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Old 07-22-2019, 11:08 AM
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Exclamation Europeans plan naval mission to ensure safe passage in Persian Gulf

Europeans plan naval mission to ensure safe passage in Persian Gulf
By: World Oil - 7-22-19
RE: https://www.worldoil.com/news/2019/7...n-persian-gulf

LONDON - European governments will assemble a naval mission to provide safe passage for ships through the Persian Gulf, after Iran seized a British oil tanker in the region last week, an act that U.K. Foreign Secretary Jeremy Hunt described as “state piracy.”

Hunt announced a “European-led maritime protection mission to support safe passage of crew and cargo” in a statement to Britain’s Parliament in London on Monday.

The U.K. demanded the immediate release of the Stena Impero, and summoned Iran’s charge d’affaires in London, Mohsen Omidzamani, following the incident in one of the world’s critical shipping chokepoints. The government threatened Iran with “serious consequences” and advised U.K. vessels to avoid the area, and to inform the government if they planned to travel there.

“Let us be clear, under international law Iran had no right to obstruct the ship’s passage, let alone board her,” Hunt told the House of Commons. “It was therefore an act of state piracy.”

The Foreign Secretary said the U.K. didn’t want to escalate tensions with Iran, which have been rising after the U.S. pulled out of the international nuclear deal and imposed new sanctions. Hunt said Britain won’t be taking part in the Trump administration’s “maximum pressure” policy, because the London government remains committed to the 2015 multi-nation pact to limit Iran’s nuclear program.

“If Iran continues on this dangerous path, they must accept the price will be a larger Western military presence in the waters along their coastline,” Hunt said. “Not because we wish to increase tensions but simply because freedom of navigation is a principle Britain and its allies will always defend.”

Tensions have flared in the Strait of Hormuz in recent weeks as Iran lashes out against U.S. sanctions that are crippling its oil exports and after the seizure of one of its tankers near Gibraltar. The Strait accounts for about a third of the world’s seaborne oil flows.

With Theresa May set to leave office on Wednesday, the latest clash with Iran presents a diplomatic headache for her successor, either Boris Johnson, the front-runner, or Hunt, his rival.

U.S. Central Command has announced a “multinational maritime effort” called Operation Sentinel to “increase surveillance of and security in key waterways in the Middle East to ensure freedom of navigation in light of recent events in the Arabian Gulf region.”

Iran’s Revolutionary Guards said on Saturday that the British ship entered the strait from the wrong direction, wasn’t paying heed to maritime regulations and could potentially have collided with other vessels. State television said the ship will be held until judicial assessments are complete.

On Sunday, the Iranian flag was seen flying over the bridge of the tanker in the Bandar Abbas port, according to images aired by state-run Press TV.

Iran has also suggested its actions are in retaliation for Britain’s seizure of the Grace 1 tanker off Gibraltar. A court in Gibraltar ordered the continued detention of the vessel for another 30 days, after it was held on suspicion of taking oil to Syria. Iran denies that was the destination.

In recent weeks the U.K. Navy has escorted some tankers out of the region, while the U.S. said it downed an Iranian drone just days ago. The latest incident cooled hopes that the U.S. and Iran would soothe tensions by entering into negotiations.

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2nd Report: Iran oil stacking up in Chinese ports adds to market uncertainty
By: World Oil - 7-22-19
RE: https://www.worldoil.com/news/2019/7...et-uncertainty

BEIJING -Tankers are offloading millions of barrels of Iranian oil into storage tanks at Chinese ports, creating a hoard of crude sitting on the doorstep of the world’s biggest buyer.

Two and a half months after the White House banned the purchase of Iran’s oil, the nation’s crude is continuing to be sent to China where it’s being put into what’s known as “bonded storage,” say people familiar with operations at several Chinese ports. This supply doesn’t cross local customs or show up in the nation’s import data, and isn’t necessarily in breach of sanctions. While it remains out of circulation for now, its presence is looming over the market.

The store of oil has the potential to push down global prices if Chinese refiners decide to draw on it, even as the Organization of Petroleum Exporting Countries and allies curb production as growth slows in major economies. It also allows Iran to keep pumping and move oil nearer to potential buyers.

“Iranian oil shipments have been flowing into Chinese bonded storage for some months now, and continue to do so despite increased scrutiny,” said Rachel Yew, an analyst at industry consultant FGE in Singapore. “We can see why the producer would want to do so, as a build-up of supplies near key buyers is clearly beneficial for a seller, especially if sanctions are eased at some point.”

There could be more of the Persian Gulf state’s oil headed for China’s bonded storage tanks, Bloomberg tanker-tracking data show. At least ten very large crude carriers and two smaller vessels owned by the state-run National Iranian Oil Co. and its shipping arm are currently sailing toward the Asian nation or idling off its coast. They have a combined carrying capacity of over 20 million barrels.

The bulk of Iranian oil in China’s bonded tanks is still owned by Tehran and therefore not in breach of sanctions, according to the people. The oil hasn’t crossed Chinese customs so it’s theoretically in transit.

Some of the crude, though, is owned by Chinese entities that may have received it as part of oil-for-investment schemes. For example, one of the Asian nation’s companies could have helped fund a production project in Iran under an agreement to be repaid in kind. Whether this sort of transaction is in breach of sanctions isn’t clear, and so the firms are keeping it in bonded storage to avoid the official scrutiny it would if it’s registered with customs, according to the people.

Nobody replied to a faxed inquiry to China’s General Administration of Customs.

The build-up of Iranian oil in Chinese bonded storage has yet to be clearly addressed by Washington. The White House ended waivers allowing some countries to keep importing Iranian oil on May 2.

There are currently no exemptions issued to any country for the import of Iranian oil, and any nation seen importing cargoes from the Persian Gulf producer will be in breach of sanctions, according to a senior Trump administration official, who asked not to be identified because he wasn’t authorized to speak publicly about the matter.

“The U.S. will now need to define how it quantifies the infringement of sanctions,” said Michal Meidan, director of the China Energy Programme at the Oxford Institute for Energy Studies. There’s a lack of clarity on whether it would look at “financial transactions or the loading and discharge of cargoes by company or entity,” she said.

China received about 12 million tons of Iranian crude from January through May, according to ship-tracking data, versus about 10 million that cleared customs over the period. The discrepancy could be due to the flow of oil into bonded storage. China will release June trade data that will include a country-by-country breakdown of oil imports in the coming days.

One of the Iranian tankers that appears to have loaded oil after the U.S. waivers ended is VLCC Horse. It discharged at Tianjin in early-July after sailing from the Middle East, where shipping data showed it signaling its destination as Iran’s Kharg Island on May 4.

Several other Iran-owned tankers offloaded in China or were heading there, according to ship tracking data. VLCC Stream discharged at Tianjin on June 19, while Amber, Salina and C. Infinity offloaded crude at the ports of Huangdao, Jinzhou and Ningbo. Snow, Sevin and Maria III were last seen sailing in the direction of China.

Putting crude into bonded tanks in China also means Iran can avoid having to tie up part of its tanker fleet by storing the oil at sea for months at a time. The Islamic Republic used floating storage in 2012 to 2016 and again in 2018 as buyers shunned its crude due to U.S.-imposed trade restrictions.

Should the Iranian crude leave bonded storage and end up in the market, it could pressure oil prices, according to Bank of America Merrill Lynch. West Texas Intermediate plunged more than 20% from late April to mid-June as the U.S.-China trade war intensified. It’s since recovered some of those losses, partly as a result of the rising tension between Washington and Tehran, and is trading near $57 a barrel.

“A further escalation in U.S. tariffs on Chinese goods could jointly drive global economic growth a lot lower and encourage Iran-China cooperation,” Bank of America Merrill Lynch said in a June note. “If Chinese refiners start to purchase Iran oil in large volumes on a sustained basis as U.S. tariffs rise again, WTI could drop to $40 a barrel.”
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O Almighty Lord God, who neither slumberest nor sleepest; Protect and assist, we beseech thee, all those who at home or abroad, by land, by sea, or in the air, are serving this country, that they, being armed with thy defence, may be preserved evermore in all perils; and being filled with wisdom and girded with strength, may do their duty to thy honour and glory; through Jesus Christ our Lord. Amen.

"IN GOD WE TRUST"
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Old 07-22-2019, 12:27 PM
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Exclamation Britain is revving up a European military response to Iran

Britain is revving up a European military response to Iran
By: Tom Rogan - Washington Examiner - 7-22-19
RE: https://www.washingtonexaminer.com/o...sponse-to-iran

Escalating against Iran, Britain's foreign secretary on Monday announced that Britain will establish "a European-led maritime protection mission to support safe passage" of tankers transiting the Strait of Hormuz.

This follows Iran's seizure of a British tanker on Friday. As I noted, that Iranian aggression was likely to backfire with just this kind of U.K. escalation.

While Britain, France, and Germany oppose the Trump administration's maximum pressure sanctions campaign on Iran, they cannot permit Iran's endangerment of critical global trade flows. Hunt says that discussions with other European powers about the formation of a task force have been "constructive." And if Britain, France, Germany, each deploy one warship, and one or two other nations do the same, the Europeans will introduce a potent force to the Persian Gulf.

That speaks to the true scale of Iran's miscalculation here: it has pushed the Europeans into de facto alignment with the U.S. military. Until now, the Europeans had resisted such an alignment out of opposition to the U.S. pressure campaign. That reluctance has aggravated the Trump administration, leading Secretary of State Mike Pompeo to tell the British on Monday that they have the responsibility "to take care of their ships."

Iran has now changed that calculation. While Hunt suggested that the European effort will be separate from the Americans', he adds that the Europeans will discuss "the best way to complement this with recent U.S. proposals in this area."

This is a de facto alliance. Bonded by close military-to-military relationships and a shared objective to protect international shipping, the European and U.S.-led task forces will divide lines of effort. Likely by geographic locale. But the ultimate outcome will be the same: greater protection for shipping and improved deterrence of Iran.

This is Iran's great difficulty.

Attempting to extort concessions to save their collapsing economy, Iran's hardliner faction is only further isolating Tehran. This is not an escalation struggle that Iran can win.
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O Almighty Lord God, who neither slumberest nor sleepest; Protect and assist, we beseech thee, all those who at home or abroad, by land, by sea, or in the air, are serving this country, that they, being armed with thy defence, may be preserved evermore in all perils; and being filled with wisdom and girded with strength, may do their duty to thy honour and glory; through Jesus Christ our Lord. Amen.

"IN GOD WE TRUST"
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