Saudis Reaping Windfall Profits As Direct Result of America’s War Policies


Exclusive: Iran sanctions seen spurring more Saudi oil sales to U.S.


A view of the Khurais oilfield, about 160 km (99 miles) from Riyadh, June 23, 2008. REUTERS/Ali Jarekji

A view of the Khurais oilfield, about 160 km (99 miles) from Riyadh, June 23, 2008.

Credit: Reuters/Ali Jarekji

By Matthew Robinson and Jonathan Saul

NEW YORK/LONDON | Fri Mar 16, 2012 5:44pm EDT

(Reuters) – Saudi Arabia is preparing to extend this year’s unexpected jump in oil sales to the United States, adding to speculation about the response of the world’s top oil exporter to sanctions against Iranand a rally in prices.

The kingdom’s shipments to the United States have quietly risen 25 percent to the highest level since mid-2008, according to preliminary U.S. government data, a sizeable leap that appears at least partly related to the imminent completion of a major expansion at its joint-venture Motiva refinery in Texas.

But some say the scale of the increase, plus other U.S. data showing Gulf Coast inventories are still subdued, suggest the potential for a political dimension as well, evoking comparisons to 2008 when the OPEC kingpin was driving up production to knock oil prices off record highs near $150 a barrel.

The surge appears set to continue. Vela, Saudi Arabia’s state oil tanker company, has booked at least nine very large crude carriers (VLCCs) capable of carrying 2 million barrels of crude each from the Middle East Gulf to the U.S. Gulf since the start of March, the biggest such wave of fixtures in years, analysts say.

The pivot to the U.S. market, which bore the brunt of Saudi output curbs after 2008, is a surprise for two reasons.

For one, many analysts had believed that the kingdom’s modest output increase in recent months was bound for fast-growing Asian markets, particularly given the pressure on refiners there to reduce their imports from Iran.

Plus, it comes after a year in which U.S. crude oil imports shrank to their lowest since 1999 thanks to a dramatic boom in shale oil production and tepid demand from consumers who are making every effort to cut back as gasoline prices rise.

The White House has been scrambling for options to bring down gasoline prices — at a seasonal record high — during an election year, after concerns over an Iranian supply disruption launched benchmark Brent crude to lofty peaks over $120 a barrel not seen since the record price run of 2008.

Washington has urged ally Saudi Arabia to cover potential shortages when new U.S. and European Union sanctions are expected to reduce Iranian oil exports from July. The Obama administration has considered releasing strategic oil inventories, potentially as part of a bilateral deal with Britain.

The kingdom has stepped up efforts this week to assure edgy markets that it will make up for any oil supply disruptions at a time when Iran’s standoff with the West has begun to intensify.

"Beyond the expansion at Motiva, there has been a major public shift by the Saudis since the Iran tensions started to raise the price of oil," said Amy Jaffe, an energy policy expert at Rice University’s Baker Institute in Houston.

"Saudi Arabia and the United States are trying to show the Iranians they (the Iranians) will have little flexibility, and they shouldn’t count on the world needing all the oil that Iran produces."

Saudi output in February was up 450,000 barrels per day (bpd) from October at its highest since August.


The build appears related, at least in part, to a massive expansion project at Saudi Arabia’s 285,000-bpd Motiva Port Arthur, Texas joint-venture refinery with Shell Oil, the U.S. unit of Royal Dutch Shell.

All expansion units are expected to be in production by the end of the second quarter of this year, with the expanded refinery reaching, by the end of the year, a maximum capacity of 660,000 bpd. Motiva Enterprises began circulating feedstocks through some of the expansion units in January

Motiva declined to comment. The expansion project, budgeted at $5 billion, began in 2007, and when complete will make the refinery the largest in the United States.

"I suspect there is some seasonality to it, U.S. refiners build inventories in the first quarter and U.S. refiners start up Gulf Coast plants out of maintenance," said Jan Stuart, head of energy research at Credit Suisse in New York City.

"In addition, this year you have the Motiva expansion, which will buy a lot of crude," he said, adding the building up of 20 days worth of inventory could account for part of the increased Saudi shipments.

That would be equivalent to building up inventories of 7.5 million barrels, by a Reuters calculation, implying a need to build 100,000 bpd of stock over the first 10 weeks of the year.


Still, crude inventories in the Gulf Coast region have not grown as much as they traditionally do during the first quarter when refiners build up stocks.

Gulf Coast stocks have risen by only 10.3 million barrels — or roughly 140,000 bpd — over the 10 week period, compared with 14.2 million barrels on average for the past five years, according to EIA data. The weekly data is preliminary, and more comprehensive monthly data for January is not yet available.

While the rise in Saudi output has been well charted, the fact that the lion’s share of it appears destined for U.S. refiners will come as a surprise to many. Overall U.S. demand for foreign crude has ebbed this year as a boom in domestic and Canadian production reduces the need for imports.

The reversal of the key Seaway pipeline — which will begin running from Oklahoma to Texas by July — was expected further to temper demand for imports by helping bring more cheap crude from the Midwest to the U.S. Gulf Coast refining hub.

"We were all expecting to see U.S. imports fall for Vela, so it’s a jump at a time when we are preparing for a reversal given the Seaway pipeline," one shipping source said. "It raises the question why would they need more imports?"

Omar Nokta, managing director with investment bank Dahlman Rose & Co, said in a note on Friday that it was the first time in "several years" for Vela to book so many tankers in such a short time.


Provisional weekly data from the U.S. Energy Information Administration shows that the rise in supplies began several months ago, and outpaced gains to other consumers such as China.

U.S. imports of Saudi oil hit 1.5 million bpd in the first 10 weeks of 2012, up 300,000 bpd from the fourth quarter of 2011 and marking the largest rise in shipments since the second quarter of 2003. Saudi shipments to China in January rose only 14 percent from the year before.

Total U.S. crude imports are up only 165,000 bpd in the first 10 weeks of the year versus the fourth quarter. The EIA was not immediately able to respond to requests for an explanation of the data.

The shift also could simply be the result of restoring supplies to U.S. customers whose shipments had been cut much more deeply after prices crashed four years ago.

"Up to 2008, there was definitely a much larger rise in shipments to Asia, that’s where the demand was growing. The cuts that followed that were not proportionate," said a senior executive at a major Saudi oil customer.

"Now there’s a degree of rebalancing."

The rise in bookings to the U.S. Gulf has also tightened tanker availabilities, helping push the average earnings for VLCCs on the benchmark Middle Gulf to Japan route — the major market barometer — to their highest level in over a year to $33,205 a day, Baltic Exchange data showed.

Data shows that the Saudi crude has been priced advantageously for U.S. buyers. Official selling prices (OSPs) for U.S. buyers, which are set by the state oil firm Saudi Aramco, have fallen to a deep discount versus Asian and European refiners, according to Reuters data.

The bargain rates may have encouraged a bit more crude to move West, although industry sources say the kingdom’s largest customers with global refining systems have less flexibility to shift supplies between different regions than they have in the past.

Edward Morse, global head of commodities research at Citigroup, said that while the higher U.S. volumes could be due to Motiva, it may come as part of efforts to build up global inventories.

"I think that if you look over a longer term, the Saudis are increasing their exports to the whole world right now and not just the U.S.," Morse said.

"The Saudis are getting oil onto the market to encourage inventory building, and to show their customers they can deliver whatever is needed."

(Additional reporting by Jonathan Leff and Joshua Schneyer in New York; Editing by Dale Hudsonand Marguerita Choy)

West is on decline, high time it learnt to mind its business

US on Sri Lanka


West is on decline, high time it learnt to mind its business


Two years after the civil war in Sri Lanka ended with the decimation of the terrorist outfit Liberation Tigers of Tamil Eelam (LTTE), the United States of America is poking around the scab to reopen healing wounds. What else could be the intention of the resolution being moved by it at the United Nations Human Rights Council session in Geneva later this month?

The LTTE waged a no-holds-barred war with the state of Sri Lanka for over two decades, killing millions of people. The organisation that was founded for the cause of attaining legitimate political power sharing with the Sri Lankans went awry and indulged in ruthless killings, bomb blasts and targeted assassinations. It is public knowledge that several western nations had been arming the group. There have been muffled whispers of evangelical interest in the Buddhist majority country, combined with the geo-military position of the island nation on the Indian Ocean. It is for this reason that India, under the then Prime Minister Rajiv Gandhi offered to help Sri Lanka in the war against LTTE, by sending the IPKF (Indian Peace Keeping Force). India lost a huge number of soldiers but mid-way through the operations Sri Lanka asked India to withdraw its forces. Rajiv Gandhi and several senior Tamil leaders of Eelam, who dared to walk away from the LTTE Supremo V Pirabhakaran or speak against him, were finished off by the loyal assassination squad.

It is a fact to be borne in mind that it was Pirabhakaran and his unyielding temperament that stood in the way of an amicable, bloodless settlement of the Tamil problem. A political issue that could have been resolved with proportional representation was converted into ethnic war and genocide by the LTTE, the extremist JVP (Janata Vimukti Peramuna) and the then successive Sri Lankan government. It was the unflinching stand of the present Sri Lankan President Mahinda Rajapaksa that saw the end of one of the longest and bloodiest wars in modern world.

While accusing the Sri Lankan government of human rights violations, one must remember that the enemy was not a hapless, unarmed group of peaceful activists. The cadres of LTTE were armed to the teeth, with the latest machine guns, rocket launchers and tanks. The last few weeks of war that are under scrutiny now witnessed a pitched battle in which both sides killed and got killed unrestrained. The number of child soldiers Pirabhakaran recruited and trained has not been documented. Boys and girls were picked up at an unsuspecting age, fed on a liberal dose of LTTE literature enumerating the torture and humiliation of the Tamils by the Lankans and were prepared to ‘fight’ on the command of the well-structured LTTE ‘army’. Several thousands of Tamils were killed by the LTTE cadres for defying the leadership. But the US or any other nation did not raise the issue of war crimes then.

The tragic-comedy of the current situation is that the US, the biggest violator of human rights globally is moving a resolution against Sri Lanka. Its own track record on the issue is pathetic. Korea, Vietnam, Iraq, Afghanistan, the list is long and cruel. But not once has anyone ever charged the American government with human rights abuse.

India faces multi-pronged problem internally. Kashmir, North-East, Naxalites and Islamic extremists – these four major groups are active in anti-government campaign which takes the virulent form of attacking the state property, the killing of defence and police personnel and periodic carnage of innocent civilians. Whenever any major state offensive is launched against any of these groups, the so-called human rights activists become vocal, aggressive and shrill. The United States is playing that role globally.

It is the responsibility of the Sri Lankan government to rehabilitate the victims of the civil war. The Tamils of Sri Lanka are citizens of that country. At best, India has an interest and moral responsibility to speak for them, which India has been doing all these decades. But it makes no case for anybody else to intervene.

The heart-wrenching stories of the abuse of the rights of the Gypsies world over have not ever been heard by those sitting at the podium in the world body. Even India, which the Gypsies look at as their homeland has turned a blind eye. The accounts of the Malaysian Hindus, mostly Tamils, who are being targeted by the Islamic groups with indulgent support from the government, did not even make it to the headlines in major national dailies in India. Their representatives who came to India knocking political doors for help – to just speak on their behalf to the Malaysian government – did not get an appointment and audience with those in power here. And these are all people who have been living in their respective nations for centuries, like the Tamils in Lanka.

India should take an unequivocal stand against the resolution being backed by the US to condemn Sri Lanka. If India baulks today and adopts a ‘neutral’ position, it would find itself in the dock one day. India by its geo-political position must take a robust stand against the West interfering in issues not concerning them directly. There is no case for the US or any of the European nations to dictate to a democratically elected government or try to humiliate it in a world forum that belongs as much to us as it does to them.

Bara Looks More Like Baluchistan Everyday

[If the Army, the Army’s Lashkars and the Tehreek Taliban Pakistan (TTP) are all fighting against Mangal Bagh’s Lashkar e-Islam, does that imply that, when it gets down to it, they are all on the same side?] 

[Lashkar-i-Islam is a creation of the intelligence agencies.  It is only fitting that they are now waging war against the Pak Army (SEE:  Waging War Upon Ourselves

Before his promotion to terrorist overlord of  Bara, and potentially, all of Khyber, Mangal Bagh was a mere bus driver.  The Lashkar-i-Islam he commands began as a self-imposed religious police, brutally enforcing a warped Wahabbi version of Shariah Law that had been brought into Bara by a religious-terrorist named Haji Namdar, who had been brought in after finishing ten years of religious indoctrination in Saudi Arabia.  Namdar had created the precursor to Lashkar-i-Islam, called "Tanzim Amr bil Maroof wa Nehi Anil Munkir" (the Suppression of Vice and the Promotion of Virtue).  Lashkar was actually formed by his successor, a radical preacher Mufti Munir Shakir, whom Namdar had brought in for reinforcement.  When the feud which Shakir had started with local Berelvi leader, Pir Saifur Rahman (over Shakir’s "Radio Mullah" broadcasts) started looking like a religious war, the authorities stepped in and deported the radical Mufti from the war zone.  At that point, Shakir’s "Army of Islam" was turned over to Mangal Bagh.  Today, the TTP are waging a campaign of terror against the Lashkar and Mangal’s forces are eagerly reciprocating.  That forces the Army to step-in between the two warring factions, causing heavier casualties to all parties involved. 

There is no hope at all for Pakistan, until messes like this one are cleared-up.  Don’t forget to thank the Saudis and the CIA for every bomb blast in Khyber.] 

Strife in Bara: Militia publicly executes three ‘extremists’

Five killed in separate incidents in Bara; three handcuffed bodies found.


Three alleged activists of the Lashkar-e-Islam (LI) extremist groups were publicly executed by the Zakhakhel peace committee in the Bara subdivision of Khyber Agency on Saturday.

The local Aman Lashkar publicly shot dead three alleged LI men – Aqal Zareen, Yaqub and another man, whose name could not be ascertained, accusing them for violence in the region.

The Lashkar also arrested three other alleged LI men, one of whom was identified as Jumma Khan, from the Zakhakhel tribe.

Bomb attack

Separately suspected militants set off an improvised explosive device in the Mandikas area, killing the wives of two brothers – Yaras Khan and Sherullah – and injuring as many people from the same family.

Talking to The Express Tribune, a senior political administration official said that such blasts occur in every military operation.

Three bodies found

Meanwhile, local sources told The Express Tribune that amid the ongoing military operation, three unidentified handcuffed bodies were found on Saturday in the Yousaf Talab area populated by the Sipah tribe in Bara.

They said the law and order situation in the area has again taken a turn for the worse during the last two weeks and people mostly stay indoors.

Residents complain about problems

Several residents have complained about the collateral damage in the military operation and other problems.

Talking to The Express Tribune, Muhammad Saleem claimed that nearly 80% of the local population had evacuated the area while the rest were either restricted, or they lack the resources to move to other areas.

Misal Khan, a principal at a private school in the Akakhel area, said that the authorities should provide an opportunity to locals to shift their families to Peshawar and surrounding areas.

Senator Haji Khan Afridi, hailing from Bara, said that the local population is suffering badly. He demanded relaxation in curfew timings to let the locals evacuate from the area.

He also complained that the Khyber-Pakhtunkhwa governor and the concerned corps commander did not consult the local elected representatives before launching the operation in the area.

Published in The Express Tribune

Dozens of bullet-ridden bodies found in Khyber region

By Reuters

BARA: Villagers found 13 bullet-ridden bodies scattered around the Bara area of the northwestern Khyber tribal region near the Afghanistan border on Sunday, as Pakistani security forces step up military offensives against militants.  

Sunday’s discovery was made just two days after 12 more bodies, also bearing signs of torture and numerous bullet-wounds, were discovered in the same area, 15 km south of Peshawar.

“They were taken into custody by the paramilitary Frontier Corps a few days back from Sepah area after unknown people attacked the FC post and killed four soldiers,” a local tribesman told Reuters, requesting anonymity because he feared for his safety.

No one has acknowledged any connection with the deaths.

An official for the Frontier Corps (FC), which has taken the lead against militants in the Khyber agency, said he knew nothing about the bodies and that the men were never in the custody of the FC.

“It is possible they have been killed earlier during the military operation and their bodies recovered now,” the official said, who asked for anonymity. “The FC has been conducting military operations against the terrorists in Bara and other areas of Khyber tribal region.”

Witnesses claimed one of the slain men found on Sunday was a former commander of the banned militant organisation, Lashkar-e-Islam (LeI), which is fighting the government in the Khyber agency.

LeI is also fighting the Tehrik-i-Taliban Pakistan (TTP), or Pakistan Taliban, in the area and frequently clashes with the larger group.

Fighting in the Bara area of Khyber, which sits astride a strategic supply route for Nato forces fighting in Afghanistan, has increased markedly in the past week, with security forces conducting a search and cordon operation since Tuesday.

A curfew was imposed, but security forces’ checkposts and convoys were still being attacked by militants. Witnesses said 30 to 35 people had been killed since the operation began.

“We are investigating the incident,” said assistant political agent for Khyber, Bakhtiar Mohmand. “A few people had gone missing the first few days of the operation, we cannot confirm their identities yet.”

The government had asked women and children to evacuate the area and fighters to give themselves up.

This area of Bara is the hometown of militant leader Mangal Bagh who heads LeI. The Pakistan military and security forces have been conducting sporadic operations in the area since November 2011.

More than 50 dead in gunfights, air strikes in Orakzai, Kurram


At least 25 militants and four soldiers were killed in Bara, Khyber Agency in gunfights between March 12 and 18, the official said.

“Four security forces personnel embraced martyrdom and 12 others were wounded in gunfights which left 25 militants dead,” he said.

The official said that no militant had been killed in custody and added that the military operation was directed at the militants belonging to the Taliban-linked Laskhar-e-Islam group that is led by warlord Mangal Bagh.

The group has been involved in recent suicide attacks and kidnapping in Peshawar, which borders Khyber, he said.

Two local intelligence officials confirmed the clashes and death toll.

Independent verification of the incident is not possible as access to the area is restricted by the military.

Some 18,000 people fled their homes in Khyber in October last year amid fears of a fresh outbreak of fighting between the army and militants linked to the Pakistani Taliban.

Pakistan’s seven tribal districts near the Afghan border are rife with homegrown insurgents and are strongholds of Taliban and al Qaeda operatives.

Militants have killed more than 4,800 people across Pakistan since government troops raided a mosque in Islamabad in July 2007.