Cuba weighs odds of US thaw against Venezuela ties
Cuba is hoping the impending political shift in Washington will lead the US to ease its longstanding economic embargo, but any new rapprochement would likely come at the price of the island's close ties to Venezuela.
Cuba was among many countries that swiftly congratulated Joe Biden for his victory in the 3 November US elections in spite of incumbent president Donald Trump's refusal to concede. Russia, China and Turkey are still holding off.
In recognizing the "new course" chosen by the US electorate, Cuban president Miguel Diaz-Canel signaled an openness to "the possibility of a constructive bilateral relationship that is respectful of differences."
One Caribbean diplomat in Havana told Argus that Cuban officials felt "some relief" that the Trump era was giving way to a "more flexible" administration.
President-elect Biden served as vice president in 2008-16 under Trump's predecessor Barack Obama who spearheaded a short-lived thaw in relations with Cuba. During the presidential campaign in October, Biden signaled a willingness to resume that overture.
"The (Trump) administration's approach is not working. Cuba is no closer to democracy than it was four years ago," he said. Biden has expressed support for diplomacy over "regime change".
The US embargo on Cuba is a Cold War relic dating back to the early 1960s. After a 1990s "special period" of malaise that followed the collapse of its Soviet patron, Havana moved into Venezuela's orbit under late president Hugo Chavez, an acolyte of Cuba's late revolutionary leader Fidel Castro. In a bilateral deal signed in 2000, Venezuela began supplying oil to Cuba in exchange for the deployment of Cuban experts in healthcare, security, sports and other areas. The opaque arrangement has endured for two decades in spite of the steep decline in Venezuela's oil production under Chavez's successor, Nicolas Maduro.
One of the recent drivers of the energy ties is the escape valve that the island provides for Venezuela's state-owned PdV when oil storage fills up at home, because the US sanctions have impeded exports.
Under the Trump administration, the US levied financial and oil sanctions in a failed effort to depose Maduro in favor of opposition leader Juan Guaido. Over the past year, the US targeted tankers and shipping companies to try to cut off Venezuela's oil supplies to Cuba, with little direct impact.
Siege narrative
For Havana and Caracas, the sanctions drive a common political narrative that blames the US for prolonged hardship, manifested by severe shortages of fuel for transportation, agriculture and power generation. In an unusually detailed 22 October assessment, the Cuban government denounced Trump's more aggressive sanctions for blocking access to critical spare parts, worsening a fuel shortage and interrupting the island's offshore oil exploration campaign.
Both impoverished countries rely heavily on financial remittances from expatriates and their descendants, particularly in the US state of Florida where many of them voted for Trump.
The campaign of the outgoing Republican president appealed to this conservative subset of Latino voters with anti-socialist messaging that resonated with their past experiences of repression and exile, distorting the moderate slant of Biden's Democratic platform that includes temporary asylum for Venezuelan immigrants that Trump has rejected.
There is a realization across the region that any solution to Venezuela's impasse would have to include economic incentives for Cuba and possibly a mediating role similar to its participation in Colombia's 2016 peace deal.
But coupled with the priority of tackling the Covid-19 pandemic, the Florida-focused domestic political dynamic is likely to inhibit Biden from quickly reopening diplomatic channels to Havana. The Venezuela sanctions framework will probably remain in place as well. But a Biden administration would show more openness toward Venezuela and Cuba on humanitarian grounds, with fewer sticks and more carrots to free political prisoners and introduce democratic reforms.
The Trump administration's controversial shutdown of diesel swaps for Venezuela, for instance, could be lifted, even as a path for negotiations is reopened in line with EU-led efforts. For Cuba, some travel and financial restrictions could be eased.
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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
Dubai, 2 May (Argus) — Abu Dhabi's state-owned Adnoc has nudged up its self-reported crude production capacity to 4.85mn b/d, from 4.65mn b/d previously. The UAE state energy giant did not formally announce the increase but updated the figure on its website. It did something similar when its capacity reached 4.65mn b/d in late 2023, up from 4.5mn b/d in the middle of last year. This latest hike takes the company a step closer to its long-term 5mn b/d crude capacity target, which it aims to reach by 2027. Adnoc set the 5mn b/d target back in 2018 when its capacity was 3.5mn b/d. At that time, the company said it was aiming to deliver the increase by 2030, but in November 2022 it brought the timeframe forward by three years, citing the "UAE's robust hydrocarbon reserves". The change in timeline had been expected, with sources telling Argus earlier that year that discussions had been taking place in the upper echelons of Adnoc about significantly accelerating its capacity growth plans . Given the speed at which the company has been delivering capacity gains over the past few years, and how close it is to meeting its target already, it is not inconceivable that Adnoc will reach 5mn b/d ahead of schedule. Put your best foot forward The UAE's rising capacity comes as Opec+ producers engage with independent agencies to update their respective crude output capacities for use in production policy decisions from 2025. At their meeting in June last year, all Opec+ members committed to undergo an external assessment of their sustainable capacities in the first half of 2024 by three independent consultancies, IHS, Wood Mackenzie and Rystad. The updated capacity assessment will help address a key criticism of the Opec+ production restraint agreements in their current format, namely that many of the countries involved have been cutting output from a baseline level of production that they can no longer actually deliver, in most cases due to natural decline. The UAE has been one of a handful of countries in the group that has been raising its capacity over the past few years. This means it should, in theory, benefit from the latest assessment, as a higher accepted capacity will afford it a higher production baseline under any Opec+ agreements struck from 2025 onwards. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Battery storage stands out in Japan clean power auction
Battery storage stands out in Japan clean power auction
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