Latest news with #AgatheDemarais
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First Post
05-07-2025
- Business
- First Post
Iran oil industry booms as sanctions lose bite: Energy output, export at record high
Sanctions are increasingly seen as ineffective, existing 'only on paper', while Iranian oil production and exports surge. Experts from all around the world are divided about the efficacy of sanctions read more A map showing the Strait of Hormuz and Iran is seen behind a 3D printed oil pipeline in this illustration. Reuters Iran is higher up on the list of countries that are sanctioned in the world. Despite this, Iran's economy is booming, with the country recording soaring highs in the oil and energy industries. Earlier this week, the US imposed sanctions against a network that smuggles Iranian oil disguised as Iraqi oil and on a Hezbollah-controlled financial institution, the Treasury Department said. Sanctions are increasingly seen as ineffective, existing 'only on paper', while Iranian oil production and exports surge. Experts from all around the world are divided about the efficacy of sanctions. Agathe Demarais, the author of Backfire: How Sanctions Reshape the World Against U.S. Interests, told NPR, 'The reality is that sanctions are sometimes effective, but most often not, and it is hard to accurately predict when they will work.' STORY CONTINUES BELOW THIS AD Iran used to be the most-sanctioned country in the world until it was surpassed by Russia following the launch of its war in 2022. But Tehran's fortunes in the energy sector tell a completely different story. A number story Iran's oil sector is thriving despite decades of US-led sanctions, with output reaching a 46-year high in 2024 and set to rise further in 2025. Energy export revenues soared to a 12-year high of $78 billion in 2024, a dramatic jump from $18 billion in 2020. The story of how Iran has managed to bypass US oil sanctions goes back many years. It's a mix of US political decisions, Iranian creativity, and China's growing global influence. At times, the US looked the other way to keep oil prices low and avoid rising inflation. Other times, it shows how Iran and China have become better and more determined at working around the rules. Sanctioned plays smart Iran has diversified its energy exports, ramping up production of condensates and natural gas liquids (NGLs) such as ethane, butane, and propane, which now generate significant foreign currency. The country has the second-largest natural gas reserve and is the third-largest producer of the resource after Russia and the US. The South Pars natural gas field, the largest in the world, is located in southern Bushehr province. Iran shares this facility with Qatar, where it is called the 'North Field'. The field accounts for about 66 per cent of Iran's gas production, making it the main source in the country, which is the world's third-largest gas producer after the United States and Russia. A military hand The Islamic Revolutionary Guards Corps has played a key role in developing domestic infrastructure to process and export these products, bypassing the need for foreign partners. The buyer China is now the main buyer, taking 90 per cent of Iran's oil exports, thanks to a sanctions-proof supply chain involving discreet shipping and non-dollar transactions. The US sanctions on Iranian oil are not likely to change this business setup, as China has been buying discounted Iranian oil in bulk for years now, and analysts say that a hidden supply chain using transshipment and a payment system based in yuan that avoids the US dollar. While Chinese customs have not officially reported any oil imports from Iran since 2022, ship tracking data from Kpler shows that China's imports of Iranian crude have actually increased, nearly doubling to 17.8 million barrels per day in 2024 compared to 2022. STORY CONTINUES BELOW THIS AD Wars? No problem Recent geopolitical tensions, including the Israel-Iran conflict, have not dented Iran's oil output, with any damage to facilities quickly repaired and the US intervening to prevent escalation in the energy sector. The result is that Iran's oil industry is more robust than ever, undermining the credibility of Western sanctions and providing the regime with a steady flow of petrodollars. With inputs from agencies
Reuters
27-05-2025
- Business
- Reuters
How the EU can respond to US economic warfare: podcast
Follow on Apple or Spotify. Listen on the Reuters app. As President Donald Trump threatens tariffs, Brussels is also worrying about Washington using sanctions against it. In this episode of The Big View podcast, Agathe Demarais of the European Council on Foreign Relations talks about how the bloc should deploy its own weapons. Follow @ (The host is a Reuters Breakingviews columnist. The opinions expressed are his own.) Further Reading Why financial warfare could backfire on the US: podcast Europe will struggle to slip US economic chokehold No brain, no brawn: Trump 2.0 makes an EU Economic Security Network essential Learning from shipwrecked sailors: Three ways Europeans can weather the Trump storm A User's Guide to Restructuring the Global Trading System Visit the Thomson Reuters Privacy Statement for information on our privacy and data protection practices. You may also visit to opt-out of targeted advertising.
Asharq Al-Awsat
05-02-2025
- Business
- Asharq Al-Awsat
After Tariff Fight with Canada and Mexico, Trump's Next Target Is Europe
Europe, you're next. That's the latest message from President Trump, who has repeatedly said in recent days that he would slap punitive tariffs on the 27 members of the European Union. Tariffs 'will definitely happen with the European Union,' Trump told the BBC Sunday evening, and they are coming 'pretty soon.' He doubled down on the threat on Monday, complaining about deficits in auto and farm products. New tariffs were set to go into effect on imports from Canada, China and Mexico on Tuesday, but on Monday Mexico and Canada were granted a one-month delay. 'The European Union has abused the United States for years, and they can't do that,' Trump said on Monday. A head-spinning blitz of executive orders and policy reversals related to international trade, aid and agreements has come out of the White House in the past two weeks. But one common thread is that Trump has directed the harshest penalties at some of America's closest economic and military allies. One reason is that the United States has large trade deficits with Mexico, Canada and the European Union in addition to China, said Agathe Demarais, a senior policy fellow at the European Council on Foreign Relations. 'Trump is obsessed with trade deficits,' she said. And he may be 'starting with the places where he feels he will have quick wins.' Of course, trade surpluses are not necessarily any indication of a country's economic health. The last time the United States had an overall trade surplus was 1975, when the American economy was still in a severe recession. The United States did have a trade surplus in 2023 with Britain, according to the US Bureau of Economic Analysis. And that may help Britain avoid tariffs. 'I think that one can be worked out,' Trump said, contrasting Britain with Europe. As for the European Union, Trump has characterized the bloc's trade practices as an 'atrocity.' But tariffs imposed by the United States and the European Union on each other are pretty similar. 'The pattern of protectionism between the US and Europe is very even, and there is absolutely no evidence that the US has been taken advantage of,' said Kimberly Clausing, an economist at the Peterson Institute for International Economics in Washington. 'This claim is disingenuous.' Products exported from the United States to the European Union are on average subject to a 3.95 percent tariff, according to ING Global Markets Research. A 3.5 percent tariff on average is added to products from the European Union that head west across the Atlantic. The disparities, however, are bigger on some items, like cars. The European Union tariff is 10 percent, compared with 2.5 percent from the United States. And E.U. tariffs on food and beverages are on average 3.5 percent higher than those set by the United States. Mr. Trump has long complained about both sectors. The United States is the No. 1 buyer of E.U. exports, accounting for nearly 20 percent of the total in 2023, according to Eurostat. The bloc's surplus on goods was roughly $160 billion; there was a $107 billion deficit on services. Mette Frederiksen, Denmark's prime minister, said Monday that she would 'never support fighting allies,' but that 'if the US puts tough tariffs on Europe, we need a collective and robust response.' Donald Tusk, Poland's prime minister, said, 'We have to do everything to avoid it — totally unnecessary and stupid tariff war or trade wars.' For months, European leaders have quietly been preparing for how to respond. Business leaders and trade associations are warning that the brewing trade war and the unpredictable way in which it is being waged could slow investment. American tariffs on European goods would also hurt companies when they were weakened by flagging demand at home and in China. The US Chamber of Commerce to the European Union issued a statement on Monday criticizing potential tariffs, arguing that they would invite retaliation and cause companies on both sides of the Atlantic to suffer. German business leaders were reluctant on Monday to comment on the possibility of tariffs on Europe, but they reacted with a mixture of concern and resignation to those targeting Mexico and Canada. 'German industry is directly affected by the tariffs, as it also supplies the U.S. market from plants in Mexico and Canada,' said Wolfgang Niedermark, a board member of BDI, a German industry lobby group. 'The automotive industry and its suppliers, including the chemical industry as a supplier of chemical raw materials, will be hit much harder than other sectors.' Many of the 2,100 German companies that have operations in Mexico, including BMW, Volkswagen and Audi, chose to build there after Trump signed a trade agreement with Mexico and Canada during his first term, when the threat of tariffs against Germany loomed. Nearly a quarter of the 1.3 million vehicles that German automakers sold in the United States last year were produced in Mexico. In addition to the car companies, a web of auto parts suppliers, such as Bosch and ZF, have research and production plants there. Asian and European stock markets fell on Monday, with some of the biggest drops in share prices among auto manufacturers. Economists at the Prognos Institute in Switzerland calculated that 1.2 million jobs in Germany were dependent on exports to the United States, and that as many as 300,000 of them could be endangered if tariffs against Europe came into effect. Europe's luxury industry has also been bracing for a hit. In 2019, the United States briefly imposed 25 percent tariffs on French wines and Italian cheeses, as well as luxury leather handbags and luggage from brands like Louis Vuitton and Gucci. Bernard Arnault, the head of the LVMH Moët Hennessy Louis Vuitton empire, has sought to cultivate direct ties with Trump, who personally invited him to attend last month's inauguration in Washington. At an earnings presentation last week, Arnault said that by lowering the corporate tax to 15 percent and 'welcoming you with open arms,' Trump was making the United States more attractive for companies. There can be reasons for a country to worry about too large a trade deficit, said Clausing, the Peterson Institute economist. But the United States is not facing those problems at the moment. The trade deficit signals that American consumers are getting a lot of stuff from the rest of the world, she explained. If tariffs drive up prices and Americans have to pay more, as most economists expect, their standard of living will go down. *The New York Times
