The Yellow Vest movement in France scored a victory, as the government of President Emmanuel Macron agreed to suspend a controversial fuel tax after weeks of increasingly violent protests. This may be concretely a win for the working class, but the fact that Macron imposed the tax in the name of reducing carbon emissions has provided fodder for anti-environmental content to the protest movement. Exploiting this moment, Donald Trump blamed the uprising on the Paris climate accord, tweeting: "The Paris Agreement isn't working out so well for Paris. Protests and riots all over France. People do not want to pay large sums of money, much to third world countries (that are questionably run), in order to maybe protect the environment. Chanting 'We Want Trump!' Love France."
Venezuela has agreed to open at least seven oil-fields to private companies in contracts "similar to ones rolled back under late socialist leader Hugo Chávez," Reuters reported Sept. 10. The plan was revealed in a televized ceremony Aug. 28 in which representatives of the companies met with President Nicolás Maduro to sign "joint service agreements" with the state oil company PDVSA. Terms of the deals were not disclosed. But in a draft contract obtained by Reuters, PDVSA offers to turn over the fields for six years on condition that the companies provide the required investment to boost production. PDVSA president Manuel Quevedo said at the ceremony that the plan would require $430 million for an increase of 641,000 barrels per day. Quevedo said the plan involves 14 companies, although only seven were present for the ceremony and the others were unnamed. The seven include five Venezuelan firms: Petrokariña, Enfriadores de Venezuela, Consorcio Rinoca Centauro Kariña, Consorcio Petrolero Tomoporo and Well Services Cavallino. The remaining two are Helios Petroleum Services of Panama and Shandong Kerui Holding Group of China. The fields in question were formerly operated by Italy's Eni and the French Total.
US President Donald Trump announced Aug. 27 that the US and Mexico have reached an agreement on a new trade deal called the United States-Mexico Trade Agreement, which will ultimately terminate the North American Free Trade Agreement (NAFTA). While sitting at the resolute desk, Trump called Mexican President Enrique Peña Nieto to announce the new pact, which Trump described as "a really good deal for both countries [and] something that is very special for our manufacturers and farmers." Among a number of changes to NAFTA, both parties agreed to a provision that would require a significant portion of vehicles to be made in high-wage factories, a measure aimed to discourage factory jobs from leaving the US. Peña Nieto agreed with Trump while on speaker phone, stating, "I think this is something very positive for the United States and Mexico." The Mexican president further stated that he wanted Canada to be involved in the agreement.
Dictator Bashar al-Assad flew to Vladimir Putin's summer residence in the Black Sea resort of Sochi for talks on the prosecution of the Syrian war and their future plans for the country. Assad congratulated Putin on his new term as president, following his March re-election (amid waves of protest), and (of course) thanked the Russian military for its support in re-conquering Syria. "Stability is improving," Assad told Putin at he opening press conference. Invoking the intermittent Russia-brokered peace talks in Kazakhstan (now largely irrelevant, that most of the country has been re-conquered), Assad added that "we have always wholeheartedly supported the political process, which should proceed in parallel with the war on terrorism." (Reuters) As Assad arrived in Sochi, Putin announced that Russian military vessels with Kalibr cruise missiles would be on permanent stand-by in the Mediterranean to counter what he called the "terrorist threat" in Syria. (Moscow Times)
After all the talk we've heard in recent years about how depressed oil prices are now permanent, in the wake of Trump's announced withdrawal from the Iran nuclear deal Bank of America is predicting that the price of Brent crude could go as high as the once-dreaded $100 per barrel in 2019. The report also cited collapsing production in Venezuela due to the crisis there. Brent prices have risen above $77 per barrel since Trump's announcement. Prices have jumped more than 8% over the past month and 15% since the beginning of the year. According to the analysis, investors fear that renewed sanctions on Iran could lead to supply disruptions. (CNNMoney, May 10) Although the report failed to mention it, the Israeli air-strikes on Iranian targets in Syria have doubtless contributed to the jitters.
Seemingly irregular oil contracts have emerged as a factor in the ongoing political scandal that last week brought down Peru's president Pedro Pablo Kuczynski. Following accusations from left-opposition congressmember Manuel Dammert (Nuevo Perú), state agency PeruPetro admitted that hours before leaving office on March 21, Kuczynski had issued a Supreme Decree initiating the process of approving five offshore oil concessions with a private company—but without the involvement of PeruPetro in vetting the contracts, as required by law. Calling the deals "lobista," Dammert is demanding that new President Martín Vizcarra declare the contracts void. The exploration contracts for blocs off the coast of Tmubes region are with Irish company Tullow Oil, They still must be approved by the ministries of Energy & Mines and Economy & Finance. (Gestión, March 29; TeleSur, March 26; Gestión, March 24)
As a part of the Republican tax overhaul bill, Congress voted Dec. 20 to open Alaska's Arctic National Wildlife Refuge (ANWR) to oil and natural gas drilling, after more than four decades of contestation on the matter. The House voted 224-201 to pass the bill, mostly along party lines. This finalizes the legislation, as the Senate version was passed by a 51-48 party-line vote earlier in the day. Once President Trump signs the law, the oil industry will have finally achieved a long-sought goal. "We're going to start drilling in ANWR, one of the largest oil reserves in the world, that for 40 years this country was unable to touch. That by itself would be a massive bill," Trump boasted. "They've been trying to get that, the Bushes, everybody. All the way back to Reagan, Reagan tried to get it. Bush tried to get it. Everybody tried to get it. They couldn't get it passed. That just happens to be here."
Well, we hate to say "We told you so," but... We told you so. We've been told for the past several years now that the depressed oil prices were permanent, that thanks to fracking and the surge in US domestic production, the price was now immune to Middle East instability, dramatic spikes and "oil shocks" forever banished. Well, futures for Brent crude just hit $63.37 per barrel, with the spot price for West Texas Intermediate at $57.34. (Panorama.am, Investing.com) Creeping toward the $100 per barrel we were so recently assured was a thing of the past. OilPrice.com blames Trump's announcement that the US will move its embassy in Israel to Jerusalem, which has of course unleashed unrest in the Palestinian territories and instability fears across the Middle East. But the jump really began almost exactly a month ago, seemingly prompted by the leadership purge in Saudi Arabia. That brought the Brent crude price up to $62, its highest level since July 2015. (The Guardian, Nov. 6)