Trafigura halts oil trade with Venezuela

Reuters: Global commodities firm Trafigura has decided to stop trading oil with Venezuela due to U.S. sanctions on the OPEC nation’s energy sector, a source with direct knowledge of the matter said.

The decision will come as a blow to Caracas as Swiss-based Trafigura has a long-standing arrangement with state-run PDVSA to take Venezuelan crude and, in exchange, supply the Latin American country with refined products.

Washington imposed fresh sanctions on PDVSA last month to cut off a key source of revenue for President Nicolas Maduro. The move came after congress head Juan Guaido invoked constitutional provisions to become interim president, arguing that socialist Maduro’s re-election last year was a sham.

Last year, trading company Trafigura directly took 34,000 barrels per day (bpd) of Venezuelan crude and products, which were mostly resold to U.S. and Chinese refineries, according to internal PDVSA trade documents seen by Reuters.

Trafigura will stop business with PDVSA after completing a small number of already-concluded trades, the source said.

Due to the size of Venezuela’s oil-for-loan agreements with China and Russia and the weight of previous U.S. sanctions, cash-strapped PDVSA has become increasingly reliant on intermediaries to export its crude and import refined products.

PDVSA did not immediately respond to a request for comment.

Trafigura is due to load two cargoes of Venezuelan crude before the end of February, the source with direct knowledge and a shipping source said.

It was not immediately clear whether these two tankers were the last of the already-concluded trades, or how many - if any - product tankers would be sent in return.

For the trading firm, the decision means giving up a source of crude supply for Russia-backed Indian refiner Nayara Energy, in which Trafigura holds a near 25 percent stake.

Nayara would still be able to buy Venezuelan crude through Russia’s Rosneft and other intermediaries.

The U.S. sanctions limit U.S. refiners to paying for Venezuelan oil by using escrow accounts that cannot be accessed by Maduro’s government. Foreign firms that use the U.S. financial system for oil trading or U.S. units are similarly restricted, cutting off avenues for PDVSA to collect revenue.

In an effort to ease domestic fuel shortages, PDVSA’s imports skyrocketed last year. Its own refining system is hobbled by technical failure, a lack of investment, delayed maintenance and insufficient crude supply.

In the last three months of 2018, Venezuela exported about 1.45 million bpd of crude and products. Trading houses lifted 225,000 bpd of that, according to the PDVSA documents and Refinitiv Eikon data.

Exports to the United States, Venezuela’s primary export customer, have since dried up, as well as those to other destinations, with loaded tankers left stranded off Venezuelan ports. 

Green New Deal is good economics

The Hill: After years of failing to pass a carbon tax, climate hawks are now rallying behind a bold new proposal for tackling global warming. Known as the Green New Deal, this economic stimulus package for the planet promises to dramatically cut carbon emissions through government spending on clean energy jobs, technologies, and infrastructure. The main selling point of the Green New Deal has been its politics. While carbon pricing has long been touted as the most cost effective policy for reducing emissions, it has struggled to gain legislative traction. By contrast, advocates of the Green New Deal believe their proposal can build a winning coalition by reframing climate policy as a story of economic growth and opportunity.

A Green New Deal is not just good politics. It is good economics. Society can combat climate change by using existing clean technologies to cut emissions today or by innovating new clean technologies to cut emissions in the future. We need both strategies to address global warming. Every second that we delay in reducing our carbon footprint imposes costs on ourselves and on countless future generations. If we want to avoid climate catastrophe, we need to make deep cuts in emissions soon. On the other hand, the challenges and costs of relying solely on current technologies to address climate change are prohibitively high. We need investments in clean innovation to make it cheaper to reduce emissions in the future.

We could achieve the twin goals of slashing emissions and spurring innovation by putting a very high price on greenhouse gases. Carbon taxes can encourage industries to both reduce their footprints and develop cheaper clean technologies. However, carbon pricing by itself is not the most efficient climate policy. As we explain in a recent paper, the cheaper and faster approach for our society is to combine a moderately sized carbon tax with significant federal spending on the development and deployment of clean technologies. While carbon pricing is the most cost effective way to reduce emissions today, government subsidies are the most cost effective way to advance clean technologies tomorrow.

The intuition behind all this is simple. Policies work best when they are narrowly tailored to the behavior that they seek to alter. Thus, if we want markets to produce more clean innovation, we should reward innovators rather than penalize polluters in the hopes that doing so will indirectly induce them to produce innovation. The benefits of directly encouraging clean innovation are striking. Economists have estimated our society can save more than $1.4 trillion a year if governments used a combination of taxes and subsidies, rather than taxes only, to address climate change.

In short, good economics calls for the type of broad federal spending on clean innovation that the Green New Deal promises to deliver. Of course, the effectiveness of the proposal at spurring innovation will depend on its design, the exact details of which have yet to be ironed out. The package should increase funding for early stage clean energy research, as this kind of basic science is usually too risky to attract private investors. The Green New Deal should also include subsidies for the adoption and deployment of clean technologies, such as tax credits for clean energy investment and manufacturing. These types of policies that help emerging technologies scale up and mature can be powerful drivers of clean energy innovation.

Critics will undoubtedly argue that we cannot afford the Green New Deal. This line of attack, however, ignores the costs of inaction. While the Green New Deal will not be cheap, its price pales in comparison to the damage that unchecked climate change will inflict on the economy. This argument also ignores the savings that will result from the push toward clean energy innovation under the Green New Deal. The development of cheaper clean technologies should more than offset the costs of the stimulus package.

Opponents will also claim that the government is a bad venture capitalist, and that a Green New Deal will pour taxpayer dollars into clean energy boondoggles. While concerns about government waste are certainly real, they can be avoided through smart policy design. The government can encourage innovation without favoring particular clean technologies or companies by enacting neutral research and development tax credits.

The ideal economic climate policy does include carbon pricing. But we cannot let the perfect be the enemy of the good. Even if the government cannot enact the best policy for cutting emissions today, it can still use the best policy for advancing clean innovation tomorrow. The Green New Deal pushes climate policy into uncharted political waters, but it does so based on sound economic theories. If we want to save the planet for the least amount of money, we need the Green New Deal, and we need it now.

Quentin Karpilow is a law clerk in the federal judiciary. Zachary Liscow is an economist and a professor at Yale Law School who has served on the staff of the White House Council of Economic Advisors. The views are their own.

At 40, Iran’s decaying Islamic Republic is showing its age

By Jason Rezaian

The Washington Post: On Feb. 11, 1979, an aging Shiite cleric, who had returned from long exile just 10 days earlier, seized power in Tehran. Ayatollah Ruhollah Khomeini’s founding of the Islamic Republic of Iran ushered in a new phase of tumult, confusion and terror in the Middle East that has lasted to this day.

Now, as Iran’s Islamic revolution enters middle age, having weathered countless challenges, it finds itself on the wobbliest ground yet.

The Islamic Republic is not on the verge of collapse, as some are predicting. Nor is it in the midst of a rebirth.

In fact, like so many others before it, the regime is going through an identity crisis of its own making. The further it gets from the revolutionary moment of 1979, the more it sounds like an old man repeating the same stories to adult children who have grown impatient.

Iran was the first country in the modern era to embark on a unique experiment: a system of governance supposedly rooted in Islam and mechanisms of democracy. Judging by current circumstances, Iran could also become the first country to see that experiment’s compete failure and demise. But when?

The people of Iran saw through theocratic rule long ago. Yet it remains unclear when the reign of the mullahs will expire.

Iranians want a freer, secular future that’s integrated into the world order, specifically the global economy, but foreign adversaries and the regime’s domestic partners — a network of mini-oligarchs, essentially — are standing in the way.

These 40 years have not been easy on Iranians. Current circumstances — including tough sanctions from the United States, misadventures in the region and the obstinance of the country’s leaders — suggest that the next few years could be even harder.

From its earliest days, the Islamic Republic presented a spectacle of violence and fear. Show trials and mass executions followed Khomeini’s ascension to power. Militant students stormed the U.S. Embassy in Tehran and held 52 American diplomats hostage for 444 days. Iraqi dictator Saddam Hussein invaded Iran, sparking an eight-year war that did more than anything else to exacerbate the sectarian divides that still haunt the region.

All the while, though, Iran’s shaky concept of rule by Koranic law was bolstered by attention to more worldly concerns, extending the system’s power within its own borders. Leaders bought a measure of loyalty from the populace by using the country’s massive oil wealth to fund a wide range of public services. But that didn’t mean Iranians necessarily bought into the belief system that provided a foundation for the regime.

Its most loyal subjects — often people whose were most devastated by the war with Iraq — received favorable treatment, while the system’s dissenters were quashed by execution, imprisonment or exile.

This ruthless approach went against the natural inclinations of one of the Middle East’s most educated and sophisticated societies. But the regime remained viable because of an unspoken understanding: It subsidized a standard of living replete with nearly free access to utilities, basic food sources, medical care, education. These resources weren’t the best in the world, but they weren’t too shabby, either. People improved their lives where and how they could. When the opportunity presented itself, many left for life abroad.

As the years passed, the authorities mostly stayed out of people’s personal lives, especially when they came to understand they could capitalize on and profit from habits that were officially outlawed. Alcohol, satellite dishes and now Internet access are officially outlawed or limited, but the black market in each is controlled by regime insiders.

What resulted from this hypocrisy was a society that was publicly pliant but defiant behind closed doors. As long as the petrodollars flowed, it was an easy situation to control.

Iran is again experiencing rocky times. The Trump administration will tell you that sanctions have again pushed the regime to the brink, but that’s not the whole story.

The reality is that Iranian society is under pressure from all directions, domestic as well as foreign.

What Iranian officials won’t tell you about is the growing wealth disparity, the depravity of a society conditioned to look out for No. 1.

These realities are enough to make Iranians one of the most forsaken peoples on Earth. The sanctions and screeds emanating from Washington — usually as uninformed as they are disingenuous — only compound the challenges ordinary Iranians face. Meanwhile, it is the morally bankrupt regime and its quiet partners within Iranian society who profit.

The current system is directly responsible for the plight of women, ethnic and religious minorities and the country’s LQBTQ communities. We can also blame much of the environmental degradation on the regime and the greed of its members.

Iran’s biggest adversaries — Saudi Arabia and Israel, along with much of the U.S. political establishment — fund and shape the conversation on Iran in Washington. We should not welcome lobbyists for the Islamic Republic to this turf, but we should seek to see completely independent, transparent, authentic and representative Iranian voices involved in the debate over the future of U.S. policy toward Tehran. Right now, there are none.

Revolution's birthday cake

Saudi official denies kingdom was involved in leak of Bezos' private texts

Politico: A top Saudi Arabian official on Friday denied the kingdom was involved in the leak of Amazon CEO Jeff Bezos' private text messages and photos to the National Enquirer tabloid.

"Absolutely not," Adel Al-Jubeir, Saudi's minister of state for foreign affairs, when asked by "Face the Nation" moderator Margaret Brennan about potential Saudi involvement, in an interview to be broadcast Sunday. "This sounds to me like a soap opera. I've been watching it on television and reading about it in the paper. This is something between the two parties. We have nothing to do with it."

In an extraordinary public statement posted to Medium on Thursday, Bezos said an investigation he directed into how the Enquirer obtained private messages he exchanged with Lauren Sanchez, with whom he was reported to be having an affair, had angered David Pecker, CEO of American Media, Inc., which owns the Enquirer, in part because "the Saudi angle seems to hit a particularly sensitive nerve."

Bezos further pointed to reports that Pecker was looking for business opportunities in Saudi Arabia.

The world's richest person, Bezos also owns the Washington Post, whose publisher and editorial board have been critical of the kingdom since columnist Jamal Khashoggi was murdered inside the Saudi consulate in Istanbul, Turkey, on Oct.18.

While not explicitly stated in his blog post, Bezos seemed to suggest a connection with the leaking of his messages and the Post's coverage of the kingdom.

When asked about the reports Pecker explored business in his country, al-Jubeir said that "as far as I'm aware," Pecker and AMI had no contact with Saudi government officials during its search.

"We ... maybe some of our citizens read The National Enquirer when they're in the United States," al-Jubeir told Brennan. "Other citizens watch the soap opera unfold on television but that's it."

In a statement released Friday, AMI defended its proposal to publish a nude photo of Bezos and other private pictures if Bezos did not end his counter-investigation of the company. AMI pledged to investigate the matter internally.

President Donald Trump and his administration have insisted on maintaining ties to Saudi Arabia after Khashoggi's death. On Friday, Trump missed a deadline imposed by a bipartisan group of senators to identify Khashoggi's killers and determine if the U.S. should impose sanctions on them.

Top Saudi officials, including al-Jubeir, have characterized Khashoggi's death as a rogue action that was carried out without the knowledge of the crown prince.

Why Trump and the Republicans are terrified of transparency

By Paul Waldman, Opinion writer

The Washington Post: When they run for president, many candidates pledge to have “the most transparent administration in history.” Sometimes they mean it and sometimes they don’t, but you can at least give Donald Trump credit for not making that promise in 2016. He couldn’t be bothered to pretend to value transparency and had every intention of keeping his doings as secret as possible.

Now, Democrats are in a position to demand answers and documents from the administration. And that has left the entire Republican Party working to clamp down on information in as many ways as possible, lest the public get too close a look at what the administration is really up to.

Let's begin here:

    Acting Attorney General Matthew G. Whitaker said he will not appear before Congress on Friday without assurances that he won’t be subpoenaed — giving Democrats a deadline of 6 p.m. Thursday to respond.

    Whitaker’s move came shortly after the House Judiciary Committee voted along party lines to give its chairman the authority to subpoena Whitaker’s testimony, should he not appear or answer lawmakers’ questions.

“I’ll come, but only if you promise not to demand that I come” is certainly a novel offer. Of course, if Whitaker is going to voluntarily testify, the possibility of subpoenaing him is moot. It’s almost as though he’s laying the groundwork to charge the committee with being mean to him, then refuse to come after all. And Justice Department representatives say that even if he does testify, he’ll refuse to answer questions about his conversations with the president.

Which in ordinary circumstances might be justifiable, but, in this case, those communications are at the heart of the matter of whether he should have recused himself from overseeing the Russia investigation. We certainly have a right to know whether Whitaker gave President Trump any assurances that he would use his position to tamp down the investigation or suppress its final report, which the president would prefer. But Whitaker won’t say — if he deigns to answer questions at all.
Trump dodges question on whether Whitaker should testify

President Trump said Acting Attorney General Matthew G. Whitaker is a "very fine man," when asked about Whitaker withholding his Feb. 8 testimony from Congress. (The Washington Post)

Speaking of special counsel Robert S. Mueller III, it does appear that he’s at least approaching the end of his investigation, which raises the question of whether the public will get to see whatever he produces at its end. Trump’s nominee to be the new attorney general, William P. Barr, hedged on the question in his confirmation hearing, saying, “I don’t know what, at the end of the day, what will be release-able.” And the White House is preparing to assert executive privilege in an attempt to keep as much as possible of Mueller’s report hidden from the public.

That’s despite the fact that in a new CNN poll, 87 percent of those surveyed — including 80 percent of Republicans — say the Mueller report should be made public.

Let’s be honest here: The administration would like to keep the Mueller report hidden because they’re afraid of what will happen if the public sees it. Fighting for secrecy might itself be politically damaging, but they no doubt calculate that the damage from the report itself will be much worse, so if they can keep it secret, they’ll come out ahead.

Which is not coincidentally the same calculation Trump made when he decided to go against decades of tradition and refuse to release his tax returns. Yes, he would take a political hit for it, but it would be far worse if the public actually saw them.

The problem is now that Democrats have control of the House, they can demand the returns from the IRS as long as they have a legitimate purpose for doing so, and they have dozens of legitimate purposes. So Trump’s allies in Congress have come to the conclusion that a president being forced to show us his returns is an unconscionable threat to the privacy of every American >>>

Maduro Sold 40% of Venezuela's Gold Amid Cash Crunch

Bloomberg: President Nicolas Maduro blew through more than 40 percent of Venezuela’s gold reserves last year in a desperate bid to fund government programs and pay millions to bondholders.

The government sold a total of 73 tons of gold to two firms in the United Arab Emirates and another in Turkey, opposition lawmaker Carlos Paparoni told reporters in Caracas on Wednesday. That drained reserves to about 110 tons at the end of last year from 184 tons, according to a person with knowledge of the situation, who corroborated Paparoni’s data.

Maduro raided the central bank’s vaults of the 2.34 million ounces of gold (worth about $3.1 billion at current spot prices) as debt piled ever higher and financing options dried up after the U.S. imposed sanctions against his regime. Amid an international push to persuade the authoritarian ruler to cede power to a transitional government, the opposition is also seeking to thwart further gold sales to prevent a ransacking of the country during Maduro’s final days in power.

About 24 tons of the gold was sold to Istanbul’s Sardes Kiymetli Madenler SA, according to Paparoni. The company got regulatory approval to operate as a member of Borsa Istanbul’s Precious Metals Market on Dec. 26, 2017, just days after signing its first contract with Venezuela’s central bank, according to documents obtained by Bloomberg. A company official declined to comment.

Some 27.3 tons went to the UAE’s Noor Capital, which was identified by U.S. Senator Marco Rubio as orchestrating a gold transaction with Venezuelan authorities that collapsed last week following growing international condemnation. After the plans came to light, Noor said it would refrain from conducting business with Venezuela until the situation “stabilizes.”

The rest of the gold sales last year went to Goetz Gold of the United Arab Emirates, Paparoni said.

Calls to Noor Capital and Goetz Gold seeking comment after normal business hours weren’t immediately returned.

The Vicious Cycle of Terrorism

Donald Trump 2019: Same lying racist he was last year

By Amanda Marcotte

Salon: Well, one good thing came out of the State of the Union that Donald Trump delivered on Tuesday night: It ended the government shutdown. To be more precise, the shutdown ended because of Trump's endless, yawning need to have his sneering mug photographed as he defiles the institutions of the world's oldest existing democracy. There is little doubt that when House Speaker Nancy Pelosi told Trump that his camera time was canceled until the shutdown ended, that hastened his capitulation.

Unfortunately, Tuesday's speech showed that Trump has learned nothing, not that this is any surprise. Trump spent the first 72 years of life learning nothing, so there was no reason to think he would start now. Sure enough, the speech showed that Trump is the same person he has been for the past three years, and likely his whole life: A liar, a racist and a man who is willing to ruin the country for no other reason than power and personal gain.

Before the speech, White House aides told reporters that Trump would deliver a positive message, focused on bipartisanship and moving forward. They leaked quotes about how "we can break decades of political stalemate" and "bridge old divisions, heal old wounds, build new coalitions, forge new solutions, and unlock the extraordinary promise of America’s future."

All the skepticism was warranted. There's not a living soul on the planet that believes Trump gives a single hoot about bridging divisions, and anyway Trump spent the hours beforehand on Twitter making petty remarks about Senate Minority Leader Chuck Schumer and demonizing immigrants as criminals. Sure enough, the opening remarks involved Trump saying "a Republican agenda or a Democrat agenda." a phrasing based in the longstanding right-wing habit of refusing to call the Democratic Party by its name.

Surprising no one, Trump continued his multi-year effort to mainstream talking points taken straight from white supremacist websites. For instance, Trump argued that "politicians and donors push for open borders while living their lives behind walls and gates and guards," a direct echo of the white supremacist accusation that diversity is something elites force on working white people, while remaining in privileged enclaves themselves.

The speech dwelled at length on Trump's efforts to convince the public that a surge of crime is coming over the border. This campaign that has reached the point where you get the sense Trump believes that Latino immigrants are the only source of crime in the United States.

Trump brought out a family who had members murdered by immigrants and declared dramatically, "No one should ever have to suffer the horrible heartache that they have had to endure."

Indeed, murder is bad. But Trump's implication that murder is a direct result of immigration is simply false. Immigrants, both documented and undocumented, commit fewer crimes than native-born Americans. If Trump wants less murder in communities, as he claims, then he should welcome more immigrants. If he wants less sexual violence, as he claims, he should recommend that sex offenders — particularly those caught on tape confessing to sexual assault, as he was — be arrested and convicted at higher rates. Perhaps he could turn himself over to the police to set an example.

As befits Trump's ever-trolling nature, this speech was constructed as an elaborate troll of the left. Repeatedly, Trump pretended to care about progressive values such as criminal justice reform or women's equality in the workplace, and then he unleashed virulently racist and misogynist rhetoric that revealed his true values.

He played this trick with the immigration issue. Right before a lengthy diatribe painting dark-skinned immigrants as an invading horde bringing violence and disease — he literally invoked racist fears about "hospitals that are so crowded you can’t get in" to denounce nonwhite immigrants — Trump bragged about bipartisan criminal justice reform. The scheme wasn't sophisticated. The  criminal justice issue becomes a cover story so Trump can claim not to be a racist when people point out how extraordinarily racist this speech was.

He ran a similar game with women's rights. Trump made some routine remarks pretending to care about the surge in women's employment and the record-setting numbers of women in Congress. And then he followed it up by launching a nasty rhetorical attack on reproductive rights, by joining in the festival of demagoguery about late-term abortions.

"Lawmakers in New York cheered with delight upon the passage of legislation that would allow a baby to be ripped from the mother’s womb moments before birth," he claimed, demonizing women who terminate pregnancies for medically necessary reasons, and calling for a law that would likely condemn many women to serious illness or death.

This gambit, using late-term abortions -- which are extremely rare and always medically indicated -- as a stalking horse to ban all abortions, showed Trump's true colors: He opposes women's equality and is happy to use mandatory childbirth as a weapon to cripple their ability to control their economic and family lives for themselves.

Luckily, the Democratic women in Congress had a good time undermining Trump's efforts to troll liberals with his feigned concern for women's equality. When he mentioned the gains made by women, the mostly white-clad female Democrats exploded into cheers and dancing in the seats, which created a visual reminder that the female representation in Congress comes almost exclusively on the Democratic side — and there is no way to separate support for reproductive rights and support for women's equality >>>