control of oil
After oil prices went negative for the first time ever last month, they are now starting to rise again as lockdowns imposed by the COVID-19 pandemic are gradually lifted. US crude is now back to nearly $30 a barrel. But this is less than half what the price was a year ago, and a third what it was a dozen years ago. Iraq, OPEC's second-largest producer, is at the forefront of the cartel's effort to squeeze supply to consumer nations, as part of its recent deal to curb output. Baghdad just announced a 30% cut of exports to Asia. But it remains to be seen if such measures will jack up prices and ease the economic pain that has led to a remobilization of anti-regime protests, despite pandemic fears. (Reuters, Bloomberg, Al Jazeera)
Despite last week's agreement by Saudi Arabia and Russia to end their price war, the oil market remains in free-fall amid the virtual shut-down of the world economy by the COVID-19 pandemic. The price of the main US oil benchmark, West Texas Intermediate, fell on April 20 to $30 below zero—the first time oil prices have ever turned negative. This means anyone trying to sell a barrel would have to actually pay a buyer. The global industry output of 100 million barrels a day would appear to be on borrowed time. (NYT)
On Cuba's farms, oxen are again tilling the soil as tractors are paralyzed by oil shortages. President Miguel Díaz-Canel has imposed fuel rationing, among other emergency energy-saving measures and price controls on food. As in the "special period" a generation ago, Cubans are having to line up for gasoline and public transport. The island has been running on just 30% of petroleum deliveries since last September, as the US Treasury Department has imposed sanctions on more maritime firms and vessels shipping Venezuelan oil to Cuba. In February, the Cuban government resorted to purchasing a ship carrying fuel after its owner refused to put into port on the island for fear of incurring US sanctions. "We have reached the point of having to buy a ship in the immediate vicinity of our shores…because the ship owner has refused to dock," Transportation Minister Eduardo Rodriguez told state television.
Already depressed oil prices are now plummeting in response to the COVID-19 pandemic. Global oil consumption is said to be in "free-fall," and predicted to lead to the largest "annual contraction in history." Bloomberg reports that oil traders fear that demand "may contract by the most ever this year, easily outstripping the loss of almost 1 million barrels a day during the great recession in 2009 and even surpassing the 2.65 million barrels registered in 1980, when the world economy crashed after the second oil crisis." (OilChange)
Thousands of people are fleeing ongoing inter-communal clashes in South Sudan's Jonglei State and the newly created Greater Pibor Administrative Area—the latest challenge to efforts to cement peace following last month's formation of a unity government. Médecins Sans Frontières reported an influx of 83 wounded patients last week and said it had treated 45 gunshot wounds in Pibor, as fighting between Lou Nuer and Murle ethnic militias continued. "We are very worried about the extreme level of violence that some of the patients have been subjected to," said Claudio Miglietta, MSF head of mission in South Sudan. "This is not just a matter of providing medical care, it is also a protection concern, with some of the most vulnerable, including young children and pregnant women, being targeted."
In his talks with Vladimir Putin on their carve-up of northern Syria, Recep Tayyip Erdogan says that he has proposed joint Russian-Turkish control of the oil-fields in Deir ez-Zor province, now under the control of the Kurdish-led Syrian Democratic Forces (SDF). "I made the offer to Mr. Putin that if he gives financial support, we can do the construction, and through the oil obtained here, we can help the destroyed Syria get on its feet," Erdogan told reporters March 10. (Al Monitor) The Wall Street Journal meanwhile reports that the SDF has been selling oil from the Deir ez-Zor fields to the Assad regime. A regime-aligned entity called the Qatirji Group is reportedly brokering the deal. (VOA)
South Sudan's rival leaders have finally agreed to form a transitional government of national unity, officially putting an end to more than six years of war that has left millions displaced and an estimated 400,000 dead. The breakthrough came on Feb. 20, when President Salva Kiir met rebel leader Riek Machar in the capital Juba, and agreed to appoint Machar as his deputy in a new three-year coalition government—part of a long-delayed power-sharing deal. Kiir and Machar, who leads the Sudan People's Liberation Movement-in Opposition (SPLM-IO), first signed the deal in September 2018, but were unable to finalize terms and missed two previous deadlines—May 2019 and November 2019. The new pact comes just as a third 100-day extension, brokered last year by Uganda, was about to run out.
Moscow has certainly been a flurry of diplomatic activity in recent days. Jan. 13 saw the first direct meeting in years between the intelligence chiefs of Turkey and Syria's Assad regime, supposedly deadly rivals. The head of Turkey's National Intelligence Organization (MIT) Hakan Fidan met with Ali Mamlouk, head of the Syrian National Security Bureau, in a sure sign of a Russian-brokered rapprochement between the burgeoning dictatorship of Recep Tayyip Erdogan and the entrenched dictatorship of Bashar Assad. Sources said discussions included "the possibility of working together against YPG, the terrorist organization PKK's Syrian component, in the East of the Euphrates river." (Daily Sabah, Reuters)