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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.


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11/10/24

Opec+ cuts hit 4mn b/d

Opec+ cuts hit 4mn b/d

London, 11 October (Argus) — Opec+ has reduced its crude production by 4mn b/d since it started cutting output almost two years ago, Argus' latest output survey shows. Crude output by members subject to cuts fell by 220,000 b/d in September to 33.52mn b/d, driven by reductions in Iraq and Nigeria (see table). This compares with 37.52mn b/d in October 2022, when the alliance announced what would prove to be the in a series of production cuts. September output was not only the lowest since April 2021, but also 330,000 b/d below the group's collective production target. But even with the removal of such a vast amount of crude from the market, oil prices remain $11-15/bl below where they were when Opec+ announced its October 2022 cut. This is partly because production from non-Opec members such as the US, Guyana and Brazil has surged. The US alone has boosted production by 830,000 b/d over the past two years. The lower prices are also partly down to lower-than-expected oil demand, particularly in China. The IEA has made and sees global oil demand growing by under 1mn b/d this year and next, well below the 2.1mn b/d increase seen in 2023. Despite the gloomy demand picture, eight Opec+ members are scheduled to start unwinding 2.2mn b/d of production cuts from December — two months later than initially planned. This is not a foregone conclusion — the group has said this could change depending on market conditions — but a decision to push ahead would only widen an expected supply surplus next year. The eight members are expected to decide on whether to start returning production in early November. Opec+ will be keenly watching how the conflict between Israel and Iran plays out over the coming days and weeks. Rising tensions propelled Atlantic basin benchmark North Sea Dated above $81/bl on 7 October. There are fears that Israel could strike Iran's oil infrastructure in retaliation for . This would put Iranian production — which rose to 3.37mn b/d in September — at risk. Any attack on Iran's oil sector could conceivably see Tehran disrupt regional oil flows through the strait of Hormuz , through which more than 15mn b/d of crude and products are exported. Compensation questions Another factor that could influence Opec+ policy in the coming weeks is the extent to which serial overproducers Iraq, Kazakhstan and Russia can show they are for exceeding their targets. In an effort to start complying with its commitments, Iraq reduced its production by 130,000 b/d in September, Argus estimates. But this was still 70,000 b/d above its Opec+ target of 4mn b/d, and 170,000 b/d above its effective target in September under its compensation plan. Kazakhstan's output rose by 40,000 b/d to 1.48mn b/d in September, 10,000 b/d above its Opec+ quota and 40,000 b/d above the effective target in its compensation plan. All eyes are now on the country's October output, when it is due to deliver the largest chunk of its compensation commitment, which has been designed to coincide with maintenance at its Kashagan field . Russia's production edged down by 10,000 b/d to 8.97mn b/d, in line with its target. Libya's output fell by a hefty 370,000 b/d to 550,000 b/d in September as an oil blockade declared in late August took its toll. But with the blockade lifted in early October, production has already returned close to the country's normal level of about 1.2mn b/d. Venezuela's production rose by 20,000 b/d to 900,000 b/d — the highest since February 2019. Both Venezuela and Libya are exempt from production targets. Opec+ crude production mn b/d Sep Aug* Target† ± target Opec 9 21.18 21.45 21.23 -0.05 Non-Opec 9 12.34 12.29 12.62 -0.28 Total 33.52 33.74 33.85 -0.33 *revised †includes additional cuts where applicable Opec wellhead production mn b/d Sep Aug* Target† ± target Saudi Arabia 8.92 8.96 8.98 -0.06 Iraq 4.07 4.20 4.00 +0.07 Kuwait 2.46 2.40 2.41 +0.05 UAE 2.95 2.98 2.91 +0.04 Algeria 0.91 0.91 0.91 0.00 Nigeria 1.36 1.45 1.50 -0.14 Congo (Brazzaville) 0.24 0.26 0.28 -0.04 Gabon 0.21 0.23 0.17 +0.04 Equatorial Guinea 0.06 0.06 0.07 -0.01 Opec 9 21.18 21.45 21.23 -0.05 Iran 3.37 3.33 na na Libya 0.55 0.92 na na Venezuela 0.90 0.88 na na Total Opec 12^ 26.00 26.58 na na *revised †includes additional cuts where applicable ^Iran, Libya and Venezuela are exempt from production targets Non-Opec crude production mn b/d Sep Aug* Target† ± target Russia 8.97 8.98 8.98 -0.01 Oman 0.76 0.76 0.76 +0.00 Azerbaijan 0.49 0.48 0.55 -0.06 Kazakhstan 1.48 1.44 1.47 +0.01 Malaysia 0.32 0.31 0.40 -0.08 Bahrain 0.16 0.15 0.20 -0.04 Brunei 0.09 0.09 0.08 0.01 Sudan 0.02 0.02 0.06 -0.04 South Sudan 0.05 0.06 0.12 -0.07 Total non-Opec 12.34 12.29 12.62 -0.28 *revised †includes additional cuts where applicable Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Pemex Deer Park refinery H2S leak kills 2: Update


11/10/24
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11/10/24

Pemex Deer Park refinery H2S leak kills 2: Update

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Iran slows oil exports as it braces for Israeli attack


11/10/24
News
11/10/24

Iran slows oil exports as it braces for Israeli attack

Dubai, 11 October (Argus) — Iran's crude exports have slowed down dramatically this month as the country braces for a possible strike on its oil facilities in retaliation for its large-scale missile attack against Israel on 1 October. Although US president Joe Biden has suggested Israel should think about an alternative response , potential strikes on Iranian oil facilities have been up for discussion and the Israeli government appears to be still weighing up its options. In the meantime, there has been a noticeable drop off in Iranian exports. Crude loadings from Iran only averaged about 600,000 b/d in the first 10 days of October, around a third of the amount it has exported in the past few months, according to Armen Azizian, senior oil risk analyst at trade analytics firm Vortexa. "The first 10 days has been very slow compared to what we usually see," Azizian said. "Normally, over this period, we see an average of 5-8 tankers load ꟷ a mix of VLCCs and Suezmaxes. But so far, we have only seen just 3-4 load." A VLCC typically carries 1.9mn-2.2mn bl, while a Suezmax can carry 800,000-1mn bl. Of the three VLCCs that have loaded this month, two did so at Iran's Kharg Island terminal in the Mideast Gulf and the third co-loaded between Kharg Island and the Soroush terminal, also in the Mideast Gulf. An Aframax also loaded at Kharg this month but it is a tanker that typically engages in domestic trade. The Kharg terminal is Iran's largest and most important by some distance, handling more than 90pc of Iranian crude and condensate exports. All of the vessels that have loaded at Iranian terminals this month have been sanctioned. "It seems like the operators of the non-sanctioned tankers are being more cautious," Azizan said. "The thinking being that the value of the sanctioned tankers is so low anyway, that they are more worth taking a risk with." The slowdown in exports coincides with Iran moving many of its empty tankers away from Kharg Island. "It was likely done as a precaution, in the event of an Israeli retaliation," said Homayoun Falakshahi, senior oil analyst at trade analytics firm Kpler. Iran's crude exports have been rising in recent years, notably since the start of 2023. Vortexa puts them s at 1.7mn b/d in July-September, while Kpler's estimate is slightly higher at 1.75mn b/d. September was a particularly strong month — 1.83mn b/d according to Kpler and 1.75mn b/d according to Vortexa. Kpler's September estimate is the highest since the fourth quarter of 2018 and Vortexa's is just 50,000 b/d short of a six-year high of 1.8mn b/d in June. This month's exports will be much lower. Even if Iran's loading activities were to return to normal for the rest of October, it would struggle to breach the 1.35mn b/d mark for the full month, a level it has surpassed consistently since the fourth quarter of last year. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Mexico’s Sep inflation slows with energy prices


10/10/24
News
10/10/24

Mexico’s Sep inflation slows with energy prices

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Hurricane Milton leaves 3.4mn in the dark


10/10/24
News
10/10/24

Hurricane Milton leaves 3.4mn in the dark

New York, 10 October (Argus) — About 3.4mn customers in Florida were without power this morning after Hurricane Milton pummeled the state with heavy rainfall and strong winds. Utility crews began the process of assessing and repairing the damage caused by the hurricane which tore down trees and downed power lines after slamming into Florida's west coast as a powerful Category 3 hurricane late Wednesday. Florida Power & Light had about 1.2mn homes and businesses without electricity, Duke Energy reported about 875,000 outages, while about 592,000 customers of Tampa Electric were affected, according to independent tracker Poweroutage.us. Milton, which has since weakened to a category 1 storm with maximum sustained winds of 85mph, is now moving off the east coast of Florida. "On the forecast track, the center of Milton will continue to move away from Florida and pass to the north of the Bahamas today," according to the National Hurricane Center. The risk of life-threatening storm surge remains on the eastern coast of Florida, while hurricane-force winds are expected to linger for a few more hours. Major flooding as a result of heavy rainfall also continues to pose a threat. A recovery in road fuel supplies, which were strained by the pre-storm evacuation of hundreds of thousands of residents, will depend on the extent of power, roadway and port outages. The state has waived statutes regulating the sale, storage and distribution of liquid fuels . By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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