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Italy Quits Belt And Road Plan As Europe Rethinks China Relations

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Italy, the only G7 country to join China’s flagship Belt and Road Initiative, will abandon the global infrastructure program when its contract expires next year, marking the latest symptom of Europe’s growing hostility against Beijing and its worldwide ambitions.

Giorgia Meloni, the prime minister, acknowledged the much-anticipated action on Thursday. She made the promise during her election campaign last year in response to complaints that the agreement with China that a previous administration had negotiated in 2019 had not been particularly beneficial to Italy’s economy.

On the other hand, Meloni emphasized that Rome could maintain excellent relations with Beijing outside of the program, which has increased China’s worldwide power while raising concerns that it has burdened some nations with unmanageable debt.

italy

Italy Quits Belt And Road Plan As Europe Rethinks China Relations

“I believe we should… improve our cooperation with China on trade and the economy,” Meloni told reporters, according to Reuters, in her first public comments on the matter following rumors that Italy had informed China of its decision not to renew the treaty when it ends in March 2024.

“The tool of the (BRI) … has not produced the results that were expected,” she said in a statement.

Italy’s decision coincides with the European Union’s campaign to “de-risk” its supply chains from China and secure critical technologies after the bloc’s designation of Beijing as a “systemic rival” in 2019.

These tensions were on display Thursday during a conference in Beijing between EU leaders and Chinese leader Xi Jinping, as the two sides grappled with issues ranging from trade to Russia’s war in Ukraine – with little progress made.

When asked about the Italian pullout during a normal news briefing on Thursday, China’s Foreign Ministry maintained a cautious tone, citing the “enormous appeal and global influence of Belt and Road cooperation.”

“China vehemently opposes attempts to smear and sabotage Belt and Road cooperation, or to incite bloc confrontation and division,” said spokesperson Wang Wenbin, without mentioning Italy specifically.

italy

Italy Quits Belt And Road Plan As Europe Rethinks China Relations

China has signed collaboration agreements with what it claims are more than 140 countries for the initiative, which has invested hundreds of billions of dollars in roads, ports, airports, and bridges, mostly in the Global South over the last decade.

Italy’s decision to join the scheme in 2019 was generally interpreted as a diplomatic victory for Beijing, prompting criticism from Washington and Brussels.

This summer, Italian Defense Minister Guido Crosetto called the 2019 decision “wicked,” citing growing trade disparities between the two countries in an interview with Corriere della Sera newspaper.

Last year, China imported $26.9 billion in Italian goods, up from $21.4 billion in 2019. According to China’s customs data, Chinese exports to Italy increased from $33.5 billion to $50.5 billion during the same time.

Former China-friendly Prime Minister Giuseppe Conte, who joined the scheme, blasted the withdrawal in an interview on his Facebook page, saying it was made for “ideological reasons” and risked “scuppering” future Italian export growth.

italy

Italy Quits Belt And Road Plan As Europe Rethinks China Relations

In an interview with the Italian news outlet Fanpage earlier this year, the Chinese Ambassador to Italy, Jia Guide, stated that a “reckless” choice to withdraw from the accord would have a “negative” influence on cooperation.

Italian politicians were eager to tread gently in their withdrawal, with Meloni frequently implying that good relations with China could be maintained outside of the Belt and Road initiative. She has also refuted allegations that the US persuaded her to abandon the scheme.

Rome withdrew as a delegation of top European Union officials arrived in Beijing for the first EU-China meeting in four years.

Chinese leaders saw the summit as a critical opportunity to calm tense relations with Europe, which Beijing sees as a major potential counterweight in its competition with the United States.

“We should not regard each other as rivals simply because our systems are different,” Xi told the visiting leaders, according to China’s official readout. “We should not reduce cooperation because competition exists, or engage in confrontation because there are disagreements.”

italy

Italy Quits Belt And Road Plan As Europe Rethinks China Relations

European Commission President Ursula von der Leyen and European Council President Charles Michel challenged Xi and Chinese Premier Li Qiang on their countries’ massive trade deficits and “unfair competition,” while Li urged the EU to be “prudent” in its use of “restrictive” economic policies.

Even though the summit looked to achieve nothing regarding fundamental problems, Von der Leyen stated that both parties agreed “that it is in our mutual interest to have balanced trade relations.”

The EU will seek “concrete progress following these discussions,” according to a statement issued after the meeting.

Source – CNN

World

RUSSIA: The Kremlin Has Never Been Richer – Thanks To A US Strategic Partner

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Russia is entering its third year of war in Ukraine with an unprecedented amount of cash in government coffers, bolstered by a record $37 billion in crude oil sales to India last year, according to a new analysis, which concludes that some of the crude was refined in India and then exported to the United States as oil products worth more than $1 billion.

This cash flow, which ultimately benefits Moscow, stems from India raising its purchases of Russian crude by more than 13 times its pre-war levels, according to a study by the Centre for Research on Energy and Clean Air (CREA) shared exclusively with CNN. According to the study, it amounts to US strategic partner New Delhi stepping in to replace crude purchases by Western purchasers, which have been decreased due to sanctions imposed in response to Russia’s invasion of Ukraine.

Despite the fact that Russian crude sales to India are not subject to sanctions and are entirely legal, experts’ examination of shipping lanes indicates that this significant amount of shipments may involve the Kremlin’s so-called “shadow fleet” of crude tankers, which Moscow specifically created to try to conceal who it is trading with and how while also maximizing the Kremlin’s profits.

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RUSSIA: The Kremlin Has Never Been Richer – Thanks To A US Strategic Partner

CNN spotted a possible component of that intricate exchange off the Greek port of Gythio earlier this month. Two oil tankers, one large and the other smaller, sat next to each other for a ship-to-ship transfer, which entails transporting crude oil between vessels, often to conceal its origin and ultimate destination.

The two tankers have a colourful history. Both had departed from Russia weeks before. According to shipping tracking agency Pole Star Global, one is owned by an Indian corporation accused of sanctions violations, while the other was previously controlled by a person subject to separate US penalties.

“Transfers are (sometimes) done legally, but they’re also used as an illicit tactic to evade sanctions,” said Pole Star Global’s David Tannenbaum. “You’re adding multiple layers to the shell game of vessels as they try and confuse authorities as to where this oil is coming from and who’s buying it at the end of the day.”

Analysts claim dozens of identical transfers occur each week in Greece’s Laconian Gulf, a convenient stop on the way to the Suez Canal and Asian markets.

Earlier in February, the US Treasury imposed a new set of penalties on ships and organizations suspected of assisting in the movement of Russian oil in violation of US sanctions to impede the operation of Russia’s shadow fleet.

In late 2022, the United States led a coalition of countries that agreed to a “price cap,” promising not to buy Russian crude for more than $60 per barrel. These countries also prohibited their shipping and insurance companies, which are major players in global shipping, from assisting the movement of Russian crude beyond that price.

“The price cap was the real trigger for the creation of the shadow fleet,” stated Viktor Katona, head of crude oil analysis at trade research firm Kpler. “The longer the supply chains, the more difficult it is to disentangle ship-to-ship transfers, the more difficult it would get… to determine the real cost of a Russian barrel.”

Some oil trading between Russia and India is open and transparent. Windward, a maritime artificial intelligence company, analyzed global shipping movements for CNN and discovered 588 direct voyages by oil tankers from Russia to India last year.

However, some trade between the two countries is more complicated, as CNN discovered off the Greek coast. Pole Star Global investigated the same route last year and discovered over 200 journeys by Russian ships that made a transfer in the Laconian Gulf to another ship that continued to India.

Tannenbaum of Pole Star Global stated that the business “suspected” that the primary motivation for these transfers was to avoid sanctions because “almost all of these vessels” had ties to the United States or the European Union and would be subject to the price cap. “The bay is fenced. It is out of the way. And so they can carry out this activities in a pseudo-anonymous manner.”

Windward CEO Ami Daniel concurred, saying, “That is part of a Russian methodical, systemic effort to just make everything much more complicated.” He described the motive for Russia and oil dealers to avoid sanctions as “gigantic,” saying: “You really needed to have a reason to transfer 60-plus million barrels in the middle of the ocean and export them to India because it’s much easier not to do that – to sail directly.”

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RUSSIA: The Kremlin Has Never Been Richer – Thanks To A US Strategic Partner

The shadow fleet has allowed Russia to establish a parallel shipping network that can withstand Western sanctions’ shifting tactics and focus, with hundreds of tankers owned in secret and operating on convoluted routes. Windward estimates that the fleet increased to 1,800 vessels last year.

India’s crude purchases have had the overall effect of lessening the burden of oil sanctions on Russian President Vladimir Putin. Russia’s federal revenues soared to a record $320 billion in 2023 and are expected to increase even further. According to some estimates, around one-third of the money was spent on the Ukrainian war last year, and a larger part is expected to be spent on the fight in 2024.

The funds at the Kremlin’s disposal place Moscow in a better position to sustain a long war than Kyiv, battling to retain the urgently required flow of Western funding.

According to RAND economist Howard Shatz’s examination of public statistics from the Russian finance ministry, Russian government revenue and expenditure reached all-time highs in 2023. However, Moscow has yet to balance its books, indicating the war’s high cost and the impact of sanctions on oil earnings.

“Despite the jump in revenues, the federal budget deficit was at its third-highest… larger only in 2022 and 2020,” added Mr. Obama. “Tax on domestic production and imports are both high and effective, which means they are taxing their population to pay for this war,” he said.

India has defended its purchases from Russia as a way to keep world prices down by not competing with Western nations for Middle Eastern oil. Hardeep Singh Puri, India’s Minister of Petroleum and Natural Gas, told CNBC this week that if the country starts importing more Middle Eastern oil, the price will be less than $75 or $76. “It will cost $150.

India’s intricate involvement in global oil trading is reflected in the fate of the oil products produced from Russian crude. Some crude is converted into oil products at refineries along India’s western coast before being transported to the United States and other nations that have imposed sanctions on Russian oil. Sanctions do not affect products refined outside Russia, which critics call a “refinery loophole.”

The CREA estimated that the US was the largest consumer of refined products from India derived from Russian crude last year, worth $1.3 billion between early December 2022, when the price cap was implemented, and the end of 2023. The projections are based on publicly available shipping and energy statistics.

kremlin

RUSSIA: The Kremlin Has Never Been Richer – Thanks To A US Strategic Partner

The value of these oil product exports increases dramatically when US partners imposing sanctions on Russia are added. The CREA anticipated that these countries would buy $9.1 billion in oil products derived from Russian crude oil in 2023, a 44% increase over the previous year.

Moscow has developed a way to profit from the refining and export process. One of the Indian refineries and ports that handle Russian crude is in Vadinar and is operated by Nayara Energy, a 49.1 %-%-owned subsidiary of Russian state oil major Rosneft. The CREA anticipated that the US will import $63 million in oil products processed in Vadinar in 2023, with Russian crude accounting for roughly half of the crude utilized in the plant. Everything is above board.

However, the organization’s assessment stated that exports from Vadinar “lead to significant tax revenues for the Kremlin in the form of taxing the exported Russian crude oil” and profits Rosneft gained from refining and reselling to Moscow’s Western opponents.

Nonetheless, researchers say the profits that may be earned from even the tiniest evasion of sanctions against Russia are enormous, given the large sums involved in selling a single oil tanker’s cargo. “You’re talking about something which is amazingly lucrative,” remarked Daniel at Windward. “Traders face significant temptation to engage in such behaviour.” They earn $10 to $40 million in four or five months. I don’t think there’s any other opportunity in the world to achieve it.”

SOURCE – (CNN)

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Macron Says Recognizing A Palestinian State Is Not A Taboo For France

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PARIS — As worldwide displeasure with Israel’s activities in the Palestinian territories deepens, French President Emmanuel Macron believes recognising a Palestinian state is not a ”taboo”.

France and the EU have long advocated for a two-state solution in the Middle East but as part of a negotiated settlement. With talks long deadlocked and Israel’s offensive against Hamas in Gaza intensifying, some European countries are expressing support for recognising a Palestinian state sooner.

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Macron Says Recognizing A Palestinian State Is Not A Taboo For France

“Recognising a Palestinian state is not a taboo for France,” Macron said Friday at a meeting in Paris with Jordan’s King Abdullah. “We owe it to Palestinians, whose aspirations have been trampled for far too long.” We owe it to Israelis, who endured the biggest antisemitic massacre of our time. We owe it to a region striving to rise above those who incite disorder and sow resentment.

Macron should have specified when or under what conditions France could recognise a Palestinian state, and France is unlikely to make such a move unilaterally. However, France has significant diplomatic power as one of just five permanent United Nations Security Council members.

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Macron Says Recognizing A Palestinian State Is Not A Taboo For France

“Our regional partners, particularly Jordan, are working on it, and we are working with them. “We are ready to contribute to it, both in Europe and at the Security Council,” Macron added.

He also called for a cease-fire in Gaza and warned that an Israeli offensive on Rafah, near Egypt’s border, would result in a “humanitarian disaster without precedent.”

British Foreign Minister David Cameron stated earlier this month that his country may officially recognise a Palestinian state following a cease-fire in Gaza.

macron

Macron Says Recognizing A Palestinian State Is Not A Taboo For France

Israeli Prime Minister Benjamin Netanyahu rejects Palestinian statehood, and there have been no real talks for a two-state solution since 2009. Some of Israel’s important allies may recognise a Palestinian state, putting pressure on Israel to resume negotiations.

SOURCE – (AP News)

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Why Oil Prices Aren’t Soaring Despite Middle East Uncertainty

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When Russia invaded Ukraine in 2022, the price of oil rose to well over $100 per barrel. Despite the potential of increased tensions in the Middle East and attacks on Red Sea shipping, oil markets have yet to witness such swings this time around.

Last month, oil prices skyrocketed following US-led raids on Houthi targets in Yemen in response to repeated attacks on commercial ships in the Red Sea. Crude prices have been erratic as Wall Street analyses the path of interest rates, the US dollar, and global tensions.

Nonetheless, they remain significantly below their 2022 highs. The US benchmark for oil, West Texas Intermediate crude futures, finished at $77.59 a barrel on Thursday, while the international benchmark Brent crude futures settled at $82.86.

oil

Why Oil Prices Aren’t Soaring Despite Middle East Uncertainty

Weakening demand is one factor that could keep oil prices under control. According to a new monthly study released Thursday by the International Energy Agency, world consumption will expand at a slower rate of 1.2 million barrels per day in 2024, down from 2.3 million in 2023. This comes as demand growth declined to 1.8 million bpd in the fourth quarter of 2023 from 2.8 million bpd the previous quarter.

“Global oil demand growth is losing momentum,” the agency stated in its February report. “The expansive post-pandemic growth phase in global oil demand has largely run its course.”

However, for several economies, the period of expansion was disappointing. China’s economy was expected to revive dramatically in 2023 after shutting down during the Covid epidemic.

oil

Why Oil Prices Aren’t Soaring Despite Middle East Uncertainty

Instead, a property crisis, low expenditure, and high youth unemployment have caused it to stop, and some economists fear the country may suffer decades of stagnation.

Other nations are experiencing economic downturns. The United Kingdom entered a recession when its GDP fell 0.3% in the fourth quarter of 2023, following a 0.1% drop in the previous quarter. A recession is typically defined as two consecutive quarters of GDP decrease, but other reasons, such as high unemployment, can also cause it.

Japan likewise entered a recession unexpectedly as weak domestic consumption caused GDP to shrink for the second consecutive quarter. That was enough for Japan to lose its position as the world’s third-largest economy, trailing Germany.

While the US economy has remained solid despite the Federal Reserve’s relentless pace of rate hikes, some investors and analysts predict it may enter recession later this year as high-interest rates and their savings shrink pinch Americans.

oil

Why Oil Prices Aren’t Soaring Despite Middle East Uncertainty

While global oil demand growth is slowing, supply remains relatively strong, potentially placing additional downward pressure on oil prices. In the fourth quarter of 2023, the United States was predicted to generate 13.3 million bpd of petroleum and condensate, the highest level ever recorded.

Furthermore, some significant OPEC+ members produced more oil in January than their planned output. According to the IEA assessment, Iraq pumped 230,000 more barrels, while the UAE produced 300,000 more.

“Higher global oil supply this year, led by the United States, Brazil, Guyana and Canada, should more than eclipse the expected rise in world oil demand,” according to the research.

SOURCE – (CNN)

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