to revive the economy after 2008
  • In response to the Soviet invasion of Afghanistan and the Iran hostage crisis, the Carter Doctrine declared America’s intent to use military force to protect its interests in the Gulf. In so doing, Carter not only denounced “the overwhelming dependence of the Western democracies on oil supplies from the Middle East,” but he also proposed new efforts to restrict oil imports, to impose price controls and to incentivize more fossil fuel extraction in the United States, all in conjunction with solidifying key alliances (Egypt, Israel and Pakistan) and reinforcing the US military presence in the region.[5] In effect, America would now extract geopolitical power from the Middle East by seeking to secure it.
  • In denouncing certain governments as “pariahs” or “rogue states,” and in calling for regime change, American policy has allowed those leaders to institute permanent states of emergency that have reinforced their grip on power, in some cases aided by expanded oil rents due to heightened global prices
  • A 2015 report by the Public Accountability Initiative highlights the extent to which the leading liberal and conservative foreign policy think tanks in Washington—the American Enterprise Institute, Atlantic Council, Brookings, Cato, Center for Strategic and International Studies (CSIS), Council on Foreign Relations and Heritage Foundation—have all received oil industry funding, wrote reports sympathetic to industry interests or usually both
  • For some 50 years, the United States has been able to extract geopolitical power from Middle Eastern oil by posing as the protector of global energy security. The invention of the concept of energy security in the 1970s helped to legitimate the efforts of the Nixon, Ford and Carter administrations to forge new foundations for American hegemony amid the political, economic and social crises of that decade. In the wake of the disastrous US war efforts in Korea and Southeast Asia, Henry Kissinger infamously attempted to re-forge American hegemony by outsourcing US security to proxies like Iran under what is referred to as the Nixon Doctrine. At the same time, regional hegemons would be kept in check by “balancing” competing states against each other.
  • The realization of Middle Eastern insecurity was also made possible by the rapid and intensive arms build-up across the region in the 1970s. As oil prices skyrocketed into the 1980s, billions of so-called petrodollars went to purchase arms, primarily from North Atlantic and Soviet manufacturers. Today, the Middle East remains one of the most militarized regions in the world. Beyond the dominance of the security sector in most Middle Eastern governments, it also boasts the world’s highest rates of military spending. Since 2010, Middle Eastern arms imports have gone from almost a quarter of the world’s share to nearly half in 2016, mainly from North Atlantic armorers.
  • For half a century, American policy toward the Middle East has effectively reinforced these dynamics of insecurity by promoting conflict and authoritarianism, often in the name of energy security. High profile US military interventions—Lebanon in 1983, Libya in 1986 and 2011, the Tanker Wars in the late 1980s, the wars on Iraq in 1991 and 2003, Somalia in 1993, Afghanistan since 2001, the anti-Islamic State campaign since 2014 and the Saudi-Emirati war on Yemen since 2015—have received the most scrutiny in this respect, alongside the post-2001 “low intensity” counterterrorism efforts worldwide
  • cases abound where American policy had the effect of preventing conflicts from being resolved peacefully: Trump’s shredding of the 2015 Joint Comprehensive Plan of Action (JCPOA) nuclear agreement with Iran comes to mind; the case of the Israeli-occupied Palestinian territories and the Moroccan-occupied Western Sahara have likewise become quintessential “peace processes” that have largely functioned to prevent peace.
  • the myth of authoritarian stability
  • A year after the unexpected 2011 uprisings, the IMF’s former director Christine Lagarde admitted that the Fund had basically ignored “how the fruits of economic growth were being shared” in the region
  • What helps make energy security discourse real and powerful is the amount of industry money that goes into it. In a normal year, the oil industry devotes some $125 million to lobbying, carried out by an army of over 700 registered lobbyists. This annual commitment is on par with the defense industry. And like US arms makers,[9] the revolving door between government, industry and lobbying is wide open and constantly turning. Over two-thirds of oil lobbyists have spent time in both government and the private sector.[10]
  • From 2012 to 2018, organized violence in the Middle East accounted for two-thirds of the world’s total conflict related fatalities. Today, three wars in the region—Syria, Iraq and Afghanistan—now rank among the five deadliest since the end of the Cold War. Excluding Pakistan, the Middle East’s share of the worldwide refugee burden as of 2017 was nearly 40 percent at over 27 million, almost double what it was two decades prior.
  • profound political and financial incentives are accumulating to address the existing glut of oil on the market and America’s declining supremacy. A major war in the Middle East would likely fit that bill. The Trump administration’s temptation to wage war with Iran, change Venezuela’s regime and to increase tensions with Russia and China should be interpreted with these incentives in mind.
  • While nationalizing the North Atlantic’s petroleum industries is not only an imperative in the fight against climate change, it would also remove much of the profit motive from making war in the Middle East. Nationalizing the oil industry would also help to defund those institutions most responsible for both disseminating the myths of energy security and promoting insecurity in the Middle East.
Ed Webb

Will the U.S.-Saudi Arabia Relationship Ever Reach a Breaking Point? - 1 views

foreignpolicy.com/...t-relationship-oil-geopolitics

USA US diplomacy military politics analysis opinion energy Iran KSA Saudi

shared by Ed Webb on 05 Jul 20 - Cached
  • Again and again, the unlikely partners would fall out—usually over the Arab-Israeli conflict, much later over the 9/11 attacks. But the fundamental bargain struck by U.S. President Franklin D. Roosevelt and then-King Ibn Saud in the waning days of World War II that consummated the U.S.-Saudi relationship 75 years ago would never break
  • lawmakers in oil states such as Texas, Louisiana, North Dakota, and Alaska accuse Saudi Arabia of waging “economic warfare” and have drafted legislation to immediately pull out U.S. troops and furl up a decades-old U.S. security umbrella that has protected the vulnerable Saudi state
  • many in Washington are coming to question the very fundamentals that have underpinned a very special bilateral relationship for 75 years—essentially, U.S. security to ensure the free flow of Saudi oil and Saudi support for U.S. designs in the Middle East
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  • Today’s tensions stem, in many ways, from the original foundations of the odd-couple relationship: an oil-for security bargain that always sought, but never fully managed, to bridge the divide between a liberal democracy and a conservative religious monarchy
  • Some experts believe U.S.-Saudi ties will ultimately weather the storm, as they always have, because of the need for a large, wealthy, and anti-Iran anchor for U.S. interests in the Middle East
  • “But we don’t need the Saudis anymore—this comes in a very different geopolitical environment than previous crises.”
  • Saudi Arabia was one of the only countries in the world that continued to receive U.S. Lend-Lease aid after the end of the war.
  • essentially underwriting the security of an oil-rich desert sheikdom to keep oil supplies flowing—and to keep the Soviets out of the Middle East.
  • Roosevelt had met Ibn Saud hoping for Saudi support for a Jewish homeland in the Middle East, which the king vehemently opposed, and the U.S. president—in Saudi eyes—gave his word not to press the matter. But Truman, Roosevelt’s successor, eventually supported the creation of Israel, sowing years of distrust and cries of betrayal in Saudi Arabia
  • “In my conversations with the king, the crown prince, and the deputy crown prince, they favored the effort to halt Iran’s nuclear weapons program. But they wanted more: They wanted us to push on Iran’s actions in Iraq, Syria, and Yemen, and we didn’t do that.”
  • The Iranian revolution, as well as an assault that same year on the Grand Mosque in Mecca, terrified Saudi leadership, who saw how vulnerable their own position was. The revolution, by removing the shah and creating permanent enmity with the United States, left Saudi Arabia as America’s main linchpin in the Middle East, all the bad blood from the oil embargo notwithstanding
  • Fearful of being toppled by religious radicals, Saudi leaders embraced a much more conservative line and empowered hard-line religious leaders in their own country, the first steps toward a decadeslong program to export the austere Wahhabi brand of Islam particular to the kingdom. Soon, wealthy Saudis, including one Osama bin Laden, started funding the Muslim mujahideen who were fighting the Soviet invasion of Afghanistan that began the same year as the Iranian revolution. Two decades later, that Saudi lurch toward a harsher official line on religion would end up creating the biggest crisis yet in the special relationship.
  • “The relationship never really recovered from 9/11,”
  • the George W. Bush administration, despite vehement Saudi objections, decided to invade Iraq to topple Saddam Hussein. Saudis feared that would open the door to greater Iranian influence on their doorstep, as in fact happened.
  • In the end, the United States and Saudi Arabia patched up the dispute, and the oil embargo ended by the spring of 1974. But the scars it left were deep and long-lasting, permanently damaging Saudi Arabia’s image in American popular opinion, and leaving deep-rooted fears that the Saudis could and would use their oil weapon to damage U.S. interests—a fear that has persisted even though the nature of the Saudi oil threat has changed.
  • “King Abdullah was very respectful and liked Obama personally, but there were things they couldn’t understand,” said Westphal, who was present for three of Obama’s record four trips to Saudi Arabia. “‘Why are you supporting Maliki, who is essentially handing over his country to the Iranians? How can you not depose Assad?’”
  • Since 1979, Saudi leaders had seen Iran as the gravest threat to the region and their own security, and U.S. efforts to reach a nuclear deal while seemingly letting Iran continue its destabilizing behavior in the region unsettled the Saudis.
  • “There’s no question that the Arab Spring unsettled the U.S. relationship with the Saudis. For them, the U.S. response [to calls for reform in the Arab world] was way too sympathetic, and the relationship cooled,”
  • Saudi leaders famously rolled out the red carpet, and a glowing orb, for Trump’s first overseas trip as president. It seemed a surprising about-face after Trump’s attacks on Muslims, and repeated attacks on Saudi Arabia, on the campaign trail, when he accused the kingdom of carrying out 9/11, criticized it for sponging off American protection, and threatened an economic boycott. Saudi leaders were happy to overlook Trump’s comments, eager to forge ties with an untested and unorthodox president before other foreign leaders could. “Washington is like Rome in the Roman Empire, and we are like a satellite state—you pay homage to the emperor,” Shihabi said. “You could put a monkey in the White House, and we’d pay homage.”
  • The playbook that has reliably worked since 1945 to ground the bilateral ties in personal relationships with the president now seems to be backfiring. Mohammed bin Salman, reviled by many in Congress for his alleged role in the Khashoggi killing, as well as other continued human rights abuses inside Saudi Arabia and in Yemen, is seen as being exceptionally close to Kushner and Trump. Riding the coattails of a historically unpopular, already-impeached president isn’t the best way to improve Saudi Arabia’s image.
  • Despite decades of close economic ties and military and counterterrorism cooperation, Saudi Arabia never seemed to plant deep roots in the United States that would institutionalize the relationship beyond kings, generals, and presidents. This meant when tensions flared up between the two countries, Riyadh didn’t have many outside allies to come to its defense in Washington
  • Mohammed bin Salman’s foreign-policy excesses: the disastrous war in Yemen, the bizarre virtual kidnapping of Lebanon’s prime minister to pressure Iran and Hezbollah, and an embargo on Qatar, its small neighbor and a key U.S. military partner. At home, there was the regular drumbeat of reports on human rights violations, plus a $100 billion shakedown on wealthy political rivals to consolidate power under the guise of an anti-corruption campaign.
  • As long as they’ve been a country—they’re so young—they really don’t know what their place in the world would be like without the backing of the United States,”
  • Unlike in 1973, when Saudi Arabia used the oil weapon to jack up oil prices and hurt the United States, this time crashing oil prices did the trick. U.S. shale producers need oil prices above $40 a barrel to break even; the Russian-Saudi price war sent the price of oil to $25 and then into the single digits, ensuring a wave of bankruptcies and economic hardship from Texas to North Dakota.
  • “The Saudis have a deep problem with the Democrats, and that’s been clear for a long time. Now they have spoiled their relationship with Republicans,”
  • In the summer of 2019, when Iranian attacks on oil tankers near the Persian Gulf threatened the flow of oil, Trump’s response was to tell allies such as Japan and South Korea to protect their own ships, questioning why the United States should continue to carry out a mission it’s done for decades unless other countries coughed up cash. That fall, key Saudi oil facilities were attacked, allegedly by Iran, knocking out 5 percent of global oil production in a matter of minutes. The U.S. response, other than a Trump tweet, was to do nothing.
  • The bitter recriminations during this spring’s oil price war, coming on the heels of the Khashoggi murder, the continued war in Yemen, and other Saudi missteps, give many observers reason to believe that the relationship is due for a fundamental rethink.
  • as long as the United States continues to view Iran as a major threat, close relations with Saudi Arabia will have a strong appeal
Ed Webb

Beyond Oil: Lithium-Ion Battery Minerals and Energy Security - Foreign Policy Research ... - 0 views

www.fpri.org/...y-minerals-and-energy-security

energy China resources commodities technology climate trade OPEC Saudi KSA Russia oil

shared by Ed Webb on 11 Mar 21 - No Cached
  • Should the mass adoption of electric vehicles occur, access to reliable and affordable sources of minerals like cobalt, graphite, lithium, manganese, and nickel, which are used in modern electric-vehicle batteries, will come to occupy a larger share of energy security concerns, especially since one country has already gained control over much of the world’s production and processing of those minerals
  • oil has remained abundant and affordable, despite major production disruptions during the Arab Spring from 2010-2012, in Libya from 2013-2016, and in Venezuela after 2017. In fact, oil prices had dropped 60 percent from their 2008 highs by early 2020, even before the COVID-19 pandemic had made a dent in the global economy.
  • falling oil prices throughout the 2010s may have lulled Western policymakers into believing that the Russian Federation, whose economy is heavily reliant on oil and natural gas exports, would become more docile. It did not; instead, it continued to modernize its military and intimidate its neighbors
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  • OPEC and Russia bargained for months, but talks finally broke down after Moscow refused to limit its oil production to help stabilize oil prices in the wake of the slump in global oil demand caused by the COVID-19 pandemic. Calculating that it could hurt Russia enough to force it back to the negotiating table, Saudi Arabia boosted its daily oil output by 20 percent, flooding the market with oil. Not to be intimidated, Russia responded with a short-term increase in its own oil output (possibly to strike back at Saudi Arabia or to force some American shale-oil companies out of business or both). As a result, oil prices collapsed. The futures price for West Texas Intermediate crude touched a remarkable -$37 per barrel. Although beneficial for oil consumers, the Russia-Saudi Arabia oil price war was a reminder of the influence that state-driven oil producers still had over the world’s energy security.
  • a single country, China, has gained control over much of the world’s production and processing of the cobalt, graphite, lithium, manganese, and nickel used in lithium-ion batteries, the type of electricity-storage devices favored by electric-vehicle manufacturers today.
  • Chinese companies now control almost half of the DRC’s cobalt output, which constitutes over two-thirds of the world’s production. Perhaps of greater concern, China has come to dominate the refining and processing of those minerals. Eighty percent of the cobalt sulphates and oxides used for lithium-ion battery cathodes are processed in China.
  • China’s monopoly can be largely attributed to its relatively low energy costs and less stringent environmental regulations.
  • Though China controls a smaller share of the world’s production of lithium than that of other minerals, it has been buying up stakes in lithium mines around the globe.
  • Moving up the value chain, it is expected to build 101 of the 136 lithium-ion battery manufacturing plants that are currently planned over the next decade
  • n 2010, China abruptly restricted its rare-earth metal exports to Japan, nominally to protect the environment. But after a lengthy review, the World Trade Organization ruled against China’s restrictions. Since then, worries about relying on China as a strategic-minerals supplier have continued to grow. Sometimes, China feeds those fears. In one 2019 incident, China’s state-run Global Times flaunted the country’s dominance over rare-earth metals as a strategic weapon against other countries with the headline “China gears up to use rare-earth advantage.” Such not-so-veiled threats from government-linked media only fan suspicions that China will behave no better than Russia or Saudi Arabia—and possibly worse.
  • In 2019, the U.S. Department of State launched the Energy Resources Governance Initiative to “promote resilient and secure energy resource mineral supply chains” for all kinds of renewable energy and battery storage technologies.  The initiative’s membership has grown to include Australia, Botswana, Canada, Peru,
  • the world appears to be swapping its old dependency on OPEC and Russia, a fractious bunch that until recently was losing power to American oil-shale upstarts, for a new one on China, a single country with a one-party government
Ed Webb

40 years after the oil crisis: Could it happen again? - 2 views

www.washingtonpost.com/...l-crisis-could-it-happen-again

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shared by Ed Webb on 16 Oct 13 - No Cached
  • Forty years ago today, the Organization of the Petroleum Exporting Countries (OPEC) voted to raise the posted price of their oil by 70 percent.  The next day, several Arab oil producers decided to impose an embargo on oil sales to the United States to punish it for supporting Israel in the unfolding Yom Kippur War.  While the two decisions were not formally linked, policymakers have worried ever since that OPEC could again restrict the global supply of oil. A lot has changed since 1973.  Oil embargoes used to happen fairly frequently: There was one in 1956, and another in 1967.  Until 1973, they didn’t attract much attention.  But due to structural changes in the oil market in the early 1970s, the one in 1973 had a huge impact.  Since that time, there hasn’t been a single international embargo. (The current sanctions against Iran are an importers’ boycott, not an exporters’ embargo.)  What happened?
  • Even without an embargo, policymakers worry that OPEC manipulates the oil market. For example, James Woolsey, a former CIA director and self-proclaimed energy hawk, argues that OPEC has a grip on global oil and gasoline prices so tight that the U.S. will never be free of its influence.  Like most people, Woolsey wrongly believes that OPEC is a powerful cartel. Many economic studies cast doubt on that idea, but there are still some scholars who support the proposition. OPEC rarely if ever influences its members’ oil production rates.  It has almost no impact on prices.  My research looked at OPEC’s behavior since 1982, when it first adopted formal production quotas for its members.  I found that joining OPEC has little influence on new members’ oil production rates; members cheat on their quotas a whopping 96 percent of the time; changes in OPEC quotas have little impact on changes in production; and members of OPEC produce oil at about the same rate as non-members of the group, all else equal.  Any of these findings would cast doubt on OPEC’s status as a cartel; collectively they are damning.
  • Most OPEC members – from Venezuela to Nigeria to Iraq – are pumping their oil as fast as they can, with no spare capacity
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  • OPEC is a political club.  It perpetuates a “rational myth” about its cartel power to generate political benefits and prestige for its members, both at home and abroad.  As long as OPEC is viewed as powerful, its leaders can falsely claim credit at home for “managing the economy.”
  • the world would be better off if it stopped assuming that OPEC drives world energy markets.  It does not.  Most of the credit or blame for rising oil prices in recent years rests with the energy demands of Asian customers, not diabolic moves by OPEC
Ed Webb

UAE Peace Deal Opens Doors for Secret Israeli-Iranian Pipeline and Big Oil Investments - 0 views

foreignpolicy.com/...uae-israel-iran-oil

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shared by Ed Webb on 19 Sep 20 - Cached
  • desert oil pipeline that Israel once operated as a secret joint venture with Iran could be a major beneficiary from the Trump-brokered peace deal with the United Arab Emirates. With the UAE formally scrapping the eight-decade Arab boycott of Israel—and other oil-rich Gulf neighbors likely to follow suit—the Jewish state is on the cusp of playing a much bigger role in the region’s energy trade, petroleum politics, and Big Oil investments
  • Stepping cautiously out of the shadows, the Israeli managers of Europe Asia Pipeline Co. (EAPC) say their 158-mile conduit from the Red Sea to the Mediterranean Sea provides both a cheaper alternative to Egypt’s Suez Canal and an option to connect to the Arab pipeline grid that transports oil and gas not just to the region, but to the seaports that supply the world
  • the pipeline, which connects Israel’s southern port of Eilat with a tanker terminal in Ashkelon on the Mediterranean coast, could nip off a significant share of the oil shipments now flowing through the nearby Suez Canal.
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  • Now that the Emiratis have broken the ice, opportunities for Arab-Israeli energy deals are broad and lucrative, ranging from investment in the Israeli pipeline itself, to adapting it for carrying natural gas or connecting it to pipelines across Saudi Arabia and the wider Middle East
  • Just over 60 years ago when it was built, the Eilat-Ashkelon pipeline was a massive national construction project aimed at guaranteeing Israel’s and Europe’s energy supplies in the wake of the 1956 Suez crisis
  • Most of the oil flowing through the pipeline came from Iran, which had close but discreet relations with Israel for decades under Shah Mohammad Reza Pahlavi. In 1968, the Israeli and Iranian governments registered what was then called the Eilat-Ashkelon Pipeline Co. as a 50-50 joint venture to manage the export of Iranian crude through Israeli territory and onward by tanker to Europe
  • A Swiss court ordered Israel in 2015 to pay Iran compensation of about $1.1 billion as a share of profits from the joint ownership of the pipeline since the two enemies broke off relations in 1979, but Israel has refused to pay up.
  • While the company’s main 42-inch pipeline was built to transport Iranian oil north to the Mediterranean, it now does most of its business in reverse. It can pump oil unloaded in Ashkelon from ships sent by producers such as Azerbaijan and Kazakhstan to tankers in the Gulf of Aqaba for transport to China, South Korea, or elsewhere in Asia
  • The pipeline’s advantage over the Suez is the ability of the terminals in Ashkelon and Eilat to accommodate the giant supertankers that dominate oil shipping today, but are too big to fit through the canal. Known in oilspeak as VLCCs, or very large crude carriers, the ships can transport as much as 2 million barrels of petroleum. The 150-year-old Suez Canal, on the other hand, is only deep and wide enough to handle so-called Suezmax vessels, with just half the capacity of a VLCC
  • The company’s business has always been one of Israel’s most closely guarded secrets. Even today, EAPC releases no financial statements. Levi says he can’t disclose the names of customers—though he says they include “some of the biggest companies in the world.” What little information that is publicly known only came to light as the result of legal battles following a 2014 rupture in the pipeline that caused the worst environmental disaster in Israeli history, spilling more than 1.3 million gallons of crude oil into the Ein Evrona desert nature preserve.
  • The boycott enforced by Saudi Arabia, the UAE, and their oil-producing neighbors meant that tankers acknowledging their docking in Israel would be barred from future loadings in the Persian Gulf, effectively destroying their business. The details are highly confidential—but generally the ways ships can obscure their activities include turning off their transponders, repainting, reflagging, reregistering, and faking their docking records.
  • EAPC’s business model improves dramatically with the erosion of the Arab boycott. “If the concerns [with secrecy] go down significantly, the price will drop significantly,”
  • Saudi Arabia has indicated it won’t establish formal links until the Palestinian conflict is resolved, although its business connections with Israel are plentiful and growing
  • Because of the canal’s limitations, much of the Gulf crude bound for Europe and North America gets pumped through Egypt’s Suez-Mediterranean Pipeline, in which Saudi Arabia and the UAE hold a stake. Egypt’s pipeline, however, operates in only one direction, making it less useful than its Israeli competitor, which can also handle, for example, Russian or Azerbaijani oil heading to Asia.
  • Even more possibilities arise from Israel’s discovery of a bounty of natural gas deposits off its Mediterranean coast that can supply far more than Israel’s own needs. Bringing in Gulf investors in addition to Israel’s current partners such as Chevron, and the possibility of connecting to the Middle East’s gas pipeline grid, would open yet another new horizon for Israel’s nascent energy industry.
Ed Webb

Graham and Fox News expert showed Trump a map to change his mind about Syria withdrawal - 0 views

www.nbcnews.com/...p-map-change-his-mind-n1069901

Syria Iran Russia US USA oil energy Kurds military Trump politics foreignpolicy

shared by Ed Webb on 22 Oct 19 - Cached
  • Retired Gen. Jack Keane, a Fox News analyst, first walked the president through a map showing Syria, Turkey and Iraq on Oct. 8, pointing out the locations of oil fields in northern Syria that have been under the control of the United States and its Kurdish allies, two people familiar with the discussion said. That oil, they said Keane explained, would fall into Iran's hands if Trump withdrew all U.S. troops from the country.
  • Keane went through the same exercise with Trump again Oct. 14, this time with Sen. Lindsey Graham, R-S.C., at his side
  • Keane displayed a map showing that almost three quarters of Syria's oil fields are in the parts of the country where U.S. troops are deployed, the people familiar with the meeting said. They said that Graham and Keane told the president that Iran is preparing to move toward the oil fields and could seize the air space above them once the U.S. leaves.
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  • The president seemed "resigned" to leaving a small number of American troops in northern Syria to keep control of the oil, according to a person who was present.
  • The episodes shed light on how the latest twist in Trump's orders of a Syria withdrawal — that the U.S. needs troops there to "secure the oil" — emerged
  • Trump's comments in recent days about the need for U.S. troops to secure oil fields in Syria have raised questions about where the idea came from and fueled widespread confusion about what the president's mission is for American forces deployed there
  • On Oct. 7, the day before Keane, whom Trump had considered to be his defense secretary, first came to the White House to talk to him about Syria, he appeared on Fox News and described the president's decision on Syria as a "strategic blunder." His in-person presentation to Trump on Oct. 8 seemed to leave an impression on the president
  • the focus is on presenting options to Trump that address how to maintain the counter-ISIS operation after a U.S. withdrawal from northeast Syria, shore up defenses in Iraq and deny oil revenues to the Islamic State militant group and other adversaries.
  • In the first two years of the administration, current and former officials said Trump so frequently threatened to withdraw U.S. troops from Afghanistan, Syria, Iraq and even the Korean Peninsula that some of his advisers developed a system for talking him down from taking such steps. The effort included showing him visual materials like maps to walk through the reasons why an abrupt withdrawal would be detrimental to U.S. interests,
  • On Afghanistan, the presentation to Trump included a map of the country's rare earth minerals, largely used in electronic devices,
  • The focus on Iran in trying to convince Trump to keep a contingent of U.S. troops in northern Syria — rather than on potential action by Russia, which officials say is far more capable and likely to make moves to harness the oil — is in part because the president has appeared more likely to be persuaded by proposals aimed at countering Iran than Russia
  • while the emphasis on oil in Syria is intended to convince the president that the U.S. military presence is valuable, securing the oil fields is not a military strategy. U.S. troops will not actually be guarding the oil fields
  • U.S. military officials acknowledged Monday that they don't know if troops in Syria are actually going to stay or for how long.
  • This month wasn't the first time Trump has been shown a map detailing economic assets to convince him not to follow through on ordering U.S. troops home, officials said.
  • Esper told reporters that a small contingent of U.S. troops currently working with Kurdish allies to secure the oil fields will only remain in the country until the full withdrawal of U.S. forces is complete in a matter of weeks
Ed Webb

Confusion reigns over US plan to 'secure the oil' in Syria as commanders await orders -... - 0 views

www.cnn.com/...index.html

Syria US USA military Trump oil

shared by Ed Webb on 04 Nov 19 - Cached
  • US military commanders overseeing Syria operations are still waiting for precise battlefield orders from the White House and Pentagon on their exact mission to protect oilfields in eastern Syria
  • US commanders lack clarity on the most basic aspects of their mission, including how and when troops can fire their weapons and what, exactly, that mission is
  • Perhaps most crucially, there is no clarity about exactly who they are operating against in the oilfields.
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  • The precision that's lacking is vital for military commanders, who need specific, legal orders that are not subject to interpretation in moments of crisis.
  • There is no approved military task for specifically how US troops will take "control" of the oil and no decision whether the US should also protect other oil fields in northeast Syria beyond Deir Ezzor area, where they're currently present.
  • military officials say there is nothing in place to address the possibility that Syrian or Russian tanks or aircraft might approach the oil fields. The plan for now, officials say, is to declare the US presence and warn other players not to get close
  • "It's the only argument that resonates with the President and thus becomes the excuse that we need to keep forces there to protect other interests," Wechsler said. While the oil justification seems to have worked, "using it as an excuse opens up a whole series of other questions,"
  • what the legal basis for the US presence is, especially since the Assad government hasn't asked for it?
  • "we're keeping the oil. Remember that. I've always said that. Keep the oil. We want to keep the oil."
  • The statement won praise from Syrian President Bashar al-Assad, who told state TV on Thursday that Trump is the best of the US presidents because he is "the most transparent."
  • "All the US Presidents commit crimes, but get Nobel prizes, and act like defenders of human rights and the noble unique US values -- or Western values -- but they are a group of criminals who act on behalf of lobbies," Assad said. Trump's declaration that "'we want the oil' -- at least that's honest," the Syrian dictator said.
  • It remains unclear what legal basis the US government would have for controlling or taking the oil in Syria.
  • For now, the military sees its mission as "defending against any incursions," to be able to "enable the Syrian Democratic Forces to prevent ISIS from gaining access to the oilfields,"
  • When asked if that means the US will "take" the oil fields, as Trump has said, Esper responded with somewhat unusual wording. "I interpret that as deny ISIS access to the oil fields," he said.
  • Currently, there are still about 900 troops in Syria, just under the 1,000 estimated force level when the withdrawal began last month, because of the additional forces going in
Ed Webb

Leaking Ghost Tankers: Pollution in the Port of Aden - Peace Organization PAX - 0 views

paxforpeace.nl/...-pollution-in-the-port-of-aden

Yemen maritime RedSea environment pollution shipping war anaylsis OSINT

shared by Ed Webb on 04 Aug 22 - Cached
  • Decaying oil tankers at the coasts of Yemen pose serious risks to the environment and the people depending on it, reminding us starkly how conflicts can bring serious pollution risks. New open source research by PAX reveals multiple oil spills from rusty ships that have been polluting the coastal areas around the Port of Aden. If no action is taken by the authorities to remove these ships, it is only a matter of time before a new disaster will unfold.
  • Current international attention is mainly focused on finding a solution for the decaying oil tanker FSO SAFER loaded with 1.1 million barrels of oil. The tanker is at risk of sinking or exploding, which would create a regional environmental catastrophe. Yet over the course of the last years, smaller incidents around oil tankers in Yemen’s ports, the Red Sea and the Gulf of Aden have been mounting as well. Ranging from direct attacks on oil tankers to abandoned ships sinking and fires at port refineries, the conflict continues to create serious local pollution problems.
  • The war itself already poses serious environmental challenges that impact both Yemen’s population and its precious ecosystems. This ranges from structural leaking oil incidents documented by the Yemen environmentalist group Holmakhdar and the Sanaa Center, to broader environmental problems, and conflict-linked cutting and dying of millions of date palms, demonstrated by the open-source investigative group Bellingcat. The current weak state of governance and oversight around the many environmental challenges Yemen is facing continues to result in ongoing incidents that worsen the state of environment and affect the people depending on it.  Not only does this currently already lead to mounting environmental health risks and degraded ecosystems, these impacts will also worsen climate resilience for the conflict-affected country due to more extreme weather events, water shortages and rising temperatures
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  • According to the experts, over 40 tons of oil was leaked from the leaking tanker, though this has not been confirmed by the local authorities
  • PAX has observed leaks from two ships, including a large spill on July 5,2022 from the PEARL OF ATHENA that continued for 18 days until July 23. Oil slicks have washed ashore, polluting the coastal environment, and could pose a long-term risk to the marine environment in and around the bay of Aden, which could pose particular threats to the livelihoods of fishing communities. Hydrocarbons from crude oil and refined products contain toxic heavy metals such as lead, zinc, cadmium and mercury that can accumulate around coastal soils and sediments, be ingested by marine organisms such as fish, affect marine birds and mammals and impact marine ecosystems.
  • Large spills such as this one are also likely to hold up the arrival of ships that need to offload humanitarian goods in the container terminal. This is because ships are not able to go into the port until such slicks are removed to prevent further dispersal of the oil by the movement of incoming ships.  
  • The ongoing war in Yemen continues to stress local authorities’ capacities to address both the issues with dilapidated oil tankers and set up a proper environmental monitoring and enforcement mechanism for ships arriving in the Port of Aden
  • A damage assessment conducted by the UN Development Programme (UNDP) in 2021 found that at over 20 million USD was needed for reparations at the container terminal alone. The report, also stated that:  “Health, safety, and environmental awareness in the Port is currently unacceptable. The Port contains large areas of conflict-damaged debris, damaged and unusable equipment, and equipment and materials being stored for future use.”  
  • The arrival of ballast water on ships trading to ports in the Red Sea and Gulf of Aden (..) has the potential to do more harm to the marine environment than a major oil pollution incident. (..) Dumping of hazardous materials at sea in waters close to the Gulf of Aden has the potential to carry serious pollution hazards into the region.”   
  • the international community has failed to pick up the bill to effectively prevent a major environmental disaster with the FSO SAFER, despite the UN starting a public campaign to raise $20 million dollar to prevent a serious disaster posed by the tanker. Meanwhile, western countries continue to allow for billions in weapons sales to the countries bombing Yemen.  
  • The remaining tankers in the Port of Aden continue to pose a risk of sinking, which would likely lead to further environmental pollution with effects on coastal areas. This would particularly impact fishing communities and surrounding ecosystems
Ed Webb

There will be pain - With oil cheap, Arab states cannot balance their books | Leaders |... - 0 views

www-economist-com.envoy.dickinson.edu/...tes-cannot-balance-their-books

opinion MENA oil energy economy GCC Algeria KSA Saudi Oman Jordan Lebanon Egypt

shared by Ed Webb on 17 Jul 20 - No Cached
  • Peak demand for oil may still be years away, but covid-19 has given the Middle East and north Africa a taste of the future. Prices of the black stuff plummeted as countries went into lockdown. The region’s energy exporters are expected to earn about half as much oil revenue this year as they did in 2019; the IMF reckons their economies will shrink by 7.3%. Even when the virus recedes, a glut of supply will probably keep prices down. Faced with budgets that no longer add up, Arab states must adapt.
  • in May the Algerian government said it would cut its budget by half. Things are no better in Iraq, a big oil exporter, which is nearly broke. Even stable producers such as Oman and Kuwait are living beyond their means. Saudi Arabia, the world’s biggest oil exporter, has been burning through its cash reserves for months. Money that was meant to smooth the kingdom’s transition to a less oily economy is now propping up the old petrostate.
  • Egypt exports little oil, but over 2.5m of its citizens work in oil-rich countries. Remittances are worth 9% of its GDP. As oil revenues fall and some of those jobs disappear, Egypt will suffer, too. The same is true of Jordan, Lebanon and the Palestinian territories, which have long relied on the Gulf to absorb their jobless masses.
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  • Around a third of exports from Jordan and Lebanon go to oil-rich states, which send back wealthy tourists. Kuwaitis, Saudis and Emiratis account for about a third of tourist spending in Lebanon.
  • The bad news is that these states are moving too slowly. Some have cut their bloated bureaucracies and pared back subsidies. Saudi Arabia recently tripled its value-added tax. But the public sector is still the region’s main employer. Despite talk of diversification, the Gulf’s economies continue to revolve around oil
  • these reforms will be painful and are harder in bad times
  • The plans put forward by leaders like Saudi Arabia’s Muhammad bin Salman are tearing up the social contract. Saudis wonder why he doesn’t sell his $550m yacht instead of raising taxes. Anger is growing across the region. For the past century Arabs have been ruled by abusive leaders who hoarded their country’s wealth. Now these leaders are asking their people to make sacrifices and giving them little say in the matter. That is a recipe for continuing unrest and brutal suppression. If Arab rulers want citizens to pay their way, they will need to start earning their consent.
Ed Webb

'Apocalypse soon': reluctant Middle East forced to open eyes to climate crisis | Climat... - 0 views

www.theguardian.com/...to-open-eyes-to-climate-crisis

climate energy economy GCC Gulf UAE KSA Saudi Kuwait Qatar Oman Bahrain

shared by Ed Webb on 14 Nov 21 - No Cached
  • In Qatar, the country with the highest per capita carbon emissions in the world and the biggest producer of liquid gas, the outdoors is already being air conditioned.
  • In the United Arab Emirates it is estimated that the climate crisis costs £6bn a year in higher health costs. The salinity of the Gulf, caused by proliferating desalination plants, has increased by 20%, with all the likely impact on marine life and biodiversity.
  • The Middle East is warming at twice the rate of the rest of the world. By the end of the century, if the more dire predictions prove true, Mecca may not be habitable, making the summer Haj a pilgrimage of peril, even catastrophe
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  • The ruling elites are all dependent on oil rents for the survival of their regimes. They need the oil business to stay alive for them to stay in power. Their system is based on continued oil rent, but ultimately, the citizens’ long-term interests are with a liveable climate
  • The precise point oil demand will peak has been contested, and depends on a myriad of assumptions about regulation, technology and consumer behaviour. But many people say demand will peak in about 2040, and then decline.
  • the International Energy Association’s report Net Zero by 2050, by contrast, proposed oil demand fall from 88m barrels a day (mb/d) in 2020, to 72 mb/d in 2030 and to 24 mb/d in 2050, a fall of almost 75% between 2020 and 2050. It argued that the Gulf has all three elements needed to switch to renewables: capital, sun and large tracts of vacant land.
  • The Gulf’s self-proclaimed first mover, the UAE, was the first country in the region to ratify the Paris agreement and is now the least dependent on oil for government revenues. Last week it announced a “net zero initiative by 2050” to be begun with $163bn (£118bn) of investments and a new minister for climate change and the environment, Mariam Almheiri. The announcement came after the UAE ordered an 80-day brainstorming session in every government department from June. It was the first petro-state to embrace net zero in domestic consumption.
  • Opec’s own projections suggest oil demand will rise in absolute terms through to 2045, and oil’s share of world wide energy demand will fall only from 30% to 28%. Hardly a green revolution.
  • Aramco, the Saudi company with the largest carbon footprint in the world, is not trying to diversify at the rate of Shell or BP. Indeed, it has just announced an investment to increase crude capacity from 12m barrels a day to 13m barrels by 2027
  • If you see the lifestyle in the UAE, Saudi Arabia and Qatar, it is based on endless consumption
  • The region is responsible for only 4.7 % of worldwide carbon emissions, dwarfed by the pollution from Europe, America and China. The oil that the Middle East exports is logged against the carbon emissions of the users, not the producers.
  • The Gulf States are still highly reliant on oil and gas exports, which remain more than 70% of total goods exports in Kuwait, Qatar, Saudi Arabia and Oman, and on oil revenues, which exceed 70% of total government revenues in Kuwait, Qatar, Oman, and Bahrain. In Vision 2030, published in 2016, the Saudi crown prince, Mohammed bin Salman, promised to turn the country into a diversified industrial power house. The reality is very different. The World Bank shows Saudi Arabia is still 75% dependent on oil exports for its budget.
  • Gulf states are deeply competitive, so a flurry of news is emerging. Qatar has appointed a climate minister; Bahrain is targeting net zero by 2050; Kuwait has a new emissions plan.
  • Fossil fuels shipped abroad are not on the Saudi’s carbon ledger, owing to UN accounting rules, and the promised internal reduction in emissions is dependent on a heavy bet that unproven blue hydrogen and carbon capture technology will work.
Ed Webb

OPEC Is in its Death Throes | Foreign Policy - 0 views

foreignpolicy.com/...arabia-united-states-oil-shale

Saudi KSA economy economics OPEC oil energy Russia Iran Iraq Venezuela Kuwait UAE

shared by Ed Webb on 21 Oct 16 - No Cached
  • In February, OPEC called for an oil production “freeze” to raise crude prices in conjunction with Russia. But this effort collapsed at a meeting in Doha, Qatar, in April when Iran refused to join any freeze in order to regain the pre-2012 production levels of close to 4 mbpd it enjoyed before U.S. and European Union nuclear sanctions were imposed, following the removal of certain sanctions after the 2015 nuclear deal. A similar proposal failed at the OPEC meeting in June, again following Iran’s refusal, despite outreach by the Qataris.
  • OPEC again called for a form of output cut on Sept. 28 at an extraordinary meeting in Algiers. Markets bit on the news, with Brent prices rising sharply by about 15 percent in the following week, from $46 to $52 per barrel.
  • Can action by the cartel sustain higher crude prices over the long term? Probably not. Like a desert mirage, the image of an OPEC resurrection vanishes when approached.
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  • The massive fall in oil prices from over $100 per barrel in early 2014 to under $30 by January 2016 was caused primarily by then-Saudi Minister of Petroleum Ali al-Naimi’s strategy to gain market share for the kingdom and hurt the U.S. tight oil (or “shale”) industry by allowing the market, not OPEC interventions, to set prices.
  • While Riyadh has cranked up its production from mid-2014 to today by over a million barrels a day (to a peak of 10.7 mbpd in August this year), its fiscal position has taken a serious blow, with the budget deficit rising from 3 percent of GDP to 16 percent in 2015
  • The resilience of U.S. shale makes the argument that OPEC has experienced a resurrection a fragile claim. The cartel can probably raise prices in the short term through an output cut, but it will only be so long, perhaps already by mid-2017, before the U.S. shale industry revives and grabs any market share conceded by OPEC in a higher price environment. This will ultimately bring prices lower again, all else being equal.
  • Within OPEC, while other Gulf Co-Operation states, namely Kuwait and the United Arab Emirates, may be prepared to make a small cut to their production, key producers like Iraq and Venezuela are in too difficult a fiscal position to agree to any major cut.
  • Outside OPEC, Russia reached a production record of 11.1 mbpd in August, eclipsing Soviet levels. Being so close to the maximum anyway, Russia has little to lose by supporting the OPEC output cut and agreeing not to raise production further. Yet the Kremlin is unlikely to impose actual cuts on the range of oil companies that operate in the country.
  • In the short term, it seems Riyadh’s fiscal position was under such pressure from low oil prices that something had to give. While the kingdom has eased the fiscal pressure by starting to issue sovereign debt, the burn rate through its foreign reserves has been relentless (from about $740 billion in mid-2014 to $550 billion today) as it has attempted to defend the currency in the face of substantial capital flight from the country since the oil price crash in 2014.
  • Climate change will plainly be a major problem of the 21st century, and the world is moving away from fossil fuels: game over for an unreformed Saudi Arabia.
  • Saudi Arabia will face hard years ahead as the oil market increasingly looks to U.S. shale, not OPEC, as a handrail to oil prices on the supply side. However, this might well be the jolt that Salman needs to push through painful but necessary reforms
Ed Webb

Petro-aggression: How Russia's oil makes war more likely - 0 views

www.washingtonpost.com/...sias-oil-makes-war-more-likely

IR Russia Europe oil energy environment analysis war

shared by Ed Webb on 01 Apr 14 - No Cached
  • A Russian natural gas embargo is a trick that can probably only be pulled once (not unlike the 1973 oil embargo).  So in a sense, European dependence on Russian energy does not imply short-term vulnerability – except that European policymakers’ perceptions of vulnerability can become its own reality.
  • Russia’s resource curse.  Russia’s energy revenues (from both oil and gas) have ensconced Vladimir Putin as an autocrat and given him a free hand in foreign policy.  Russia is so heavily dependent on its energy revenues that it is a classic petrostate, making it more susceptible to corruption, autocracy and violent conflict.
  • Russia’s incursion into Crimea can be seen as a close cousin of petro-aggression.  A state is more likely to instigate international conflict when it has a combination of (a) oil income and (b) a leader with aggressive preferences.  A lot more likely: 250 percent more military conflict than a typical non-petrostate, on average.  Oil income means more military spending, increasing the state’s scope for potential conflicts.  Even more importantly, it distorts the domestic politics of the state, reducing the leader’s domestic political risk from military adventurism and aggressive foreign policy.
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  • Here lies the real risk of Europe’s energy situation: So long as it continues to buy Russian oil and gas, it is sending massive amounts of cash to a neighboring dictator.  By keeping the taps on, Putin consolidates his power as Russian dictator.
  • Diversifying away from fossil fuels would bring security benefits (in addition to some obvious environmental ones), in part by reducing the money sent to petrostates like Russia.
Ed Webb

Saudi Arabia, China Sign Deals Worth Up to $65 Billion | Foreign Policy - 2 views

foreignpolicy.com/...elt-one-road-saudi-vision-2030

KSA Saudi China economy energy oil trade investment FDI diversification

shared by Ed Webb on 16 Mar 17 - Cached
  • Saudi Arabian King Salman traveled to China Thursday to deepen economic ties between the world’s biggest oil exporter and the world’s second-largest oil consumer. It’s a key stop in the king’s six-week trip to Asia that comes as Riyadh struggles with a slumping oil market and a desperate need to diversify its economy.
  • up to $65 billion worth of economic and trade deals, spanning sectors from energy to space
  • more than 20 agreements on oil investments and in renewable energy
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  • China even discussed taking a stake in Saudi Aramco, the state-owned oil firm, which is preparing for a public listing
  • King Salman, and especially crown prince Mohammed bin Salman, have launched an ambitious campaign to shock the country out of oil-dependency and diversify the economy under the auspices of its Saudi Vision 2030 plan. It’s culminated in the unusual six-week trip to Asia that includes stops in Japan, Malaysia, Indonesia, Brunei, and the Maldives as Salman courts foreign investors
  • Xi couched China’s future role in the Middle East in purely economic terms, citing his country’s ambitious One Belt One Road initiative, China’s state-run Xinhua News reported. He stressed China would continue its longstanding policy of non-interference in the Middle East, in contrast to the United States and European counterparts
  • But China has steadily ramped up involvement in the region as its dependence on Middle Eastern oil grows. Beijing began building its first overseas military outpost, a naval base in Djibouti on the Horn of Africa, in 2016. And it funneled thousands of peacekeepers to U.N. missions, including in oil-rich countries like South Sudan.
Julianne Greco

UPDATE: Lukoil Submits New Bid For Iraqi Oil Field-Official - WSJ.com - 0 views

online.wsj.com/...BT-CO-20091018-702105.html

oil Iraq Lukoil Exxon ConocoPhillips deal crude oil

shared by Julianne Greco on 19 Oct 09 - Cached
  • -Competition is hotting up for rights to develop one of Iraq's largest oilfields after Russia's oil giant Lukoil (LKOH.RS) submitted this weekend an improved offer and accepted the government's production sharing terms, an official said.
  • Iraq is offering international oil companies a rare chance to gain a foothold in one of the world's largest deposits of crude at a time when few opportunities exist for private investors to exploit Middle East oil. In the Middle East, the industry is mainly controlled by state oil companies.
  • Lukoil is said to have raised the production plateau for the West Qurna-1 field in its new proposal and the company expects a decision by the Iraqi oil ministry on Monday or Tuesday, an industry official, with knowledge of the matter, said. The Russian company is partnering ConocoPhillips (COP) in the bid. Lukoil is now the second international oil company after Exxon to accept Baghdad's $1.90 a barrel payment fee for West Qurna, the most sought-after field in the country's first postwar petroleum round held at the end of June this year.
Ed Webb

Pentagon guardianship of Syrian oil fields faces pushback - 0 views

www.al-monitor.com/...syria-oil-fields-pushback.html

US USA military Syria oil energy Russia Iraq Turkey Kurds Trump

shared by Ed Webb on 22 Oct 19 - Cached
  • Defense Secretary Mark Esper says the US administration is considering leaving a residual force of 200 American troops in Syria to keep the Bashar al-Assad regime and Russia away from the country’s contested rigs and derricks. This plan is likely to face pushback from within the administration and among allies, as well as lead to potential legal challenges from Congress, current and former American officials told Al-Monitor.
  • “I don’t know where all this oil infrastructure stuff is coming from,” the senior US official said. “Maybe playing to what [Trump] wants here. We have not seized the oil fields.”
  • current Pentagon plans focused on partnering a small American force with both the Kurdish People’s Protection Units (YPG) and Sunni Arabs in northeastern Syria. “It’s small, and no more Europeans,”
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  • the American withdrawal appeared to pick up pace on Monday as a US ground convoy carrying troops and equipment out of Syria from the main American base in Kobane “is complete,” coalition spokesman Col. Myles Caggins told Al-Monitor in a statement. “The forces in the convoy will eventually be repositioned throughout the region after a temporary pause.”
  • “The biggest concern for the US-led coalition in Deir ez-Zor should be force protection,” said Nicholas Heras, a Middle East fellow at the Center for a New American Security. “There is a lot of trial by fire that the US forces will have to directly step into in Deir ez-Zor, and they will not have the YPG as a layer of protection for them.”
  • The Kurdish Red Crescent, the primary provider of medical care in the SDF-held northeast, said on Sunday that the Turkish incursion into Syria had killed 83 people and left 231 wounded since Oct. 9.
  • In February 2018, Russian paramilitaries and pro-regime forces staged a large attack on an SDF-held field, known as Conoco, that left 200-300 dead, after the United States repeatedly warned the Moscow-backed forces to stop their advance.
  • The Assad regime has long coveted retaking the oil fields that dot Syria's northern and eastern provinces that have fallen out of Damascus’ hands as IS exploited the turmoil an of eight-year civil war
  • Experts worry the administration could be stretching a 2001 legal authority that the US military uses in Syria to combat terrorist groups such as al-Qaeda and IS. “My sense is that the footprint you’d keep in the Deir ez-Zor oil fields is not anything like a counter-IS operation,”
  • with American troops already headed out of the country, protecting oil installations, such as the United States did in the hourslong 2018 battle against Russian paramilitaries and pro-regime forces on an eastern Syrian oil field may prove more difficult.
  • The plan to reposition American forces into Iraq would face significant bureaucratic challenges, as the number of US troops is capped at 5,200, and the Iraqi government could impose limits on cross-border raids
Ed Webb

Warming Temperatures & Decades of Oil Spills Cause Irreversible Damage to the Persian G... - 0 views

www.ipsnews.net/...reversible-damage-persian-gulf

gulf pollution sustainability environment extinction water

shared by Ed Webb on 19 Sep 20 - Cached
  • According to estimates by experts, pollution levels in the Persian Gulf are 47 times higher than the world’s average and are steadily increasing. The 600-mile body of water that is also known as the Arabian Gulf currently has 34 oilfields with more than 800 wells. In addition, roughly 85% of the oil extracted in the Gulf countries is exported – 40% of the world export of crude oil and around 15% of the world’s total export of refined products come from the region – and more than half of all the oil is carried by ships. It is estimated that approximately 25,000 tanker movements sail in and out of the Strait of Hormuz, the only sea passage that connects the Persian Gulf to the open sea. Accidental spilling is unavoidable and, on average, 100–160 thousand tons of oil and oil products end up in the Gulf every year.
  • In 2017, ScanEx and the Institute of Oceanology of the Russian Academy of Sciences began conducting the pilot project on the satellite monitoring of the state of the water of the Persian Gulf. The results of the research confirmed the severe levels of oil pollution in the gulf waters and the damage, some of it which have been irreversible, on its marine life. “In addition to military-led pollution, other issues such as warming waters due to climate change and the increasing saline levels due to desalination efforts by countries in the Gulf area aggressively worsening marine productivity and habitats,” says George Stacey, an analyst working with Norvergence, an environmental advocacy NGO.
  • a combination of human activities was pushing at least 35 per cent of the fauna in the Gulf waters to extinction in the next 60 years.
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  • Fisheries of Bahrain, with a relatively large fishing industry, and Iran, with the highest catch and fewer employment alternatives due to sanctions, are pointed out to be particularly vulnerable
  • A lot of the damage done in the past few decades cannot be reversed completely but it is not too late to prioritize the sustainability of the marine ecosystems of the gulf waters right now because any damages to it will trickle down to impact the communities living on its coasts and reverse years of development and advancements.”
Ed Webb

The Oil Drum | IEA Economist Warns about World Oil Supply - 0 views

www.theoildrum.com/5634

oil energy futures future depression recession growth prediction

shared by Ed Webb on 03 Aug 09 - Cached
  • the market power of the very few oil-producing countries that hold substantial reserves of oil – mostly in the Middle East – would increase rapidly as the oil crisis begins to grip after 2010
  • Many people think there will be a recovery in a few years' time but it will be a slow recovery and a fragile recovery and we will have the risk that the recovery will be strangled with higher oil prices.
  • demand after 2010 is expected to exceed dwindling supplies
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  • I fear that most governments, particularly members of the OECD, will waste time trying to downplay the possible ramifications of declining oil production and to assure the public that everything is under control.
Ed Webb

Key oil figures were distorted by US pressure, says whistleblower | Environment | The G... - 1 views

www.guardian.co.uk/...il-international-energy-agency

oil peak IEA IR energy environment

shared by Ed Webb on 10 Nov 09 - Cached
  • The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.
  • John Hemming, the MP who chairs the all-party parliamentary group on peak oil and gas, said the revelations confirmed his suspicions that the IEA underplayed how quickly the world was running out and this had profound implications for British government energy policy.He said he had also been contacted by some IEA officials unhappy with its lack of independent scepticism over predictions. "Reliance on IEA reports has been used to justify claims that oil and gas supplies will not peak before 2030. It is clear now that this will not be the case and the IEA figures cannot be relied on," said Hemming."This all gives an importance to the Copenhagen [climate change] talks and an urgent need for the UK to move faster towards a more sustainable [lower carbon] economy if it is to avoid severe economic dislocation," he added.
Ed Webb

'Five years ago there was nothing': inside Duqm, the city rising from the sand | Cities... - 0 views

www.theguardian.com/...ity-sand-luxury-hotels-housing

Oman economy trade investment infrastructure China OBOR culture beduin oil

shared by Ed Webb on 07 Sep 18 - No Cached
  • a long line of plans stretching back to the 1980s aimed at developing and populating barren parts of Oman. Around 70% of the country’s population resides within a thin 150-mile-long coastal strip in the north near Muscat. The government now sees its hundreds of miles of unused coastline as full of economic potential.
  • “Duqm is a huge industrial city being built out of thin air,” says Manishankar Prasad, a local researcher who worked on the new city’s environmental and cultural impact assessments. “It will essentially change the locus of industrial activity from the northern parts of the country, which are heavily urbanised. [Having this] huge geographical expanse with this sparse population and no industrial activity is really not the way forward.”
  • We are in the midst of an era of new cities – with more than 200 currently under construction. Remote deserts all over east Asia, the Middle East and parts of Africa are being urbanised. There’s Nurkent in Kazakhstan, Aylat in Azerbaijan, New Kabul City in Afghanistan, New Baghdad in Iraq, Rawabi in Palestine, King Abdullah Economic City in Saudi Arabia, New Cairo in Egypt … Morocco has nine new cities in the works, and Kuwait has 12.
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  • Oman is desperate to diversify away from its oil and gas dependency. Research by the US Energy Information Administration puts Oman’s known crude oil reserves at 5.6bn barrels. While this is only enough to rank the country 21st in the world, its economy is disproportionately dependent: oil and gas accounts for nearly half of the country’s GDP, 70% of exports and between 68% and 85% of government revenue.
  • “Several dozen new cities are being constructed in the Middle East, mainly to transition away from the petroleum industry to a variety of other industries, including tourism, manufacturing, education and hi-tech,” says Dr Sarah Moser, a McGill University geography professor and author of an upcoming atlas of new cities.
  • Duqm sits on the Arabian Sea near the Strait of Hormuz, the gateway to the Persian Gulf – and the world’s most glaring oil supply chokepoint. Nearly a fifth of the world’s oil currently flows through this passage, ever prone to disruption. If the Duqm project succeeds, the shipping industry would be able to dock at the gates of the Middle East without needing to go all the way inside.
  • attracted the attention of Beijing’s much heralded Maritime Silk Road. More than three-quarters of Oman’s crude oil exports go directly to China.
  • While Duqm was never very densely populated, around 3,000 Bedouin – mostly fishermen and semi-nomadic herders – called the area home before the bulldozers arrived. These villages have now been demolished and the Oman government has built a new, modern town for them to relocate to. The houses look as if they were copied and pasted from Muscat – bright, white buildings two storeys high with garages and ornate gateways. There is a mosque in the centre. The houses stand empty. The local Bedouin prefer their traditional way of life – and want space to keep camels.
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