Wednesday, November 7, 2018

U.S. sanctions on Iran—Do they make any sense?


Russia Is Surprise Beneficiary of Iran Oil Ban

3 hrs ago

President Donald Trump speaks during a news conference in the East Room of the White House, Wednesday, Nov. 7, 2018, in Washington. (AP Photo/Evan Vucci)



a close up of a bicycle© ILYA NAYMUSHIN/REUTERSAn early winner from the latest round of Iranian sanctions is emerging: Russia.

The U.S. began enforcing a tough new slate of economic restrictions against Iran on Monday, including a threat to sanction buyers of Iranian crude. That has refineries in Europe and Asia—recent, big buyers of Iran oil—looking for alternative supplies. Russian oil companies have stepped in, stealing customers from Iran. The two countries produce similar grades of crude, making a switch by refiners relatively easy.


But Moscow is also offering Tehran a lifeline for its stranded crude. It says it plans to defy U.S. sanctions and purchase Iranian imports. It’s offering to pay only in the form of barter, and then process the crude for domestic use. That would free up its own oil for more-lucrative crude export markets.

“Russia is playing on all sides,” said Helima Croft, chief commodities strategist at Canadian broker RBC.

Russia counts Iran as a key ally in its widened geopolitical role in post-civil war Syria. It has criticized the new round of U.S. sanctions and says it won’t be bound by them. In recent months, Moscow has repeatedly said it would purchase at least 100,000 barrels a day of Iranian oil, which would provide a welcome buyer for oil that might not find a customer otherwise. Russia is offering to pay for the crude with Russian machinery and food, according to Russia’s Oil Ministry. It’s also promising to invest in the Iranian oil sector as Western companies retreat.


The new, Washington-imposed sanctions take specific aim at Iranian oil exports, that country’s most important economic pillar. U.S. officials want to cork up all 2.2 million barrels a day of Iranian crude-export capacity, threatening buyers with sanctions. Many purchasers, because they use the U.S. banking system, are vulnerable to such sanctions and are already pulling back. Russia is less vulnerable to Washington’s retaliation, since it already is under U.S. sanctions and its economy and financial system are less tied to the U.S. than Western European countries.

Iranian exports had been down some 800,000 barrels a day from before the U.S. announced its new set of sanctions. Oil market watchers expect that to fall sharply now that sanctions are in place.

At the same time it is promising to help Iran, Russia is replacing Tehran on the global oil market. It has boosted its output by almost half a million barrels a day, compared with last year, recently hitting a 30-year production record. Russia, the world’s largest oil producer, pumped 11.41 million barrels a day in October, up 4.3% from the same period last year.

Some of that new crude is being snapped up by former customers of Iran.

That’s especially the case in Europe, where buyers have been abruptly halting Iranian purchase because they tend to be more exposed to the U.S. business and financial systems.

For European refiners, Russian oil is a natural substitute to Iran crude because it tends to be of medium density and relatively high sulfur levels can typically be shipped faster to their plants than other replacement crudes. Italian refiners Eni SpA and Saras SpA, for instance, are tapping more of Russia’s oil, especially its popular Urals grade, to make up for Iranian oil, according to people familiar with the matter. Spokespeople for Eni and Saras didn’t return calls for comment.

The “Urals [grade] will benefit,” Patrick Pouyanne, chief executive of Total SA, told a London energy conference last month.

Total stopped buying Iranian crude in July, the company said. The following month, it bought 217,000 barrels a day of Russian crude for its Le Havre refinery in France, a year-to-date high, according to data from shipping tracker Kpler.

Russia is also replacing Iranian crude for customers outside the European Union. Turkey resumed imports of Russian oil in June after a three-month absence, making up for cuts in Iran oil purchases, according to official statistics. Turkey has vowed to defy U.S. sanctions, too, but many of its companies have deep, international ties and would be vulnerable to U.S. sanctions.

That’s already translating into higher profits for Moscow’s state-run energy companies. On Tuesday, Rosneft reported a three-fold jump in net income to 451 billion rubles ($6.8 billion) for the first nine months of 2018 compared with the same period last year, mostly due to a production boost and higher prices for Urals.

The same replacement effect came about in China, which cut oil imports from Iran by 34% in September year-on year, while Russian sales rose by 7%.

In South Korea, Tehran’s oil sales collapsed in August, falling 85% on an annual basis. Russian shipments rose by 20% the same month, according to South Korean customs.

Write to Benoit Faucon at benoit.faucon@wsj.com

Above is from:  https://www.msn.com/en-us/money/markets/russia-is-surprise-beneficiary-of-iran-oil-ban/ar-BBPrVKG?ocid=spartanntp

Will Evers’ “victory” over Governor Walker hold up to recount?


Wisconsin allows a recount if election result is within 1%;  Will Governor Walker make the request?



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Above graphic is fromhttps://www.politico.com/election-results/2018/wisconsin/


TheHill.com

Dem defeats Scott Walker in Wisconsin governor’s race

© Getty

Wisconsin Gov. Scott Walker (R) appeared headed for defeat early Wednesday morning at the hands of Democrat Tony Evers, the state superintendent of public instruction.

Walker’s loss puts an end to a fraught period in Wisconsin, a state long known for go-along, get-along politics. Walker notched a string of wins for conservative causes, victories that gave him a platform for a brief and aborted campaign for president in 2016.

Walker narrowly won three races in that stretch, including a recall election mounted by Democrats and union advocates angered by his move to curtail the power of public sector unions.

Polls showed the state narrowly and bitterly divided, and almost no one did not have an opinion of Walker.

Still, Democrats failed to recruit a top-tier challenger, and many worried that none of the eight candidates who did run would have the firepower to knock off a well-funded opponent, even in a battleground state.

Evers emerged as the runaway winner of the primary, with 42 percent of the vote.

Walker started the general election with about $6 million in the bank. In hopes of closing that gap, the Wisconsin Democratic Party hired a consultant to prepare donors to flood the party’s eventual nominee with cash to help him get on the air.

Since Labor Day, Walker pulled in more than $7.7 million, while Evers raised $6 million. Both the Republican and Democratic governors associations spent freely on behalf of their nominees, a sign of just how important the two parties viewed Wisconsin.

Evers’s win is an important step for Democrats trying to rebuild their broken Blue Wall, the 18 states and the District of Columbia that voted for Democratic presidential nominees in six successive elections. That wall fell in 2016, when President Trump won states like Wisconsin, Michigan and Pennsylvania on the strength of huge support from blue collar white voters.

Above is fromhttps://thehill.com/homenews/campaign/414904-dem-defeats-scott-walker-in-wisconsin-governors-race?userid=217221