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Wednesday 24th of July 2019 |
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Macro Thoughts |
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"A person isn't who they are during the last conversation you had with them - they're who they've been throughout your whole relationship." - Rainer Maria Rilke Africa |
“You who never arrived in my arms, Beloved, who were lost from the start, I don't even know what songs would please you. I have given up trying to recognize you in the surging wave of the next moment. All the immense images in me -- the far-off, deeply-felt landscape, cities, towers, and bridges, and un- suspected turns in the path, and those powerful lands that were once pulsing with the life of the gods-- all rise within me to mean you, who forever elude me.
You, Beloved, who are all the gardens I have ever gazed at, longing. An open window in a country house-- , and you almost stepped out, pensive, to meet me. Streets that I chanced upon,-- you had just walked down them and vanished. And sometimes, in a shop, the mirrors were still dizzy with your presence and, startled, gave back my too-sudden image. Who knows? Perhaps the same bird echoed through both of us yesterday, separate, in the evening... ” ― rainer maria rilke
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Russia-China 'joint air patrol' sees Japan and South Korea scramble jets @BBCWorld Law & Politics |
Russia says it has carried out its first ever joint air patrol with China, prompting both South Korea and Japan to send jets in response. The defence ministry says four bombers, supported by fighter jets, patrolled a pre-planned route over the Sea of Japan and the East China Sea. South Korea says its jets fired flares and machine-gun warning shots when Russian planes intruded. Japan has protested both to Russia and South Korea over the incident. The alleged incursion happened over the disputed Dokdo/Takeshima islands, which are occupied by South Korea but also claimed by Japan. Russian and Chinese bombers and reconnaissance planes have occasionally entered the zone in recent years, but this is the first incident of its kind between Russia and South Korea. The defence ministry said two of its Tu-95MS strategic missile-carriers had joined two Chinese Hong-6K strategic bombers on the pre-planned route over "neutral waters". They were supported by fighters and A-50 and Kongjing-2000 airborne early warning and control aircraft. At one point the patrol became a "single airborne formation consisting of a line of pairs of planes flying within 3-4km [around two miles] of each other", Lt-Gen Sergei Kobylash said in a televised statement. While performing their task, he said, they were followed by foreign fighters 11 times. He accused South Korean pilots of performing "dangerous manoeuvres" in the vicinity of disputed islands, "crossing paths with the aviation group and creating danger for the safety of the flight". He confirmed the South Korean jets had fired decoy flares. The patrol, he said, had been more than 25km away from the Dokdo/Takeshima islands, and he accused South Korean pilots of "hooliganism in the air". He said Russia had complained to the South Korean military about its crews' "illegal and dangerous actions". This first "joint air patrol" involving Russian and Chinese long-range aircraft in the Asia Pacific region, sends a powerful signal of the developing military relationship between Moscow and Beijing. This still falls short of a formal alliance but their joint exercises are larger and more sophisticated. In turn this is a reflection of the ever closer economic and diplomatic ties between the two countries who, though they still have points of tension, are drawing ever closer together. They broadly share a similar world view, hostile to Western liberal democracy, eager to promote an alternative model, protective of their own national sovereignty, and often willing to ride rough-shod over that of others. This poses a huge challenge for US strategy. The nightmare in Washington is an ever closer relationship between an assertive, but declining Russia, and a rising China, which looks set to overtake the US as a technological and economic power in the years ahead. South Korea's military said five aircraft had entered the Korea Air Defense Identification Zone (KADIZ) at around 09:00 local time (00:00 GMT) on Tuesday. The military said it had fired 10 flares and 80 machine-gun rounds during the alleged first violation. It said a Russian A-50 plane had left and then re-entered the KADIZ - to be met by 10 more South Korean flares and 280 machine-gun rounds. The head of South Korea's National Security Office, Chung Eui-yong, has lodged a strong objection with the Security Council of Russia, and asked the council to take appropriate action. "We take a very grave view of this situation and, if it is repeated, we will take even stronger action," the South Korean president's office quoted Mr Chung as saying. South Korea has also protested to China. Beijing has insisted South Korea's air defence identification zone is not territorial airspace and so all countries can move within it. The government in Tokyo has lodged a complaint against both Russia and South Korea. Because it claims sovereignty over the islands, Japan's government said that Russia had violated its airspace. It also said that South Korea's response had been extremely regrettable. Chief Cabinet Secretary Yoshihide Suga said: "In light of Japan's stance regarding sovereignty over Takeshima, the South Korean military aircraft's having carried out warning shots is totally unacceptable and extremely regrettable."
Conclusions
This is in fact a significant Geopolitical development
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Why Strait of Hormuz is World's Oil Flashpoint @business Law & Politics |
Once again, the Strait of Hormuz is at the center of global tensions. The Middle East’s crude oil and natural gas flow through the narrow sea conduit to international markets, making it the world’s most critical transportation “chokepoint.” Incidents there – such as Iran’s seizure of a British tanker, attacks on ships and confrontations involving drones – can whipsaw energy prices and send shipping and insurance rates rocketing. The U.S. and U.K. have stepped up their military presence in the region amid calls to ensure the waterway remains open.
1. Where is the Strait of Hormuz?
Shaped like an inverted V, the waterway connects the Persian Gulf to the Indian Ocean, with Iran to its north and the United Arab Emirates and Oman to the south. It’s about 96 miles (154 kilometers) long and 21 miles wide at its narrowest point, with the shipping lanes in each direction just two miles wide. Its shallow depth makes ships vulnerable to mines, and the proximity to land – Iran, in particular – leaves large tankers open to attack from shore-based missiles or interception by fast patrol boats and helicopters.
2. What’s the strait’s role in global shipping?
It’s essential to the global oil trade. Tankers hauled about one third of the oil moved at sea through the strait – 20.7 million barrels a day of crude, condensate and refined fuels last year, according to the U.S. Energy Information Administration. The strait is also crucial for liquefied natural gas, with more than a quarter of the world’s supply, mostly from Qatar, passing through it annually, according to the EIA.
Oil Tanker Chokepoints 3. Why would Iran disrupt the strait?
U.S. sanctions, particularly those aimed at stopping oil sales, have pushed Iran’s economy into recession, prompting President Hassan Rouhani to accuse the U.S. of waging “economic war” against his country. Disrupting the strait demonstrates that Iran, which is seeking relief from the sanctions, has the power to inflict pain in return on the U.S. and its allies by restricting the flow of energy and driving up prices. In the meantime, any boost in the price of oil can help make up for the revenue Iran is losing from lower sales due to sanctions. Iranian officials have made threats to close the waterway in the past. “We certainly have the ability to do it,” Foreign Minister Javad Zarif said July 17, adding that Iran wouldn’t want to do so “because the Strait of Hormuz and the Persian Gulf are our lifeline.”
4. Could Iran really close the waterway?
Closing the waterway entirely would be self-defeating for Iran, preventing its own exports of petroleum and starving it of revenue. Oil traders doubt the country would ever go that far. Iran’s navy also is no match for the U.S. Fifth Fleet and other forces in the region. Iran is still capable of considerable disruption. In July, its Revolutionary Guard, which is charged with maintaining the security of the Persian Gulf for the country, escalated tensions when it seized a U.K.-registered tanker, owned by Sweden’s Stena AB, in the strait. Iran said the ship had violated maritime rules. It also suggested the move was in retaliation for the U.K.’s seizure of an Iranian tanker near Gibraltar on suspicion of violating sanctions against Syria. Earlier in July, the British Navy intervened to prevent a tanker operated by BP Plc from being blocked by Iranian vessels as it passed through the strait.
Strait of Hormuz - A Timeline of Events
5. Has the strait been closed to traffic before?
No, but it has seen its share of conflict. During the 1980-1988 Iran-Iraq War, Iraqi forces attacked Iran’s oil export terminal at Kharg Island, in the Persian Gulf northwest of the strait, in part to provoke an Iranian retaliation that would draw the U.S. into the conflict. Although Iran didn’t try to shut the strait, there followed a so-called Tanker War during which culprits from both sides attacked 451 vessels, most carrying oil or refined petroleum products. That significantly raised the cost of insuring vessels, increasing the cost of oil exports. When sanctions were imposed on Iran in 2011, threats were again made to close the strait, but these were subsequently denied by Iran’s foreign ministry.
6. Can the strait be protected?
During the 1980s Tanker War, the U.S. Navy resorted to escorting vessels through the Gulf. This time, the U.S. has dispatched an aircraft carrier and B-52 bombers to the Persian Gulf, but repeating the 1980s operation would tie up large parts of U.S. and allied fleets. Trump, in a Twitter posting, questioned why American forces should be responsible for protecting ships from other countries as they make the “dangerous journey.” Instead, the U.S. has said it is developing a multinational effort to ensure freedom of navigation in the Persian Gulf. The U.K. Navy has escorted some tankers out of the region. Tanker operators must take protective measures of their own, says industry trade group Intertanko, by performing regular searches for mines, using spotlights to look for approaching ships and employing sonar to deter divers. Owners of tankers that ply the Gulf face spiraling costs. War risk premiums paid every time a ship enters the region surged from $30,000 in early 2019 to $185,000 in June, while cargo rates more than doubled in June, to $26,000 per day.
7. Who relies most on the strait?
Iran, Kuwait, Qatar and Bahrain export all their output through the strait. Ninety percent of Iraq’s exported oil goes through it as well. The U.A.E. can partly bypass the strait by sending 1.5 million barrels a day via a pipeline from its oilfields to the port of Fujairah on the Gulf of Oman. Saudi Arabia has the greatest ability to divert flows from the risk zone, by using a 746-mile mega-pipeline across the country to an export terminal on the Red Sea. That link has never been used to its full capacity of 5 million barrels a day, however, and in any case it falls short of the 8.5 million barrels of crude and petroleum products the kingdom ships worldwide each day.
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Iran runs rings around Royal Navy @asiatimesonline Law & Politics |
Drone footage released by Iran’s Fars news agency on Saturday showed a bird’s-eye view of the UK’s Stena Impero, moored in the port of Bandar Abbas after its seizure by the Islamic Revolutionary Guard Corps (IRGC). In the video, a pair of Iranian boats speed in circles around the tanker to the soundtrack of heavy metal, in a show of force likely designed for domestic as much as regional and global consumption.
In the past 24 hours, a leaked audio recording laid bare the failed attempt by the British Royal Navy to avert the impounding.
“Alter your course, do 360 degrees immediately, over,” an Iranian officer is heard telling the crew of the UK oil tanker Stena Impero on Friday. “Obey, and you will be safe.”
A British warship, despite being too far away to pose an immediate threat, then issues a competing directive, telling the commercial ship it should continue on its path.
“Stena Impero, this is British warship, Foxtrot 236. I reiterate that you are conducting transit passage in a recognized international strait. Under international law, your passage must not be impaired, obstructed or hampered,” the British officer says, before the vessel is forced to Iranian shores.
The veracity of the recording, released by maritime security risk consultancy Dryad Global, has not been challenged by the UK or Iran.
The raid itself – videotaped and published by the Iranian Revolutionary Guard Corps – shows Balaclava-wearing commandos descending on the British tanker by helicopter. The seizure appeared designed to replicate Britain’s impounding of an Iranian tanker earlier this month.
Asked on Monday what the United States would do to help retrieve the vessel of its ally, US Secretary of State Mike Pompeo appeared to wash his hands of the incident.
“The responsibility in the first instance falls to the United Kingdom to care of their ships,” he told Fox and Friends. The UK – in the midst of messy talks to leave the European Union – said on Monday it was looking to its European allies to help secure Persian Gulf shipping.
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In SSA, growth is expected at 3.4% in 2019 and 3.6% in 2020, 0.1% lower for both years than in the April #WEO. @IMFNews Africa |
In sub-Saharan Africa, growth is expected at 3.4 percent in 2019 and 3.6 percent in 2020, 0.1 percentage point lower for both years than in the April WEO, as strong growth in many non-resource-intensive countries partially offsets the lackluster performance of the region’s largest economies. Higher, albeit volatile, oil prices have supported the outlook for Angola, Nigeria, and other oil-exporting countries in the region. But growth in South Africa is expected at a more subdued pace in 2019 than projected in the April WEO following a very weak first quarter, reflecting a larger-than-anticipated impact of strike activity and energy supply issues in mining and weak agricultural production.
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