US investigates UAE tanker attack report
US government agencies and the Pentagon have reacted with caution to reports of attacks on oil and products tankers in UAE-controlled waters off the coast of the emirate of Fujairah yesterday.
A total of four ships were "sabotaged," the UAE said. Two Saudi Arabian oil tankers were hit by a "sabotage attack", the Saudi energy ministry said.
The US Central Command, which oversees US military assets providing protection for critical oil shipping lanes in the Middle East, said it is aiding the investigation at the request of the UAE government. The US Maritime Administration in an alert said that the incident and precise means of the attack have not been confirmed and advised "exercising caution when transiting the area."
The Department of Energy said it was "aware of efforts to disrupt oil shipping as reported by the governments of Saudi Arabia and the UAE," adding that it is "monitoring the oil markets, and is confident they remain well-supplied." The State Department referred inquiries to the UAE government.
The incident did not result in any injuries or spills, and details on the attack remain scant. The attack on the tankers comes amid rising tension in the Mideast Gulf following Washington's decision not to renew sanctions waivers for buyers of Iranian crude and the escalation in the US rhetoric directed at Iran.
Saudi, UAE and US officials have not publicly blamed Iran for the attacks. But oil futures prices initially surged by $1.50-1.90/bl in early trading on concerns that the incident could lead to a confrontation between Iran and the US that would threaten crude, products and LNG flows through the critical strait of Hormuz. Fujairah is located at the entrance to the straits of Hormuz in the Gulf of Oman.
Prices later retreated on the lack of any solid news linking Iran to the attacks, and on expectations of a slowdown in oil demand growth amid a worsening trade dispute between the US and China.
Oil markets remain on tenterhooks, awaiting further information on the attacks. Just two days before the incident, the US Maritime Administration issued an advisory warning of an increased possibility since early May "that Iran and/or its regional proxies could take action against US and partner interests," including oil production infrastructure.
The White House last week announced the deployment of a US carrier group and a bomber task force to the Middle East as a means to confront an unspecified threat from Iran.
But US officials never have detailed the threat or explained their reasons for believing why the security situation would deteriorate. The US Navy regularly rotates its forces, including carrier groups, in the Mideast Gulf. On 8 April, the Pentagon announced deployment of the USS Abraham Lincoln, which is now en route to the Mideast Gulf.
"We will see what happens with Iran. If they do anything, it will be a very big mistake," President Donald Trump said at the White House today.
The tougher rhetoric likely signals a further escalation in the administration's "maximum pressure" campaign against Tehran. Secretary of state Mike Pompeo sought to underscore the point by making an unscheduled visit in Brussels today for a meeting with the EU member countries' foreign ministers. The EU foreign affairs council was meeting to discuss steps to preserve the Iran nuclear deal, among other agenda items.
Pompeo planned to discuss "recent threatening actions and statements" from Iran, the State Department said ahead of the meeting. "Secretary Pompeo will continue to coordinate closely with our allies and partners to ensure the security of our mutual interests in the Middle East and around the world."
But his European counterparts urged him to exercise restraint.
"Mike Pompeo heard very clearly from us today, not only from myself, but also from the other EU member states' ministers, that we are living in a crucial and delicate moment, where the most relevant and responsible attitude to take is that of maximum restraint and avoiding any escalation on the military side," EU foreign affairs commissioner Federica Mogherini said following the meeting.
"We are really worried about the risk of a conflict happening by accident with an escalation that is unintended on either side, with some kind of conflict," UK foreign minister Jeremy Hunt said.
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Canadian rail workers vote to launch strike: Correction
Canadian rail workers vote to launch strike: Correction
Corrects movement of grain loadings from a year earlier in final paragraph. Washington, 2 May (Argus) — Workers at the two major Canadian railroads could go on strike as soon as 22 May now that members of the Teamsters Canada Rail Conference (TCRC) have authorized a strike, potentially causing widespread disruption to shipments of commodities such as crude, coal and grain. A strike could disrupt rail traffic not only in Canada but also in the US and Mexico because trains would not be able to leave, nor could shipments enter into Canada. This labor action could be far more impactful than recent strikes because it would affect Canadian National (CN) and Canadian Pacific Kansas City (CPKC) at the same time. Union members at Canadian railroads have gone on strike individually in the past, which has left one of the two carriers to continue operating and handle some of their competitor's freight. But TCRC members completed a vote yesterday about whether to initiate a strike action at each carrier. The union represents about 9,300 workers employed at the two railroads. Roughly 98pc of union members that participated voted in favor of a strike beginning as early as 22 May, the union said. The union said talks are at an impasse. "After six months of negotiations with both companies, we are no closer to reaching a settlement than when we first began, TCRC president Paul Boucher said. Boucher warned that "a simultaneous work stoppage at both CN and CPKC would disrupt supply chains on a scale Canada has likely never experienced." He added that the union does not want to provoke a rail crisis and wants to avoid a work stoppage. The union has argued that the railroads' proposals would harm safety practices. It has also sought an improved work-life balance. But CN and CPKC said the union continues to reject their proposals. CPKC "is committed to negotiating in good faith and responding to our employees' desire for higher pay and improved work-life balance, while respecting the best interests of all our railroaders, their families, our customers, and the North American economy." CN said it wants a contract that addresses the work life balance and productivity, benefiting the company and employees. But even when CN "proposed a solution that would not touch duty-rest rules, the union has rejected it," the railroad said. Canadian commodity volume has fallen this year with only rail shipments of chemicals, petroleum and petroleum products, and non-metallic minerals rising, Association of American Railroads (AAR) data show. Volume data includes cars loaded in the US by Canadian carriers. Coal traffic dropped by 11pc during the 17 weeks ended on 27 April compared with a year earlier, AAR data show. Loadings of motor vehicles and parts have fallen by 5.2pc. CN and CPKC grain loadings fell by 4.3pc from a year earlier, while shipment of farm products and food fell by 9.3pc. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
FTC clears Exxon-Pioneer deal but bars Sheffield
FTC clears Exxon-Pioneer deal but bars Sheffield
New York, 2 May (Argus) — US antitrust regulators signaled they will clear ExxonMobil's proposed $59.5bn takeover of Pioneer Natural Resources but banned the shale giant's former chief executive officer from gaining a seat on the board. A proposed consent order from the Federal Trade Commission seeks to stop Scott Sheffield, Pioneer's former chief executive, from taking part in "collusive activity" that would potentially raise crude prices and cause US consumers to pay more at the pump. The order paves the way for ExxonMobil to close its blockbuster deal for Pioneer, which will make it the leading producer in the prolific Permian shale basin of west Texas and southeastern New Mexico. It is also the top US oil producer's biggest transaction since Exxon's 1999 merger with Mobil. ExxonMobil's Permian output will more than double to 1.3mn b/d of oil equivalent (boe/d) when the acquisition closes, before increasing to about 2mn boe/d in 2027. The FTC, which has taken a tougher line on mergers under the administration of President Joe Biden, has paid close attention to oil deals announced during the latest phase of shale consolidation. Only this week, Diamondback Energy said it had received a second request for information from the regulator over its $26bn proposed takeover of Endeavor Energy Resources. And Chevron's planned $53bn acquisition of US independent Hess has also been held up. The FTC alleged in a complaint that Sheffield exchanged hundreds of text messages with Opec officials discussing crude pricing and output, and that he sought to align production across the Permian with the cartel. His past conduct "makes it crystal clear that he should be nowhere near Exxon's boardroom," said Kyle Mach, deputy director of the FTC's Bureau of Competition. ExxonMobil said it learnt about the allegations against Sheffield from the FTC. "They are entirely inconsistent with how we do business," the company said. While Pioneer said it disagreed with the FTC's complaint, which reflects a "fundamental misunderstanding" of US and global oil markets and "misreads the nature and intent" of Sheffield's actions, the company said it would not be taking any steps to stop the merger from closing. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Abu Dhabi’s Adnoc puts crude capacity at 4.85mn b/d
Abu Dhabi’s Adnoc puts crude capacity at 4.85mn b/d
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Shell's 1Q profit supported by LNG and refining
Shell's 1Q profit supported by LNG and refining
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