“We are defending your industry while you’re destroying ours.”

Is Trump Really, Finally Ready To Punish Saudi Dictatorship?

 

WASHINGTON/LONDON/DUBAI (Reuters) – As the United States pressed Saudi Arabia to end its oil price war with Russia, President Donald Trump gave Saudi leaders an ultimatum.

FILE PHOTO: U.S. President Donald Trump speaks with Saudi Arabia’s Crown Prince Mohammed bin Salman during a family photo session with other leaders and attendees at the G20 leaders summit in Osaka, Japan, June 28, 2019. REUTERS/Kevin Lamarque/File Photo

In an April 2 phone call, Trump told Saudi Crown Prince Mohammed bin Salman that unless the Organization of the Petroleum Exporting Countries (OPEC) started cutting oil production, he would be powerless to stop lawmakers from passing legislation to withdraw U.S. troops from the kingdom, four sources familiar with the matter told Reuters.

The threat to upend a 75-year strategic alliance, which has not been previously reported, was central to the U.S. pressure campaign that led to a landmark global deal to slash oil supply as demand collapsed in the coronavirus pandemic – scoring a diplomatic victory for the White House.

Trump delivered the message to the crown prince 10 days before the announcement of production cuts. The kingdom’s de facto leader was so taken aback by the threat that he ordered his aides out of the room so he could continue the discussion in private, according to a U.S. source who was briefed on the discussion by senior administration officials.

The effort illustrated Trump’s strong desire to protect the U.S. oil industry from a historic price meltdown as governments shut down economies worldwide to fight the virus. It also reflected a telling reversal of Trump’s longstanding criticism of the oil cartel, which he has blasted for raising energy costs for Americans with supply cuts that usually lead to higher gasoline prices. Now, Trump was asking OPEC to slash output.

A senior U.S. official told Reuters that the administration notified Saudi leaders that, without production cuts, “there would be no way to stop the U.S. Congress from imposing restrictions that could lead to a withdrawal of U.S. forces.” The official summed up the argument, made through various diplomatic channels, as telling Saudi leaders: “We are defending your industry while you’re destroying ours.”

Reuters asked Trump about the talks in an interview Wednesday evening at the White House, at which the president addressed a range of topics involving the pandemic. Asked if he told the crown prince that the U.S. might pull forces out of Saudi Arabia, Trump said, “I didn’t have to tell him.”

“I thought he and President Putin, Vladimir Putin, were very reasonable,” Trump said. “They knew they had a problem, and then this happened.”

Asked what he told the Crown Prince Mohammed, Trump said: “They were having a hard time making a deal. And I met telephonically with him, and we were able to reach a deal” for production cuts, Trump said.

Saudi Arabia’s government media office did not respond to a request for comment. A Saudi official who asked not to be named stressed that the agreement represented the will of all countries in the so-called OPEC+ group of oil-producing nations, which includes OPEC plus a coalition led by Russia.

“Saudi Arabia, the United States and Russia have played an important role in the OPEC+ oil cut agreement, but without the cooperation of the 23 countries who took part in the agreement, it would not have happened,” said the Saudi official, who declined to comment on the discussions between U.S. and Saudi leaders.

The week before Trump’s phone call with Crown Prince Mohammed, U.S. Republican Senators Kevin Cramer and Dan Sullivan had introduced legislation to remove all U.S. troops, Patriot missiles and anti-missile defense systems from the kingdom unless Saudi Arabia cut oil output. Support for the measure was gaining momentum amid Congressional anger over the ill-timed Saudi-Russia oil price war. The kingdom had opened up the taps in April, unleashing a flood of crude into the global supply after Russia refused to deepen production cuts in line with an earlier OPEC supply pact.

On April 12, under pressure from Trump, the world’s biggest oil-producing nations outside the United States agreed to the largest production cut ever negotiated. OPEC, Russia and other allied producers slashed production by 9.7 million barrels per day (bpd), or about 10% of global output. Half that volume came from cuts of 2.5 million bpd each by Saudi Arabia and Russia, whose budgets depend on high oil-and-gas revenues.

Despite the agreement to cut a tenth of global production, oil prices continued to fall to historic lows. U.S. oil futures dropped below $0 last week as sellers paid buyers to avoid taking delivery of oil they had no place to store. Brent futures, the global oil benchmark, fell towards $15 per barrel – a level not seen since the 1999 oil price crash – from as high as $70 at the start of the year.

The deal for supply cuts could eventually boost prices, however, as governments worldwide start to open their economies and fuel demand rises with increased travel. Whatever the impact, the negotiations mark an extraordinary display of U.S. influence over global oil output.

Cramer, the Republican senator from North Dakota, told Reuters he spoke to Trump about the legislation to withdraw U.S. military protection from Saudi Arabia on March 30, three days before the president called Crown Prince Mohammed.

Asked whether Trump told Saudi Arabia it could lose U.S. military support, U.S. Energy Secretary Dan Brouillette told Reuters the president reserved the right to use every tool to protect U.S. producers, including “our support for their defense needs.”

The strategic partnership dates back to 1945, when President Franklin D. Roosevelt met with Saudi King Abdul Aziz Ibn Saud on the USS Quincy, a Navy cruiser. They reached a deal: U.S. military protection in exchange for access to Saudi oil reserves. Today, the United States has about three thousand troops in the country, and the U.S. Navy’s Fifth Fleet protects oil exports from the region.

Saudi Arabia relies on the United States for weapons and protection against regional rivals such as Iran. The kingdom’s vulnerabilities, however, were exposed late last year in an attack by 18 drones and three missiles on key Saudi oil facilities. Washington blamed Iran; Tehran denied it.

THIRTEEN ANGRY SENATORS

Trump initially welcomed lower oil prices, saying cheap gasoline prices were akin to a tax cut for drivers.

That changed after Saudi Arabia announced in mid-March it would pump a record 12.3 million bpd – unleashing the price war with Russia. The explosion of supply came as governments worldwide issued stay-home orders – crushing fuel demand – and made clear that U.S. oil companies would be hit hard in the crude price collapse. Senators from U.S. oil states were infuriated.

On March 16, Cramer was among 13 Republican senators who sent a letter to Crown Prince Mohammed reminding him of Saudi Arabia’s strategic reliance on Washington. The group also urged Commerce Secretary Wilbur Ross to investigate whether Saudi Arabia and Russia were breaking international trade laws by flooding the U.S. market with oil.

On March 18, the senators – a group that included Sullivan of Alaska and Ted Cruz of Texas – held a rare call with Princess Reema bint Bandar bin Sultan, the Saudi ambassador to the United States. Cramer called the conversations “brutal” as each senator detailed the damage to their states’ oil industries.

“She heard it from every senator; there was nobody that held back,” Cramer told Reuters.

The Saudi embassy did not respond to requests for comment.

Cramer said the princess relayed their comments to officials in Saudi Arabia, including the energy minister. The senators told the princess that the kingdom faced rising opposition in the Senate to the Saudi-led coalition that is waging a war in Yemen against Houthi rebels.

Saudi and U.S. officials have said the Houthis are armed by Iran, which Tehran denies. The backing of Senate Republicans over Yemen had proved crucial for Saudi Arabia last year. The Senate upheld Trump vetoes of several measures seeking to end U.S. weapons sales and other military support to Saudi Arabia amid outrage over the Yemen conflict, which has caused more than 100,000 deaths and triggered a humanitarian crisis.

Cramer said he made a phone call to Trump on March 30, about a week after he and Sullivan introduced their bill to pull U.S. troops from Saudi Arabia. The president called Cramer back the same day with Energy Secretary Brouillette, senior economic adviser Larry Kudlow and U.S. Trade Representative Robert Lighthizer on the call, the senator said.

“I said the one person that you don’t have on the call that can be very helpful is Mark Esper,” the defense secretary, Cramer recounted, saying he wanted Esper to address how U.S. military assets in Saudi Arabia might be moved elsewhere in the region to protect U.S. troops.

The Pentagon did not respond to a request for comment on whether Esper was involved in discussions of pulling military assets out of Saudi Arabia.

BENDING THE KNEE

Trump’s oil diplomacy came in a whirlwind of calls with Saudi King Salman, Crown Prince Mohammed and Russian President Vladimir Putin starting in mid-March. The Kremlin confirmed Putin’s conversation with Trump and said they discussed both oil supply cuts and the coronavirus pandemic.

On the April 2 call with Prince Mohammed, Trump told the Saudi ruler he was going to “cut them off” the next time Congress pushed a proposal to end Washington’s defense of the kingdom, according the source with knowledge of the call. Trump also publicly threatened in early April to impose tariffs on oil imports from Saudi Arabia and Russia.

After the conversation with the Saudi crown prince, and another the same day with Putin, Trump tweeted that he expected Saudi Arabia and Russia to cut output by about 10 million barrels, which “will be GREAT for the oil & gas industry!”

Riyadh and Moscow later confirmed they had restarted negotiations.

On April 3, Trump hosted a meeting at the White House with senators Cramer, Cruz, and Sullivan, and oil executives from companies including Exxon Mobil Corp, Chevron Corp, Occidental Petroleum Corp and Continental Resources.

During the public portion of the meeting, Cramer told Trump that Washington can use the billions of dollars it spends defending Saudi Arabia on other military priorities “if our friends are going to treat us this way.”

The prospect of losing U.S. military protection made the royal family “bend at the knees” and bow to Trump’s demands, a Middle Eastern diplomat told Reuters.

After prolonged and fractious negotiations, top producers pledged their record output cut of 9.7 million bpd in May and June, with the understanding that economic forces would lead to about 10 million bpd in further cuts in production from other countries, including the United States and Canada.

Trump hailed the deal and cast himself as its broker. “Having been involved in the negotiations, to put it mildly, the number that OPEC+ is looking to cut is 20 Million Barrels a day…” he tweeted shortly after the deal.

Riyadh also took credit. Saudi energy minister Prince Abdulaziz told Reuters at the time that the crown prince had been “instrumental in formulating this deal.”

Reporting by Timothy Gardner and Steve Holland in Washington, Dmitry Zhdannikov in London and Rania El Gamal in Dubai; additional reporting by Alexandra Alper and Humeyra Pamuk in Washington, and Marwa Rashad in Riyadh; writing by Michael Georgy; editing by Richard Valdmanis and Brian Thevenot

Is Trump Really, Finally Ready To Punish Saudi Dictatorship?

Trump Could Use ‘Nuclear Option’ To Make Saudi Arabia Pay For Oil War

US Saudi flags

President Donald Trump is considering all options available to him to make the Saudis pay for the oil price war as the crash that followed has done significant damage to the U.S. oil industry

With last month having seen the indignity of the principal U.S. oil benchmark, West Texas Intermediate (WTI), having fallen into negative pricing territory, U.S. President Donald Trump is considering all options available to him to make the Saudis pay for the oil price war that it started, according to senior figures close to the Presidential Administration spoken to by OilPrice.com last week. It is not just the likelihood that exactly the same price action will occur to each front-month WTI futures contract just before expiry until major new oil production cuts come from OPEC+ that incenses the U.S. nor the economic damage that is being done to its shale oil sector but also it is the fact that Saudi is widely seen in Washington as having betrayed the long-standing relationship between the two countries. Right now, many senior members on Trump’s closest advisory circle want the Saudis to pay for its actions, in every way, OilPrice.com understands.

This relationship was established in 1945 between the U.S. President Franklin D. Roosevelt and the Saudi King at the time, Abdulaziz, on board the U.S. Navy cruiser Quincy in the Great Bitter Lake segment of the Suez Canal and has defined the relationship between the two countries ever since. As analysed in depth in my new book on the global oil markets, the deal that was struck between the two men at that time was that the U.S. would receive all of the oil supplies it needed for as long as Saudi Arabia had oil in place, in return for which the U.S. would guarantee the security of the ruling House of Saud. The deal has altered slightly since the rise of the U.S. shale oil industry and Saudi Arabia’s attempt to destroy it from 2014 to 2016 in that the U.S. also expects the House of Saud to ensure that Saudi Arabia not only supplies the U.S. with whatever oil it needs for as long as it can but also that it also allows the U.S. shale industry to continue to function and to grow.

Related: Could Brent Crude Oil Prices Ever Fall Into Negative Territory?

For the U.S., if this means that Saudi Arabia loses out to U.S. shale producers by keeping oil prices up but losing out on export opportunities to U.S. firms then that is just the price that the House of Saud must pay for the continued protection of the U.S. – politically, economically, and militarily. As U.S. President Donald Trump has made clear whenever he has sensed a lack of understanding on the part of Saudi Arabia for the huge benefit that the U.S. is doing the ruling family: “He [Saudi King Salman] would not last in power for two weeks without the backing of the U.S. military.” Trump has a very good point, as it is fair to say that without U.S. protection, either Israel or Iran and its proxy operatives and supporters would very soon indeed end the rule of the House of Saud.

Aside from just withdrawing all such support from the Saud family right now, there are other options available to the U.S. as interim measures, although some are more practical than others. Early in the oil price war, Trump stated that “I will do whatever I have to do… to protect… tens of thousands of energy workers and our great companies,” and added that plans to impose tariffs on Saudi Arabia’s oil exports into the U.S. were “certainly a tool in the toolbox.” From a practical volumes perspective, putting tariffs on Saudi oil rather than Russian oil would make sense from two key perspectives. First, the U.S. imports around 95 per cent more oil from Saudi than it does from Russia, so sanctioning Russian oil would have little effect on the U.S.’s supply glut that is overhanging its already-stretched domestic storage facilities. Second, Russia is in much better economic shape than Saudi to handle any shocks to its oil-related streams of revenue, with a budget breakeven oil price of US$40 per barrel of Brent rather than Saudi’s US$84 per barrel point.

Second, there is also the fact that Saudi currently provides one of the few large-scale sources of sour crude (including the benchmark Arab Heavy) that is available to the U.S., which is essential to its production of diesel, and to which purpose WTI is less suited. Certainly much of the U.S.’s Gulf Coast refinery system is geared towards using sourer crude, having invested heavily in coking systems and other infrastructure to better handle heavier crudes from the Middle East in recent decades. The other major historical sources of this for the U.S. are not in a position to fill the gap, with U.S. sanctions still imposed on oil imports from Venezuela, Mexican flows unreliable, and Canada’s pipeline capacity to the U.S. not able to handle any more more exports south until the long-delayed Keystone pipeline is up and running at some point in 2023.

In a U.S. presidential election year, the last thing that a U.S. president wants is increasing diesel prices or shortages making a coronavirus-hit economy even worse. It is a fact that since the end of the First World War, the sitting U.S. president has won re-election 11 times out of 11 if the U.S. economy was not in recession within two calendar years ahead of an election whilst presidents who went into a re-election campaign with the economy in recession over the same time-frame won only once out of seven.

Related: Oil Prices Crash 24% As Storage Fears Mount

This said, it may be that Trump will use the threat of such tariffs on Saudi Arabia, as his mercurial reputation may work to convince the Saudis that he is unpredictable enough to impose such taxes, regardless of the short-term economic consequences. Even as it stands, he needs to do something as around 44 million barrels of Saudi crude are expected to reach the U.S. over the next four weeks, according to oil industry and shipping data. This is around four times the most recent four-week average, according to EIA records, and it is mostly due to be delivered to the already overwhelmed Cushing delivery point. Republican Senator Kevin Cramer of North Dakota, who has advised Trump on energy issues, has been calling on the White House to take action to stop the very large crude carriers from unloading, and several senators and congressmen have threatened to vote to withhold military aid to Saudi Arabia. Trump, for his part, has so far only said that he will “look at it,” referring to stopping these new imports.

Given the burgeoning ill-feeling towards the Saudis amongst the U.S.’s two legislative houses – from an already high base – sources in the Presidential Administration say that a forceful, but private, reiteration of the threat of the ‘No Oil Producing and Exporting Cartels Act’ (NOPEC) Bill direct to King Salman, circumventing his son Crown Prince Mohammed bin Salman, might do the trick in convincing the Saudis to dramatically increase the contextually paltry output cut last agreed with the Russians. As highlighted by OilPrice.com, the pressure for Trump to finally sign off the NOPEC Bill has been growing from the second that the Saudis began the latest oil price war.

Specifically, the NOPEC Bill would make it illegal to artificially cap oil (and gas) production or to set prices, as OPEC, OPEC+, and Saudi Arabia do. The Bill would also immediately remove the sovereign immunity that presently exists in U.S. courts for OPEC as a group and for each and every one of its individual member states. This would leave Saudi Arabia open to being sued under existing U.S. anti-trust legislation, with its total liability being its estimated US$1 trillion of investments in the U.S. alone. The U.S. would then be legally entitled to freeze all Saudi bank accounts in the U.S., seize its assets in the country, and halt all use of U.S. dollars by the Saudis anywhere in the world (oil, of course, to begin with, is denominated in U.S. dollars). It would also allow the U.S. to go after Saudi Aramco and its assets and funds, as it is still a majority state-owned production and trading vehicle, and would mean that Aramco could be ordered to break itself up into smaller, constituent companies that are not deemed to break competition rules in the oil, gas, and petrochemicals sectors or to influence the oil price.

The Bill came very close indeed to being passed into law when in February of last year, the House Judiciary Committee passed the NOPEC Act, which cleared the way for a vote on the Bill before the full House of Representatives. On the same day, Democrats Patrick Leahy and Amy Klobuchar and – most remarkably – two Republicans, Chuck Grassley and Mike Lee, introduced the NOPEC Bill to the Senate. Its progress was only halted after President Trump stepped in and vetoed it when the Saudis did what he told them to do (at that point, to produce more to keep oil prices under US$70 per barrel of Brent), but the option is still available for a relatively quick turnaround on turning it into law.

By Simon Watkins for Oilprice.com

GLOBAL ECONOMIC COLLAPSE REVEALS THE COMPLETE FAILURE OF NEO-LIBERAL CAPITALISM

GLOBAL ECONOMIC COLLAPSE REVEALS THE COMPLETE FAILURE OF NEO-LIBERAL CAPITALISM

Global Economic Collapse Reveals the Complete Failure of Neo-Liberal Capitalism

ILLUSTRATIVE IMAGE

Written by Dr. Leon Tressell exclusively for SouthFront

  • Fitch Ratings, ‘Unparalleled Global Recession Underway’
  • Economist Sven Heinrich, ‘Central banks are weapons of economic mass destruction.’

As each day passes by data pours in revealing the immense economic damage caused by the Coronavirus pandemic. Most politicians and economic pundits will put the blame for up the economic hurricane, blasting tens of millions into unemployment, on Coronavirus lock downs. Fitch Ratings has given a brief snapshot of the unfolding economic catastrophe which it predicts will last well into the 2020s:

“World GDP is now expected to fall by 3.9% in 2020, a recession of unprecedented depth in the post-war period. This is twice as large as the decline anticipated in our early April GEO update and would be twice as severe as the 2009 recession.”

“The decline in GDP equates to a USD2.8 trillion fall in global income levels relative to 2019 and a loss of USD4.5 trillion relative to our pre-virus expectations of 2020 global GDP. Fitch expects Eurozone GDP to decline by 7%, US GDP by 5.6%, and UK GDP by 6.3% in 2020.”

Yet at the beginning of this year the financial media and political classes around the world were making rosy forecasts how we were going to experience moderate economic growth this year built upon solid economic foundations. There was no cause for worry or alarm just let global capital work its magic and trickle-down economics would ensure living standards would rise for all.

Fast forward 4 months and a global health pandemic has revealed how shallow, brittle and unstable were the economic foundations of the neo-liberal economic order that has been heralded as such a success since the Reagan-Thatcher era of the 1980s. These foundations were built upon infinitely low interest rates, an exponential rise in debt both public and private (sending global debt over the $250 trillion mark) and a massive increase in social and economic inequality. Alongside this, has been the intense exploitation of nations in the developing world and the use of regime change wars as naked resource grabs which cement the neo-liberal economic model in position.The world economy was slowing down during 2019 and heading towards a global recession. Japan’s economy had already entered recession territory in the last quarter of 2019, meanwhile PMI data from China and Germany indicated that they were hovering just outside recession territory.The global economy at the end of 2019 was teetering on the brink and just needed a catalyst or pin to pop the everything bubble which has seen massive inflation in the prices of paper assets across the globe ranging from stocks and bonds to derivatives such as collateralized loan obligations.

The anaemic economic growth experienced by global capitalism since the last financial crisis, which was a mere 12 years ago, has been based upon a gigantic expansion of the global money supply as central banks and governments mistakenly believe that the only way to sustain our debt fuelled economic system was to create ever more debt.

The last 12 years since the 2008 global financial crisis have witnessed an unparalleled wealth transfer from the working classes to the billionaire class which wields immense political influence over governments across the world. Central bank stimulus programs i.e. quantitative easing together with historically low interest rates fuelled a speculative bonanza which has pushed financial markets to all-time highs across the globe.

Meanwhile, governments across the world have sought to give the hard pressed billionaire class a helping hand by cutting capital gains, income and corporation taxes across the board. President Trump’s $1 trillion tax give away to the economic elites in 2017 is the most egregious example of this phenomena.

At the same time, wages for billions of ordinary people have stagnated or fallen whilst welfare benefits and health care have declined. We now have the utterly surreal situation whereby 26 billionaires control as much wealth as the poorest half of humanity amounting to over 3.8 billion people.

The working and middle classes together with the underemployed poor of the developing world were made to pay for the costs of the 2008 global economic crisis. Once the Coronavirus pandemic has finally burned itself out the working people of this world will be confronted with an economic depression which will rival and indeed may exceed in severity that of the 1930s. Governments across the board will once again seek to make ordinary people pay for the cost of the gigantic debts incurred by government and central bank bailouts.

In a desperate effort to prop up their system and protect the interests of their own class central bankers and corporate politicians across the globe are presiding over yet another wealth transfer that benefits the richest 1% in society. Bloomberg has noted how over $8 trillion has been printed out of thin air by global central banks and governments to prop up their debt fuelled system. The bulk of this horde of fiat money has gone to service the needs of Wall Street and its counterparts in London, Paris Frankfurt, Shanghai et cetera.The Wall Street Journal has openly acknowledged this truth in an editorial:

“The Fed may feel all of this is essential to protect the financial system’s plumbing and reduce systemic risk until the virus crisis passes, but make no mistake the Fed is protecting Wall Street first. The goal seems to be to lift asset prices, as the Fed did after the financial panic, and hope that the wealth effect trickles down to the rest of the economy.”

As the 2020s progress massive wealth and health inequalities, hunger and poverty will lead large numbers of people to question the hyper financialised economic system whose sole motive is to protect the interests of the 1%.

The American dominated monetary system which gives preferential treatment to the empire and its allies is in decline. Its decline will be exacerbated by the twin hammer blows of the Coronavirus pandemic and the global economic depression now unfolding.

During the coming decade the make the world will become an even more unstable place as the hegemonic power of our era seeks to maintain its dominant position in the global economy at the expense of other nations. The contradictions and tensions between the United States and its rival China will be greatly exacerbated during the next period. As we saw in the 1930s once these economic contradictions and tensions reach breaking point then the superpowers of the day have few course of action open to them beyond war or appeasement of their rival.Yet during the 1930s there were instances where the onward march to war could have been averted. If Republican Spain had defeated Franco’s fascist insurgency then the momentum towards war would have been slowed. It would have greatly strengthened the Popular Front government in France and halted the appeasement policies that allowed Nazi Germany to grow in strength like a cancerous tumour.
During the next decade there will no doubt be other such instances where the onward march to war can be averted.

The Seven-Step Path From Pandemic To Totalitarianism

Authored by Rosemary Frei via Off-Guardian.org,

There are just seven steps from pandemic declaration to permanent totalitarianism – and many jurisdictions are about to start Step 5…

As if it was planned in advance, billions of people around the globe are being forced step by rapid step into a radically different way of life, one that involves far less personal, physical and financial freedom and agency

Here is the template for rolling this out.

STEP 1

A new virus starts to spread around the world. The World Health Organization (WHO) declares a pandemic.

International agencies, public-health officials, politicians, media and other influential voices fan fear by focusing almost exclusively on the contagiousness of the virus and the rising numbers of cases, and by characterizing the virus as extremely dangerous.

Within a few days governments at national and local levels also declare states of emergency. At lightning speed they impose lock-down measures that confine most people to their homes – starting with closing schools – and shut down much of the global economy. World markets implode.

The stunned, fearful and credulous public – convinced over the previous few years that their bodies do not have the natural ability to react to pathogens by producing antibodies that confer long-lasting immunity – largely complies willingly.

The first weekly virtual class on local emergency and crisis responses to COVID19 is held for mayors and other city officials around the world. Coordinated by a handful of American organizations in the academic, medical, financial, political and transportation spheres, the classes feature guests ranging from Barack Obama to Bill Gates.

STEP 2

National, state/provincial and municipal leaders, as well as public-health officials, start daily press briefings. They use them to pump out frightening statistics and modelling asserting the virus has the potential to kill many millions.

Most of this information is hard to decipher and sheds little real light on the natural course of the virus’s spread through each geographic area.

Officials and media downplay or distort inconveniently low death tolls from the virus and instead focus on alarming statistics produced by compliant academics, social-media influencers and high-profile organizations.

The main message is that this is a war and many lives are at stake unless virtually everybody stays at home. Mainstream media amplify the trope that the world is at the mercy of the virus.

Simultaneously, central banks and governments hand out massive amounts of cash largely to benefit the big banks. And they bring in giant private-sector financial firms to manage the process despite these global companies’ very poor track record in the 2008-2009 crash. Governments also rapidly start to create trillions of pounds’ worth of programs that include compensating businesses and workers for their shutdown-related losses.

STEP 3

There is a concerted effort by all levels of government and public health to very rapidly ramp up testing for viral RNA, along with production of personal protective equipment.

They push aside the need for regulation, including quality standards and independent verification of tests’ rates of accuracy, by insisting that fast approval and roll-out are imperative for saving lives.

Models are released that predict snowballing of numbers of cases, hospitalizations and deaths even under best-case scenarios.

At about the same time, public-health officials significantly loosen the criteria for viral infections, outbreaks and deaths, particularly in the oldest members of society. That increases the numbers of cases and deaths ascribed to the new pathogen.

The media continue to clamour for more testing and for severe punishment of people who aren’t completely compliant with the lock-down measures.

As a result, there’s little backlash as police and military with sweeping new powers enforce these measures and give stiff penalties or even jail terms to those who disobey orders. States also monitor with impunity massive numbers of people’s movements via their cellphones.

Vast human resources are focused on tracking down people who have had contact with a virus-positive individual and confining them to their homes. Thus the portion of the public exposed to the virus remains relatively small.

It also contributes to social isolation. Among many effects, this enables those in control to even further erase individual and collective choices, voices and power.

STEP 4

When the numbers of cases and deaths start to plateau, local officials claim it’s too early to tell whether the virus has finished passing through their population and therefore, restrictive measures must continue.

An alternative narrative is that if such measures aren’t kept in place there will be a resurgence of cases and deaths. Yet another is that the continuing climb in elderly persons’ deaths means all bets are off for the time being.

They admit that initial models incorrectly predicted there would be a tsunami of cases, ICU admissions and deaths. However, they assert more time is needed before it can be determined whether it’s safe to loosen some of the restrictions and let children return to school or adults go back to work.

Officials do not try to calculate the overall skyrocketing cost to their populations and economies of the shut-downs and other measures against, nor do they discuss what cost level may be too high.

They and powerful media organizations also push for the massive virus-testing over-capacity to be used to surveil the general population for viral DNA in their bodies. At the same time, the roll-out begins of widespread blood testing for antibodies to the virus.

Meanwhile, new data are published showing the virus has a high capacity to mutate. Scientists and officials interpret this as meaning a larger medical arsenal will be needed to combat it.

Image source: The Spectator

STEP 5

About two or three weeks later, the dramatic increase in testing for viral DNA produces the desired goal of a significant upsurge in the number of people found positive for the virus.

Public-health officials add jet fuel to the surge by adding to their case and death tallies the large number of people who are only suspected – and not lab-test-confirmed – to have had an infection. Politicians and public-health officials tell the populace this means they cannot return to their jobs or other activities outside the home for the time being.

Governments work with public-health agencies, academics, industry, the WHO and other organizations to start to design and implement immunity-passport systems for using the results of the widespread antibody testing to determine who can be released from the lock-downs. This is one of many goals of the seven steps.

Meanwhile, government leaders continue to highlight the importance of vaccines for besting the virus.

STEP 6

Large-scale human testing of many different types of antivirals and vaccines begins, thanks to a concerted push from the WHO, Bill Gates and his collaborators, pharmaceutical and biotech companies, governments and universities.

Large swaths of the population don’t have the antibodies to the virus because they’ve been kept from being exposed to it; they eagerly accept these medications even though they’ve been rushed to market with inadequate safety testing. They believe these medical products offer the only hope for escaping the virus’s clutches.

STEP 7

Soon the new virus starts another cycle around the globe – just as influenza and other viruses have every year for millennia. Officials again fan the flames of fear by positing the potential for millions of deaths among people not yet protected from the virus.

They rapidly roll out virus and antibody testing again, while companies sell billions more doses of antivirals and booster vaccines.

Governments simultaneously cede control of all remaining public assets to global companies. This is because local and national governments’ tax bases were decimated during Step 1 and they’re virtually bankrupt from their unprecedented spending in the war against the virus in the other steps.

The overall result is complete medicalization of the response to the virus, which on a population level is no more harmful than influenza.

This is coupled with the creation of permanent totalitarianism controlled by global companies and a 24/7 invasive-surveillance police state supported by widespread blossoming of ‘smart’ technology.

The key players repeat the cycle of hysteria and massive administration of antivirals and booster shots every few months.

And they implement a variation of steps 1 to 7 when another new pathogen appears on the planet.

Sounds far-fetched? Unfortunately, it’s not.

With the arrival of COVID19 many countries quickly completed Steps 1, 2 and 3.

Step 4 is well under way in a large number of jurisdictions.

Step 5 is on track to start in early May.

World Shipping Grinds To A Screeching Halt

Oil Tankers Surround California With Nowhere to Unload

 

(Bloomberg) — Oil tankers carrying enough crude to satisfy 20% of the world’s daily consumption are gathered off California’s coast with nowhere to go as fuel demand collapses.

Almost three dozen ships — scattered in waters from Long Beach to the San Francisco Bay — are mostly acting as floating storage for oil that’s going unused as the coronavirus pandemic shutters businesses and takes drivers off the road. Marathon Petroleum Corp.’s refinery in Martinez, California, has been idled and others, including Chevron Corp.’s El Segundo refinery, have curtailed crude processing as the state orders residents to stay at home.

The more than 20 million barrels of crude is the highest volume of crude to ever float off the West Coast at one time, according to Paris-based Kpler SAS, which tracks tanker traffic. About three quarters of those tankers are holding oil in storage, meaning they have been floating steadily for seven days, also a record.

Storage has become increasingly scarce as a growing supply glut collides with collapsing fuel demand. As traditional tanks have filled, oil has been pushed onto tankers to float off Singapore, the U.S. Gulf Coast and, now, the U.S. West Coast.

The slowdown in oil deliveries into California was already becoming evident last quarter, when 38.8 million barrels of crude was delivered into Long Beach, down from 42 million barrels a year earlier, according to Port of Long Beach data.

The Seaexpress, a tanker that normally carries fuel, is currently holding crude for Royal Dutch Shell Plc. for at least a month in Puget Sound, Washington, after data on the ships draft indicated it loaded up at the company’s Anacortes refinery.

(Adds Port of Long Beach data in second to final paragraph)

[EDITOR’S NOTE: included unusual image of tug boats (light blue) at anchor up and down the Mississippi, Ohio and Missouri Rivers…another indicator of the huge hit now being absorbed by the US shipping industry.]

Global Food Chain Breakdown Anticipated from Covid Economic Disruption

[ Ship Crews Stuck in Lockdown Strain Global Supply Chains]

[Pandemic could cause famines of ‘biblical proportions’]

Global Food Exports Paralyzed by Growing Port Problems

shipping containers
File Photo: hxdyl / Shutterstock

By Jen Skerritt, Leslie Patton and Emele Onu (Bloomberg)

The port backups that have paralyzed food shipments around the world for weeks aren’t getting much better. In fact, in some places, they’re getting worse.

In the Philippines, officials at a port that’s a key entry point for rice said earlier this week the terminal was at risk of shutting as thousands of shipping containers pile up because lockdown measures are making them harder to clear. Meanwhile, curfews in Guatemala and Honduras, known for their specialty coffees, are limiting operating hours at ports and slowing shipments. And in parts of Africa, which is heavily dependent on food imports, there aren’t enough workers showing up to help unload cargoes.

The port choke-points are just the latest example of how the virus is snarling food production and distribution across the globe. Trucking bottlenecks, sick plant workers, export bans and panic buying have all contributed to why shoppers are seeing empty grocery store shelves, even amid ample supplies.

Food moves from farm to table through a complicated web of interactions. So problems for even just a few ports can ripple through to create troubling slowdowns. For example, wheat grown in Europe can be shipped off to India, where it’s processed into naan bread for eventual export into the American market. Disruptions along the way are causing heavy delays.

And there’s the threat that things could get much worse if port problems spread. Just a handful countries, for instance, export the bulk of the world’s rice and wheat, staple sources of calories. Soybeans from South America help keep the planet’s livestock fed, and the vast majority of cocoa supplies are shipped out of small section of West Africa.

Even countries like the U.S., a key food exporter, depend on imports for things like wine, spices, cheese and out-of-season produce — that’s how you can make avocado toast year-round.

U.S. frozen-foods company Saffron Road relies on Indian shipments for naan and other products. A three-week lockdown on the nation’s 1.3 billion people has brought transportation of goods within its borders to a near halt, and the government sparked confusion when it told all major ports that the virus was a valid reason to halt some operations.

Saffron Road may be forced to look for other suppliers if the disruptions continue much longer, said Chief Executive Officer Adnan Durrani.

“It’s uncharted territory,” Durrani said.

Still, in some parts of the world earlier port disruptions have already improved.

China is past the worst of its problems. At the height of the nation’s outbreak, thousands of containers of frozen pork, chicken and beef were piling up at major ports after transport disruptions and labor shortages slowed operations. The logjam also created a dearth of containers elsewhere in the world, which was then compounded by the fact that vessels weren’t making trips out from the Asian nation with manufactured goods. Those issues have since cleared up as the country went back to work.

In Brazil, the world’s top exporter of soybeans, beef, coffee and sugar, shipments are now running at a normal pace. Companies brought in extra empty refrigerated containers to ease a shortage that disrupted meat shipments. The nation also managed to export record volumes of soybeans in March after the government intervened to stop a strike threatened by port workers who were worried about their safety.

“Brazil’s export volumes are so big that any minor issue must be solved very quickly. Otherwise, it may lead to logistic bottlenecks in all the world,” said Sergio Mendes, head of the nation’s grain export group known as Anec.

But with the disease spreading, container issues are popping up in other regions. The sturdy boxes, often made of steel and usually measuring somewhere between 20 feet (about 6 meters) to 50 feet in length, are constantly sent back and forth across the planet with goods. That flow has been heavily disrupted as the virus slows manufacturing and cripples demand for some products. The Port of Los Angeles, for example, saw a 31% drop in volume in March compared with a year ago as retailers scale back orders.

Food exporters are being forced to wait longer for incoming shipments to be able to empty and refill vessels with their goods. That’s the case in Europe, where operations are running more or less normally, but the container squeeze is causing delays, according to Philippe Binard, general delegate of Freshfel Europe, a produce association.

It’s also a problem in Canada after some shipping routes were canceled by carriers because of lower demand for manufactured goods.

“The outbound capacity is really starting to diminish,” said Mark Hemmes, president of the Edmonton, Alberta-based Quorum Corp., a company hired by the federal government to monitor Canada’s grain-transportation system.

Across the globe in Nigeria, the problem is too many containers, which are piling up and clogging the ports. Workers who would normally be clearing the congestion are facing difficulties coming in as the nation’s lockdown shut public transportation. Banks near the ports are closing, making it harder to process receipts and clearing documents.

With food stuck in containers floating at the docks, it’s exacerbating shortages and driving up prices.

“The ports are jam-packed,” Tony Nwabunike, president of the Association of Nigerian Licensed Customs Agents, the union that represents workers who clear the ports. “The main reason is that there is no movement now. Even those of us that have been given orders to go to the ports as essential service providers, we are not accessing the ports because transportation remain skeletal,” and not all workers have the necessary paperwork to show they are essential employees, he said.

“Police are on the road, so people are scared. There is harassment everywhere.”

Even as some of these issues start to ease, there’s also concern over the possibility of port workers getting sick. Employees in close proximity will have to be quarantined if they are exposed, and there’s the threat of contagion. Hubs like Singapore and Shanghai have halted crew transfers to prevent the spread of the virus.

In Australia, two workers at Port Botany, one of the country’s biggest container ports, tested positive for Covid-19, it was confirmed this week. A further 17 workers went into self isolation for 14 days.

The threat of sick workers is top of mind for Paul Aucoin, executive director of the Port of South Louisiana, the largest tonnage port district in the U.S. The virus has already forced some security personnel to self-isolate, and vessel crews are no longer allowed on shore in an effort to stem the spread, he said.

“I fear we’re going to lose some workers, and when you lose workers it gets harder to keep the same pace,” Aucoin said. “We are going to see a slowdown.”

–With assistance from Tatiana Freitas, Marvin G. Perez, Ruth Olurounbi, Megan Durisin, Claire Jiao, James Thornhill, Isis Almeida, Jenny Leonard and Aaron Clark.

© 2019 Bloomberg L.P