Intelligence Briefings

Ball in europe's court on snap back sanctions 

july 15, 2019

Iran is now in violation of its obligations under the JCPOA accord, and that allows Washington or other signatories to bring the issue to the United Nations Security Council under the terms of the resolution, UNSCR 2231, that endorsed that agreement. Under the UN resolution, sanctions could be "snapped back" onto Iran. Europe's approach is to recommend more dialogue including the U.S. and Iran, so more sanctions are not yet on the table.

U.S. Struggles to build coalition against iran

july 1, 2019

The standoff between the United States and Iran continues with no end in sight. The U.S. Administration is trying to build a coalition of countries to monitor if not protect shipping in the Persian Gulf. The effort faces obstacles, and it is not clear that, if implemented, it will have a significant impact on the safety of merchant traffic, let alone contribute to a broader reduction in tensions.

will iran retaliate

may 6, 2019

As the U.S. deploys military assets to the Arab Gulf region, and continues to increase the pressure on Iran, will Iran retaliate? Closing the Straits of Hormuz is what first comes to mind, but that step would not really help Iran beyond showing its resistance to the U.S. and its allies in the Gulf. Moreover, it can be overcome by a U.S. military response. Cyber-attacks on its neighbors, especially their oil facilities, would be more subtle and deniable. As Iran’s economy deteriorates, the likelihood of some form of retaliation is growing.

president trump targets iran and complicates libya

april 22, 2019

President Trump continues to adopt policies that have a bearing on key oil producers. Continued rumors that the Administration will eliminate waivers on Iranian sanctions dovetail with his tough position vis a vis the Iranian Revolutionary Guards. Meanwhile, President Trump’s apparent support of General Haftar in Libya is a bit of a surprise. The President’s posture towards both Iran and Libya seem generally in line with Saudi interests. Could this mean a quid pro quo on Iranian production? For the moment we continue to believe the waivers will not be reduced to zero, but it is hard to anticipate the next steps of such a quixotic president.

competition drowning out collaboration in 2019

january 21, 2019

As 2019 stretches out ahead of us, the World Economic Forum will meet this week and is likely to highlight the rise of competition over collaboration between countries, and the implications for the global economy. The global oil market is not immune to these forces. Notwithstanding the “cooperation” represented by the recent OPEC deal, falling OPEC exports and rising US exports will be unsettling this year. Competition in the oil markets is likely to intensify by the end of 2019. That is generally bearish for oil prices.

Stumbling into military conflict

may 20, 2019

Yesterday, the Joint Ministerial Monitoring Committee (JMMC) of OPEC met to assess the oil market and the impact of the OPEC+ production restraint. The committee commended the "agile and flexible approach" of the OPEC+ countries, but made no specific recommendations beyond continuing to monitor the oil market until the next meeting in June. That JMMC meeting will take place just before the full Ministerial meeting at which the member states will decide whether to continue the current production restraint. The JMMC communique pointed out “critical uncertainties” such as trade negotiations, monetary policy and geopolitical challenges. Among those geopolitical challenges are rising tensions between Iran and the U.S. since the non-renewal of sanctions waivers early this month. The possibility that the two countries could stumble into direct military conflict is rising.

fragility of peace between india and pakistan

march 4, 2019

India and Pakistan account for almost 5.0 million b/d of crude oil imports, most headed to India. As a result, any conflict or potential for military escalation is relevant to the global oil market. Last week’s exchange of air strikes between India and Pakistan is a stark reminder of how vulnerable the region is to military confrontation.

the u.s. turning away from the middle east

february 19, 2019

Since replacing the British Navy as the guarantor of regional peace after World War Two, the United States has had a heavy presence in the Middle East. Now, as the U.S. comes closer to net oil exports, the country’s engagement with the Middle East, especially under President Trump, is diminishing. Even more than the Obama pivot to the East, the Trump Administration is moving the United States out of the region. That will implications for U.S. influence in the region, not to mention military conflict.

will 2019 be dangerous for the u.s. and china?

january 7, 2019

Another naval incident in the South China Sea has the U.S. claiming freedom of navigation and China claiming provocation. Military conflict remains unlikely, but relations between China and the U.S. are fraying beyond just the trade war. The continued economic clash with Washington coupled with a Chinese economic slowdown, policy uncertainty in Washington, and the possibility of provocative actions by Taiwan or Japan could precipitate more serious conflict.

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