Tag Archives: Gulf oil

Trump leaves ‘question mark’ over use of force to protect Gulf oil

Flight deck of the U.S aircraft carrier USS Abraham Lincoln (CVN 72) is seen as sailors swip the deck for foreign object and debris (FOD) walk-down on the flight deck of the Nimitz-class aircraft carrier USS Abraham Lincoln (CVN 72) in Arabian Sea, May 19, 2019. Garrett LaBarge/U.S. Navy/Handout via REUTERS

By Babak Dehghanpisheh and Sylvia Westall

GENEVA/DUBAI (Reuters) – U.S. President Donald Trump said he was prepared to take military action to stop Tehran having a nuclear bomb but left open whether he would sanction the use of force to protect Gulf oil supplies.

Fears of a confrontation between Iran and the United States have mounted since Washington blamed long-time foe Iran for Thursday’s attacks on two oil tankers near the strategic Strait of Hormuz shipping lane.

Tehran denies responsibility but the incidents, and similar attacks in May, have further soured relations that have plummeted since Trump pulled the United States out of a landmark international nuclear deal with Iran in May of last year.

Since exiting the accord, which gave Iran sanctions relief in return for curbs on its nuclear program, Trump has restored and extended U.S. sanctions. That has forced countries around the world to boycott Iranian oil or face sanctions of their own.

But in an interview with Time magazine, Trump, striking a different tone from some Republican lawmakers who have urged a military approach to Iran, said last week’s tanker attacks in the Gulf of Oman had had only a “very minor” impact so far.

Asked if he would consider military action to prevent Iran from obtaining nuclear weapons or to ensure the free flow of oil through the Gulf, Trump said:

“I would certainly go over nuclear weapons, and I would keep the other a question mark.”

The 2015 nuclear deal with Iran aimed to head off any pathway to an Iranian nuclear bomb but Trump says the deal failed to address Iran’s missile program or punish it for waging proxy wars in Middle East countries.

Tehran has decried the toughening of U.S. sanctions and urged other signatories to take action to save the nuclear pact or see Iran turn its back on the deal.

CALLS FOR RESTRAINT

Iran said on Monday it would soon breach limits on how much-enriched uranium it can stockpile under a 2015 nuclear deal, which had sought to limit its nuclear capabilities.

Exceeding the uranium cap at the heart of the accord could prompt a diplomatic crisis, forcing the other signatories, which include China, Russia and European powers, to confront Iran.

The White House National Security Council condemned the statement as “nuclear blackmail” while Russia and China, two other signatories of the accord, on Tuesday urged restraint.

Russia told the United States it should drop what it called provocative plans to deploy more troops to the Middle East and cease actions that looked like a conscious attempt to provoke war with Iran, and urged restraint on all sides.

“What we see are unending and sustained U.S. attempts to crank up political, psychological, economic and yes military pressure on Iran in quite a provocative way,” Deputy Foreign Minister Sergei Ryabkov was cited as saying by Russian media.

“They (these actions) cannot be assessed as anything but a conscious course to provoke war,” he said.

China’s top diplomat Wang Yi warned the world should not open a “Pandora’s Box” in the Middle East, as he denounced U.S. pressure on Iran and urged Tehran to heed the deal.

Chancellor Angela Merkel said Germany, another signatory, was doing all it could to ease tensions with Iran but said Iran must abide by the 2015 deal.

IRAN DEFIANT

Acting U.S. Defense Secretary Patrick Shanahan on Monday announced the deployment of about 1,000 more troops to the Middle East for what he said were defensive purposes, citing concerns about a threat from Iran.

The deployment is in addition to a 1,500-troop increase announced last month in response to tanker attacks in May.

Iranian President Hassan Rouhani said in a speech that Iran did not seek war and dismissed U.S. efforts to isolate Iran.

“Iran will not wage war against any nation,” he said. “Despite all of the Americans’ efforts in the region and their desire to cut off our ties with all of the world and their desire to keep Iran secluded, they have been unsuccessful.”

Heightened Iran-U.S. tensions have stoked fears of increased violence in countries where Iran and its Gulf Arab regional rivals are locked in a sometimes bloody struggle for influence.

Saudi air defenses intercepted two drones fired by Yemen’s Iran-aligned Houthi group, Saudi media said on Tuesday. The group’s Al Masirah TV said the Houthis had sent drones to strike the airport of the Saudi city of Abha.

MILITARY BASE

Three rockets landed on a military base hosting U.S. forces north of Baghdad late on Monday, an Iraqi military statement said, without providing further details. There was no immediate claim of responsibility for the attack.

U.S. officials said last month there was an increased threat from Iran-backed militias against U.S. interests in Iraq, and the U.S. embassy in Baghdad evacuated hundreds of staff.

The United States is discussing options with its allies on how to protect international shipping in the Gulf of Oman following the recent attacks, two senior Trump administration officials said last week.

A senior Gulf official said Washington was considering establishing a military coalition, including other nations, to protect oil tankers.

“We hope they will implement this proposal soon,” said the official, who said he had been briefed by a U.S. official and had heard details from Gulf “partners”.

(Additional reporting by Alexander Cornwell in Dubai, Tom Balmforth and Maxim Rodionov in Moscow, Ben Blanchard in Beijing, Writing by William Maclean, Editing by Janet Lawrence and Jon Boyle)

If Iran can’t export oil from Gulf, no other country can, Iran’s president says

Iranian President Hassan Rouhani gives a public speech during a trip to the northern Iranian city of Shahroud, Iran, December 4, 2018. Official President website/Handout via REUTERS

GENEVA (Reuters) – Iranian President Hassan Rouhani made an apparent threat on Tuesday to disrupt other countries’ oil shipments through the Gulf if Washington presses ahead with efforts to halt Iranian oil exports.

The United States has imposed sanctions on Iran and U.S. officials say they aim to reduce Iran’s oil exports to zero in a bid to curb the Islamic Republic’s missile program and regional influence.

“America should know that we are selling our oil and will continue to sell our oil and they are not able to stop our oil exports,” Rouhani said in a televised speech during a trip to the northern Iranian city of Shahroud.

“If one day they want to prevent the export of Iran’s oil, then no oil will be exported from the Persian Gulf,” he said.

Rouhani made similar comments in July.

Also in July, an Iranian Revolutionary Guards commander, Ismail Kowsari, was quoted as saying that Tehran would block oil shipments through the Strait of Hormuz if the United States banned Iranian oil sales.

Tensions have risen between Iran and the United States after U.S. President Donald Trump withdrew from a multilateral nuclear deal in May and reimposed sanctions on the Islamic Republic.

Rouhani said the United States would not succeed in cutting Iran’s economic ties with the region and the world.

“The most hostile group in America, with relation to Iran, has taken power,” Rouhani said, according to the state-run Islamic Republic News Agency (IRNA). “Of course they never had a friendship with the people of Iran and we never trusted America or others 100 percent.”

Earlier, Foreign Minister Mohammad Javad Zarif denied a Reuters report that said a European mechanism to set up an account to trade with Iran and beat the newly reimposed U.S. sanctions may not cover oil sales, the Iranian foreign ministry website reported.

“Based on the information we have, it’s not so. Because if Iran’s oil money is not deposited into the account, it’s not clear that there would be any funds for trade, because oil is a major part of Iran’s exports,” Zarif said, according to the website.

“This appears to be propaganda aimed at discouraging people,” Zarif added.

France and Germany are to take joint responsibility for the EU-Iran trade mechanism, Reuters reported.

But the agency quoted diplomats as saying that, with U.S. threats of retribution for sanctions-busting unrelenting, the goals of the nascent trade mechanism could be scaled back to encompass only less sensitive items such as humanitarian and food products.

Iranian Vice President Eshaq Jahangiri said on Tuesday that U.S. sanctions were hitting vulnerable people in Iran.

“When (Americans) say their target is the Iranian government and there won’t be pressure on the sick, the elderly and the weak in society, it’s a lie,” Jahangiri said, according to IRNA.

(Reporting by Babak Dehghanpisheh, additional reporting by Dubai newsroom; Editing by Adrian Croft and David Evans)

Retail U.S. gasoline prices surge as Harvey keeps refiners shut

A gas station submerged under flood waters from Tropical Storm Harvey is seen in Rose City, Texas, U.S., on August 31, 2017.

By Erwin Seba and Devika Krishna Kumar

HOUSTON/NEW YORK (Reuters) – Retail U.S. gasoline prices hit two-year highs and global shipping routes were scrambled as the nation’s largest refiners remained shut on Friday, even as Storm Harvey lost strength.

Major fuel pipelines feeding the U.S. Northeast and Midwest were either closed or severely curtailed, prompting shortages in some areas and dramatic spikes in wholesale prices.

The storm, which began as a hurricane a week ago, has roiled global fuel markets, and tankers carrying millions of barrels of fuel have been rerouted to the Americas to avert shortages. European refining margins hit a two-year high amid the surge in exports.

Indeed, the effects of the storm will continue for several weeks, if not months, after Harvey hammered the Gulf Coast for days and brought floods that buried Houston and the surrounding area in several feet of water. It knocked out about 4.4 million barrels of daily refining capacity, slightly more than Japan uses daily, and the signs of restarts were tentative.

The nation’s largest refiner, Motiva’s Port Arthur facility, which can handle 600,000 barrels of crude daily, will be shut for at least two weeks, according to sources familiar with plant operations.

Other plants in the Beaumont/Port Arthur area are expected to face similar challenges restarting as waters continued to rise, even as flooding receded in Houston, some 85 miles (137 km) west.

In Corpus Christi, where Harvey first made landfall, refiners Citgo Petroleum Corp, Flint Hills Resources and Valero Energy Corp were moving to restart their plants, along with the nearby Valero Three Rivers refinery, according to sources.

Benchmark U.S. gasoline prices  have surged more than 15 percent since the storm began, but in trading Friday, the contract for October delivery lost 1 percent, the first decline in five days. September’s contract had risen by 25 percent, but stopped trading Thursday.

U.S. crude prices continued to slump along with demand, with the futures contract falling 0.4 percent to $47.02 a barrel.

The national average for a regular gallon of gasoline rose to $2.519 as of Friday morning, according to motorists advocacy group AAA, with even gaudier increases in the U.S. Southeast, which relies heavily on Gulf supplies. South Carolina, for instance, has seen prices rise nearly 30 cents, and prices were up nearly 20 cents in Texas, where fuel shortages were already evident.

 

SHORTAGE WORRIES

Suppliers in the Chicago area were taking steps to prevent shortages, and banking on hope.

Dave Luchtman, owner and president of Lucky’s Energy Service Inc., a small distributor in Chicago, has rented two storage trailers that hold 8,000 gallons each, expected to be delivered Friday.

“So I have a little lifeline,” Luchtman said.

Refineries so far have not given any indication that there are fuel shortages, said Mario Orlandi, an operations manager at Olson Service Co, which supplies diesel and gasoline to the Chicago area.

“Cross our fingers, keep our tanks full,” Orlandi said.

The global impact of the storm was being felt in Venezuela, where financially strapped state-run PDVSA is facing the possibility that scheduled deliveries – tankers floating offshore for weeks due to non-payment – will make their way to other Latin American destinations.

At least two cargoes scheduled to deliver to Venezuela currently in the port of Curacao are now expected to be delivered to Ecuador.

Mexico, Brazil, Colombia and other countries want to tap some of the 7 million barrels of fuel sitting in the Caribbean sea, according to three traders and shippers.

European and Asian traders have diverted millions of barrels of fuel to the Americas. That included a rare opportunity for exports of jet fuel from Europe to the United States, reversing the usual flow of shipments.

Supplies from distant markets may not arrive soon enough to avert a crunch after the Colonial Pipeline, the biggest U.S. fuel system, said it would shut part of its main lines to the Northeast.

“We are going to have outages from Texas to Boston,” said one East Coast market source. The market is “way under-appreciating the magnitude of this.”

Several East Coast refineries have run out of gasoline for immediate delivery as they sent fuel elsewhere, and concerns over shortages ahead of the U.S. Labor Day extended weekend were mounting.

 

(Reporting by Erwin Seba and Devika Krishna Kumar; Additional reporting by Jarrett Renshaw, Susannah Gonzales, Marianna Parraga, Karolin Schaps, Ron Bousso, Libby George and Seng Li Peng; Writing by David Gaffen; Editing by Susan Fenton and Bernadette Baum)