Tag Archives: United States

From Iraq to Yemen, drones raise U.S. alarm over Iranian plans

FILE PHOTO: A projectile and a drone launched at Saudi Arabia by Yemen'S Houthis are displayed at a Saudi military base, Al-Kharj, Saudi Arabia June 21, 2019. REUTERS/Stephen Kalin

By Babak Dehghanpisheh and Phil Stewart

GENEVA/WASHINGTON (Reuters) – The increased use of drones by Iran and its allies for surveillance and attacks across the Middle East is raising alarms in Washington.

The United States believes that Iran-linked militia in Iraq have recently increased their surveillance of American troops and bases in the country by using off-the-shelf, commercially available drones, U.S. officials say.

The disclosure comes at a time of heightened tensions with Iran and underscores the many ways in which Tehran and the forces it backs are increasingly relying on unmanned aerial vehicles (UAVs) in places like Yemen, Syria, the Strait of Hormuz and Iraq.

Beyond surveillance, Iranian drones can drop munitions and even carry out “a kamikaze flight where they load it up with explosives and fly it into something”, according to a U.S. official who spoke on condition of anonymity.

Yemen’s Iranian-backed Houthis have significantly increased their UAV attacks in recent months, bombing airports and oil facilities in Saudi Arabia, a main rival of Iran.

Last month, Iran came close to war with the United States after the Islamic Republic’s unprecedented shoot-down of a U.S. drone with a surface-to-air missile, a move that nearly triggered retaliatory strikes by U.S. President Donald Trump.

Trump withdrew from a major 2015 nuclear deal last year and reimposed sanctions to cut off Iran’s oil exports and pressure the Islamic Republic to negotiate over its ballistic missile program and regional policy.

The increased use of drones by Iran or its regional allies is a strategy aimed at pushing back and defending against pressure from the United States and foes like Saudi Arabia and Israel, current and former security officials and analysts say.

Iran now flies two or three drones over Gulf waters every day, the first U.S. official estimated, making it a core part of Tehran’s effort to monitor the Strait of Hormuz, through which one-fifth of the world’s oil consumption flow.

The United States and Saudi Arabia have accused Iran of carrying out attacks against six oil tankers near the Strait in the past two months, a claim Tehran has denied.

The U.S. officials, who spoke on condition of anonymity, declined to quantify the extent to which surveillance near U.S. forces has increased in Iraq or to specify which militia were carrying it out.

“We have seen an uptick in drone activity in Iraq near our bases and facilities,” the first official said. “Certainly the drones that we have seen are more of the commercial off-the-shelf variant. So they’re obviously a deniable type UAV-activity in Iraq.”

A second official said the recent increase in surveillance was worrying but acknowledged Iran-linked militia in Iraq had a history of keeping tabs on Americans.

Reuters has previously reported that the United States has indirectly sent warnings to Iran, saying any attack against U.S. forces by proxy organizations in Iraq will be viewed by Washington as an attack by Iran itself.

In recent weeks, mortars and rockets have been fired at bases in Iraq where U.S. forces are located but no American troops have been injured. U.S. officials did not link those attacks to the increased surveillance.

Attempts to reach the Iranian ministry of foreign affairs and the Revolutionary Guards, who are most closely linked to militant groups in Iraq, for comment were unsuccessful.

Iraqi militia groups linked to Iran began using drones in 2014 and 2015 in battles to retake territory from Islamic State, according to militia members and Iraqi security officials.

These groups received training on the use of drones from members of Iran’s Revolutionary Guards and Lebanon’s Iranian-backed Hezbollah, two Iraqi security officials with knowledge of militia activities said.

“Key militia groups have the ability to launch aerial attacks using drones. Will they target American interests? That hasn’t happened yet,” said one Iraqi security official. “They used Katyusha [rockets] and mortars in very restricted attacks against American interests in Iraq to send a message rather than trying to inflict damage. Using explosive-laden drones is very possible once we have a worsening situation between Tehran and Washington.”

HOW SOPHISTICATED ARE IRAN’S DRONES?

In March, Iran boasted about a complex military exercise involving 50 drones. In a slickly edited video aired on state TV, waves of drones streak across a clear blue sky, bombing buildings on an island in the Gulf.

The show of force was intended to highlight Iran’s locally developed UAV program, which it has been building up for several years.

Douglas Barrie, a senior fellow at the London-based International Institute for Strategic Studies, however, cautioned that some of Iran’s claims were “best viewed through the prism of domestic messaging”. “That Iran has a growing capability in UAVs isn’t debatable. What is an open question is the actual levels of technology it often employs,” Barrie said, adding that Israel had the most advanced program in the region.

American technology may have been used to enhance the Iranian drone program: an advanced U.S. RQ-170 Sentinel reconnaissance drone went down in eastern Iran in 2011, and Revolutionary Guards commanders say they were able to reverse engineer it, a claim which some security officials and analysts dispute.

“They’ve really come up with some aircraft which are looking increasingly sophisticated in terms of their ability to carry guided weapons and carry out long-range surveillance missions,” said Jeremy Binnie, Middle East and Africa editor for Jane’s Defense Weekly.

U.S. forces have shot down Iranian-made drones in 2017 in Syria, after deeming them a threat to both U.S.-backed forces and their advisers.

EXPORTING DRONE TECHNOLOGY

Iran has passed on its drones and technical expertise to regional allies, current and former security officials and analysts say.

The Revolutionary Guards and Hezbollah advise the Houthis on the use of drones and operate video uplinks from Tehran and Beirut to beam in technical expertise when needed, an official from the Saudi-led coalition fighting in Yemen said.

Iran has denied any role in the conflict in Yemen.

U.N. experts say the Houthis now have drones that can drop bigger bombs further away and more accurately than before. In May, drones hit two oil pumping stations hundreds of kilometers inside Saudi territory.

“Either the drones that attacked the pipelines were launched from inside Saudi territory or the Houthis just significantly upped their capability with satellite technology and were provided with the capability to extend the distance,” said Brett Velicovich, a drone expert and U.S. Army veteran, about the May attack.

A commander of Kataib Hezbollah, an Iraqi militia closely linked to Iran, using the nickname Abu Abdullah, told Reuters in 2014 that Iran had provided training for operating drones, which were mostly used to target Islamic State positions.

He said at the time that they had also used the drones to carry out surveillance on American military positions in Iraq and in the conflict in Syria, where Kataib Hezbollah fought in support of President Bashar al-Assad. 

Iraqi militia groups have now acquired enough expertise to modify drones for attacks, two Iraqi security officials with knowledge of the militia activities said.

(Reporting by Babak Dehghanpisheh and Phil Stewart; Additional reporting by Ahmed Rasheed in Baghdad, Tuqa Khalid in Dubai, Stephen Kalin in Riyadh and Dan Williams in Jerusalem; editing by Giles Elgood)

Apollo 11’s astronauts snapped photos for science. Then came MTV

Astronaut Buzz Aldrin, lunar module pilot for Apollo 11, poses for a photograph beside the deployed United States flag during an extravehicular activity (EVA) on the moon, July 20, 1969. The lunar module (LM) is on the left, and the footprints of the astronauts are visible in the soil. Neil Armstrong/NASA/Handout via REUTERS

By Alex Dobuzinskis and Jeremy Schultz

(Reuters) – The Apollo 11 astronauts who made mankind’s first visit to the moon 50 years ago were trained in how to take pictures for science. Back on Earth, some of those photos became pop culture touchstones.

People collected and shared prints of the Apollo 11 landing and moonwalk, which also became the basis for artist Andy Warhol’s colored prints “Moonwalk” and for MTV’s logo when the music channel launched in 1981.

The Apollo 11 astronauts – Neil Armstrong, Buzz Aldrin and Michael Collins – were not trained in how to take photographs of each other but those were the ones that became most popular, said Jennifer Levasseur, curator of the space history department at the Smithsonian National Air and Space Museum.

“The photographs of people are what make it real for everybody back on Earth. We can sort of understand it because we can put ourselves in their place,” Levasseur said.

Armstrong had the instinct to photograph Aldrin standing alone and told him – by radio transmission – to turn around for a picture, Levasseur said.

Another famous photo of Aldrin, showing him standing by an American flag, took more planning, she said. MTV used that picture to market itself, replacing the flag with its own logo.

Still photography from the Apollo 11 moonwalk was captured on cameras specially built by the Swedish company Hasselblad to mount on an astronaut’s chest. All they had to do was point their body in the right direction, adjust the settings if necessary and pull a trigger.

All three Apollo 11 crew members were encouraged to take the bulky cameras on family vacations to familiarize themselves with their unusual operation, according to a NASA website.

U.S. astronaut Neil Armstrong, the Apollo 11 Mission Commander, standing next to the Lunar Module "Eagle" on the moon July 20, 1969. REUTERS/Buzz Aldrin-NASA/Handout

U.S. astronaut Neil Armstrong, the Apollo 11 Mission Commander, standing next to the Lunar Module “Eagle” on the moon July 20, 1969. REUTERS/Buzz Aldrin-NASA/Handout

Armstrong, the first human to set foot on the lunar surface, and Aldrin had one camera for their moonwalk and they had planned to share it. However, Armstrong had the camera for almost the entire two-and-a-half-hour landing. As a result, nearly all the still photographs showing an astronaut on the moon are of Aldrin, the website says.

NASA noticed this embarrassing omission as the agency struggled to find a photo of the first man to walk on the moon actually walking on the moon.

Its staff, however, found it almost impossible to tell Aldrin and Armstrong apart. A personalized armband was added to every spacesuit after Apollo 11, the NASA website says.

(Writing by Alex Dobuzinskis; Editing by Bill Tarrant and Paul Tait)

U.S. judge blasts drug lord El Chapo’s ‘overwhelming evil,’ imposes life sentence

FILE PHOTO: Joaquin "El Chapo" Guzman is escorted by soldiers during a presentation in Mexico City, January 8, 2016. REUTERS/Tomas Bravo

By Brendan Pierson and Jonathan Stempel

NEW YORK (Reuters) -Joaquin “El Chapo” Guzman, the Mexican drug lord who twice escaped maximum-security prisons in that country will spend the rest of his life in a U.S. penitentiary, a federal judge said on Wednesday after accusing him of “overwhelming evil.”

Guzman berated the U.S. justice system, and a former associate described how he had paid a gang $1 million to try to kill her before U.S. District Judge Brian Cogan imposed the mandatory sentence of life plus 30 years.

Cogan also ordered Guzman to forfeit $12.6 billion in a hearing in federal court in Brooklyn.

Guzman, 62, was found guilty by a jury in February of trafficking tons of cocaine, heroin and marijuana and engaging in multiple murder conspiracies as a top leader of the Sinaloa Cartel, long known as one of Mexico’s largest and most violent drug trafficking organizations.

Guzman, whose nickname means “Shorty,” developed a reputation as a Robin Hood-like figure that made him a folk hero to many in his home state of Sinaloa, where he was born in a poor mountain village.

He has been held in solitary confinement in the Metropolitan Correctional Center, a fortress-like jail in lower Manhattan. Cogan last month rejected his request for more time to exercise on the jail’s roof, after prosecutors said that would risk an escape.

Guzman, who recently grew a mustache, complained about the terms of his confinement before his sentence was handed down.

“It has been psychological, emotional, mental torture 24 hours a day,” said Guzman. He alleged that the jurors on his case allowed media accounts of the trial to influence their thinking – an argument his lawyers have also made.

“Since the government of the United States is going to send me to a prison where my name will not ever be heard again, I take advantage of this opportunity to say there was no justice here,” he told the court.

Before he was finally captured in 2016, Guzman twice escaped maximum-security prisons in Mexico. He was extradited to the United States to face trial in January 2017.

Guzman made a name for himself as a trafficker in the 1980s by digging tunnels under the U.S.-Mexico border that allowed him to smuggle drugs more quickly than any of his rivals. He amassed power during the 1990s and 2000s through often bloody wars with rivals, eventually becoming the best-known leader of the Sinaloa Cartel.

His 11-week trial, which featured testimony from more than a dozen former associates of Guzman who had made deals to cooperate with prosecutors, offered the public an unprecedented look at the cartel’s inner workings.

‘EL CHAPO’ ASSOCIATE: ‘I SINNED’

Andrea Velez, a former associate of Guzman, said Guzman had paid the Hell’s Angels motorcycle gang $1 million to have her killed, and that she had escaped with the help of U.S. authorities.

“I confess that I sinned, but I paid a high price for my faults,” Velez said of her work with the cartel.

The witnesses, who included some of Guzman’s top lieutenants, a communications engineer and a onetime mistress, described how he built a sophisticated organization reminiscent of a multinational corporation.

He sent drugs northward with fleets of planes and boats, and had detailed accounting ledgers and an encrypted electronic communication system run through secret computer servers in Canada, witnesses said.

U.S. prosecutors have claimed that Guzman sold more than $12 billion worth of drugs, and Forbes magazine once listed him as among the world’s richest men.

Though other top cartel figures had been extradited to the United States before, Guzman was the first to go to trial rather than pleading guilty.

Guzman often lived on the run. Imprisoned in Mexico in 1993, he escaped in 2001 hidden in a laundry cart and spent the following years moving from one hideout to another in the mountains of Sinaloa, guarded by a private army.

He was seized again in 2014 but pulled off his best-known escape the following year when he disappeared into a ventilated, mile-long (1.6-km) tunnel dug into his cell in a maximum-security prison.

He was finally recaptured in January 2016. The Mexican government says he blew his cover through a series of slipups, including an attempt to make a movie about his life.

Guzman’s lawyers have said they intend to appeal his guilty verdict. They have already asked Cogan to overturn it, citing a report that jurors disobeyed court rules by reading news reports about the case during the trial, but the judge rejected that request.

Despite Guzman’s downfall, the Sinaloa Cartel had the biggest U.S. distribution presence of Mexican cartels as of last year, followed by the fast-growing Jalisco New Generation Cartel, according to the U.S. Drug Enforcement Administration.

(Reporting by Brendan Pierson and Jonathan Stempel in New York; editing by Scott Malone and Jonathan Oatis)

U.S. unsure about circumstances of tanker towed to Iran

FILE PHOTO: A British Royal Navy patrol vessel guards the oil supertanker Grace 1, that's on suspicion of carrying Iranian crude oil to Syria, as it sits anchored in waters of the British overseas territory of Gibraltar, historically claimed by Spain, July 4, 2019. REUTERS/Jon Nazca

DUBAI (Reuters) – U.S. officials say they are unsure whether an oil tanker towed into Iranian waters was seized by Iran or rescued after facing mechanical faults as Tehran asserts, creating a mystery at sea at a time of high tension in the Gulf.

The MT Riah disappeared from ship tracking maps when its transponder was switched off in the Strait of Hormuz on July 14. Its last position was off the coast of the Iranian island of Qeshm in the strait.

Iran says it towed a vessel into its waters from the strait after the ship issued a distress call. Although Tehran did not name the vessel, the Riah is the only ship whose recorded movements appear likely to match that description.

A U.S. official, speaking on the condition of anonymity, said it appeared that the tanker was in Iranian territorial waters, but it was not clear whether that was because Iran had seized it or rescued it.

The mystery comes at a time when Washington has called for greater security for ships in the Gulf.

Iran has threatened to retaliate for the British seizure of an Iranian oil tanker accused of violating sanctions on Syria. Iran’s Supreme Leader Ayatollah Ali Khamenei has branded the British action “piracy”.

The United States has also blamed Iran for attacks on tankers in the Gulf since May, which Tehran denies.

Shipping experts say U.S. sanctions on Iran intended to halt its oil exports have led to a rise in unusual tanker movements away from shipping lanes, with Iran seeking covert ways to export its oil. Increasingly, ships are switching off location transponders, transferring oil at sea and concealing their routes. Iran has also become more dependent on a fleet of aging ships, and some have had to be towed for emergency repairs.

Adding to the riddle of the missing ship was difficulty establishing who owns it, which no country or company has so far publicly claimed. Initial reports described it as Emirati. However, an Emirati official told Reuters the tanker was neither owned nor operated by the UAE.

The tanker’s registered manager is Prime Tankers in the UAE. That company told Reuters it had sold the tanker to another UAE-based company, Mouj al-Bahar. An employee at Mouj al-Bahar told Reuters that the firm did not own it but had been managing the vessel up to two months ago, and that it was now under the management of a company called KRB Petrochem. Reuters could not reach KRB Petrochem for comment.

(Reporting by Dubai newsroom, Parisa Hafezi, Ghaida Ghantous and Alex Cornwell; Writing by Lisa Barrington; Editing by Peter Graff)

Iran supreme leader ups ante in volatile stand-off with U.S.

Iran's Supreme Leader Ayatollah Ali Khamenei waves during ceremony attended by Iranian clerics in Tehran, Iran, July 16, 2019. Official Khamenei website/Handout via REUTERS

By Parisa Hafezi

DUBAI (Reuters) – Iran’s supreme leader upped the ante in a volatile stand-off with the United States on Tuesday, warning Tehran would continue removing restraints on its nuclear program and retaliate for the seizure of an Iranian oil tanker.

Tensions have spiked since U.S. President Donald Trump last year abandoned world powers’ 2015 nuclear deal with Iran under which it agreed to curtail its enrichment of uranium in return for the lifting of global sanctions crippling its economy.

European parties to the pact decided on Monday not to trigger the deal’s dispute mechanism in favor of pursuing more talks and avert any U.S.-Iranian military conflict, but took no action to shield Iran against a sanctions clampdown by Trump.

Ayatollah Ali Khamenei, Iran’s ultimate authority, accused Britain, Germany and France of failing to uphold obligations under the deal to restore Iranian access to global trade, especially for Tehran’s oil exports blocked by U.S. sanctions.

“According to our foreign minister, Europe made 11 commitments, none of which they abided by. We abided by our commitments and even beyond them. Now that we’ve begun to reduce our commitments, they oppose it. How insolent! You didn’t abide by your commitments!” Khamenei said, according to his website.

“We have started to reduce our commitments and this trend shall continue,” Khamenei said in remarks carried by state television.

IRAN FUMES OVER EU INACTION

He has previously upbraided European powers for not standing up to Trump and circumventing his sanctions noose. Russia and China are also parties to the accord.

But it was the first time Khamenei explicitly pledged to press ahead with breaches of the nuclear deal, spurning European appeals to Iran to restore limits on enrichment aimed at obviating any dash to developing atomic bombs.

“So far, efforts to win gestures from Iran to de-escalate the crisis are not succeeding (as) Tehran is demanding the lifting of sanctions on its oil and banking sectors first,” a European diplomatic source told Reuters. 

Iran has long denied any intent to acquire nuclear weapons and has said all its breaches could be reversed if Washington returned to the deal and its economic dividends were realized. Tehran has accused Washington of waging “economic war”.

“Western governments’ major vice is their arrogance,” Khamenei said. “If the country opposing them is a weak one, their arrogance works. But if it’s a country that knows and stands up against them, they will be defeated.”

IAEA inspectors last week confirmed Iran is now enriching uranium to 4.5% fissile purity, above the 3.67% limit set by its deal, the second breach in as many weeks after Tehran exceeded limits on its stock of low-enriched uranium.

The level at which Iran is now refining uranium is still well below the 20% purity of enrichment Iran reached before the deal, and the 90% needed to yield bomb-grade nuclear fuel. Low-enriched uranium provides fuel for civilian power plants.

European Union foreign ministers, in a meeting on Monday, deemed Iran’s violations not to be “significant”, drawing Israeli accusations of appeasement recalling failed diplomacy with Nazi Germany in the run-up to World War Two.

British Foreign Secretary Jeremy Hunt said on Monday Iran remained “a good year away from developing a nuclear bomb”, adding there was still a “small window to keep the deal alive.”

The Europeans are trying to set up Instex, a barter-based trade conduit with Iran but it would initially deal only in items not subject to U.S. sanctions — such as pharmaceuticals and foods. Iran has said Instex must include oil sales or provide substantial credit facilities for it to be beneficial.

“PIRACY”

Khamenei also said Iran would respond to Britain’s “piracy” over the seizure in early July of an Iranian oil tanker in Gibraltar.

“Evil Britain commits piracy and steals our ship … and gives it a legal appearance. The Islamic Republic…will not leave this wickedness unanswered and will respond to it at an appropriate time and place,” he said.

Iran has called on Britain to immediately release the vessel, which was detained by British Royal Marines on the suspicion that it was breaking European sanctions by taking oil to Tehran’s close ally Syria.

Washington says it is applying “maximum pressure” on Iran to agree stricter limits on its nuclear capacity, curb its ballistic missile program and end support for proxy forces in a Middle East power struggle with U.S.-backed Gulf Arabs.

Fears of direct U.S.-Iranian conflict have risen since May with several attacks on oil tankers in the Gulf, Iran’s downing of a U.S. surveillance drone, and a plan for U.S. airstrikes on Iran last month that Trump aborted at the last minute.

In what loomed as another obstacle to trouble-shooting diplomacy, Iran confirmed on Tuesday it had detained French-Iranian scholar Fariba Adelkhah but declined to elaborate, a day after Paris demanded information on her case.

Rights activists have accused Iran of arresting a number of dual nationals to try and extract concessions from the West – a charge the Islamic Republic has repeatedly dismissed.

Iran’s rial currency appears to have stabilized despite the brewing confrontation with the United States, gaining about 13% since early May after a 60% plunge last year.

Analysts said that not only was Iran’s forex market growing used to the tensions but the central bank had propped up the rial through injections of hard cash and steps to ensure the return of dollars earned from exports.

(Additional reporting by John Irish in Paris; Writing by Mark Heinrich; Editing by Jon Boyle)

North Korea says nuclear talks at risk if U.S.-South Korea exercises go ahead

FILE PHOTO: U.S. President Donald Trump and North Korean leader Kim Jong Un stand at the demarcation line in the demilitarized zone separating the two Koreas, in Panmunjom, South Korea, June 30, 2019. REUTERS/Kevin Lamarque/File Photo

By Hyonhee Shin

SEOUL (Reuters) – The United States looks set to break a promise not to hold military exercises with South Korea, putting talks aimed at getting North Korea to abandon its nuclear weapons at risk, the North Korean Foreign Ministry said on Tuesday.

The United States’ pattern of “unilaterally reneging on its commitments” is leading Pyongyang to reconsider its own commitments to discontinue tests of nuclear weapons and intercontinental ballistic missiles (ICBMs), the ministry said in a pair of statements released through state news agency KCNA.

U.S. President Donald Trump revitalized efforts to persuade the North to give up its nuclear weapons last month when he arranged a spur-of-the-moment meeting with North Korean leader Kim Jong Un on the border between the two Koreas.

Trump said they had agreed to resume so-called working-level talks, stalled since their second summit in February collapsed. The negotiations are expected in coming weeks.

But a North Korean foreign ministry spokesman cast doubt on that, saying the United States and South Korea were pressing ahead with exercises called Dong Maeng this summer, which he called a “rehearsal of war”.

“We will formulate our decision on the opening of the DPRK-U.S. working-level talks, while keeping watch over the U.S. move hereafter,” the spokesman said, using the initials of North Korea’s official name, the Democratic People’s Republic of Korea.

The exercises are expected in August.

North Korea has for years denounced military exercises between the United States and South Korea, but in recent months has increased its criticism as talks with Washington and Seoul stalled.

“It is crystal clear that it is an actual drill and a rehearsal of war aimed at militarily occupying our Republic by surprise attack,” the North Korean spokesman said in a separate statement, adding that Trump had reaffirmed at last month’s meeting with Kim that the exercises would be halted.

Trump, in his first meeting with Kim in Singapore in June last year, said he would stop exercises after the two leaders agreed to work towards the denuclearization of the Korean peninsula and to improve ties.

While the main annual South Korean-U.S. exercises have been stopped, they still hold smaller drills.

“Readiness remains the number one priority for USFK,” said Jacqueline Leeker, a spokeswoman for U.S. Forces Korea (USFK). “As a matter of standard operating procedure, and in order to preserve space for diplomacy to work, we do not discuss any planned training or exercises publicly.”

She said U.S. and South Korean troops continued to train together but had adjusted the size, scope, number and timing of exercises in order to “harmonize” training programs with diplomatic efforts.

An official at South Korea’s ministry of defense said it did not have immediate comment, but Seoul officials have previously said the drills are defensive in nature.

Since the Singapore summit, North Korea has not tested any nuclear weapons or intercontinental ballistic missiles, though it tested new short-range missiles in May.

The United States’ decision to forge ahead with drills less than a month after Trump and Kim last met is “clearly a breach” of the two leaders’ agreements made in Singapore last year, and is an “an undisguised pressure” on North Korea, the foreign ministry spokesman said.

“With the U.S. unilaterally reneging on its commitments, we are gradually losing our justifications to follow through on the commitments we made with the U.S. as well,” he said.

A North Korean nuclear envoy who steered the talks ahead of the failed February summit is alive, a South Korean lawmaker said on Tuesday, contradicting a South Korean news report that he had been executed.

(Reporting by Hyonhee Shin. Additional reporting by Josh Smith.; Editing by Robert Birsel and Nick Macfie)

Oil steadies as U.S. supply concerns ease but Iran tensions loom

FILE PHOTO: Oil pumps are seen after sunset outside Vaudoy-en-Brie, near Paris, France November 14, 2018. REUTERS/Christian Hartmann

By Bozorgmehr Sharafedin

LONDON (Reuters) – Oil prices steadied on Tuesday as a resumption of production in the Gulf of Mexico after Hurricane Barry and a boom in U.S. supply from shale oil countered tensions in the Middle East.

Uncertainty about China’s economic prospects also pressured prices after data on Monday showed that growth in the country slowed to 6.2% from a year earlier, the weakest pace in at least 27 years.

Brent crude futures <LCOc1> were up 9 cents at $66.57 a barrel by 1333 GMT. The international benchmark hit a session high of $66.84 earlier in the day.

West Texas Intermediate crude futures <CLc1> rose by 13 cents to $59.71 a barrel. The U.S. benchmark hit a session high of $60.02 earlier.

U.S. oil companies on Monday began restoring some of the nearly 74% of production that was shut at platforms in the Gulf of Mexico because of Hurricane Barry.

“Crude oil is having a quiet day today after giving back some of last week’s gains,” Saxo Bank commodity strategist Ole Hansen said.

“U.S. output from the Gulf looks set to increase and … Barry failed to hit refinery assets along the coast.”

Workers were returning to the more than 280 production platforms that had been evacuated. It can take several days for full production to resume.

“You could almost hear the big sigh of relief from oil producers and refiners in the region as the storm passed without causing significant damage,” PVM analyst Tamas Varga said.

The storm will probably result in a noticeable decline in U.S. crude oil stocks this week, analysts at Commerzbank said.

Inventory data will be published by the American Petroleum Institute on Tuesday evening, and by the U.S. Department of Energy on Wednesday.

The market was also weighed down by signs of further increases in output from the United States, which has ridden a wave of shale oil production to become the world’s biggest crude producer, ahead of Russia and Saudi Arabia.

U.S. oil output from seven major shale formations is expected to rise by about 49,000 barrels per day in August, to a record 8.55 million bpd, the U.S. Energy Information Administration said.

Market activity has started to slow as it tends to in July and August, the peak European and U.S. holiday season, Hansen said.

Tension between the United States and Iran over Tehran’s nuclear program kept the market on edge given the potential for a price spike should the situation deteriorate.

Iran’s Supreme Leader Ayatollah Ali Khamenei said on Tuesday Tehran would respond to Britain’s “piracy” over the seizure of its oil tanker in Gibraltar.

“The Iranian tension … still makes any oil bear careful,” Varga said.

(Additional reporting by Aaron Sheldrick in Tokyo; Editing by Dale Hudson/Kirsten Donovan)

Strong U.S. retail sales boost economic outlook

FILE PHOTO: A stack of shipping containers are pictured in the Port of Miami in Miami, Florida, U.S., May 19, 2016. REUTERS/Carlo Allegri/File Photo

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. retail sales increased more than expected in June, pointing to strong consumer spending, which could help to blunt some of the drag on the economy from weak business investment.

The report from the Commerce Department on Tuesday did not change market expectations that the Federal Reserve will cut interest rates this month for the first time in a decade.

But signs of strong consumer spending and rising underlying inflation suggest the U.S. central bank is unlikely to cut rates by 50 basis points at its July 30-31 policy meeting as markets had initially anticipated.

Fed Chairman Jerome Powell last week told lawmakers the central bank would “act as appropriate” to protect the economy against risks stoked by a trade war between the United States and China, as well as slowing global growth.

“It certainly will counteract weak business spending to some degree,” said Robert Frick, corporate economist at Navy Federal Credit Union in Vienna, Virginia. “Given that the Fed is most worried about foreign economies and the threat of an escalating trade war, it is unlikely to dissuade them from cutting rates soon.”

Retail sales increased 0.4% last month as households stepped up purchases of motor vehicles and a variety of other goods. Data for May was revised slightly down to show retail sales gaining 0.4%, instead of rising 0.5% as previously reported.

Economists polled by Reuters had forecast retail sales edging up 0.1% in June. Compared to June last year, retail sales advanced 3.4%.

Excluding automobiles, gasoline, building materials and food services, retail sales jumped 0.7% last month after an upwardly revised 0.6% increase in May. These so-called core retail sales, which correspond most closely with the consumer spending component of gross domestic product, were previously reported to have increased 0.4% in May.

    June’s strong gain in core retail sales, coming on the heels of solid increases in April and May, suggested an acceleration in consumer spending in the second quarter. Consumer spending grew at its slowest pace in a year in the first quarter.

The dollar rose against a basket of currencies, while U.S. Treasury prices fell.

BROAD GAINS

Consumer spending is being supported by a tight labor market, even as the broader economy is slowing as weaker business investment, an inventory overhang, a trade war between the United States and China, and softening global growth pressure manufacturing.

The Fed reported on Tuesday that manufacturing output rose 0.4% in June, boosted by increased production of motor vehicles and parts, after gaining 0.2% in May. Still, factory production dropped at an annual rate of 2.2% in the second quarter, the biggest drop in three years, after contracting at a 1.9% rate in the January-March period.

“Healthy consumption growth is especially important now amid the U.S. and global industrial slump that we expect to contribute to an outright decline in real business fixed investment in the second quarter and as manufacturers continue to work off the inventory overhang,” said Roiana Reid, an economist at Berenberg Capital Markets in New York.

The Atlanta Fed is forecasting GDP increased at a 1.4% annualized rate in the second quarter. The economy grew at a 3.1% pace in the January-March quarter. The government will publish its snapshot of second-quarter GDP next Friday. The economy is losing speed in part as last year’s stimulus from massive tax cuts and more government spending fades.

Auto sales increased 0.7% in June after a similar gain in May. Receipts at service stations fell 2.8%, reflecting cheaper gasoline. Sales at building material stores rebounded 0.5% after dropping 1.5% in May.

Receipts at clothing stores rose 0.5%. Online and mail-order retail sales climbed 1.7%, matching May’s increase. Receipts at furniture stores advanced 0.5%. Sales at restaurants and bars surged 0.9%. Spending at hobby, musical instrument and book stores was unchanged.

While core inflation perked up in June, gains are likely to remain moderate. A separate report on Tuesday from the Labor Department showed import prices dropped 0.9% last month, the biggest decrease in six months, after being unchanged in May.

Import prices, which exclude tariffs, were held down by a 6.2% drop in the cost of petroleum products. There were also decreases in the prices of imported food and capital goods.

The cost of goods imported from China slipped 0.1%, matching May’s drop. Prices of Chinese goods fell 1.5% in the 12 months through June, the largest decrease since February 2017.

(Reporting by Lucia Mutikani; Additional reporting by Pete Schroeder; Editing by Andrea Ricci)

Trump defiant as lawmakers blast his ‘racist’ attacks on four congresswomen

U.S. Reps Rashida Tlaib (D-MI), Ilhan Omar (D-MN), Alexandria Ocasio-Cortez (D-NY) and Ayanna Pressley (D-MA) hold a news conference after Democrats in the U.S. Congress moved to formally condemn President Donald Trump's attacks on the four minority congresswomen on Capitol Hill in Washington, U.S., July 15, 2019. REUTERS/Erin Scott

By Jeff Mason and Susan Cornwell

WASHINGTON (Reuters) – President Donald Trump doubled down on his attacks against four minority U.S. congresswomen on Monday and dismissed concerns that his comments were racist, prompting outrage from Democrats, who moved to condemn him in the House of Representatives.

Speaking at the White House, Trump said people he described as critical of the United States should leave the country.

Those remarks followed his Twitter messages on Sunday that said the four left-wing lawmakers, known in Congress as “the squad,” should go back to “the totally broken and crime-infested places from which they came.”

All four of the first-term House members are U.S. citizens and all but one were born in the United States.

“If you’re not happy in the U.S., if you’re complaining all the time, very simply: You can leave,” he said, drawing scattered applause from a crowd of businesspeople.

Asked if he was concerned that some viewed his remarks as racist and that white supremacists found common cause with him, Trump said he was not. “It doesn’t concern me because many people agree with me,” Trump said.

The president’s remarks were widely derided and some, though not many, of his fellow Republicans spoke out against them.

Trump did not identify the lawmakers by name in his Sunday tweets, but he appeared to refer to representatives Alexandria Ocasio-Cortez of New York, Ilhan Omar of Minnesota, Ayanna Pressley of Massachusetts and Rashida Tlaib of Michigan.

All four have been critical of Trump, as well as of the current Democratic leaders of the House, straining party unity in that chamber.

At a press conference on Capitol Hill, the four lawmakers said Trump was trying to sow division and distract attention from what they characterized as failed policies on immigration, healthcare and taxation.

“Weak minds and leaders challenge loyalty to our country in order to avoid challenging and debating the policy,” Ocasio-Cortez said.

Tlaib and Omar repeated their calls for Trump to be impeached.

House Speaker Nancy Pelosi, who has been criticized by members of “the squad,” said her party would introduce a resolution condemning Trump’s “xenophobic tweets.”

A draft of the resolution, seen by Reuters late on Monday, said the House “strongly condemns President Donald Trump’s racist comments that have legitimized and increased fear and hatred of new Americans and people of color …”

Representative Steny Hoyer, the No. 2 Democrat in the House, told reporters the resolution could be on the House floor for debate as soon as Tuesday.

Such a resolution could put Trump’s fellow Republicans in Congress in an awkward position, forcing them either to vote against their party’s leader, who has strong support among conservatives, or effectively to defend his statements.

Trump’s attacks elevated the profiles of the four progressive Democrats, who have helped push the party’s agenda to the left, causing concern among Democratic moderates who are eager to hold onto their seats in the 2020 election.

A FEW REPUBLICANS SPEAK OUT

Trump has a history of what critics consider race-baiting. He led a movement that falsely claimed former President Barack Obama was not born in the United States, and he said after a deadly, white supremacist-led rally in Charlottesville, Virginia, that “both sides” were to blame for violence there.

“This is the agenda of white nationalists, whether it is happening in chat rooms, or it’s happening on national TV, and now it’s reached the White House garden,” Omar said.

Although most Republicans stayed silent on Trump’s divisive rhetoric, several began expressing concern late on Monday.

Texas Representative Will Hurd, the only African-American Republican in the House, called the attacks “racist” on CNN.

Tim Scott, the Senate’s only black Republican, called them “racially offensive” on Twitter.

Others did not go that far. Senator Mitt Romney, the party’s 2012 presidential nominee, and Senator Marco Rubio, who ran in 2016, both condemned the remarks but declined to characterize them as racist.

House Republican Leader Kevin McCarthy said the four lawmakers belonged in the United States, but did not criticize Trump. “The president is not a racist,” he told reporters.

Senate Republican Leader Mitch McConnell did not comment on the controversy.

Trump regularly used racially charged language during his campaign and continued in his presidency. His latest remarks came as some of his efforts to deal with immigration – a major issue for his conservative base – have faltered.

Trump promised as a candidate to build a wall along the U.S.-Mexico border and that Mexico would pay for it. As president, very little has happened on wall construction and Mexico has resolutely refused to pay for a wall.

‘RACISM, DIVISION’

In his Sunday tweets, Trump said of the four congresswomen, “Why don’t they go back and help fix the totally broken and crime-infested places from which they came … Then come back and show us how … it is done.”

Ocasio-Cortez, Pressley and Tlaib were born in the United States while Omar, a Somali refugee, arrived in 1992.

Republican Senator Lindsey Graham, a sometime Trump golf partner and adviser, called the four congresswomen “communist” and “anti-Semitic” on Fox News on Monday, but he also called on Trump to stop making such personal attacks.

“Aim higher … Take on their policies. The bottom line here is this is a diverse country,” he said, adding that he had spoken to Trump.

(Additional reporting by Makini Brice, Eric Beech, Richard Cowan, Mohammad Zargham and Roberta Rampton; Writing by Andy Sullivan and Jeff Mason; Editing by Kevin Drawbaugh, Bill Trott, Dan Grebler and Cynthia Osterman)

Turkey’s Erdogan says Russian S-400s will be fully deployed by April 2020

FILE PHOTO: First parts of a Russian S-400 missile defense system are unloaded from a Russian plane at Murted Airport, known as Akinci Air Base, near Ankara, Turkey, July 12, 2019. Turkish Military/Turkish Defence Ministry/Handout via REUTERS

By Sarah Dadouch

ISTANBUL (Reuters) – Turkish President Tayyip Erdogan said on Monday that the Russian S-400 missile defense system, parts of which have been delivered to Turkey over the past four days, would be fully deployed in April 2020.

Turkey’s purchase of the Russian system has raised tensions with its NATO allies, particularly the United States, which has warned Turkey that it will respond with sanctions.

Speaking at Istanbul’s Ataturk Airport on the third anniversary of 2016’s attempted coup, Erdogan said eight planes had already brought parts of the Russian system and more were coming, as he had repeatedly promised.

“With God’s permission, they will have been installed in their sites by April 2020,” he told the crowd.

“The S-400s are the strongest defense system against those who want to attack our country. God willing, we are doing this as a joint investment with Russia, and will continue to do so.”

U.S. officials have said that in addition to being hit with legislation aimed at preventing countries from purchasing military equipment from Russia, known as CAATSA, Turkey could be thrown off the F-35 stealth fighter jet program.

That would mean it would no longer make F-35 parts or be able to buy the jets it has ordered.

On Sunday, Erdogan said that U.S. President Donald Trump has the authority to waive sanctions on Turkey for its purchase of Russian air defense systems and should find a “middle ground” in the dispute.

Tensions between Turkey and Western allies have risen in recent months over the purchase of the S-400 system, with a series of other actions taken by the NATO member state compounding the situation.

German and Austrian ministers said on Monday that the European Union would endorse a symbolic punishment for Turkey over what it calls “illegal” drilling for oil and gas off Cyprus and threaten harsher sanctions unless Ankara changes tack.

Foreign Minister Mevlut Cavusoglu had said on Sunday that Turkey will continue drilling for gas in waters off Cyprus if the internationally recognized Greek Cypriot government does not accept a cooperation proposal put forward by Turkish Cypriots.

After sacking the central bank governor this month, citing differences over the timing of rate cuts, Erdogan said on Sunday that Turkey would make serious cuts to interest rates and aims to reduce inflation to single digits by the end of the year.

In his first remarks since taking office nine days ago, new governor Murat Uysal was reported as hinting at rate cuts, saying there was “room for maneuver” in monetary policy.

Turkey’s benchmark interest rate was hiked to 24% last September to stem a sharp fall in the lira and has remained there to prevent renewed losses in the currency as the economy tumbled into recession.

Ratings agency Fitch downgraded Turkey’s sovereign rating to BB- on Friday, saying the central bank chief’s dismissal heightened doubt over the authorities’ tolerance for a period of slower growth.

On Monday, agency S&P Global said Turkey’s credit rating is only likely to be affected by U.S. sanctions if they specifically target the country’s banks.

(Reporting by Sarah Dadouch and Ali Kucukgocmen; Writing by Sarah Dadouch; Editing by Catherine Evans)