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Oil producers’ cuts could boost gasoline prices, help Russia

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Oil producers’ cuts could boost gasoline prices, help Russia

FRANKFURT, Germany (AP) — Main oil-producing nations led by Saudi Arabia stated they’re slicing provides of crude — once more. This time, the choice was a shock and is underlining worries about the place the worldwide financial system is likely to be headed.

Russia is becoming a member of in by extending its personal cuts for the remainder of the 12 months. In concept, much less oil flowing to refineries ought to imply larger gasoline costs for drivers and will increase the inflation hitting the U.S. and Europe. And that will additionally assist Russia climate Western sanctions over its invasion of Ukraine on the expense of the U.S.

The choice by oil producers, lots of them within the OPEC oil cartel, to chop manufacturing by greater than 1 million barrels a day comes after costs for worldwide benchmark crude slumped amid a slowing international financial system that wants much less gas for journey and trade.

It provides to a minimize of two million barrels per day introduced in October. Between the 2 cuts, that’s about 3% of the world’s oil provide.

Listed below are key issues to know in regards to the cutbacks:

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WHY ARE OIL PRODUCERS CUTTING BACK?

Saudi Arabia, OPEC’s dominant member, stated Sunday that the transfer is “precautionary” to keep away from a deeper slide in oil costs.

Saudi Vitality Minister Abdulaziz bin Salman has constantly taken a cautious method to future demand and favored being proactive in adjusting provide forward of a attainable downturn in oil wants.

That stance gave the impression to be borne out as oil costs fell from highs of over $120 per barrel final summer time to $73 final month. Costs jumped after Sunday’s announcement, with worldwide benchmark Brent crude buying and selling at about $85 on Monday, up 6%.

With fears of a U.S. recession exacerbated by financial institution collapses, a scarcity of European financial development and China’s rebound from COVID-19 taking longer than many anticipated, oil producers are cautious of a sudden collapse in costs like in the course of the pandemic and the worldwide monetary disaster in 2008-2009.

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Capital markets analyst Mohammed Ali Yasin stated most individuals had been ready for the June 4 assembly of the OPEC+ alliance of OPEC members and allied producers, most prominently Russia. The choice underlined the urgency felt by producers.

“It was a shock to all, I believe, watchers and the market followers,” he stated. “The swiftness of the transfer, the timing of the transfer and the scale of the transfer had been all important.”

The goal now could be to keep off “a continous slide of the oil worth” to ranges under $70 per barrel, which might be “very damaging” for producer economies, Yasin stated.

A part of the October minimize of two hundreds of thousands barrels per day was on paper solely as some OPEC+ nations aren’t in a position to produce their share. The brand new minimize of 1.15 million barrels per day is distributed amongst nations which might be hitting their quotas — so it quantities to roughly the identical measurement minimize as in October.

Governments introduced the choice outdoors the standard OPEC+ framework. The Saudis are taking the lead with 500,000 barrels per day, with the United Arab Emirates, Kuwait, Iraq, Oman, Algeria and Kazakhstan contributing smaller cuts.

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WILL THE PRODUCTION CUT MAKE INFLATION WORSE?

It actually might. Analysts say provide and demand are comparatively effectively balanced, which implies manufacturing cuts might push costs larger in coming months.

The refineries that flip crude into gasoline, diesel and jet gas are preparing for his or her summer time manufacturing surge to satisfy the annual improve in journey demand.

Within the U.S., gasoline costs are extremely depending on crude, which makes up about half of the value per gallon. Decrease oil costs have meant U.S. drivers have seen the common worth fall from information of over $5 per gallon in mid-2022 to $3.50 per gallon this week, in line with motor membership AAA.

The cuts, if absolutely carried out, “would additional tighten an already basically tight oil market,” Jorge Leon, senior vice chairman at Rystad Vitality, stated in a analysis word. The minimize might increase oil costs by round $10 per barrel and push worldwide Brent to round $110 per barrel by this summer time.

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These larger costs might gas international inflation in a cycle that forces central banks to maintain climbing rates of interest, which crimp financial development, he stated.

Given the fears in regards to the general financial system, “the market could interpret the cuts as a vote of no confidence within the restoration of oil demand and will even carry a draw back worth danger — however that may solely be for the very quick time period,” Leon stated.

WHAT WILL THIS MEAN FOR RUSSIA?

Moscow says it can lengthen a minimize of 500,000 barrels per day by means of the remainder of the 12 months. It wants oil income to help its financial system and state funds hit by wide-ranging sanctions from the U.S., European Union and different allies of Ukraine.

Analysts assume, nevertheless, that Russia’s minimize could merely be placing the perfect face on diminished demand for its oil. The West shunned Russian barrels even earlier than sanctions had been imposed, with Moscow managing to reroute a lot of its oil to India, China and Turkey.

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However the Group of Seven main democracies imposed a worth cap of $60 per barrel on Russian shipments, enforced by bans on Western corporations that dominate delivery or insurance coverage. Russia is promoting oil at a reduction, with income sagging initially of this 12 months.

WHAT DOES THE WHITE HOUSE SAY?

White Home Nationwide Safety Council spokesperson Adrienne Watson, stated that “we don’t assume cuts are advisable at this second given market uncertainty — and we’ve made that clear.”

She famous that ”costs have come down considerably since final 12 months, greater than $1.50 per gallon from their peak final summer time” and that “we are going to proceed to work with all producers and shoppers to make sure power markets help financial development and decrease costs for American shoppers.”

The preliminary White Home response was milder than in October, when cuts got here on the eve of U.S. midterm elections the place hovering gasoline costs had been a significant challenge. President Joe Biden vowed on the time that there can be “penalties,” and Democratic lawmakers referred to as for freezing cooperation with the Saudis.

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Caroline Bain, chief commodities economist at Capital Economics, stated the cutback reveals “the group’s help for Russia and flies within the face of the Biden administration’s efforts to decrease oil costs.”

___

AP journalists Bassam Hatoum in Dubai, United Arab Emirates, and Seung Min Kim in Washington contributed.

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Jackie Farry, Nirvana Associate, Veteran Tour Manager and Frances Bean Cobain’s Former Nanny, Dies at 58

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Jackie Farry, Nirvana Associate, Veteran Tour Manager and Frances Bean Cobain’s Former Nanny, Dies at 58

Jackie Farry, an industry veteran who worked closely with Nirvana — becoming Frances Bean Cobain’s first nanny — and then was tour manager for Elliott Smith, the Jon Spencer Blues Explosion, the Lemonheads and others, died Sunday of complications from a lung disease. Farry, who had battled cancer for more than 20 years, was 58.

Farry’s industry career began at Homestead Records, where she was a receptionist for the influential indie label that was a precursor to Matador Records. She moved quickly into radio-promotion roles at Atlantic and Epic, but she quickly became a familiar and popular presence on the New York music scene and a friend to many of the bands of the era. After working with Nirvana until Kurt Cobain’s death in 1994, she was briefly host of a short-lived MTV show called “Super Rock” that was intended to replace the metal show “Headbangers’ Ball.” Later in the ’90s, Farry became a tour manager for bands like the Lemonheads, Jon Spencer Blues Explosion, Elliott Smith, Quasi, Stereolab and Quintron.

A native of New York, Farry was raised in the controversial Synanon community before relocating to Long Island. She was diagnosed with cancer in 2003 and her friends in the music industry rallied for her, with benefits headlined by such artists as the Breeders, Yeah Yeah Yeahs, TV on the Radio, Liars and Guided by Voices.

Her longtime friend and associate Janet Billig Rich told the Hollywood Reporter, “Jackie’s love for music was matched only by her sharp wit, humor, and magnetic personality. She was a beacon for friends and strangers alike, drawing people in with her infectious energy.”

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Donations in her honor can be made to LovePaws, Farry’s charity of choice.

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Incoming Trump administration given new blueprint on ways to weaken Iran: 'unique opportunity'

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Incoming Trump administration given new blueprint on ways to weaken Iran: 'unique opportunity'

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A new report shared with the Trump transition team and shown to Fox News Digital recommends drastic steps to curtail the Iranian regime just days away from the start of President-elect Donald Trump’s second term in office.

“President-elect Trump now has the unique opportunity to push back on the regime in a moment of its significant decline. By using diplomatic, informational, military, and economic means to hold Tehran accountable, he can promote regional stability and a new Middle East,” Ambassador Mark D. Wallace, CEO and founder of United Against Nuclear Iran (UANI), told Fox News Digital.

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The UANI report, titled “A 100 Day Plan for the Incoming Trump Administration on Iran” is a blueprint for the administration to employ against Iran and has been shared with the Trump transition team, according to its authors.

Heavy weapons, including ballistic missiles, air defense systems and unmanned aerial vehicles, are displayed during the 44th anniversary of the 8-year war with Iraq, which is known as “Holy Defense Week”, at Baharestan Square in Tehran, Iran, on Sept. 25, 2024. (Photo by Fatemeh Bahrami/Anadolu via Getty Images)

INSIDE ISRAEL’S DARING RAID THAT DESTROYED IRAN-FUNDED UNDERGROUND MISSILE FACTORY IN SYRIA

“Since 1979, Iran has been the world’s number one state sponsor of terrorism, the major cause of instability in the Middle East, and has brutally repressed its people with impunity,” Wallace said.

The report recommends that the incoming Trump administration take a comprehensive, whole-of-government approach across, as Ambassador Wallace said, the diplomatic, informational, military and economic sectors alongside allies to properly hold Iran accountable for its regional destabilization efforts.

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Iranian protesters carry flowers while standing in front of a giant banner depicting a portrait of Lebanon's Hezbollah Secretary General Hassan Nasrallah during a protest gathering to condemn an Israeli air strike against Hezbollah's headquarters in the suburb of Beirut and the killing of Hassan Nasrallah and an Islamic Revolutionary Guard Corps' Quds Force commander, General Abbas Nilforoushan, in Tehran, Iran, on Sept. 30, 2024.

Iranian protesters carry flowers while standing in front of a giant banner depicting a portrait of Lebanon’s Hezbollah Secretary General Hassan Nasrallah during a protest gathering to condemn an Israeli air strike against Hezbollah’s headquarters in the suburb of Beirut and the killing of Hassan Nasrallah and an Islamic Revolutionary Guard Corps’ Quds Force commander, General Abbas Nilforoushan, in Tehran, Iran, on Sept. 30, 2024. (Morteza Nikoubazl/NurPhoto via Getty Images)

Iran fears the incoming Trump administration, said co-author of the report Jason Brodsky, adding he believes there is a strategic opportunity for Washington and its allies to capitalize on that fear to advance U.S. interests.

“Rushing into premature diplomacy risks undermining that dynamic,” Brodsky, policy director of UANI, told Fox News Digital. 

The report outlines several specific policy prescriptions in order to weaken Iran and argues that the U.S. government should first build a pressure campaign against Iran which will sharpen the regime’s choices.

IRAN EXECUTES OVER 1K PRISONERS IN 2024, HIGHEST TOTAL IN 30 YEARS, REPORT SAYS

In this new policy approach, the United States should learn from Israel’s experience since Oct. 7 about how to strike the Islamic Republic militarily without triggering a wider war.

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Iranian Supreme Leader Ali Khamenei, left, and President-elect Donald Trump.

Iranian Supreme Leader Ali Khamenei, left, and President-elect Donald Trump. (AP)

“If the Israelis can do so without triggering a wider war, so can the U.S. government,” Brodsky said.

The authors assert that President-elect Trump should deliver a major policy address to warn Tehran that the U.S. would not hesitate to use military force to destroy Iran’s nuclear program if it takes steps to further advance its capabilities. The International Atomic Energy Agency reported in early December enriched uranium to weapons-grade levels. French President Emmanuel Macron said Iran’s nuclear program is nearing the “point of no return” with many seeing it as a method to build leverage against the incoming Trump administration.

Additionally, the report’s authors say the incoming Republican administration could also use targeted strikes against Islamic Revolutionary Guard Corps commanders, Quds Force and Intelligence Ministry assets inside Iran if Iran or its proxies harm Americans. Targeted strikes should also hit Iran’s repressive apparatus through cyber and kinetic means if security forces violently suppress innocent protesters, as happened in 2009 after the disputed presidential election and in 2022 following the death of Mahsa Amini, who had been arrested by the morality police for not covering her hair with a hijab.

Iran Mahsa Amini protest

Demonstrators in Iran protesting the regime in 2022. (Credit: NCRI)

U.S. strikes or retaliations against the regime, the report notes, have been non-existent or focused on the Islamic Republic’s proxies.

“That dynamic only emboldens Iranian decision-making to calculate the benefits of these operations against Americans outweigh the costs and to doubt the U.S. resolve to defend its interests. The incoming Trump administration should reverse that calculus and one way to do so is to start holding Iran’s regime responsible on Iranian soil for the terrorism of its proxies,” Brodsky explained. The U.S. should also build a military defector program and encourage political and military actors across the Islamic Republic, including within the Revolutionary Guard and other security forces, to defect from the regime. 

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IRAN’S NUCLEAR PROGRAM IS NEARING ‘THE POINT OF NO RETURN,’ FRANCE’S MACRON SAYS

A key source of Iranian revenue is provided by its vast oil exports and allows Iran to sustain its terror across the Middle East through its “Axis of Resistance” proxy networks. In 2024, Iran exported 587 million barrels of oil, an increase of 10.75% compared to the previous year due to OPEC cuts and lack of sanctions enforcement. 

Claire Jungman, co-author and director of the Tanker Tracking Program and chief of staff of UANI, told Fox News Digital that Iran’s oil exports have surged to nearly 2 million barrels per day—the highest in five years—under President Biden’s administration, reflecting weakened sanctions enforcement and the impact of billions in unfrozen assets. 

Iran rocket space

The Simorgh, or “Phoenix,” rocket launches at Iran’s Imam Khomeini Spaceport in rural Semnan province, Iran, on Friday, Dec. 6, 2024. (Iranian Defense Ministry via AP)

“The incoming Trump administration has a critical opportunity to halt Tehran’s illicit revenue streams and restore maximum pressure on the regime,” Jungman added.

Iran is the world’s leading state sponsor of terrorism and is a key source of regional Islamist terror groups including Hezbollah and Hamas, the group responsible for the Oct. 7 attacks against Israel. The State Department estimates that Iran provides some $100 million annually to Hamas and helps fund Hezbollah with about $700 million a year.

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UANI cautions against some in Western capitals who wish to seek negotiation with Tehran and views this flawed approach of endless negotiations as a way Iran can buy time and avert pressure. Ambassador Wallace said the previous maximum pressure campaign worked, and it’s time to reapply this policy as the regime faces setback after setback as it became embroiled in regional conflict with Israel after October 7th.

“With the loss of its proxies and the support of the Iranian people … the Iranian regime’s days are numbered and, inevitably, the brave Iranian people will rise against the weakened corrupt mullahs,” Wallace said.

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Lebanon President Joseph Aoun starts consultations for PM selection

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Lebanon President Joseph Aoun starts consultations for PM selection

Caretaker Prime Minister Najib Mikati and top ICJ judge Nawaf Salam seen as frontrunners.

Lebanon’s new President Joseph Aoun has begun binding consultations with members of parliament to nominate a prime minister.

Aoun’s consultations got under way at 8:15am (06:15 GMT) on Monday with a meeting with Elias Abu Saab, the deputy parliament speaker, according to the official National News Agency.

Caretaker Prime Minister Najib Mikati, who is backed by the Hezbollah-led alliance, and Nawaf Salam, a favourite of anti-Hezbollah legislators who is the presiding judge at the International Court of Justice (ICJ) in The Hague, are seen as the frontrunners.

The consultations follow Aoun’s election last week amid foreign pressure to form a government desperately needed to tackle major challenges in the country.

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Lebanon had been without a president since October 2022, run by a caretaker government amid a crushing economic crisis compounded by all-out war between Lebanese group Hezbollah and Israel.

The outcome of the parliamentary consultations is expected to emerge by the end of the day. Once the prime minister is selected, it is their job to form a new government, a process that could take months.

“The newly elected President Aoun said that he hopes the next prime minister will be a partner and not an opponent,” said Al Jazeera’s Zeina Khodr, reporting from the Lebanese capital, Beirut. “A man who has the support of the international community, and a man who is ready to carry out much-needed reforms.”

Big challenges

Lebanon has a unique power-sharing system, designed to balance power among the nation’s different communities.

The president, who must be a Maronite Christian, serves as head of state and commander-in-chief of the armed forces. Meanwhile, the prime minister must be a Sunni Muslim and has significantly more executive power than the president.

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The speaker of parliament, who leads parliamentary debates as well as playing the role of political mediator, has to be a Shia Muslim.

One of the country’s richest men, Mikati has headed the country in a caretaker capacity throughout the presidential vacuum.

Mikati said on the sidelines of the presidential vote on Thursday that he was ready to serve Lebanon “if needed”.

However, Hezbollah’s opponents see Mikati as part of an old political system that the group has within its grip.

Whoever heads Lebanon’s new government will face major challenges, including implementing reforms to satisfy international donors amid the country’s worst economic crisis in its history.

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They will also face the daunting task of reconstructing swaths of the country after the Israel-Hezbollah war and implementing the November 27 ceasefire agreement, which includes the thorny issue of disarming the Lebanese armed group.

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