Trump fires his Iran policy architect: Update 2

  • Market: Crude oil
  • 10/09/19

Updates throughout

US president Donald Trump today fired White House national security adviser John Bolton, a proponent of strong pressure tactics against Iran and Venezuela.

Trump said he and other administration officials disagreed strongly with many of Bolton's views. Bolton's "priorities and policies just do not line up with the president," the White House said.

"The president has the right to put someone who carries out his agenda" but that was no longer tenable with Bolton, a senior White House official said.

The final straw for the president came after he was forced to call off talks with the leaders of the Taliban insurgency, scheduled to take place at the presidential retreat at Camp David on 7 September. Bolton opposed the talks and the prospect of inviting Taliban leaders to Camp David just days before the 18th anniversary of the 11 September 2001 attacks drew rebukes even from Trump's loyalists in Congress.

Bolton, responding via Twitter after Trump's announcement, said he offered to resign last night and "President Trump said, 'Let's talk about it tomorrow.'"

More than any other individual, Bolton had laid out the case for the "maximum pressure" campaign against Iran through sanctions and diplomatic pressure even before becoming Trump's national security adviser in April 2018.

Bolton had argued that the pressure of unilateral US sanctions will either result in the overthrow of the Iranian government or force it to negotiate a new deal on US terms. He suggested that Trump ought to publicly discuss the prospect of talking with Iran after withdrawing the US from the nuclear deal, but only to address his allies' concerns.

Bolton's policy of maximum pressure has resulted in a near cutoff of Iranian crude exports, but it also has sparked a string of incidents on oil tankers and infrastructure in the Middle East. Iran has selectively stopped compliance with restrictions on its nuclear program. The two countries nearly came to a military confrontation in June, but Trump decided not to retaliate after Iran shot down an unmanned US military drone.

And Trump appears interested in negotiating with Tehran, rather than just going through the motions of a dialogue. At the suggestion of French president Emmanuel Macron, Trump has floated the possibility of meeting Iranian president Hassan Rohani at the UN General Assembly later this month, even though the US insistence on maintaining oil sanctions on Iran makes the meeting unlikely.

Trump also seems open to discussing the French proposal to provide an economic lifeline for Tehran by oil-backed loans from the remaining participants of the nuclear deal, in return for Iran's return to full compliance with that agreement.

But US secretary of state Mike Pompeo and treasury secretary Steven Mnuchin insisted today that the "maximum pressure" policy will not change despite Bolton's departure — even though both appeared visibly satisfied at the news.

"The president has made clear he is happy to take a meeting with no preconditions, but we are maintaining the maximum pressure campaign," Mnuchin said at a news briefing shortly after Bolton's termination was announced. Mnuchin and Pompeo announced a consolidation of several existing sanctions programs to better target groups Washington considers terrorist, including Iran's Islamic Revolutionary Guard Corps and its component Quds Force in this category alongside extremist groups Isis and Al-Qaeda in a calculated slight to Tehran.

Pompeo cited his own disagreements with Bolton and said that Trump "should have people that he trusts and values and whose efforts and judgments benefit him in delivering American foreign policy."

Bolton's equally confrontational approach to force out Venezuelan president Nicolas Maduro has not worked out so far. The US recognizes Venezuelan National Assembly speaker Juan Guaido as the country's interim president. US sanctions in place have cut off Venezuela's primary export destination, forcing that country to redirect its crude exports to China and India.

Mnuchin said the Venezuela policy will not change. "We have a massive sanctions program that is working."

Bolton was Trump's third national security adviser. The first, Michael Flynn, resigned after less than a month in the office and is awaiting sentencing after pleading guilty to lying to the FBI about his contacts with the Russian ambassador in Washington in 2016. Flynn's successor HR McMaster lasted 13 months on the job before Trump forced him out in March 2018 to pursue a more confrontational course on Iran.

Trump said he would appoint a new national security adviser next week. Bolton's deputy Charlie Kupperman, formerly an executive at Boeing and Lockheed Martin, will serve as acting national security adviser.

Pompeo may not serve until the end of Trump's term in office either. Senior Republicans are pushing him to run for the Senate from Kansas next year, and Pompeo has until June 2020 to make the decision. Pompeo has not ruled out his candidacy, while insisting that he will continue to serve as secretary of state as long as Trump keeps him on board.


Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
19/04/24

US reimposes Venezuela oil sanctions

US reimposes Venezuela oil sanctions

The most immediate impact of the decision is likely to be a re-routing of Venezuelan oil flows, write Haik Gugarats and Kuganiga Kuganeswaran Washington, 19 April (Argus) — The US administration on 17 April reimposed sanctions targeting Venezuela's oil exports and energy-sector investments, and set a deadline of 31 May for most foreign companies to wind down business with state-owned oil firm PdV. The US decision rescinds a sanctions waiver issued in October that allowed Venezuela to sell oil freely to any buyer and invite foreign investment in the country's energy sector. The waiver, which was due to expire on 18 April, was tied to Caracas' agreement to hold a competitive presidential election and allow opposition politicians to contest it. Venezuelan president Nicolas Maduro's government reneged on this deal by refusing to register leading opposition candidate Maria Corina Machado or an alternative candidate designated by her, a senior US official says. The US considered the potential effects on global energy markets and other factors in its decision, but "fundamentally, the decision was based on the actions and non-actions of the Venezuelan authorities", the official says. Separate sanctions waivers granted to Chevron and oil field service companies Halliburton, SLB, Baker Hughes and Weatherford will remain in place. Chevron will be allowed to continue lifting oil from its joint venture with PdV, solely for imports to the US. US-bound Venezuelan crude volumes averaged 133,000 b/d last year, up from nothing in 2022. Chevron says its Venezuela output was 150,000 b/d at the end of 2023. Argus estimated Venezuela's crude output at 850,000 b/d in March, up by 150,000 b/d on the year. PdV says it will seek to change the terms of its nine active joint ventures , starting with Spain's Repsol, in a bid to boost production. Sanctions impact The reimposition of sanctions will primarily affect Venezuelan exports to India and China. India has emerged as a major new destination for Venezuelan crude since the US lifted sanctions in October, having imported 152,000 b/d in March. Two more Venezuelan cargoes are heading to India and expected to arrive before the 31 May deadline. The VLCC Caspar left the Jose terminal on 14 March and is expected to arrive at an as-yet-unknown Indian west coast port on 26 April. The Suezmax Tinos left Venezuela on 18 March and is due at Sikka on 30 April. Chinese imports of Venezuelan Merey, often labelled as diluted bitumen, have been lower since October. Independent refiners in Shandong, which benefited from wide discounts on the sanctioned Venezuelan crude, cut back imports to just a fraction of pre-relief levels as prices rose, while state-controlled PetroChina was able to resume imports under the waiver. The Merey discount to Brent had already widened in anticipation of the reimposition of sanctions. Separate US authorisations previously issued to Repsol and Italy's Eni to allow oil-for-debt deals with PdV and enable a Shell project to import natural gas from Venezuela's Dragon field to Trinidad and Tobago are expected to remain in place. Repsol imported 23,000 b/d of Venezuelan crude to Spain last year and 29,000 b/d so far this year, according to data from oil analytics firm Vortexa. US sanctions enforcers as a rule do not disclose the terms of private sanctions licences, and the European companies were not immediately available to comment. The US would still consider future requests for sanctions waivers for specific energy projects, another senior official says. The US administration says it will consider lifting the sanctions again if Maduro's government allows opposition candidates to participate in the July presidential election. The US' action on 17 April "should not be viewed as a final decision that we no longer believe Venezuela can hold competitive and inclusive elections", a third senior official says. Chinese imports of Venezuelan crude Venezuelan crude exports Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Read more
News

US restricts future oil leasing in NPR-A


19/04/24
News
19/04/24

US restricts future oil leasing in NPR-A

Washington, 19 April (Argus) — President Joe Biden's administration today finalized a rule to prohibit future oil leasing on nearly half of the 23mn-acre National Petroleum Reserve in Alaska (NPR-A), adding to a flurry of recent environmental regulations that have frustrated oil interests. The rule will make it harder for oil producers to expand beyond development in the northeast section of NPR-A, where ConocoPhillips is developing its $8bn Willow drilling project. The rule outright bans new leasing on 10.6mn acres of the reserve, including around the ecologically sensitive Teshekpuk lake "special area" that is believed to hold large volumes of crude. The rule also restricts future leasing on an additional 2mn acres in the NPR-A that includes other special areas. "These natural wonders demand our protection," Biden said. "I am proud that my administration is taking action to conserve more than 13mn acres in the western Arctic." The US Bureau of Land Management (BLM) said it received more than 100,000 comments on its proposal to limit oil leasing in the NPR-A, a federal area established in 1923 where commercial oil production began only in 2015. The restrictions came after former president Donald Trump tried to increase drilling in the NPR-A through a plan to allow leasing on an additional 7mn acres, including around Teshekpuk lake. With the rule complete, BLM said it plans to solicit input on whether to revise the boundaries of the "special areas" and identify additional lands in NPR-A that could qualify for protection. Biden administration officials previously described the rule as creating a "one-way ratchet" for conservation that a new administration could not reverse. The rule will not affect existing oil and gas leases in NPR-A, including Biden's decision in 2023 to approve the Willow project, which is expected to reach a peak output of 180,000 b/d and that environmentalists strongly opposed. BLM said the 10.6mn acres of NPR-A that it closed to leasing has only medium or low potential for oil and gas resources. Environmentalists cheered the new NPR-A restrictions, with Sierra Club executive director Ben Jealous calling it a "major victory" for the arctic. But oil industry groups say the restrictions are a step in the wrong direction, adding to other recent regulations they say will make it hard to produce energy on federal land. BLM recently finalized more stringent bonding requirements for onshore and offshore land, in addition to finalizing a plan to lease federal land for conservation. "This misguided rule from the Biden administration sharply limits future oil and natural gas development in Alaska's National Petroleum Reserve, a region explicitly intended by Congress to bolster America's energy security," American Petroleum Institute senior vice president of regulatory affairs Dustin Meyer said. The administration has been working to finish regulations in recent weeks ahead of an upcoming deadline where any rule could be subject to "disapproval" in 2025 under the Congressional Review Act. The exact deadline remains in flux because it depends on how long the US Congress stays in session, but it could arrive as early as next month. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Limited strike on Iran opens door to de-escalation


19/04/24
News
19/04/24

Limited strike on Iran opens door to de-escalation

Dubai, 19 April (Argus) — A limited aerial assault on the central Iranian city of Isfahan earlier today could mark the beginning of the end of the latest escalation in the Mideast Gulf. Iranian state media reported in the early hours of Friday, 19 April, several explosions over Isfahan at 04:00 local time. These were later confirmed by the Iranian military to have been the result of air defences bringing down three small drones over the city. Isfahan is the home to a number of strategically important facilities, among them the Shekari airbase that houses some of Iran's F-14 Tomcat fighter planes and SU-24 Sukhoi bombers, and a uranium conversion facility. There was "no impact or damage" to either, according to Iranian army commander-in-chief Seyyed Abdolrahim Mousavi. Other Iranian officials also sought to downplay the strike. Hossein Dalirian, spokesman for Iran's National Center for Cyberspace, said on social media platform X that it was so minor "it would not be considered an attack anywhere in the world." Ice Brent crude futures rose by nearly $3/bl earlier today, but are now trading below the previous settlement level. Iran and the wider Mideast Gulf region were on high alert as Israel weighed its options for a response to Tehran's assault on Israeli territory last weekend. That attack, involving more than 300 drones, ballistic missiles and cruise missiles, was the first ever direct assault on Israel from Iranian territory. As yet, there has been no official confirmation from either side that today's attack originated from Israel. Media reports quoted unnamed US and Israeli officials saying Israel had launched the drones, and Oman's foreign ministry condemned Israel "for its attack this morning on Isfahan". Iran's attack on Israel last weekend was itself in response to a suspected Israeli air strike on an Iranian diplomatic compound in the Syrian capital, Damascus, at the start of April. That killed seven members of Iran's powerful Islamic Revolutionary Guard Corps (IRGC), including two generals. Despite its magnitude, the Iranian retaliation was not only highly choreographed, but also telegraphed to key stakeholders beforehand in an effort to limit damage and casualties. Israel said immediately after the attack that almost all of Iran's drones and missiles were intercepted with the help of allied forces in the region and that there were no fatalities, only "light" damage to the Nevatim military base in Israel's Negev desert. De-escalatory strike The limited nature of Iran's strike prompted Israel's western allies to urge it to show restraint. The US appealed to Israeli prime minister Benjamin Netanyahu to "take the win" and claim victory for its defence. But as it became increasingly clear that a response without a military dimension would be unpalatable for Israel, the US and Europe turned their efforts to making sure whatever Israel chose to do was also limited and fell below a threshold that could trigger yet another escalation in tensions. "This was probably the level of attack that on one hand was necessitated by internal Israeli calculations within the security cabinet and broader political coalition, and by virtue of the pressure by allies and what the US was willing to countenance," said Geneva Graduate Institute senior research associate Farzan Sabet. "It was a limited strike with the message that we can hit you anywhere, anytime, and without having to resort to a major strike involving 300-plus missiles." In the days following Iran's attack on Israel, several key IRGC figures said Tehran had "decided to create a new equation with Israel" ꟷ specifically that Tehran would retaliate to any Israeli attack on its interests or citizens from Iranian territory. This would be a shift from the previous status quo, which would see Israel regularly target Iranian interest and officials in third countries, many times without response from Tehran. But the limited nature of Israel's latest attack, and the very concerted effort by Iranian officials, military personnel and media to downplay its severity and impact so far, suggests it could feasibly provide a de-escalatory off-ramp for Iran. "Should Israel's response be limited to this, the Islamic Republic will not be under pressure to retaliate," said Arab Gulf States Institute senior fellow Ali Alfoneh. But is too early to say whether today's incident is the totality of Israel's response. "We're running up to [the Jewish holiday of] Passover [on 22-30 April]. The Israelis may not have wanted to carry out a major retaliation ahead of Passover so as to avoid the threat of war hanging over the country during the holiday," Sabet said. "So it is very possible that more [retaliatory attacks] could come after Passover." By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Karoon cuts 2024 guidance on lower US output


19/04/24
News
19/04/24

Karoon cuts 2024 guidance on lower US output

Sydney, 19 April (Argus) — Australia-listed oil producer Karoon Energy has cut its production guidance for 2024 to reflect lower production from its stake in the Who Dat floating production system in the US' Gulf of Mexico. Who Dat's weaker well and facility performance has led to the lower guidance, with Karoon now expecting to produce 29,000-34,000 b/d of oil equivalent (boe/d) in 2024, down from a previous 31,000-37,000 boe/d guidance. Karoon said it and joint-venture partner LLOG Exploration will continue to prioritise higher value oil production over gas for the remainder of the year. The firm's January-March output rose by 17pc against October-December 2023 . Who Dat's production on a net revenue interest (NRI) basis was 9,000 boe/d for January-March, with Karoon downgrading its forecast NRI production from 4mn-4.5mn boe in 2024 to 3-3.5mn boe. But output from Karoon's Bauna asset offshore Brazil was 15pc lower than the previous quarter because of continuing reliability problems with Bauna's floating production, storage and offloading (FPSO) vessel, the shut-in of the SPS-88 well for the full period and natural field decline. Production for January-March at Bauna was 24,000 b/d, down from 28,000 b/d the previous quarter. Karoon expects to resume production from the well during July-September following an intervention, assuming no delays in regulatory approval. Bauna's annual maintenance will take place next month with a three-week shutdown of the FPSO planned to boost reliability. By Tom Major Karoon Energy results Jan-Mar '24 Oct-Dec '23 Jan-Mar '23 y-o-y % ± q-o-q % ± Sales revenue ($mn) 197 209 144 37 -6 Production (b/d) 34,000 29,000 22,000 55 17 Sales volume (b/d) 30,000 28,000 22,000 36 7 Average prices ($/bl) Bauna oil price 76 83 73 4 -8 Who Dat sales gas ($/mn ft³) 2.95 2.22 n/a n/a 33 Who Dat oil, condensate, NGLs 78 73 n/a n/a 7 Source: Karoon Energy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

News

Australia’s Woodside records weaker Jan-Mar LNG output


19/04/24
News
19/04/24

Australia’s Woodside records weaker Jan-Mar LNG output

Sydney, 19 April (Argus) — Australian independent Woodside Energy's January-March output dropped against a year earlier and the previous quarter, as reliability fell at its 4.9mn t/yr Pluto LNG project offshore Western Australia. Woodside produced 494,000 b/d of oil equivalent (boe/d) across its portfolio for January-March, 5pc below the 522,000 boe/d reported during October-December and 4pc below its 2023 full-year figure of 513,000 boe/d. Lower production at its Bass Strait, Pyrenees and Pluto assets was partially offset by increased production at the 140,000 b/d Mad Dog phase 2 oil field in the US Gulf of Mexico, which hit peak production of 130,000 b/d during the quarter. Reliability at Pluto was 94.6pc for the quarter because of an offshore trip and an onshore electrical fault. Woodside made a final investment decision (FID) on the Xena-3 well to support Pluto production during the quarter. The 16.9mn t/yr North West Shelf (NWS) LNG achieved 97pc reliability for the quarter with NWS' joint-venture partners taking a FID on the Lambert West field, which will support continuing production. Lower seasonal market demand and offshore maintenance activity saw production drop at the firm's Bass Strait fields, while production ended at the Gippsland basin joint venture's West Kingfish platform because of slowing oil output from Kingfish field. The Pyrenees floating production storage and offloading vessel began planned maintenance in early March and will return to crude production for April-June, Woodside said. Two 550,000 bl cargoes of Pyrenees crude loaded each quarter during 2023. Revenue dropped by 31pc to $2.97bn from $4.33bn a year earlier and 12pc from $3.36bn during October-December. Woodside's total average realised price dipped to $63/boe, 6pc down on the previous quarter's $67/boe and 26pc below the year-earlier figure of $85/boe. Woodside's average realised price for LNG produced was $10.40/mn Btu or 10pc down on the previous quarter's $11.50/mn Btu. The firm is more heavily exposed to spot prices and gas hub pricing than fellow domestic LNG producer Australian independent Santos, with about 30pc of Woodside's equity-produced LNG sold at these spot prices. By Tom Major Woodside LNG production (mn boe) NWS Pluto Wheatstone* Total Jan-Mar '24 8.2 11.8 2.4 22.3 Oct-Dec '23 7.8 12.4 2.5 22.7 Jan-Mar '23 9.7 12.2 2.5 24.3 2023 32.8 45.6 10.2 88.6 2022 29.7 46.2 9.2 85.1 y-o-y % ± -15 -3 -4 -8 q-o-q % ± 5 -5 -4 -2 Source: Woodside *Woodside controls a 13pc interest in Wheatstone LNG Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more