U.S. Targets Islamic State’s Lucrative Oil Smuggling Operations

With U. S. President Barack Obama’s announcement of an open-ended plan for airstrikes on the Islamic State (IS), the U. S. and its allies will need to degrade the power and influence of the Sunni jihadist group, and that means reducing its incoming flow of oil money.
And the Obama administration seems aware of that, according to a New York Times article that reports that the President and U. S. diplomats are pressuring Turkey to cut off the stream of oil smuggled across its border.
IS controls territory in central and northern Iraq, and is thought to be producing between 25,000 and 40,000 barrels per day (bpd). Since they cannot sell this oil legitimately, they smuggle it and sell it on the black market. Some energy analysts think IS could be pulling in between $1.2 and $2 million per day.
‘The key gateway through that black market is the southern corridor of Turkey,’ Luay al-Khatteeb, a fellow at the Brookings Institute’s Doha Center, told the Times. ‘Turkey is becoming part of this black economy.’

This post was published at Zero Hedge on 09/16/2014.

Crude Oil Collapses – Plot Against Russia or Economics?

The global demand for oil is declining as the United States moves toward self-sufficiency and is the only nation still in a positive economic trend. Everywhere else we see the global economy turning down since 2007 including China and Russia no less Europe. But the level of pessimism in the USA does not imply a bull market for commodities no less oil.
The oil price has fallen in the past week for the first time since one and a half years under the $ 100 mark dropping to test the $90 level. On our models, the critical support lies at $92 and $82 going into 2015. A year-end closing below $92 will shift oil into a neutral position whereas a 2014 closing below $82 will warn of a sharp decline cannot be ruled out.
The global oil demand rose by only 500,000 barrels of crude oil per day, according to the International Energy Agency (IEA) in the second quarter. This increase in oil demand is the lowest in almost 3 years. The only place where demand has risen is in North America, whereas in Europe and Asia demand has been noted generally less. The recent slowdown in demand growth is exceptional in fact but the rising levels of taxation and the rise in draconian policies in Europe to bail out banks and municipal governments has seriously impacted expectation no less the fact that youth unemployment remains over 60%. This has impacted everything and is even sending marriage trends back to the 19th century where the age differentials are widening drastically. Girls are marrying increasingly older men to be able to start families since those near their own age in Europe are the equivalent of marrying someone virtually homeless living with their parents.

This post was published at Armstrong Economics on September 16, 2014.

A most bizarre holiday today… it’s really a sign of the times

Today is a rather peculiar public holiday in Japan: ‘Respect Old People Day’.
And judging by the official demographics, an increasing proportion of the population should be revered today.
One in eight Japanese is aged 75 or older. People over 65 will reach 33 million, the largest ever, roughly 25.9% of the population.
The thing about demographic trends is that they’re like a huge oil tanker – once they’re on their course it’s very hard to steer them around in another direction.
These are monumental, generational changes that are very hard and slow to reverse.
By today’s trend, Japan’s population will dwindle from 127 million today to around 100 million by 2050. It’s the worst possible demographic nightmare.
People stopped having as many babies decades ago. It was too damned expensive.
Then the big collapse came in the late 80s, and the economy has been dragging it heels ever since.
When prosperity is low, people consequently delay having children. They have fewer children. Or they don’t have them at all.

This post was published at Sovereign Man on September 15, 2014.

Petrodollar Panic: EU Officials Admit Buying Oil From ISIS

We recently explained how ISIS remains so well funded but what was unclear was who exactly what purchasing their ‘recently-provisioned’ oil reserves? The assumption being some desperate third-world nation or some scheming offshore hedge-fund arbitrageur; however, as Sott.net reports, a senior European Union official has revealed that some EU member states have purchased oil from ISIL Takfiri militants despite their rhetoric against the group. The official declined to disclose any names but Turkey remains a front-runner (having already shunned President Obama) andpotentially France (after their recent anti-Petrodollar comments).
As The Daily Signal’s Kelsey Harkness ( @kelseyjharkness ) notes,

This post was published at Zero Hedge on 09/15/2014.

Russian Hot Money Dodges Sanctions, Gushes into Hong Kong, Hits Resistance

The sanctions, the last batch of which took effect on Friday, are targeting with ever increasing intensity the Russian economy and a growing number of key individuals. The defense, financial, and energy sectors have been hit the hardest. Oil and gas exports are Russia’s economic and fiscal lifeblood; Western financing is Russia’s corporate lifeblood. And that’s where the sanctions have begun to bite viciously. But not only in Russia….
They’re gnawing at the revenues and profits of German companies, and potentially at the value of stock-based compensation and bonuses of their chieftains, who have been waging a loud and relentless campaign against the sanctions, which so far has fallen on deaf ears in Berlin.
A major shift in mercantilist Germany. The prior Chancellor, Gerhard Schrder, a West German through and through, has become Putin’s best buddy over the years, and within practically moments after getting kicked out of office in 2005, started to work for him. Which has led to some delicious imbroglios [for example… Putin Parties With German Ex-Chancellor, Sanctions Be Damned].
Chancellor Angela Merkel originated in Soviet-dominated East Germany, had to learn Russian in school, and experienced Soviet power first-hand. There’s no love lost between her and Putin. Even before the Ukrainian fiasco mucked up the ‘strategic relationship,’ as every German government has insisted on calling it, meetings between them were, let’s say, awkward – though big commercial deals were always signed, and that’s what counted in mercantilist Germany. But not anymore.

This post was published at Wolf Street on September 15, 2014.

Russian Hot Money Dodges Sanctions, Gushes into Hong Kong

The sanctions, the last batch of which took effect on Friday, are targeting with ever increasing intensity the Russian economy and a growing number of key individuals. The defense, financial, and energy sectors have been hit the hardest. Oil and gas exports are Russia’s economic and fiscal lifeblood; Western financing is Russia’s corporate lifeblood. And that’s where the sanctions have begun to bite viciously. But not only in Russia….
They’re gnawing at the revenues and profits of German companies, and potentially at the value of stock-based compensation and bonuses of their chieftains, who have been waging a loud and relentless campaign against the sanctions, which so far has fallen on deaf ears in Berlin.
A major shift in mercantilist Germany. The prior Chancellor, Gerhard Schrder, a West German through and through, has become Putin’s best buddy over the years, and within practically moments after getting kicked out of office in 2005, started to work for him. Which has led to some delicious imbroglios [for example… Putin Parties With German Ex-Chancellor, Sanctions Be Damned].
Chancellor Angela Merkel originated in Soviet-dominated East Germany, had to learn Russian in school, and experienced Soviet power first-hand. There’s no love lost between her and Putin. Even before the Ukrainian fiasco mucked up the ‘strategic relationship,’ as every German government has insisted on calling it, meetings between them were, let’s say, awkward – though big commercial deals were always signed, and that’s what counted in mercantilist Germany. But not anymore.
Over the weekend, it was Eckhard Cordes, chairman of the Committee on Eastern European Economic Relations, who attacked the new sanctions, warning that they would not contribute to a de-escalation of the crisis. He added the word ‘dangerous’ to the already common ‘sanction spiral.’

This post was published at Wolf Street by Wolf Richter ‘ September 15, 2014.

Former BP CEO Warns “Sanctions Will Bite West” As US Gives Majors 14 Days To Wind Down Russian Activities

For the past six months, even as Obama and the EU were laying harsher sanctions on the Kremlin, one group of companies had managed to sneak by unscathed and largely avoided being impacted by Russia’s isolation by the West: the world’s biggest E&P companies, as explained in detail over a month ago in “Exxon Drilling Russian Arctic Shows Sanction Lack Bite.”
All that is about to change, because while sanctions until this moment had been largely intended tospecifically allow energy companies to continue their status quo in Russia, as of this Friday, it is precisely the E&Ps that are being targeted, as we noted on Friday, and as Reuters follows up today, reporting that some of the world’s largest companies, namely Exxon, Anglo-Dutch Royal Dutch Shell, Norway’s Statoil and Italian ENI, will have to be put their Russian projects on hold: to wit, the companies will have 14 days to wind-down activities.
From Reuters:
Projects now in jeopardy include a landmark drilling program by U. S. giant Exxon Mobil in the Russian Arctic that started in August as part of a joint venture with the Kremlin’s oil champion Rosneft. Now this and dozens of other projects that Rosneft and Gazprom Neft agreed with Exxon, Anglo-Dutch Royal Dutch Shell, Norway’s Statoil and Italian ENI will have to be put on hold.
“Cutting off U. S. and E. U. sources of technology and services and goods for those projects makes it impossible, or at least extraordinarily difficult for these projects to continue…There are not ready substitutes elsewhere,” a senior U. S. administration official told a briefing on Friday.
The companies will have 14 days to wind-down activities.

This post was published at Zero Hedge on 09/14/2014.

Washington’s War Against Russia – Paul Craig Roberts

Quarterly Call For Donations
Dear Readers: The site has three types of donors. Some donate automatically a fixed amount each month. Others donate randomly without being asked. Others respond to the quarterly request. The response so far to this current quarterly request is disappointing.
As this site grows in influence, its support needs to grow. Protecting this site is expensive. Those of us who tell you the truth and who provide explanations different from the propaganda are targets. Many efforts are made to smear us, discredit us, and, thereby, limit our audience. Government trolls and poorly informed ‘patriots’ who defend the government but not the Constitution, attack us in comment sections and sow confusion by misrepresenting what we write. Email attacks are mounted that so swell the inbox that it becomes impossible time wise to work through the messages to find the legitimate ones to which to respond.
It will not be long before only a masochist will be willing to speak the truth in the United States or in any country of the West.
This is your site. It depends on your support. I need to see your support.
Washington’s War Against Russia
The new sanctions against Russia announced by Washington and Europe do not make sense as merely economic measures. I would be surprised if Russian oil and military industries were dependent on European capital markets in a meaningful way. Such a dependence would indicate a failure in Russian strategic thinking. The Russian companies should be able to secure adequate financing from Russian Banks or from the Russian government. If foreign loans are needed, Russia can borrow from China.

This post was published at Paul Craig Roberts on September 14, 2014.

Dropping Oil Prices Put These Countries at Risk

Executive Report with ISA Intel: This report is part of Oil & Energy Insider, the Oilprice.com premium publication. It gives subscribers an information advantage when investing, trading, or doing business in the energy sectors.
The oil markets woke up at the end of the summer of 2014 realizing that there was not as much demand out there as they thought. Suddenly, the world is flush with supplies, and there aren’t enough buyers out there to gobble it all up.
That has Brent prices at their lowest levels in over two years.
The International Energy Agency said that weakening demand for oil worldwide is ‘nothing short of remarkable.’ What is even more remarkable is the blunt language used by the IEA, usually a buttoned-up and bureaucratic bunch.
But for the third month in a row the IEA was forced to slash its demand forecast for 2014. The agency now expects oil demand to grow by just 900,000 barrels per day (bpd) between 2013 and 2014, a downward revision of 65,000 bpd from a month earlier. It is also 300,000 bpd less than what the IEA expected for the year in its July report.
For 2015, growth in oil demand is expected to only reach 1.2 million bpd, or 165,000 bpd less than the agency thought one month ago. The agency pins the slowdown on weak growth in Europe and China.
Saudi Oil Minister Ali al-Naimi responded to reporters’ questions about what OPEC would do. Prices ‘always fluctuate and this is normal,’ he said. He dismissed the notion that OPEC would resort to drastic measures to prop up prices.
‘We are confident that the current price drop does not call for an emergency meeting…. The price drop was not big and was expected…. I expect it to rebound again,’ Kuwait oil minister Ali Saleh Al-Omair said.

This post was published at Wolf Street on September 12, 2014.

The One Company Most At Risk From Russian Sanctions Is Actually American

When Exxon Mobil CEO Rex Tillerson detailed a $3.2 billion deal to drill for oil in Russia’s Arctic Sea two years ago, he predicted that the project would strengthen the ties between the U. S. and Russia. However, as WSJ reports, Exxon has instead wound up in the cross hairs of U. S. foreign policy, which could threaten one of the company’s best chances to find and tap significant – and much needed – amounts of crude oil. If the venture is significantly delayed or hampered, it would deal a blow to Exxon’s efforts to replenish its store of fuels it pumps from the ground. The company’s production has been essentially flat for years, and last quarter fell to the lowest level since 2009.

This post was published at Zero Hedge on 09/12/2014.

Undeclared War on Russia; Solidarity by Force; Ruble Falls to Record Low; Sanctions Target Private Companies

Sanctions or War?
It’s long overdue we label sanctions for what they really are: war. If you prefer, call them “economic war”.
Today, president Obama took the undeclared war another step forward by targeting Lukoil, a private Russian company.
Please consider Gazprom, Lukoil Hit in New Round of Sanctions.
The US dramatically expanded its sanctions against Russia on Friday by adding Gazprom, Europe’s leading energy provider, to the list of targeted companies, as it sought to ratchet up pressure on Moscow to step back from the war in Ukraine.
The latest measures targeting energy, financial services and defence industries also included Lukoil, the privately owned oil group, and Sberbank, Russia’s largest bank.
In addition to blocking most major state-owned groups from western capital markets, the US has also tightened restrictions on some of Russia’s largest energy projects, a key engine of its future economic growth.

This post was published at Global Economic Analysis on September 12, 2014.

Oil Price Plunge? It’s The Global Economy, Stupid!

The decline in the price of oil – in the face of surging geopolitical pandemonium – has been lauded as indicative of both US’ awesomeness in energy independence and a tax cut for Americans… but, as the following chart suggests, there may be another – much more realistic – explanation for why oil is plunging… demand!
World GDP expectations for 2014 just tumbled to their lowest since estimates started…

Maybe – just maybe – that explains the price of oil…

This post was published at Zero Hedge on 09/12/2014.

Where ISIS Makes Its Money

President Obama’s 4-pronged strategy to ‘degrade and destroy’ ISIS includes a ‘financial attack’ (according to the Treasury) as they recognize, as The Daily Signal notes, one major hurdle in the way of the ‘strategy’ is the brutal organization’s control of oil fields in Iraq and Syria; which ISIS uses that oil wealth to help finance its terror operations. Here’s how they do it…

This post was published at Zero Hedge on 09/12/2014.

US Unveils Latest Russian Sanctions, Putin Immediately Responds That Russia Drafting Retaliation

Moments ago, as was widely preannounced, the US Treasury unveiled its latest round of Russian sanctions. While the bigger picture was well-known, here are some of the highlights:
U. S. SANCTIONS FOCUS ON FINANCIAL, ENERGY, DEFENSE SECTORS U. S. TREASURY ADDS SBERBANK TO SANCTIONS LIST, U. S. TREASURY SANCTIONS AFFECTS GAZPROM, GAZPROM NEFT, LUKOIL, ROSNEFT, AND SURGUTNEFTGAZ U. S. TIGHTENS DEBT FINANCING RESTRICTIONS TO 30 DAYS As Bloomberg reports, action deepens existing sanctions on Russian financial institutions, expands sanctions on Russia’s energy sector, targets additional energy- and defense-related firms, U. S. Treasury says in statement. “Today’s actions demonstrate our determination to increase the costs on Russia as long as it continues to violate Ukraine’s territorial integrity and sovereignty,” Under Secretary for Terrorism and Financial Intelligence David S. Cohen says in statement
Treasury Dept says it ‘maintains significant scope to expand these sanctions.’
Sberbank added to sanctions list; Treasury also tightens ‘debt financing restrictions by reducing from 90 days to 30 days the maturity period’ for sanctioned banks
Also imposes sanctions that ‘prohibit the exportation of goods, services (not including financial services), or technology in support of exploration or production for Russian deepwater, Arctic offshore, or shale projects that have the potential to produce oil’
Step affects 5 cos.: Gazprom, Gazprom Neft, Lukoil, Surgutneftegas, and Rosneft, Treasury says
And instantly: PUTIN: GOVT DRAFTING PROPOSALS TO RETALIATE AGAINST SANCTIONS
PUTIN SAYS RUSSIA TO RETALIATE ONLY IF IT SERVES ITS INTERESTS PUTIN SEES MORE POSITIVES THAN NEGATIVES IN LATEST SANCTIONS PUTIN SAYS UKRAINE `HELD HOSTAGE’ BY OUTSIDE INTERESTS PUTIN SAYS RUSSIA WON’T IMPOSE TRAVEL BANS IN RETALIATION So back to square one, as Russia and China get progressively closer.

This post was published at Zero Hedge on 09/12/2014.

Despite economic fears, the E.U. sanctions Russia again

The European Union on Thursday slapped more sanctions on Russia for helping separatists destabilize Ukraine, limiting Russia’s access to its financial market, hitting the country’s vital oil industry, curbing high-tech exports and targeting more officials with travel bans and asset freezes.
Many E.U. members had been loath to increase the sanctions against Russia for fear of jeopardizing their close trade relationships with Moscow. But a compromise struck in a video conference call with top EU leaders broke a deadlock that had paralyzed the 28-nation bloc from taking tougher action over the past ten days.
Under the compromise hashed out by leaders including Britain’s Prime Minister David Cameron, Germany’s Angela Merkel and France’s Francois Hollande, the sanctions could be reversed within weeks if the cease-fire in eastern Ukraine holds.

This post was published at Washington Post

US at War with ISIS in Middle East, Ukraine Crisis and More Sanctions Against Russia

The following video was published by Greg Hunter on Sep 11, 2014
America is at war in the Middle East. President Obama came on national media this week and said ISIS terrorists in eastern Syria and western Iraq ‘will find no safe haven,’ and he wants to ‘ultimately destroy ISIL.’ Of course, Secretary of State John Kerry said it really was not a war but a ‘significant counter-terror operation.’ To that I say horse hooey! This is war any way you cut it, even if it is supposedly only an air campaign with military ‘advisors.’ Just think, President Obama won a Nobel Peace Prize at the beginning of his first term. Will he have to give it back? The Russians also charge this is more about getting a pipeline through Syria than it is about fighting terrorism. The pipeline is natural gas, and Qatar wants to start supplying Europe. The Russian Foreign Minister, Sergey Lavrov, is worried that a bombing campaign could lead to a ‘huge escalation in the conflict in the Middle East and North Africa.’
Speaking of natural gas, Europe is about to have theirs cut off. There are new sanctions coming from the U. S. and the EU over the Ukraine crisis. It’s going to involve Russia’s biggest energy companies, among other sanctions, but the oil companies are the biggies here. Russia will respond, and what do you bet it will involve higher gas prices and less of it this winter in Europe? The European economy is already in a tail spin, and this will surely drive it into a depression. News flash–even the new President of Ukraine says most, if not all, Russian fighters have left the country. Russia says they were never there to begin with, but Ukraine says they are ‘mostly gone.’ So, what gives with the new sanctions?

Fishing for Trout With Rope and Mashed Potatoes; Mentality of Jackasses; Gas Pains

The EU stepped up its sanctions today after forcing all the ducks in line with the position of president Obama. Russia immediately responded in kind with actions on cars, clothes, and energy.
The Financial Times reports Russia Threatens to Cap Western Car and Clothing Imports.
Russia threatened to escalate a growing trade dispute between the Kremlin and the EU, saying it could cap western car and clothing imports.
The fresh warning came as EU diplomats ended a week-long deadlock on Thursday over a new round of sanctions against the Kremlin, and agreed to trigger measures to block Russia’s largest state-owned oil companies from raising money on European capital markets.
Forcing Ducks In Line
The measures were due to go into effect at the start of the week, but several EU countries balked, arguing they needed more time to assess whether the Kiev-brokered ceasefire would take hold.
Diplomats said the decision by EU ambassadors to press ahead came after Herman Van Rompuy, the European Council president, held a conference call on Thursday with the leaders of the four European countries in the Group of Seven leading industrialised nations – Germany’s Angela Merkel, France’s Franois Hollande, Britain’s David Cameron and Italy’s Matteo Renzi – to finalise the measures.

This post was published at Global Economic Analysis on September 11, 2014.

Russia And Iran Put Oil-For-Goods Deals Into Motion As Iran Signals Similar Arrangements Coming With China

Russia-Iran Oil-for-Goods Contracts Representatives of the Russian and Iranian governments met in Tehran yesterday for the 11th meeting of the Iran-Russian Trade Council, where details of a ground breaking oil-for-goods swap between the two heavily sanctioned countries were revealed.
With both countries now sanctioned by the West, Russia and Iran have been in extensive negotiations on how to facilitate Iranian oil exports without breaching the UN Security Council nuclear deal that was agreed between Iran, Germany and the five UN Council permanent last January.
Sanctions on Iran had reduced Iranian oil production from 2.5 million barrels per day (BPD) down to between 1 million – 1.5 million BPD. Under the UN’s nuclear deal, Iran can only now export up to 1 million BPD. Iran has the world’s 4th largest oil reserves and both Russia and Iran are large producers and exporters of oil.
On August 5, Russia and Iran signed a Memorandum of Understanding (MoU) on oil-for-goods exchanges under which Russia could take 500,000 BPD of Iranian oil exports in returns for providing goods, services and equipment to Iran. This deal was said by Russian media to have been directly negotiated previously by Russian President Vladimir Putin and Iranian President Hassan Rouhani.
President Hassan Rouhani of Iran meeting with Russian President Vladimir Putin

This post was published at Gold Core on 10 September 2014.

What Country Just Deployed Troops To Defend Its Oil Fields Located On A Distant Continent?

If this was the 90s, the correct answer with 99.9% certainty, would have been unequivocally the United States. However, perhaps as a testament to how the times have changed, not to mention the geopolitics and the dominant global superpowers, the answer this time is not the US but instead China. And the country where according to the WSJ, China has deployed some 700 soldiers as part of a United Nations “peacekeeping” force, is South Sudan where the Chinese troops will help guard the country’s embattled oil fields and protect Chinese workers and installations, a spokesman for the African nation’s president said Tuesday.
More on this page straight out of the CIA’s playbook:

This post was published at Zero Hedge on 09/09/2014.

EU Threatens New Sanctions; Russia Responds with Threats on Natural Gas and Airspace Flight Restrictions

The tit-for-tat sanction madness in Europe took a huge leap forward today with new sanctions in the work on Russian energy companies. Russia responded by threatening to restrict commercial flights over its airspace, by threatening to halt reverse flows of natural gas to Ukraine, and with a threat to reduce gas delivery to Europe. EU Plans New SanctionsThe Wall Street Journal reports New EU Sanctions to Stop Fundraising by 3 Russian Oil Giants
New European Union sanctions on Russia will expand the number of Russian companies unable to raise money in the bloc’s capital markets to include three state-owned oil companies, according to documents seen by The Wall Street Journal. The documents show the EU seeking to hit Russian oil companies, but leaving unscathed those involved in gas production and export, which are critical to many European countries’ energy supplies. Under a modest expansion of sanctions introduced in late July, the three oil companies – Gazpromneft, the oil-production and refining subsidiary of OAO Gazprom, oil transportation company Transneft, and oil giant Rosneft – will be forbidden from raising funds of longer than 30 days’ maturity.

This post was published at Global Economic Analysis on September 08, 2014.