Rubio to discuss energy security, illegal migration, in Caribbean trip
WASHINGTON (Reuters) - U.S. Secretary of State Marco Rubio will discuss energy security in the Caribbean, illegal immigration and dismantling of transnational criminal networks during a trip to the region later this week, U.S. State Department officials said on Tuesday.
Speaking at a briefing, U.S. Special Envoy for Latin America Mauricio Claver-Carone told reporters that U.S. accusations about a labor program that sends Cuban workers, particularly medics, overseas was also going to be among the topics the top U.S. diplomat will tackle with his counterparts.
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Analysis-OPEC+ would struggle to cover major Iranian oil supply disruption
By Ahmad Ghaddar and Seher Dareen LONDON (Reuters) -Oil market participants have switched to dreading a shortage in fuel from focusing on impending oversupply in just two days this week. After Israel attacked Iran and Tehran pledged to retaliate, oil prices jumped as much as 13% to their highest since January as investors price in an increased probability of a major disruption in Middle East oil supplies. Part of the reason for the rapid spike is that spare capacity among OPEC and allies to pump more oil to offset any disruption is roughly equivalent to Iran's output, according to analysts and OPEC watchers. Saudi Arabia and the United Arab Emirates are the only OPEC+ members capable of quickly boosting output and could pump around 3.5 million barrels per day (bpd) more, analysts and industry sources said. Iran's production stands at around 3.3 million bpd, and it exports over 2 million bpd of oil and fuel. There has been no impact on output so far from Israel's attacks on Iran's oil and gas infrastructure, nor on exports from the region. But fears that Israel may destroy Iranian oil facilities to deprive it of its main source of revenue have driven oil prices higher. The Brent benchmark last traded up nearly 7% at over $74 on Friday. An attack with a significant impact on Iranian output that required other producers to pump more to plug the gap would leave very little spare capacity to deal with other disruptions - which can happen due to war, natural disasters or accidents. And that with a caveat that Iran does not attack its neighbours in retaliation for Israeli strikes. Iran has in the past threatened to disrupt shipping through the Strait of Hormuz if it is attacked. The Strait is the exit route from the Middle East Gulf for around 20% of the world's oil supply, including Saudi, UAE, Kuwaiti, Iraqi and Iranian exports. Iran has also previously stated that it would attack other oil suppliers that filled any gap in supplies left due to sanctions or attacks on Iran. "If Iran responds by disrupting oil flows through the Strait of Hormuz, targeting regional oil infrastructure, or striking U.S. military assets, the market reaction could be much more severe, potentially pushing prices up by $20 per barrel or more," said Jorge Leon, head of geopolitical analysis at Rystad and a former OPEC official. CHANGE IN CALCULUS The abrupt change in calculus for oil investors this week comes after months in which output increases from OPEC and its allies, a group known as OPEC+, have led to investor concern about future oversupply and a potential price crash. Saudi Arabia, the de facto leader of OPEC, has been the driving force behind an acceleration in the group's output increases, in part to punish allies that have pumped more oil than they were supposed to under OPEC+ agreements. The increases have already strained the capacity of some members to produce more, causing them to fall short of their new targets. Even after recent increases, the group still has output curbs in place of about 4.5 million bpd, which were agreed over the past five years to balance supply and demand. But some of that spare oil capacity - the difference between actual output and notional production potential that can be brought online quickly and sustained - exists only on paper. After years of production cuts and reduced oilfield investment following the COVID-19 pandemic, the oilfields and facilities may no longer be able to restart quickly, said analysts and OPEC watchers. Western sanctions on Iran, Russia and Venezuela have also led to decreases in oil investment in those countries. "Following the July hike, most OPEC members, excluding Saudi Arabia, appear to be producing at or near maximum capacity," J.P. Morgan said in a note. Outside of Saudi Arabia and the UAE, spare capacity was negligible, said a senior industry source who works with OPEC+ producers. "Saudi are the only ones with real barrels, the rest is paper," the source said. He asked not to be named due to the sensitivity of the matter. PAPER BARRELS Saudi oil output is set to rise to above 9.5 million bpd in July, leaving the kingdom with the ability to raise output by another 2.5 million bpd if it decides to. That capacity has been tested, however, only once in the last decade and only for one month in 2020 when Saudi Arabia and Russia fell out and pumped at will in a fight for market share. Saudi Arabia has also stopped investing in expanding its spare capacity beyond 12 million bpd as the kingdom diverted resources to other projects. Russia, the second largest producer inside OPEC+, claims it can pump above 12 million bpd. JP Morgan estimates, however, that Moscow can only ramp up output by 250,000 bpd to 9.5 million bpd over the next three months and will struggle to raise output further due to sanctions. The UAE says its maximum oil production capacity is 4.85 million bpd, and told OPEC that its production of crude alone in April stood at just over 2.9 million bpd, a figure largely endorsed by OPEC's secondary sources. The International Energy Agency, however, estimated the country's crude production at about 3.3 million bpd in April, and says the UAE has the capacity to raise that by a further 1 million bpd. BNP Paribas sees UAE output even higher at 3.5-4.0 million bpd. "I think spare capacity is significantly lower than what's often quoted," said BNP analyst Aldo Spanjer. The difference in ability to raise production has already created tensions inside OPEC+. Saudi Arabia favours unwinding cuts of about 800,000 bpd by the end of October, sources have told Reuters. At their last meeting, Russia along with Oman and Algeria expressed support for pausing a hike for July.
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Israel says missile launched from Yemen fell in Hebron; at least 5 Palestinians hurt
CAIRO (Reuters) -The Israeli military said on Friday a missile that was launched from Yemen towards Israel fell to earth inside the city of Hebron in the occupied West Bank, adding that no interceptors were involved. At least five Palestinians, including three children, sustained injuries from the missile's sharpnel that fell in Hebron, the Palestinian Red Crescent said in a later statement. The incident occurred amid an ongoing Israeli military campaign targeting nuclear sites in Iran that wiped out that country's entire top echelon of military commanders and also killed nuclear scientists. Yemen's Houthis, who usually claim responsibility for missiles launched towards Israel from Yemen, are allied to Iran.
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Trump Threatens ‘Even More Brutal' Strikes on Iran as His Pleas for a Deal Unravel
Secretary of State Marco Rubio's attempts to distance the U.S. from Israel's strikes on Iran just got even more complicated. In response to Israeli Prime Minister Benjamin Netanyahu bombing Iran on Thursday—even after Trump asked him not to—the president warned Iran in a social media post that things 'will only get worse' if Tehran doesn't 'make a deal' with Washington. Trump had reportedly asked Netanyahu on Monday to wait to strike Iran's nuclear enrichment facilities until all diplomatic options had been exhausted. The U.S. and Iran were scheduled to have a sixth round of nuclear talks in Oman this weekend, and on Thursday night, Trump reiterated on social media that his administration remained committed to diplomatic resolution. Hours later, though, Netanyahu announced what he called a 'pre-emptive strike' against Iran's main nuclear enrichment facilities, killing the commander of the Iranian Revolutionary Guards and his military chief of staff, two nuclear scientists, and at least a dozen civilians, according to Iranian state media. Secretary of State Marco Rubio quickly put out a statement saying the Israeli attacks were 'unilateral' and that Iran should not retaliate against U.S. interests or personnel. But in a rambling social media post early Friday morning, Trump threatened 'even more brutal strikes' against Iran. 'I told them it would be much worse than anything they know, anticipated, or were told, that the United States makes the best and most lethal military equipment anywhere in the World, BY FAR, and that Israel has a lot of it, with much more to come,' Trump wrote. 'Certain Iranian hardliner's spoke bravely, but they didn't know what was about to happen. They are all DEAD now, and it will only get worse!' he added. In a follow-up post, he wrote that, 'Two months ago I gave Iran a 60-day ultimatum to 'make a deal.' They should have done it! Today is day 61. I told them what to do, but they just couldn't get there. Now they have, perhaps, a second chance!' Both Iran and the Trump administration have said they wanted to make a deal, with Trump eager to notch a diplomatic win and Iran looking for relief from painful economic sanctions. The first rounds of talks were mostly indirect, but were described as 'positive' and 'respectful,' according to CNBC. This week, though, the talks seemed to hit an impasse. On Wednesday, the president accused Tehran of 'delaying,' while Iranian officials said Washington was not engaging seriously on the issue of sanctions or respecting the country's right to enrich uranium at lower levels to generate nuclear power. Trump has warned that the U.S. or Israel could bomb Iran's nuclear facilities if negotiations failed, leading Iran's defense minister to tell the Iranian press on Wednesday, 'In that case, America will have to leave the region, because all of its bases are within our reach,' The Guardian reported. The State Department responded that it was instructing 'non-essential' diplomatic staff and their families to leave the embassies in Baghdad, Bahrain, and Kuwait. On Thursday, the day of the Israeli strikes, the UN's nuclear watchdog group, the International Atomic Energy Agency, passed a resolution saying Iran was not complying with its nuclear safeguards obligations for the first time in nearly two decades. Netanyahu called Iran's nuclear program a 'clear and present danger to Israel's very survival' and vowed to continue Operation Rising Lion for 'as many days as it takes to remove this threat.' Israeli sources are now saying the U.S. supported the strikes all along and only pretended to oppose them to keep Iran from suspecting the attack, Axios reported. During Monday's call, Trump didn't actually try to delay the strikes—Netanyahu's aides just told reporters that so Israel could maintain the element of surprise, sources told the outlet. Trump has acknowledged that he knew about the strike ahead of time but said the U.S. was not involved militarily. The Daily Beast has reached out to the White House for comment. In his Friday Truth Social post, Trump wrote, 'There has already been great death and destruction, but there is still time to make this slaughter, with the next already planned attacks being even more brutal, come to an end. Iran must make a deal, before there is nothing left, and save what was once known as the Iranian Empire. No more death, no more destruction, JUST DO IT, BEFORE IT IS TOO LATE. God Bless You All!' A U.S. official told Reuters that Sunday's talks will still go forward as planned.
