The Real World is Here

Saudi Arabia slashed its export oil prices over the weekend in what is likely to be the start of a price war aimed at Russia but with potentially devastating repercussions for Russia’s ally Venezuela, Saudi Arabia’s enemy Iran and even American oil companies.

The Saudi decision to cut prices by nearly 10 percent on Saturday was a dramatic move in retaliation for Russia’s refusal on Friday to join the Organization of the Petroleum Exporting Countries in a large production cut as the coronavirus continues to slow the global economy and, with it, demand for oil.

The break in a three-year alliance between the Saudi-led oil cartel and Russia to support prices may be temporary. The moves over the weekend may well have been part of a negotiating chess game, and the Saudis and Russians can still reach a compromise. But if the collapse is lasting, oil executives say there is nothing to stop oil prices from tumbling to the lowest levels in at least five years.

“If a true price war ensues, there will be plenty of pain in the oil markets,” said Badr Jafar, president of Crescent Petroleum, a United Arab Emirates oil company. “Many will be bracing for the economic and geopolitical shocks of a low-price environment.”

A major drop in oil prices would hurt producers around the world, particularly Venezuela and Iran, whose oil-based economies are already under pressure from American sanctions. Export earnings of both countries have already been reduced to a trickle, and a further decline would stretch their abilities to pay for vital services and security.

The one bright spot may be at the gas pump. The average price of a gallon of regular gasoline in the United States, according to the AAA Motor Club, has already fallen five cents in the last week, to $2.40 from $2.45, and prices could easily drop below $2 a gallon in some states in the coming weeks. Lower-income drivers, who typically own older, less fuel-efficient vehicles and spend a higher percentage of their wages on energy, stand to gain the most.

But a prolonged price collapse would add to financial pressure on highly indebted American oil companies, dozens of which have gone out of business in recent years, with a decline in American oil production likely to follow. Oil companies have been laying off workers in Texas and other oil producing states.

Canadian oil sands development, already lagging because of environmental concerns and costs, stands to be hit hard by a price war. And developing countries that depend on oil, like Nigeria, Angola and Brazil, may suffer significant economic slowdowns.

Source: http://www.nytimes.com

Traders now expect the Federal Reserve to cut its benchmark interest rates by three-quarters of a percentage point this month, even after the reduction earlier this week.

Friday’s stock market rout and a fresh record low in government bond yields pushed traders to assign a 65% chance of a 75 basis point cut by the March 17-18 Federal Open Market Committee meeting, according to the CME’s FedWatch tracker. There was zero probability assigned to that steep of a cut Thursday.

The yield on the 10-year Treasury briefly fell below 0.7% as part of a continuing fear trade sparked by uncertainty over the coronavirus.

If the market is correct, the cut in the federal funds rate would take the borrowing cost in short-term markets down to a range of 0.25%-0.5%. On Tuesday, the Fed announced a 50 basis point cutthat put the current target to 1%-1.25%.

“We knew the Fed at some point if we had a recession again would get the funds rate to zero, and that is effectively being priced in,” said Mike Collins, senior portfolio manager at PGIM Fixed Income. “There’s a very good chance they cut a couple times more, maybe get to 50, maybe get to zero at the end of this year and probably get stuck there.”

That view got some support Friday, when various Fed regional presidents, including New York’s John Williams, Boston’s Eric Rosengren and St. Louis’ James Bullard all said the market is not wrong to expect more central bank help if the coronavirus situation worsens.

In afternoon trading Friday, the market was pricing in a 0.53% funds rate, but that was drifting lower through the day.

The possibility of the Fed going to zero, where it went in December 2008 and stayed for seven years, rose through the day Friday. Traders put a 35% chance of that happening by December, while also assigning a 12% probability to the central bank reversing some of its cuts and going back to a target range of 0.5%-0.75%.

Source: http://www.cnbc.com

Is the war inevitable in Idlib now?

“Russia doesn’t want Turkey in the field”

Çağ University Assoc. Dr. Murat Koç stated “ There is a very clear fact standing in the middle: Russia does not want Turkey in the field anymore”

While answering the questions of DW Turkce, Koç stated that he agreed the idea that Russia agreed with United States on this issue and added “They are both trying to rein in Turkey and tame it in the field

Is the Adana Agreement acceptable?

Murat Koç, who is known by his works about Syria, emphasized that the proposal to find a solution to the Idlib problem with the Adana Agreement is very difficult to be accepted at this point by Turkey. Koc also added, “The minimum conditions for the Adana Agreement were existed before the Sochi’s breach but no longer exist. If Russia pulls out of the field and Turkey become alone with the Assad regime, then there will be a regional war. This is because today we are facing a reality like Iran, which has much more comfortable area in the field than Turkey.

“It is impossible for Turkey to give up”

In addition to this Koc also stated that at this point there are some strategic reasons besides security concerns behind the fact that Turkey is willing to fight for Idlib and also adding “Idlib has a great importance for Turkey in tactical, operative and strategic terms. It is impossible for Turkey to give up and take a step backward about Idlid because of these strategic reasons. If Turkey decides to step backward, it will face to the risk of losing all its expansions in the Mediterranean”

Koc emphasized that Idlib, which is in a sense a forward outpost for Turkey’s border security, has also of great importance because of its position which controls three sites of military action carried out by the Turkish Armed Forces in other parts of Syria

According to Koc, other important factors affecting Ankara’s view about the region are the fact that it is a corridor of strategic importance and that it is the starting point for important energy and transportation projects to the Mediterranean.

Source: http://www.dw.com

OPEC is hoping to slash the supply of crude oil to world markets by 1.5 million barrels per day in an attempt to prop up prices as it confronts the biggest collapse in demand on record.

The cartel unveiled a plan Thursday to reduce output among its 13 members by 1 million barrels per day, and said it wouldseek an additional 500,000 barrels per day in cuts from longstanding allies including Russia.

Russia, the cartel’s main partner, still needs to sign on, according to Iran’s oil minister. OPEC and its allies are scheduled to meet Friday in Vienna.

OPEC initially said the new cuts would run through June, but after a series of late night meetings Thursday, the cartel said they should continue until the end of 2020. Existing cuts of 2.1 million barrels per day by OPEC and Russia would also beextended through the end of the year under the plan.

OPEC has faced immense pressure to act since oil prices fell into a bear market last month as the coronavirus outbreak destroyed demand for fuel, initially in China.

Brent crude futures, the global benchmark, rose slightly on news of the proposed cuts but fell 2% on Friday, trading more than 28% below their recent high in January. US oil is trading at $45.07, also more than 28% below its recent peak.

Research firm IHS Markit predicted Wednesday that oil demand will suffer its steepest decline on record in the first quarter — worse even than during the 2008 global financial crisis — as schools and offices close, airlines cancel flights and a growing number of people hunker down at home.

Most of the reduction in demand can be traced to China, where the coronavirus has caused what IHS Markit describes as an “unprecedented stoppage” of economic activity.

Goldman Sachs told clients this week that OPEC needed to agree to curb production by at least 1 million barrels per day in order to avoid a “sharp” sell-off.

The investment bank now believes that oil demand will shrink in 2020. Before the coronavirus outbreak, it expected demand to increase by 1.1 million barrels per day.

Source: http://www.edition.cnn.com

The nearly three-hour-long summit between President Recep Tayyip Erdoğan and his Russian counterpart Vladimir Putin in Moscow over recent developments in Idlib has ended, reports said Thursday.

An inter-delegation meeting started right after the 180-minute-long bilateral talks, reports added.

The two leaders are set to discuss the recent developments in Syria, including cease-fire violations in the Idlib de-escalation zone, a stronghold of opposition forces in the war-torn country since 2011.

The regime and its allies have consistently broken the terms of the 2018 cease-fire and a new one that started on Jan. 12, launching frequent attacks inside the territory.

Turkey, which has the second-largest army in the transatlantic NATO alliance, has funneled troops and equipment into the region in recent weeks to resist the Syrian regime advance and avoid a wave of refugees across its southern border.

Besides civilian casualties and the influx of asylum seekers along Turkey’s borders, the breach has also resulted in the deaths of more than 34 Turkish soldiers in Bashar Assad regime attacks. In response, Ankara launched Operation Spring Shield against regime targets in northwestern Idlib province.

Source: http://www.dailysabah.com

The number of stays by tourists at Turkey’s accommodation facilities surpassed 80 million in 2019, with a 12.38% increase year-on-year, while overnight stays were recorded at nearly 211 million, increasing by 10.8% compared to the year before.

Around 62.8% of the guests at the accommodation facilities were foreigners, reported Anadolu Agency (AA) citing Culture and Tourism Ministry data.

The report said the number of visitors, who stayed at a ministry or municipality-certified facility, reached 80.8 million.

The average duration of the stays in the facilities was recorded slightly over two-and-a-half days while the occupancy rate was 53.48%.

Some 24.68% of the overnight stays recorded last year were in municipality-approved accommodation facilities while 75.32% of them were in ministry-approved facilities.

The facilities recorded the highest number of visitors during June and October, while the most number of overnight stays were recorded between April and October.

The highest occupancy rate in 2019 was recorded in August at 77.5% while the lowest levels were between November and March.

Russians lead the way with the highest number of overnight stays (23%), followed by tourists from Germany (19%), the U.K. (7%), Ukraine (3%) and Poland (2.9%).

The southern Turkish resort city of Antalya was the leading province with the highest number of tourists staying at the facilities. It was followed by Istanbul, western Muğla and İzmir provinces and the capital Ankara.

In the number of overnight stays, Antalya ranked first again, followed by Istanbul, Muğla, İzmir and western province of Aydın, respectively.

The high-star hotels ranked first among the accommodation facilities, as around 38% of the visitors stayed there. Municipality-approved facilities came second, while four-star hotels with ministry approval became the third-preferred facilities. First-class holiday resorts were the fifth most preferred accommodation service.

Source: http://www.dailysabah.com

The e-commerce giant Amazon is now delivering free to the Palestinian territories, the Palestinian Economy Ministry said Wednesday.

Last month, a Financial Times report revealed that Amazon was delivering free to Israeli settlements while charging Palestinian customers for its services.

The report said Palestinians who select their address as being in Israel get free shipping from the company.

Palestinians who select their address as being in the “Palestinian territories” when placing orders can expect to pay $24 or more, the newspaper said.

A ministry statement said the American company has reversed its policy on charging items for customers in the Palestinian territories.

It attributed the policy reversal by the company to “a series of Palestinian measures aiming at halting disregard to the Palestinian identity and recognizing settlements.”

There was no comment from Amazon on the report.

Last month, the ministry threatened to sue Amazon for conducting business in Israeli settlements in the occupied West Bank.

The international community regards all Israeli settlements in occupied Palestinian territories to be illegal and a major obstacle to peace in the Middle East. The area, captured by Israel in 1967, is not sovereign Israeli territory, and Palestinians living there are not Israeli citizens and do not have the right to vote. Palestinian towns and villages in the West Bank are frequently targeted by extremist Jewish settlers.

After repeated calls from Palestinians, the U.N. Human Rights Council last month released a list of 112 companies which it has reasonable grounds to conclude have ties with Israeli settlements, 94 domiciled in Israel and 18 in six other countries, saying their activities “raised particular human rights concerns.” The move came after repeated delays in the release of the database which lists companies that promote illegal Israeli settlement expansion.

Source: http://www.dailysabah.com

Turkey has subjected protective products such as masks, goggles, and sterile gloves to export controls, according to a regulation published in the Official Gazette on March 4.  

The move aims to meet domestic demand as the novel coronavirus, known as COVID-19, continues to spread worldwide, Turkish Trade Minister Ruhsar Pekcan told a press conference in the capital Ankara.

Stating that there are no reported cases of the virus in Turkey, Pekcan added: “As it is likely that the outbreak will be seen in our country, we decided to subject protective gear exports to prior authorization to manage domestic demand.”

Sales of protective masks surged in the last two months, rising 45 percent in January and 70 percent in February, she said.

“Production in Turkey is capable of meeting our domestic needs, but global demand is huge,” Pekcan added.

First detected in Wuhan, China in December, the novel coronavirus has spread to at least 73 countries.

The global death toll from the virus is over 3,000, with more than 89,000 infected.

After declaring the outbreak an international health emergency, last week the World Health Organization raised the global risk level to very high.

Source: http://www.hurriyetdailynews.com

The European Union’s high representative for foreign and security policies, Josep Borrell, has suggested to work with Turkey in addressing common challenges stemming from regional conflicts, as he met with Turkey’s defense and interior minister late March 3.

In a separate context, European Council President Charles Michel also arrived in Ankarafor talks to overcome the ongoing refugee problem on the Turkish-Greek border. Michel will talk to President Recep Tayyip Erdoğan.

“Pressure and unilateral action are not an answer. We need to work hand in hand to address common challenges, for the benefit of both Turkey and the EU,” Borrell said on Twitter after a meeting with Interior Minister Süleyman Soylu in Ankara. EU commissioner for crisis management Janez Larencic was also present at the meeting.

Borrell also met Defense Minister Hulusi Akar and discussed the recent developments in the Idlib province of Syria where 34 Turkish troops were killed in an attack by the regime forces late last week.

“Humanitarian situation in Idlib is of extreme gravity. Need to promote de-escalation and have an in-depth discussion with Turkey on security and defense challenges,” the EU’s representative said on Twitter.

The Foreign Affairs Council will meet in an extraordinary session on March 6 a day after the informal ministerial discussions on Syrian and Turkey in Croatia, he stated.

Meanwhile, Vice President Fuat Oktay received Borrell and the accompanying delegation.

In a one-hour closed-door meeting in çankaya Palace in the Turkish capital Ankara, the 2016 Turkey-EU deal, including issues such as migrants, visa exemption, the Customs Union, and EU membership negotiations, were discussed.

During the meeting, it was stressed that the EU should fulfill its responsibilities and there should be a ‘fair share of responsibility’ among the parties.

The agreement on March 16, 2016, had pledged visa-free travel to Turkish citizens along with financial support, resettlement, and revising of the Customs Union.

Turkish Deputy Foreign Minister and Director for EU Affairs Faruk Kaymakçı, Director General for EU Relations at the Turkish Foreign Ministry Ambassador Başak Turkoglu, head of Turkish Interior Ministry’s migration management department Abdullah Ayaz, EU Commissioner for Crisis Management Janez Lenarcic and head of the EU Delegation to Turkey Christian Berger also attended the meeting.

Source: http://www.hurriyetdailynews.com

European countries must support Turkey‘s solutions in Syria if they want to resolve the migration crisis, President Recep Tayyip Erdoğan said on March 4.

“If European countries want to resolve the issue, they must support Turkey’s efforts for political and humanitarian solutions in Syria,” Erdoğan said.

The president’s remarks came at the ruling Justice and Development Party’s (AKP) parliamentary group meeting in capital Ankara.

“All European countries closing their borders to refugees today, trying to push them back by hitting them and sinking their boats, in fact even shooting at them, are trampling over the universal declaration of human rights,” Erdoğan said.

Erdoğan also called on the European countries, “especially Greece” to act in line with the Universal Declaration of Human Rights.

He criticized the Greek response, saying: “The Greeks – who are resorting to any means to stop refugees coming into their country, even drowning them or killing them with live ammunition – they shouldn’t forget they might need this same mercy one day.”  

He also showed a photo displaying the help extended to the Greek people who fled Nazi attacks and took refuge in Syria during World War II.

“One of the Greek boys or girls in this photo is maybe the grandfather or grandmother of [Greek Prime Minister Kyriakos] Mitsotakis,” Erdoğan said.

Last week, Turkish officials announced that they would no longer try to stop irregular migrantsfrom reaching Europe.

Since then, thousands of irregular migrants have flocked to Edirne to make their way into Europe.

The decision came after at least 34 Turkish soldiers were killed by the regime forces in Idlib, northwestern Syrian on Feb. 27.

Turkey, which already hosts some 3.7 million Syrian migrants, more than any country in the world, says it cannot absorb another refugee wave.

The Turkish soldiers are working to protect local civilians under a 2018 deal with Russia under which acts of aggression are prohibited in the region.

Source: http://www.hurriyetdailynews.com