Donald Trump loves to put his name on things, and when it comes to the recent burst of inflation, it’s totally deserved. Trump and Republican politicians are doing their best to try to make a simple story complicated. But there is no doubt that Trump is the lead and almost sole author of the inflation […]
The post Trumpflation is here and it’s all Trump’s doing appeared first on Asia Times.
TOKYO — An unwelcome blast of US inflation is blowing across Asia’s markets. September’s hotter-than-expected price data revived concerns that the Federal Reserve will keep rates higher for longer, threatening fresh pressure on currencies, capital flows and economic growth across the region.
Last month’s 3.7% year-on-year increase in consumer prices didn’t just exceed forecasts. It ensured the Fed is on an even bigger collision course with both the bond market and US President Donald Trump’s White House. It’s arguably the last thing both Trump and US Federal Reserve Chairman Kevin Warsh wanted to see less than three weeks ahead of the mid-term elections.
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President Donald Trump says he has struck a deal with Russian President Vladimir Putin to import large amounts of diesel fuel into the United States—apparently hoping to lower fuel prices in the weeks before the midterm elections.
The exact terms of that agreement remain somewhat unclear. The White House has not said when the purchases will be made, what prices will be paid, or who will be paying (private companies or taxpayers), though the Treasury announced that it would be issuing a "temporary general license to allow the supply of Russian diesel to the global market." Reporting by The New York Times suggests that investors with ties to the administration are most likely to profit. Because diesel prices are determined by a global market, it's also far from certain that the Russian gas would make much of a dent in American prices.
However, this much is clear: If Trump follows through with this "deal," he will have violated two federal laws recently passed by Congress—one of which he signed just weeks ago.
The more significant of those two laws is the Ending Importation of Russian Oil Act, which passed the House with a 413–9 vote and was unanimously approved by the Senate. President Joe Biden signed that bill into law on April 8, 2022. The law is an outright ban on Russian energy products, including diesel fuel.
The law also lays out the process for lifting the ban on imports. The president must tell Congress that Russia has "reached an agreement to withdraw Russian forces and cease military hostilities in Ukraine" and has recognized "the right of the Ukrainian people to independently and freely choose their own government."
There is also a clear timeline for lifting the ban. Any termination of the ban requires a 90-day waiting period, during which time Congress has the opportunity to block the change.
Obviously, Russia has not withdrawn from Ukraine. Even if it had, the White House has not gone through the necessary process to notify Congress, nor waited the necessary 90 days.
The law does not allow a president to ignore it if fuel prices are high and an election is approaching. It does not allow a president to ignore it if he starts an illegal war in another part of the world that causes fuel prices to spike.
Trump's attempt to disregard that law has drawn a bipartisan rebuke from members of Congress. A group of seven senators—three Democrats and four Republicans—issued a joint statement this week saying that Trump's deal "runs directly counter to" the 2022 law.
Sen. Thom Tillis (R–N.C.), one of the senators who joined that statement, said on Sunday that there is "a legitimate case for saying the president's not following the law."
The second law at play is the Lindsey O. Graham Sanctioning Russia and Iran Act, named for the late senator and passed earlier this year. Among other things, it authorizes the president to levy tariffs of up to 100 percent against countries that buy Russian crude oil and natural gas. The intent is clear: to prevent Russia from being able to finance its war against Ukraine by selling energy commodities onto the global market. Trump signed it into law last month.
Lawmakers on both sides of the aisle have also pointed to that law in the days since Trump announced his deal to buy Russian diesel.
"Now is the time to use those sanctions to squeeze Putin's war machine, not reward a dictator by putting more money in his hands while he continues targeting and killing Ukrainian civilians," Rep. Don Bacon (R–Neb.) posted on X this week. Rep. Steny Hoyer (D–Md.) said it was "outrageous" for Trump to be buying energy from Russia after signing a bill that could be used to punish other countries for doing the same.
The White House could argue that, in this case, Trump is merely violating the spirit of the law rather than the letter of it. Even so, this is blatantly hypocritical.
The hypocrisy runs deep. The Trump administration has spent much of its second term trying to restrict trade and downplay the advice of economists who have warned that doing so would raise prices. Now, Trump is once again seeking imports as a means to ease high prices—as he has done with beef and other products. Perhaps the White House should apply this general principle more broadly, and in circumstances where doing so would not violate federal laws.
Some of the president's allies are now trying to downplay these violations of federal law. Conservative pundit Mollie Hemingway says Trump is merely trying to "put the American people first" by addressing rising gas prices.
Sorry, but no. The president is not allowed to disregard federal laws because he believes it will lower gas prices in swing states.
You can, of course, criticize those laws for being misguided. Trade is generally good, and erecting barriers to the flow of goods tends to be costly. Trump could ask Congress to repeal these laws. He cannot deliberately ignore them.
If the "deal" with Russia comes to fruition, it will further erode what little power Congress retains within America's democratic system. If a president is not bound by the laws Congress has passed, then the legislature might as well not exist at all.
The post Trump's Plan To Buy Russian Diesel Would Violate Federal Law appeared first on Reason Magazine.
Oil prices fell on Friday after European governments agreed to release emergency diesel reserves, bringing additional supplies onto a market strained by disruption in the Middle East and shortages of refined fuel.
Brent crude futures fell $1.80, or 1.76 per cent, to $100.50 a barrel during trading on 2 October, while US West Texas Intermediate dropped $2.02, or 2.18 per cent, to $90.85, according to market data reported during Friday’s trading.
The fall came as the Group of Seven agreed to release 100 million barrels of oil and petroleum products from emergency stocks over four months. The package includes a substantial release of diesel during the first 20 days.
The G7 leaders’ statement on energy security and market stability said the releases would be co-ordinated through the International Energy Agency and would take account of commitments already made earlier this year. G7 governments will also discuss whether additional diesel releases are required.
The agreement marks a rapid development from the negotiations reported earlier on Friday. As EU Today reported before the G7 meeting, Washington had been pressing European governments, particularly France and Germany, to make more of their strategic diesel stocks available.
President Donald Trump had also raised the possibility of restricting US diesel exports as his administration sought to reduce domestic fuel prices. Such a restriction would have had significant consequences for Europe because the United States has become an important supplier of diesel to the European market.
A French proposal discussed by EU governments earlier on Friday envisaged European countries releasing around 50 million barrels of diesel, alongside another 50 million barrels of crude oil from International Energy Agency members.
The eventual G7 agreement also addresses the risk of export restrictions directly. The seven governments committed themselves to avoiding restrictions on energy and energy-product exports between G7 countries and called on other producers to refrain from measures that could worsen market shortages.
For Europe, the intervention comes as diesel supplies remain physically available but prices are being pushed higher by tight conditions on international markets.
The European Commission’s Energy Union Task Force met on Friday to examine diesel supplies and prices. The Commission said EU diesel supplies remained stable for the time being, but acknowledged that prices were high because of tight global markets.
The latest intervention follows a much larger emergency action earlier this year. In March, the International Energy Agency agreed its largest-ever co-ordinated stock release, making 400 million barrels available after the Middle East conflict severely disrupted international oil markets.
Europe’s contribution to that March operation consisted largely of refined petroleum products rather than crude oil, reflecting the particular pressure facing the continent’s fuel markets.
The pressure is part of a wider European energy problem. EU Today reported this week that the Middle East conflict has added more than €100 billion to Europe’s energy import bill, despite the continent receiving no corresponding increase in the physical amount of oil and gas purchased.
European governments have already committed €17.9 billion this year to measures intended to protect households and businesses from the rise in energy costs, according to an EU Today assessment of national support measures.
Diesel represents a particular vulnerability. It remains essential for road freight, agriculture, construction and large parts of European industry, meaning sustained increases in wholesale prices can feed into transport and production costs across the economy.
The present shortage also reflects changes in Europe’s refining sector. Refining capacity has fallen over the past two decades as plants have closed, increasing dependence on imported diesel and other refined petroleum products. That dependence has become more visible since the EU sharply reduced purchases of Russian fuel following Russia’s full-scale invasion of Ukraine.
The G7 nevertheless made clear that the emergency intervention would not be accompanied by a relaxation of measures against Moscow. Leaders said they would maintain sanctions against Russia while working with the IEA and other partners to limit the effect of market disruption on fuel and commodity prices.
The EU has separately continued to tighten measures targeting Russia’s energy revenues and its so-called shadow fleet, including restrictions connected with the maritime transport of Russian oil and petroleum products. The EU’s latest sanctions package targeting Russian energy revenues was adopted in July.
Friday’s fall in oil and diesel futures indicates that traders expect the additional stocks to relieve some of the immediate pressure on supplies. European gasoil futures, the main regional diesel benchmark, also fell sharply during the day as details of the proposed releases emerged.
The G7 has asked the IEA to monitor implementation and report within 20 days, including on whether further action is required and how emergency stocks should eventually be replenished.
For Europe, the immediate objective is to contain diesel prices without compromising security of supply. The broader issue remains unchanged: reduced domestic refining capacity and heavy dependence on imported fuel leave the European economy exposed when international supply routes are disrupted.
The Saudi Ministry of Energy announced on Friday, September 11, that the East–West Pipeline across the Riyadh and Madinah regions was subjected to multiple attacks a day earlier, leading to its closure as a precautionary measure.
According to media reports, the strategic pipeline carries roughly 4 to 5 million barrels of oil per day, which equals 4% to 5% of the total global oil supply.
The Saudi Foreign Ministry clarified in a statement issued on Saturday, September 12 that the attacks were launched from Iraq by multiple drones, adding that they resulted in injuries and some damage to the pipeline. No groups have claimed responsibility for the attacks yet.
The ministry also confirmed that Saudi Arabia will not respond to the attacks at this stage, allowing the Iraqi government to take the necessary measures to prevent attacks “originating from the Iraqi territories” against Saudi Arabia and neighboring countries.
For his part, Head of Iraq’s Security Media Cell (SMC), Lieutenant General Saad Maan confirmed on Saturday that “an intelligence and security task force exerted significant effort and succeeded in locating and seizing the launcher” involved in the attacks on the Saudi pipeline within Iraqi territory.
Moreover, Maan affirmed that investigations and intelligence operations are underway to apprehend the perpetrators.
He added that the Iraqi Armed Forces approved a request from Iran to participate in the investigation regarding the attacks on the Saudi pipeline and their repercussions.
Saudi Arabia’s East–West Pipeline represents an alternative oil transportation route bypassing the volatile Strait of Hormuz.
Therefore, the temporary closure of the pipeline has severely restricted this essential alternative, pushing Brent crude oil price to hit USD 108 per barrel on Monday, September 14.
Furthermore, reports indicate that the incident will disrupt crude delivery to Europe and Asia for weeks, particularly after the Ansar Allah-led Yemeni Armed Forces expanded their control around the Bab al-Mandeb Strait.
Iran warned South Korea of serious consequences if it joins the US military efforts against it in the Strait of Hormuz and asked it to not yield to US pressure and threats to become “complicit in aggressive acts and horrific crimes” against the Iranian people.
“Iranian people are defending themselves against America’s aggressive actions, and in a situation where they are resolutely responding to America’s war crimes against women and children” any country participating in its military activities in any way “can only be regarded as directly supporting the perpetrators of the aggression,” Baghaei said in the post on X on Monday, September 7.
He underlined that the 64 years old friendly relationship between Iran and South Korea has “consistently developed on mutual respect” and his country “places great importance” to it.
Last week, South Korea had said that it was reviewing options to support US operations, including its military efforts, in support of “freedom of navigation” in the Strait of Hormuz.
South Korea said it may deploy maritime petrol aircrafts or mine detection and clearance units if it decides to do so and if the country’s parliament approves it.
The US and South Korea have a close military alliance. South Korea hosts some of the largest US military bases in the world along with over 24,000 soldiers.
US President Donald Trump last month had threatened to re-think military relations with South Korea and even ordered scaling back of the joint military exercises after accusing its government of refusing to help in its war against Iran.
The US has pressured several NATO allies for similar assistance in the Strait of Hormuz in the past with no real success.
Iran is preparing to declare a “restricted zone” beyond the Strait of Hormuz in the Persian Gulf, Mohsen Rezaei, head of Iran’s Supreme National Security Council said in a televised interview on Sunday.
The zone will start from the line where a US naval blockade is imposed on Iran and will extend into the Persian Gulf. Any vessel entering the zone will be required to coordinate their movements with the Iranian authorities or face sanctions related to insurance and future passage, Rezaei said.
Iran will also impose a complete ban on transition through the Strait of Hormuz for countries and entities that impose unilateral sanctions or carry out hostile acts against it, its Parliamentary Commission on National Security and Foreign Policy announced on Sunday.
Rezaei also claimed that the talks with Oman are finalized and Iran will soon announce the opening of a “new international corridor” in the Strait of Hormuz. The corridor will be managed by Iran.
After the US attacked several Iranian oil tankers on Saturday and Iran retaliated by claiming to attack on US warships and three ships transiting through the US sponsored route in the Strait of Hormuz on Sunday, global oil prices were on rise yet again reaching near USD 97 per barrel on Monday.
Meanwhile, Speaker of Iran’s Parliament Mohammad Baqer Ghalibaf warned the US against attempting more strikes on its oil tankers in future claiming more such strikes will lead to Iranian retaliatory attacks on infrastructure related to American gas and oil companies in the region.
Ghalibaf was responding to US Secretary of Defense Pete Hegseth who after the US strike on three of its oil tankers last week, had claimed that Iran has no defenses left to protect them and warned of more such attacks.
“The oil and gas production chain here is sprawling, accessible and exposed. American oil and gas companies across these waters and facilities share that exposure. Strike out assets and you get struck,” Ghalibaf said in a post on X on Monday.
The latest oil prices are already touching high prices recorded in July when tit-for-tat strikes began after the June 17 Memorandum of Understanding (MoU) collapsed.
With Iran’s announcement of the restricted zone in the Strait and continued strikes on ships it may go up to USD 120 per barrel, several experts warned.
NEW YORK: Oil prices climbed in early trading Wednesday, building on the previous session’s sharp gains, as overnight military exchanges between the United States and Iran escalated tensions in the Middle East and revived fears of supply disruptions through a critical global shipping chokepoint. Brent crude futures rose $1.03, or 1.1%, to $95.68 a barrel ... Read more
The post Oil prices surge as US-Iran strikes heighten supply fears appeared first on BOL News.
Oil prices rose more than 2% Monday after the United States attacked an Iranian island in the Strait of Hormuz and drew retaliation from Tehran, as the six-month-old conflict between the two countries showed no signs of easing. Brent crude futures climbed $2.21, or 2.51%, to $90.31 a barrel as of 0436 GMT. U.S. West ... Read more
The post Oil prices jump more than 2% after US and Iran trade strikes appeared first on BOL News.
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