Thursday, April 18, 2024

 

The West now wants “restraint” after months of fuelling a genocide in Gaza


The Middle East is on the brink of war precisely because western politicians indulged for decades every military excess by Israel


Suddenly, western politicians from US President Joe Biden to British Prime Minister Rishi Sunak have become ardent champions of “restraint” – in a very last-minute scramble to avoid regional conflagration.

Iran launched a salvo of drones and missiles at Israel at the weekend in what amounted a largely symbolic show of strength. Many appear to have been shot down, either by Israel’s layers of US-funded interception systems or by US, British and Jordanian fighter jets. No one was killed.

It was the first direct attack by a state on Israel since Iraq fired Scud missiles during the Gulf war of 1991.

The United Nations Security Council was hurriedly pressed into session on Sunday, with Washington and its allies calling for a de-escalation of tensions that could all too easily lead to the outbreak of war across the Middle East and beyond.

“Neither the region nor the world can afford more war,” the UN’s secretary general, Antonio Guterres, told the meeting. “Now is the time to defuse and de-escalate.”

Israel, meanwhile, vowed to “exact the price” against Iran at a time of its choosing.

But the West’s abrupt conversion to “restraint” needs some explaining.

After all, western leaders showed no restraint when Israel bombed Iran’s consulate in Damascus two weeks ago, killing a senior general and more than a dozen other Iranians – the proximate cause of Tehran’s retaliation on Saturday night.

Under the Vienna Convention, the consulate is not only a protected diplomatic mission but is viewed as sovereign Iranian territory. Israel’s attack on it was an unbridled act of aggression – the “supreme international crime”, as the Nuremberg tribunal ruled at the end of the Second World War.

For that reason, Tehran invoked article 51 of the United Nations charter, which allows it to act in self-defence.

Shielding Israel

And yet, rather than condemning Israel’s dangerous belligerence – a flagrant attack on the so-called “rules-based order” so revered by the US – western leaders lined up behind Washington’s favourite client state.

At a Security Council meeting on 4 April, the US, Britain and France intentionally spurned restraint by blocking a resolution that would have condemned Israel’s attack on the Iranian consulate – a vote that, had it not been stymied, might have sufficed to placate Tehran.

At the weekend, British Foreign Secretary David Cameron still gave the thumbs-up to Israel’s flattening of Iran’s diplomatic premises, saying he could “completely understand the frustration Israel feels” – though he added, without any hint of awareness of his own hypocrisy, that the UK “would take very strong action” if a country bombed a British consulate.

By shielding Israel from any diplomatic consequences for its act of war against Iran, the western powers ensured Tehran would have to pursue a military response instead.

But it did not end there. Having stoked Iran’s sense of grievance at the UN, Biden vowed “iron-clad” support for Israel – and grave consequences for Tehran – should it dare to respond to the attack on its consulate.

Iran ignored those threats. On Saturday night, it launched some 300 drones and missiles, at the same time protesting vociferously about the Security Council’s “inaction and silence, coupled with its failure to condemn the Israeli regime’s aggressions”.

Western leaders failed to take note. They again sided with Israel and denounced Tehran. At Sunday’s Security Council meeting, the same three states – the US, UK and France – that had earlier blocked a statement condemning Israel’s attack on Iran’s diplomatic mission, sought a formal condemnation of Tehran for its response.

Russia’s ambassador to the UN, Vasily Nebenzya, ridiculed what he called “a parade of Western hypocrisy and double standards”. He added: “You know very well that an attack on a diplomatic mission is a casus belli under international law. And if Western missions were attacked, you would not hesitate to retaliate and prove your case in this room.”

There was no restraint visible either as the West publicly celebrated its collusion with Israel in foiling Iran’s attack.

British Prime Minister Rishi Sunak praised RAF pilots for their “bravery and professionalism” in helping to “protect civilians” in Israel.

In a statement, Keir Starmer, leader of the supposedly opposition Labour party, condemned Iran for generating “fear and instability”, rather than “peace and security”, that risked stoking a “wider regional war”. His party, he said, would “stand up for Israel’s security”.

The “restraint” the West demands relates only, it seems, to Iran’s efforts to defend itself.

Starving to death

Given the West’s new-found recognition of the need for caution, and the obvious dangers of military excess, now may be the time for its leaders to consider demanding restraint more generally – and not just to avoid a further escalation between Iran and Israel.

Over the past six months Israel has bombed Gaza into rubble, destroyed its medical facilities and government offices, and killed and maimed many, many tens of thousands of Palestinians. In truth, such is the devastation that Gaza some time ago lost the ability to count its dead and wounded.

At the same time, Israel has intensified its 17-year blockade of the tiny enclave to the point where, so little food and water are getting through, the population are in the grip of famine. People, especially children, are literally starving to death.

The International Court of Justice, the world’s highest court, chaired by an American judge, ruled back in January – when the situation was far less dire than it is now – that a “plausible” case had been made Israel was committing genocide, a crime against humanity strictly defined in international law.

And yet there were no calls by western leaders for “restraint” as Israel bombed Gaza into ruins week after week, striking its hospitals, levelling its government offices, blowing up its universities, mosques and churches, and destroying its bakeries.

Rather, President Biden has repeatedly rushed through emergency arms sales, bypassing Congress, to make sure Israel has enough bombs to keep destroying Gaza and killing its children.

When Israeli leaders vowed to treat Gaza’s population like “human animals”, denying them all food, water and power, western politicians gave their assent.

Sunak was not interested in recruiting his brave RAF pilots to “protect civilians” in Gaza from Israel, and Starmer showed no concern about the “fear and instability” felt by Palestinians from Israel’s reign of terror.

Quite the reverse. Starmer, famed as a human rights lawyer, even gave his approval to Israel’s collective punishment of the people of Gaza, its “complete siege”, as integral to a supposed Israeli “right of self-defence”.

In doing so, he overturned one of the most fundamental principles of international law that civilians should not be targeted for the actions of their leaders. As is now all too apparent, he conferred a death sentence on the people of Gaza.

Where was “restraint” then?

Missing in action

Similarly, restraint went out of the window when Israel fabricated a pretext for eradicating the UN aid agency UNRWA, the last lifeline for Gaza’s starving population.

Even though Israel was unable to offer any evidence for its claim that a handful of UNRWA staff were implicated in an attack on Israel on 7 October, western leaders hurriedly cut off funding to the agency. In doing so, they became actively complicit in what the World Court already feared was a genocide.

Where was the restraint when Israeli officials – with a long history of lying to advance their state’s military agenda – made up stories about Hamas beheading babies, or carrying out systematic rapes on 7 October? All of this was debunked by an Al Jazeera investigation drawing largely on Israeli sources.

Those genocide-justifying deceptions were all too readily amplified by western politicians and media.

Israel showed no restraint in destroying Gaza’s hospitals, or taking hostage and torturing thousands of Palestinians it grabbed off the street.

All of that got a quiet nod from western politicians.

Where was the restraint in western capitals when protesters took to the streets to call for a ceasefire, to stop Israel’s bloodletting of women and children, the majority of Gaza’s dead? The demonstrators were smeared – are still smeared – by western politicians as supporters of terrorism and antisemites.

And where was the demand for restraint when Israel tore up the rulebook on the laws of war, allowing every would-be strongman to cite the West’s indulgence of Israeli atrocities as the precedent justifying their own crimes?

On each occasion, when it favoured Israel’s malevolent goals, the West’s commitment to “restraint” went missing in action.

Top-dog client state

There is a reason why Israel has been so ostentatious in its savaging of Gaza and its people. And it is the very same reason Israel felt emboldened to violate the diplomatic sanctity of Iran’s consulate in Damascus.

Because for decades Israel has been guaranteed protection and assistance from the West, whatever crimes it commits.

Israel’s founders ethnically cleansed much of Palestine in 1948, far beyond the terms of partition set out by the UN a year earlier. It imposed a military occupation on the remnants of historic Palestine in 1967, driving out yet more of the native population. It then imposed a regime of apartheid on the few areas where Palestinians remained.

In their West Bank reservations, Palestinians have been systematically brutalised, their homes demolished, and illegal Jewish settlements built on their land. The Palestinians’ holy places have been gradually surrounded and taken from them.

Separately, Gaza has been sealed off for 17 years, and its population denied freedom of movement, employment and the basics of life.

Israel’s reign of terror to maintain its absolute control has meant imprisonment and torture are a rite of passage for most Palestinian men. Any protest is ruthlessly crushed.

Now Israel has added mass slaughter in Gaza – genocide – to its long list of crimes.

Israel’s displacements of Palestinians to neighbouring states caused by its ethnic cleansing operations and slaughter have destabilised the wider region. And to secure its militarised settler-colonial project in the Middle East – and its place as Washington’s top-dog client state in the region – Israel has intimidated, bombed and invaded its neighbours on a regular basis.

Its attack on Iran’s consulate in Damascus was just the latest of serial humiliations faced by Arab states.

And through all of this, Washington and its vassal states have directed no more than occasional, lip-service calls for restraint towards Israel. There were never any consequences, but instead rewards from the West in the form of endless billions in aid and special trading status.

‘Something rash’

So why, after decades of debauched violence from Israel, has the West suddenly become so interested in “restraint”? Because on this rare occasion it serves western interests to calm the fires Israel is so determined to stoke.

The Israeli strike on Iran’s consulate came just as the Biden administration was finally running out of excuses for providing the weapons and diplomatic cover that has allowed Israel to slaughter, maim and orphan tens of thousands of Palestinian children in Gaza over six months.

Demands for a ceasefire and arms embargo on Israel have been reaching fever pitch, with Biden haemorrhaging support among parts of his Democratic base as he faces a re-run presidential election later this year against a resurgent rival, Donald Trump.

Small numbers of votes could be the difference between victory and defeat.

Israel had every reason to fear that its patron might soon pull the rug from under its campaign of mass slaughter in Gaza.

But having destroyed the entire infrastructure needed to support life in the enclave, Israel needs time for the consequences to play out: either mass starvation there, or a relocation of the population elsewhere on supposedly “humanitarian” grounds.

A wider war, centred on Iran, would both distract from Gaza’s desperate plight and force Biden to back Israel unconditionally – to make good on his “iron-clad” commitment to Israel’s protection.

And to top it all, with the US drawn directly into a war against Iran, Washington would have little choice but to assist Israel in its long campaign to destroy Iran’s nuclear energy programme.

Israel wants to remove any potential for Iran to develop a bomb, one that would level the military playing field between the two in ways that would make Israel far less certain that it can continue to act as it pleases across the region with impunity.

That is why Biden officials are airing concerns to the US media that Israel is ready to “do something rash” in an attempt to drag the administration into a wider war.

The truth is, however, that Washington long ago cultivated Israel as its military Frankenstein’s monster. Israel’s role was precisely to project US power ruthlessly into the oil-rich Middle East. The price Washington was more than willing to accept was Israel’s eradication of the Palestinian people, replaced by a fortress “Jewish state”.

Calling for Israel to exercise “restraint” now, as its entrenched lobbies flex their muscles meddling in western politics, and self-confessed fascists rule Israel’s government, is beyond parody.

If the West really prized restraint, they should have insisted on it from Israel decades ago.

• Article first published in Middle East EyeFacebook

Jonathan Cook, based in Nazareth, Israel is a winner of the Martha Gellhorn Special Prize for Journalism. His latest books are Israel and the Clash of Civilisations: Iraq, Iran and the Plan to Remake the Middle East (Pluto Press) and Disappearing Palestine: Israel's Experiments in Human Despair (Zed Books). Read other articles by Jonathan, or visit Jonathan's website.

CANADA


Pro-Israel Municipality Claims “Discrimination”


A rich, exclusionary municipality is claiming persecution because Parliament passed a motion to lessen Canada’s role in a genocide. Hampstead highlights the moral abyss of large swaths of Canada’s Jewish community.

Last Monday the Montreal area municipality unanimously passed a motion demanding “the Council of Hampstead, hereby expresses its non-confidence in the Government of Canada for its distancing from the longstanding policy of support for Israel, which has resulted in a major spike in antisemitism across Canada; THAT the Town council calls upon the Government of Canada to reaffirm its commitment to supporting Israel and to take concrete actions to combat antisemitism in all its forms within our nation.”

Hampstead is fervently anti-Palestinian. An Israeli flag hangs outside City Hall and in November the municipality passed a law giving $1,000 tickets — with money raised sent to Israel — to anyone tearing down posters of the hostages Hamas took to Gaza on October 7. They’ve instigated multiple fundraising projects for Israel and in December Hampstead mayor Jeremy Levi told me he would continue supporting Israel even if they killed 100,000 Palestinian children since “good needs to prevail over evil”.

Despite promoting genocide, Hampstead claims egalitarian values and its statement calls for “solidarity with communities facing discrimination and persecution”. The first whereas in the recent motion claims “the Town of Hampstead, has historically upheld values of inclusivity, tolerance, and Support for communities facing discrimination.” But Hampstead is a wealthy, ethnically segregated, enclave. It traces its roots to Britain’s late-1800s Garden City movement, which was a move by London’s elite to move out of the city centre. Just west of Montréal, Hampstead was established by some of the wealthiest Canadians in 1914. The municipality doesn’t allow retail shops or industrial land in its boundaries and is one of the wealthiest municipalities in Québec. Until after the Second World War, it was almost entirely WASP (White Anglo-Saxon Protestant). Today over three-quarters of Hampstead’s 7,500 residents are Jewish and it is one be the most ethnically homogeneous areas in greater Montreal. The median income of the 2,500 households was $150,000 per year in 2021 (almost twice the Montreal wide median). Over half of the homes have four bedrooms or more. The average home value in 2021 was $1,766,000 (three times the region’s average).

To live in the exclusive municipality, residents pay large sums in property taxes. With only residential properties covering the city’s costs, the average Hampstead house pays $15,393 annually in property tax.

To ensure a Zionist and Jewish centric outlook many residents put their kids in private Jewish schools and summer camps. The current ethnic segregation is stunning for a community that comprised seven per cent of Montreal’s population a century ago. (The larger adjacent municipality of Côte Saint-Luc is two-thirds Jewish.)

Hampstead is an exclusionary well-to-do community that promotes slaughtering and starving Palestinians because they aren’t Jewish. It is a bastion of Jewish supremacy that bemoans “antisemitism”.

It is beyond absurd for this wealthy, exclusionary, genocide promoting municipality to decry “discrimination” and “persecution”.\FacebookTwitter

Yves Engler is the author of 12 books. His latest book is Stand on Guard for Whom?: A People's History of the Canadian Military . Read other articles by Yves.

 

Canadian budget aims to streamline nuclear licensing process


17 April 2024


The Canadian government has announced measures in its latest budget "to help get nuclear projects built in a timely, predictable, and responsible fashion".

The 2024 Federal Budget was unveiled in the House of Commons by Deputy Prime Minister and Minister of Finance Chrystia Freeland on 16 April.

It notes: "Nuclear energy will play a key role in achieving net-zero greenhouse gas emissions. Canada is a Tier-1 nuclear nation with over 70 years of technological leadership, including our own national reactor technology, and a strong domestic supply chain that includes the world's largest deposit of high-grade natural uranium.

"Our government is taking action to support the growth of nuclear energy, including through the Clean Electricity investment tax credit, the Clean Technology Manufacturing investment tax credit, the Strategic Innovation Fund, the Canada Infrastructure Bank, and an updated Green Bond Framework that includes certain nuclear expenditures."

The budget announces measures to help clarify and reduce timelines for major projects, so they can get built faster. These include setting a three-year target for nuclear project reviews, by working with the Canadian Nuclear Safety Commission and Impact Assessment Agency of Canada, and considering how the process can be better streamlined and duplications reduced between the two agencies.

The budget proposes to provide CAD3.1 billion (USD2.2 billion) over 11 years, starting in 2025-26, with CAD1.5 billion in remaining amortisation, to Atomic Energy of Canada Limited to support Canadian Nuclear Laboratories' ongoing nuclear science research, environmental protection, and site remediation work.

Commenting on the budget, the Canadian Nuclear Association said: "While there are few new commitments or announcements that impact the nuclear energy sector, the budget in many places reinforces the government's clear support for nuclear by confirming a series of announced policies and financial commitments intended to support a rapid build out of nuclear over the coming decades."

Around 15% of Canada's electricity comes from 19 Candu nuclear power reactors, mostly in Ontario. For many years the world's biggest producer of uranium - until it was overtaken by Kazakhstan - the country's 2022 output of 7351 tU ranks it as second in the list of the world's uranium suppliers.

Ontario Power Generation (OPG) plans to build Canada's first commercial, grid-scale small modular reactor (SMR) - GE Hitachi's BWRX-300 - at the Darlington site, eyeing commercial operation starting in 2029. In July last year, the Ontario government announced it is working with OPG to begin planning and licensing for three additional BWRX-300 SMRs, for a total of four, at the Darlington plant site.

The Ontario government has also started pre-development work to build up to 4800 MWe of new nuclear capacity at Bruce Power's existing site, in what would be Canada's first large-scale nuclear build in more than 30 years.

Researched and written by World Nuclear News

Kinder Morgan Sees Strong Natural Gas Demand Over the Next Six Years

Kinder Morgan expects demand for natural gas to increase palpably over the next six years the company said at the release of its first-quarter financial results.

In it, the company reported a 10% increase in its earnings per share, even though these came a bit below analyst expectations, and an annual increase in net profit from $679 million in the first quarter of 2023 to $746 million this year.

Income from Kinder Morgan’s gas pipeline played a big role in its first-quarter performance, the company said in its report, along with oil products.

“Notwithstanding the current low natural gas price environment, the future looks very bright for our Natural Gas Pipelines business segment,” chief executive Kim Dang said.

“We expect demand for natural gas to grow substantially between now and 2030, led by more than a doubling of demand for liquefied natural gas (LNG) exports and a more than 50% increase in exports to Mexico.”

Dang went on to forecast a surge in the demand for natural gas from the power generation industry in response to the increase in electricity demand from the information technology sector as the use of artificial intelligence increases.

At the same time, Dang brushed off the Biden administration’s pause in approvals for new LNG export capacity, saying it would not affect Kinder Morgan’s LNG plans.

Natural gas, which currently meets 43.1% of U.S. utility-scale electricity generation, will continue to meet a large part of American power demand as new wind and solar capacity installations will need backup power generation, according to gas industry executives

Now, AI is proving to be another major driver of demand for natural gas as wind and solar cannot provide the necessary uninterrupted supply of electricity that data centers would require with the increased use of artificial intelligence in their operations.

By Irina Slav for Oilprice.com

Institutional Investors Double Down On Oil Despite Divestment Pledges

  • Institutional investors have increased their shareholding in oil giants, while the smallest have been more likely to divest.

  • The largest shareholders have offset any trend towards divestment.

  • Oil giants continue to invest heavily in fossil fuels, with BP's capital expenditure on low carbon energy at only 3% and Shell's at 9%.

The campaign for institutional investors to divest from oil giants like BP and Shell hasn’t made any progress due to the way index providers dominate the market, a new study has found.

Only 60 institutional investors worldwide have sold all of their shares in BP and Shell, representing about three per cent and four per cent of their shareholders, a paper published earlier this year by David Whyte of Queen Mary University of London has revealed.

These shares have all been promptly bought up by massive asset managers like Blackrock and Vanguard, who have risen to popularity through their market-tracking index funds.

With Shell currently the largest company listed in the UK, and BP number five, tracking the index has meant buying more and more of their shares, and the passive giants have been happy to do so.

Since 2015, Blackrock has increased its shareholding in BP by 3.2 percent, with Vanguard at 1.8 percent. The same rise is true for Shell, with the two asset managers buying 1.8 percent and 1.6 percent more stock, respectively.

Tracking shareholders between 2015 and 2022, Whyte found that the largest institutions had actually increased their shareholding in the oil giants, while the smallest have been more likely to divest.

Indeed, although 47 per cent of BP shareholders and 54 per cent of Shell shareholders have reduced their stakes over the years, net share ownership overall has risen significantly in both companies.

Overall, the top 20 oil giant shareholders have increased their shares by three-quarters of a billion in BP and half a billion in Shell.

“Any trend towards divestment amongst the shareholders who have reduced their shareholding is being offset by the largest shareholders,” said Whyte.

Even the investors who cut their stake in Shell and BP are probably not doing it for ESG reasons, as over a quarter of the 20 investors who made the most significant reductions in shareholdings in the companies actually increased their overall fossil fuel investment.

Campaigners have been pushing for the largest institutional investors to divest their stakes in fossil fuel companies, with Greta Thunberg withdrawing from the Edinburgh Book Festival last year due to its sponsorship by Baillie Gifford, which invests in fossil fuel companies.

BP’s capital expenditure on low-carbon energy, such as solar and wind, is currently only three percent of its total investment, while Shell’s is nine percent. All other investment was spent on fossil fuels and high carbon energy sources

“Shareholder movements in BP and Shell are not applying the pressure necessary to cease oil and gas development,” Whyte concluded.

By CityAM

 

Standard Chartered Says Peak Oil Demand Is Not Imminent

  • Whereas the short-term oil price outlook appears murky, leading oil agencies remain largely bullish about the long-term outlook.

  • Interestingly, over the medium-and long-term, only the IEA sees global oil demand peaking before 2030.

  • Standard Chartered has predicted global oil demand will hit 110.2 mb/d in 2030 and increase further to 113.5 mb/d in 2035.

The oil price rally has lately lost some steam, with WTI for May delivery and June Brent futures slipping more than 5% since Friday after the Energy Information Administration (EIA) released bearish weekly data that triggered demand concerns. According to the EIA, crude inventories rose 5.84 mb w/w and oil product inventories rose 6.57 mb; however, the builds relative to the five-year average were modest, at just 0.11mb for crude oil and 1.24mb for products. U.S. commercial inventories now stand 16.47mb below the five-year average, with crude inventories at Cushing 7.35 mb below the five-year average. The EIA also estimates U.S. crude oil output clocked in at 13.1 mb/d for a fifth consecutive week, 0.8 mb/d higher y/y but 0.2 mb/d lower than December 2023 production.

Whereas the short-term oil price outlook appears murky, leading oil agencies remain largely bullish about the long-term outlook. Last week, the International Energy Agency (IEA) published its latest monthly Oil Market Report (OMR), including its first detailed 2025 forecast. The Paris-based energy watchdog predicted that global oil demand in 2025 demand will be 1.147 mb/d higher than 2024 levels, higher than the 1.0 mb/d estimate it had released in June 2023. Other leading agencies have predicted even higher demand growth in 2025: the EIA forecast is 1.351 mb/d, Standard Chartered’s forecast is 1.444 mb/d while the OPEC Secretariat has predicted a 1.847 mb/d increase in demand.Related: World Oil Demand Jumped To 5-Year Seasonal High in February

Interestingly, over the medium-and long-term, only the IEA sees global oil demand peaking before 2030, even in its most optimistic forecast (high growth). However, the IEA says an oil demand peak doesn't necessarily mean a rapid plunge in fossil fuel consumption is imminent, adding that  it will probably be followed by “an undulating plateau lasting for many years.”

 The EIA is the most bullish on long-term oil demand, and has predicted a demand peak will come in 2050 while the OPEC Secretariat sees it coming five years earlier. Meanwhile, Standard Chartered has predicted global oil demand will hit 110.2 mb/d in 2030 and increase further to 113.5 mb/d in 2035. However, the commodity experts have not projected a demand peak beyond the end of their modeling horizon in 2035. According to StanChart, a structural long-term peak is very unlikely within 10 years despite a high probability of cyclical downturns over the period. StanChart has argued that the current gulf between demand views creates significant investment uncertainty which that’s likely to force longer-term prices higher.

In other words, the energy agencies appear to agree that an oil demand peak is nowhere on the horizon.

Source: Standard Chartered Research

Traders Still Betting On The Energy Sector

The energy sector has been a standout performer in the current year, managing a 15.8% return in the year-to-date, the second highest amongst 11 U.S. market sectors. However, the sector has slipped nearly 5% over the past week with Wall Street experts warning that oil prices sit in a precarious position, which could lead to price swings as geopolitical tensions continue to escalate all throughout the Middle East.

Thankfully, traders are still betting on the energy sector.

Last week, U.S. fund assets (exchange-traded funds and conventional funds) recorded $29.7B in net outflows--in large part to money market funds--marking the third week in four that money flowed from the space. Money market funds recorded $35.3B in net outflows, equity funds lost $1B, commodities funds gave back $207M, and mixed-assets funds observed outflows of $168M.

Interestingly, two funds that recorded the most significant amount of capital inflows on the week were the Invesco S&P 500 Equal Weight ETF (NYSEARCA:RSP) at $2.8B and the Energy Select Sector SPDR Fund (NYSEARCA:XLE) at $756M.

Oil and gas stocks also remain among the least shorted. Last month, average short interest across energy stocks in the S&P 500 index increased 14 basis points to 2.56% of shares floating at the end of the month. APA Corp. (NYSE:APA) was the most-shorted energy stock, with 22.1 million shares sold short as of March 31, or just 5.98% of the shares float. EQT (NYSE:EQT) was the second most shorted energy stock at 5.85% of shares float, while Occidental Petroleum (NYSE:OXY) and  Valero (NYSE:VLO) were in third and fourth place with  5.58% and 3.35%, of their floats sold short, respectively

In comparison, medical services company IMAC Holdings Inc. is the most shorted stock in the S&P 500 with nearly 95% of its float sold short.

By Alex Kimani for Oilprice.com

Traders are already gaming the new Russian metal sanctions

Bloomberg News | April 17, 2024 | 

London Metal Exchange. (Image by HM Treasury, Flickr.)

It took less than a day after the UK and US banned future sales of Russian aluminum, copper and nickel on the London Metal Exchange before traders had zeroed in on a way to make money off the convoluted new rules.


The opportunity lies in massive piles of Russian metal already sitting in the exchange’s global warehouse network. And the LME might not like what they’ve got planned.

The bottom line of the sanctions is simple: no Russian material produced after April 12 may be delivered onto the LME. The idea is that the restriction will drive down demand and prices for Russian supplies, but its miners can still sell to non-US and -UK buyers outside of the LME, where the vast majority of the global trade in metals happens anyway. Prices initially spiked on the news, but quickly fell back in a sign that markets aren’t expecting major disruptions.

Now, as the dust settles, the growing buzz in the metals world is how the new rules, combined with a series of quirks in the LME’s contract structure and global warehouse system, have thrown up an opportunity for a complex but lucrative trade. Multiple traders and brokers have described the play in conversations this week, while LME chief executive officer Matthew Chamberlain fielded questions about it in a call with market participants on Sunday.

For the metals world, it’s the latest episode in a rich history of traders seeking to exploit loopholes to profit from giant stocks of aluminum on the LME, which can generate hundreds of millions of dollars a year in storage and handling fees.


The sanctions, and the way that the LME has decided to implement them, have created a new multi-tiered market of metal categories, with varying restrictions attached to each. While the exchange can no longer accept delivery of “new” Russian supplies, the UK has actually relaxed earlier rules to allow UK buyers to accept Russian metal that was already in the LME system when the rules were announced.

This category of metal — the LME calls it “Type 1” — is what many in the market are now focusing on.

The growing percentage of Russian stocks in LME warehouses has been a controversial subject since the invasion of Ukraine, and the share had increased further in recent months — to more than 90% for aluminum — after UK buyers were blocked in December from taking delivery of Russian metal, making the supplies even less attractive for everyone else.

But UK nationals and companies are only allowed to accept Russian supplies that were already in the the LME system before April 13 — the permission doesn’t extend to any metal registered after that date, or “Type 2.”

Crucially: once Type 1 metal leaves the system, it loses its special status. If it’s re-registered, it becomes categorized as Type 2, and faces the same restrictions. (At its discretion, the LME will allow traders to withdraw cargoes and move them to different warehouses while preserving the Type 1 status, but only in narrow circumstances)


So, here’s the play:

First, traders are rushing to withdraw the large volumes of (Type 1) Russian metal already stored on the LME.

Then, after selling it (now, as Type 2) back on to the LME, they can cut a deal with the warehouse to share the rent from future owners. For warehouses, the rent share deals are a way to incentivize traders to deliver to their facilities, rather than a competitor’s.

The trade is complicated, but the idea is a simple one: they’re ultimately betting that the metal could sit there for months on end if UK nationals can’t withdraw it, and many western industrial consumers don’t want it. Previously the metal might have been attractive to buyers in China, but in the coming months that market is likely to be stuffed with newly produced Russian metal.

And for every day the metal sits there, the trader receives a sliver of the warehouse’s profit on it.

Potential evidence that traders are mobilizing can be seen in a sharp rise in the prices that they’re paying to obtain spot metal. Aluminum contracts expiring in one day reached a $14 premium to those maturing a day later on Tuesday, in a condition known as backwardation that signals buyers are rushing to secure spot supplies. The spread was trading at a discount before the measur
es were announced, and it was the busiest day of trading in the spread since June 2021.



The spread between April and May contracts also closed in a large backwardation on Monday. Several people involved in the LME aluminum market who asked not to be identified said that the sharp moves in the spreads reflected traders looking to secure tonnages for these so-called rent-share deals.

On Tuesday, nearly $200 million worth of aluminum was ordered for withdrawal from LME warehouses, signaling that the trade is now well underway. Another $16 million was requested on Wednesday.

While the deals could be lucrative for the traders if they’re right that no one will want to touch the metal, they could prove problematic for the LME. Since the invasion of Ukraine, it’s faced criticism that it risked becoming a dumping ground for Russian aluminum, but it’s avoided blocking Russian deliveries unilaterally on the grounds that consumers have still been showing an appetite for the increasingly large volumes of Russian stock that have been delivered on to the exchange.

In implementing the new UK sanctions, the exchange said it will be monitoring inflows and outflows to assess whether that remains the case — and traders appear to be making a bet that it won’t.

“The LME continues to monitor the market closely and remains ready to take further action should that be required, including in relation to adverse market behaviours as a result of the introduction of the recent sanctions,” a spokesperson for the exchange said in response to questions.

Whack-a-mole

Rent-share deals have become popular on the LME in recent years, particularly as the exchange introduced whack-a-mole regulations to clamp down on other lucrative and sometimes controversial ploys that traders have come up with to make money from its global warehousing network.

Most famously, during the financial crisis banks including Goldman Sachs Group Inc. and JPMorgan Chase & Co. and traders like Glencore Plc bought up huge volumes of surplus aluminum and stashed it in warehouses they owned. As demand started to recover, consumers reacted with fury as they realized it would take years to get hold of the mountains of metal the banks and traders were sitting on.

While loose supply conditions persisted in the aluminum market, another popular trade was to withdraw metal from the LME and store it much more cheaply elsewhere, capturing a spread between depressed spot prices and higher-priced futures. Typically traders held the metal in off-exchange warehouses — or private sections of LME sheds — but sometimes they even stashed it in fields.

(By Mark Burton, Archie Hunter and Jack Farchy)

Transit Trade Growth Complicates Pollution Problem in Caucasus

  • The South Caucasus region, including Georgia, Armenia, and Azerbaijan, aims to develop international trade corridors.

  • Air pollution is a significant concern in the region, with high concentrations of inhalable particles.

  • Stricter regulations, green building materials, and increased electric vehicle use are potential solutions to address pollution challenges.

Georgia, Armenia, and Azerbaijan intend to spend millions of dollars in the coming years developing international trade corridors in the South Caucasus. While such investment may boost prosperity, it is likely to exacerbate a pernicious environmental and health challenge: air pollution.

A lack of environmental regulation of industry – along with the explosive growth of automobiles – since the Soviet Union’s collapse means that many cities in the Caucasus are often engulfed in smog. The expansion of trade that regional leaders envision threatens to intensify a pollution conundrum: present efforts to improve air quality offer reason for hope that pollution can be contained, but the expansion of transit corridors threatens to undermine progress.

A recent report on global air quality showed that pollution, as measured by the level of air-borne harmful particles, known as PM2.5, is a cause for concern in the Caucasus, though conditions are not as bad as in Central Asia. Of the 134 countries and territories evaluated, Armenia ranked 31st in terms of having the highest levels of harmful particles in the air. Azerbaijan ranked 52nd and Georgia 62nd, according to the report.

“If we don’t do anything, it’s logical that it will grow faster,” said Erekle Shubitidze, a researcher at TbilisiState University’s International School of Economics, referring to the number of inhalable particles in Georgia’s air.

High concentrations of air pollution cause tangible harm – about 6.5 million deaths per year, according to a study conducted by The Lancet. The South Caucasus sits around the middle of the pack when compared to other countries’ air pollution levels. But that makes the issue no less deadly.

Take a walk along Tbilisi’s Rustaveli Avenue, and you are likely to smell one of the causes: car exhaust. Some days, the sun glows meekly through a pale haze. Conditions are worse in Yerevan and Baku, according to the air-quality report published by IQAir, an environmental technology company. 

While Georgia may be better off in pollution levels than its regional neighbors, the country struggles in comparison with levels in the European Union, which a significant majority of Georgians aspire to join. In 2018, a World Bank report on Georgia estimated ambient and indoor air pollution led to 4,000 deaths. The problem is acute in Tbilisi, where smog is trapped by mountains on all sides. The government – under pressure from watchdog groups – introduced numerous improvements in recent years. There were expanded monitoring efforts, fines for excessive car emissions, and a push to adopt electric vehicles.

While the recently implemented measures have shown progress in containing harmful emissions, new pollution stress points are appearing. For example, the government has revived plans for a new Black Sea port, and a 30-mile stretch of road built by Chinese firms is nearing completion. These are part of major years-long schemes to turn the country into a trade conduit between China and Europe. Moving forward with these plans will entail more construction projects, and, ultimately, more cargo-laden trucks on roads.

Stricter regulation is needed to maintain progress in containing pollution, Shubitidze told Eurasianet. Adopting green building materials and increasing electric vehicle use would go a long way toward addressing the environmental challenges, he added.

That is something that could work across the region. In Yerevan, the nature of pollution is both different and the same. Like Tbilisi, extensive and congested road traffic and construction are the main generators of harmful emissions, but resource extraction also plays a role. Small quarries dot the outskirts of the city where workers mine for basalt and gypsum.

“It’s a very dusty city because of the mining, because of poor soil management practices,” said Alen Amirkhanian, director of the Acopian Center for the Environment at the American University of Armenia.

“Part of the problem is also that there aren’t a lot of monitoring stations and the monitoring stations are outdated [in Armenia],” Amirkhanian added.

Armenia’s capital sees the highest rates of air pollution in the region. Yerevan was the 780th most polluted city in the world between 2017 and 2023, according to IQAir, ranking ahead of both Baku, Azerbaijan (1279), and Tbilisi (1658). 

As with Georgia, Armenia has ambitions to significantly boost its role in East-West commerce. A government plan dubbed the Crossroads of Peace aims to transform Armenia into a trade hub, a key feature of which would be an inland port and free trade zone near the city of Gyumri.

Experts are finding that the scope of pollution hazards in Azerbaijan is harder to get a handle on than other states in the Caucasus. Azerbaijani government agencies, for instance, have been slow to submit data to UN officials on sources of harmful emissions. The United Nations Economic Commission for Europe is pushing the country to determine its major sources of air pollution under the Convention on Long-Range Transboundary Air Pollution. The body said that, since 2019, “Azerbaijan has not submitted any emission inventories, a basic requirement under the Convention.”

It is a problem that stands to get worse as the government invests in developing road and rail infrastructure to facilitate North-South trade between Russia and Iran.

Like Georgia, Azerbaijan and Armenia have been grappling with how to stymie the worst pollution-related side effects of these new trade corridors. But Amirkhanian, the environmentalist, noted that, at least in Armenia, the emergence of new pollution emitters seems to outpace policy solutions. “Even if you change your stock of automobiles to newer automobiles, now you have twice [as many] automobiles,” he said. “So you still have an issue. It doesn’t go away.”

By Brawley Benson via Eurasianet.org