Oil

  • Sanctions Prompt Iran to Remain Relevant in the Global Energy Calculus

    On August 4, the Iranian government announced that the Revolutionary Guard had seized a foreign oil tanker in the Persian Gulf. Iran claimed that the vessel was smuggling diesel fuel to Iraq, but the Iraqi oil ministry denied any connection with the tanker. Global shipping companies had not reported any missing vessels in the Persian Gulf. This is the third seizure of a vessel by Iran in recent weeks. Since US sanctions were reinstated on Iran last year, the Iranian government has struggled to export oil and other hydrocarbon resources. Iranian officials have frequently threatened that, if

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  • Gaming out the Disaster: What Could Go Wrong with the FSO Safer

    In April, we sounded the alarm about how the Safer, an oil tanker converted into a floating storage and offloading facility (FSO) near the Red Sea coast of Yemen and filled with an estimated 1.1 million barrels of crude oil, was not only structurally deteriorating but might actually explode. In the past week, news outlets around the world have taken up the story. But the question remains: what happens if the Safer spills all its oil?


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  • Iran’s Strategy to Tackle Sanctions: Pre-selling Oil

    Iran’s vice president, Eshaq Jahangiri, announced July 8 that any powerful country that is willing to work with Iran can pre-purchase Iranian oil. Iran is actively trying to convince its traditional costumers to purchase its oil for future deliveries in return for investment, goods or services in advance. Pre-selling oil is designed to get around US sanctions while building leverage for Iran in the short and long-term.

    This method can help Iran access the credit it needs for investment, goods and services. It could also be used as a floating credit in INSTEX, the trading vehicle set up by the European Union (EU) to keep Iran in compliance with the Joint Comprehensive Plan of Action (JCPOA). EU countries have all halted their oil

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  • US Oil Embargo Stalls Iran-India Energy Relations

    Before the Trump administration decided to target Tehran’s oil exports, Iran and India experienced a positive trend in relations.

    India was Iran’s second largest oil customer, importing 457,000 barrels of oil a day before the US withdrew from the Joint Comprehensive Plan of Action (JCPOA) in May 2018. Last November, India was one of eight countries that received a six-month waiver to continue importing Iranian oil; it bought 300,000 barrels per day during this period. In April, however, the Trump administration did not renew the waivers. India announced on May 24 that it would abide by US sanctions and stop all such imports.

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  • Saudi Aramco Bond Offering: What Does It Say About the Kingdom and Oil Markets?

    At the start of the month, in preparation for its first bond offering, Saudi Aramco released a 469-page prospectus that provided the first real public look into the oil company’s books. The media was astounded by the $111 billion profit figure for 2018, and a bond market hungry for returns oversubscribed to the offering by ten times, with $12 billion in bonds finally issued. The initial enthusiasm said more about the state of the bond market than the value of Aramco and is not a good proxy for equity interest in the company ahead of an IPO (now delayed until 2021).


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  • Trump’s Inconsistent Approach to Iran Oil Waivers Means He Can’t Have His Cake and Eat it Too

    The Trump administration shocked global oil markets on April 22 with US Secretary of State Michael Pompeo’s surprise announcement that the United States would not renew any waivers for importing Iranian oil when they expire on May 2. While Pompeo noted that Saudi Arabia and the United Arab Emirates (UAE) would increase production to match the approximate 1.1 million barrels per day (bpd) of Iranian crude that will come off the market, this will cut into global spare capacity and has already pushed Brent crude up over 3 percent over $74 as of publication.


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  • The LNG Moment: How US Production Could Change More than Just Markets

    Adapted from comments given by The Honorable Paula Stern, Ph.D. at the Atlantic Council IN TURKEY Program's “New Regional Gas Market Dynamics under LNG Expansion & the Shale Gas Revolution” conference on February 26, 2019, with contributions from Ben Perkins.

    Last March the Economist ran the headline, “Global powers need to take the geopolitics out of energy.” It may be true that World Trade Organization (WTO) rules, and those of its Generalized System of Tariffs and Trade (GATT) predecessor, have never applied to trade in energy, but energy has always played a starring geopolitical role and probably always will.


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  • Why the Massive Floating Bomb in the Red Sea Needs Urgent Attention

    A floating storage and offloading (FSO) terminal less than five miles off the coast of Yemen has turned into a massive bomb—capable of explosion due to its contents and lack of maintenance. The risk of explosion increases by the day, and if that were to happen, not only would it damage or sink any ships in the vicinity, but it would create an environmental crisis roughly four and a half times the size of the Exxon Valdez oil spill.


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  • Addressing the Invisible Supply Chain

    This post is the third in a series of three that focuses on 1) defining, 2) mapping, and 3) addressing the invisible supply chain. You can read the first and second posts here. 

    Criminals have the advantage of being agile. They are unencumbered by the constraints that impede the governments and institutions arrayed against them. A criminal network operating an invisible supply chain can, when challenged, often disassemble that supply chain and reassemble a new one overnight. Accustomed to finding the path of least resistance around the law, successful criminals tend to maintain a nimble footing, ready to make rapid adjustments in pursuit of continued profits.


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  • Mapping the Invisible Supply Chain

    This post is the second in a series of three that will focus on 1) defining, 2) mapping, and 3) addressing the invisible supply chain. You can read the first post here.

    In the autumn of 2017, Italian authorities busted a lucrative smuggling ring that was bringing hundreds of millions of liters of stolen Libyan fuel into the European Union. The criminal operation involved coordination between a host of players: Libyan militias, a Libyan crime boss, Maltese criminals, corrupt bureaucrats, Italian mafia groups, Italian fuel traders, and “white pump” (off-brand) retail suppliers willing to pay

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