Lebanon must not be platform for hostility, Kuwaiti FM says

BEIRUT (Reuters) -Lebanon must not be a platform for hostile acts or words, Kuwait’s foreign minister said on Sunday while visiting Beirut, an indirect call for curbs on the Iran-backed group Hezbollah in order to improve strained ties with Gulf Arab states.

Kuwaiti Foreign Minister Sheikh Ahmad Nasser al-Mohammad al-Sabah spoke after meeting President Michel Aoun in Beirut, during the first visit https://www.reuters.com/world/middle-east/lebanons-pm-meet-kuwaiti-foreign-minister-beirut-2022-01-22 by a senior Gulf Arab official since a diplomatic rift last year.

Sheikh Ahmad said on Saturday he had delivered confidence-building proposals to Prime Minister Najib Mikati, and that his trip was coordinated with Gulf states.

“We asked that Lebanon not be a platform for any aggression – verbal or actual,” Sheikh Ahmad said after meeting Aoun on Sunday. “I presented ideas and thoughts … And we are awaiting a response,” he added.

Long strained by the influence of the heavily armed Shi’ite group Hezbollah, Lebanon’s ties with Sunni-led Gulf Arab states were plunged into a new crisis in October by comments from a former Lebanese minister criticizing Saudi-led forces in Yemen.

Kuwait was one of several members of the Gulf Cooperation Council (GCC), including Saudi Arabia, that responded to George Kordahi’s remarks by expelling the Lebanese ambassador and recalling its envoy to Beirut.

Aoun, a political ally of Hezbollah, said in a tweet on Sunday Lebanon was keen on maintaining “the best relations” with the Gulf Arab states and that the Kuwaiti proposals would be discussed before an appropriate position was announced.

Lebanese governments have long declared an official policy of disassociation from wars in the Middle East, even as Hezbollah has become involved in regional conflicts, deploying fighters to Syria to help President Bashar al-Assad.

Gulf states also accuse Hezbollah of lending military support to the Iran-aligned Houthis in Yemen.

(Reporting by Nadine Awadalla; Writing by Lina Najem and Suleiman al Khalidi; Editing by Tom PerryEditing by Gareth Jones)

Lebanon keen on maintaining “best relations” with Gulf states – President Aoun

BEIRUT (Reuters) – Lebanon is keen to maintain “the best relations” with the Gulf Arab states, President Michel Aoun said in a tweet on Sunday.

Aoun also said a proposal by the Kuwaiti foreign minister on building confidence with the Gulf states would be discussed before an appropriate position was announced.

(Reporting by Enas Alashray; Writing by Lina Najem)

Thai PM to visit Saudi Arabia as diplomatic relations thaw

RIYADH (Reuters) -Thailand’s prime minister will visit Saudi Arabia on Tuesday, the Saudi foreign ministry said, in what will be the first high-level meeting between the two countries since a diplomatic row over a jewellery theft nearly three decades ago.

Saudi Arabia downgraded its diplomatic relations with Bangkok following the theft in 1989 of around $20 million of jewels by a Thai janitor working in the palace of a Saudi prince, in what became known as the “Blue Diamond Affair”.

A large number of the gems, including the rare blue diamond, are yet to be recovered.

Thailand’s Premier Prayuth Chan-ocha will start a two-day visit to Saudi Arabia on Tuesday at the invitation of Saudi Crown Prince Mohammed bin Salman, the Saudi ministry said in a statement on Sunday.

“The visit comes amid consultations that led to bringing views closer on issues of common interest,” the ministry said.

The visit is aimed at coordinating on those issues, it said, without elaborating.

The theft of the jewels remains one of Thailand’s biggest unsolved mysteries and was followed by a bloody trail of destruction that saw some of Thailand’s top police generals implicated.

A year after the theft, three Saudi diplomats in Thailand were killed in three separate assassinations in a single night.

A month later, a Saudi businessman, Mohammad al-Ruwaili, who witnessed one of the shootings, disappeared and later in 2014, a Thai criminal court dismissed https://www.reuters.com/article/cnews-us-thailand-saudi-idCABREA2U07L20140331 a case against five men, including a senior police officer, charged with murdering Ruwaili over the precious stones.

Thailand has been eager to normalise ties with the oil-rich Kingdom after the spat that has cost billions of dollars in two-way trade and tourism revenues and the loss of jobs to tens of thousands of Thai migrant workers.

(Reporting by Nadine Awadalla, writing by Aziz El YaakoubiEditing by Gareth Jones and Susan Fenton)

‘Another crime’ say survivors of coalition strikes on Yemeni detention centre

SAADA, Yemen (Reuters) -Yemeni detainee Mohammed Ali Salem was lucky that a missile fired by warplanes of the Saudi-led coalition on the next ward caused a wave strong enough to shatter the door of his own cell.

That was how he was able to escape before a second bomb fell.

“When they struck Ward 8, the door opened and we walked out… the door opened from the pressure and we walked out. God granted us safety, thank God,” he said, recounting the strikes that targeted the detention centre where he was held on Friday at dawn.

Others, wrapped in white body bags, weren’t that lucky. At least 60 people https://www.reuters.com/world/middle-east/several-killed-air-strike-detention-centre-yemens-saada-reuters-witness-2022-01-21 were killed when missiles hit a detention centre in the Yemeni province of Saada, the stronghold of the Houthi group that has been at war with a Saudi-led coalition since 2015.

A Reuters witness said several people, including African migrants, were killed in a raid.

Save the Children said in a statement that three children were also reportedly killed by air strikes on Friday in the western city of Hodeidah.

The strikes, which followed missile and drone strikes on the United Arab Emirates earlier this week, have caused an international uproar https://www.reuters.com/world/middle-east/several-killed-air-strike-detention-centre-yemens-saada-reuters-witness-2022-01-21 and brought back attention to a forgotten and deadly conflict.

The Saudi-led coalition denied on Saturday targeting the detention centre, saying the facility was not on no-targeting lists agreed upon with the United Nations and did not meet the standards stipulated by the Third Geneva Convention for Prisoners of War.

The strikes, the deadliest in more than two years, came amid an unprecedented escalation in the seven-year-old conflict with clashes raging over the control of Yemen’s oil-rich regions Shabwa and Marib, and uptick in corss-border attacks.

The strikes on Abu Dhabi followed dozens of similar attacks on Saudi Arabian cities with armed drones and ballistic missiles.

In Saada, hundreds of people gathered around lined-up body bags on Saturday near concrete rubble of the detention centre, seeking information about their relatives. Some were checking the bodies hoping to identify their loved ones.

“We came from Amran province on a visit to find out that the prison has been hit by warplanes. This is a another crime to be added to their other crimes,” said Salman Badi, one of the relatives.

Sultan al-Qahim, one of the wounded with burns on his face, said he lost consciousness after a third bomb fell.

“I was setting with my mates in our ward and then the warplane came and hit with a first strike. And a while later, two more air strikes hit. After that, nothing,” he said in the Republican hospital in Saada, where most of the wounded have been treated.

(Reporting Reuters TV, writing by Aziz El Yaakoubi;)

Japan’s Tepco hit by setback in clean-up of crippled Fukushima nuclear plant

TOKYO (Reuters) -The operator of Japan’s crippled Fukushima nuclear power plant has found that a coolant solution, used to create an ice wall halting the seepage of groundwater into reactor buildings, has leaked from two storage tanks.

The leakage has had no impact on the wall or environment, said Tokyo Electric Power Co Holdings Inc (Tepco).

Still, it underscores the unpredictable challenges in the clean-up of the site, nearly 11 year after an earthquake and tsunami ravaged Japan’s northeastern coast, causing the world’s worst nuclear disaster since Chernobyl, Ukraine, in 1986.

Only last year, Japan’s government approved https://www.reuters.com/world/asia-pacific/japan-says-release-contaminated-fukushima-water-into-sea-2021-04-12 the release of over 1 million tonnes of irradiated water from the site after treatment, starting around spring 2023. Tepco last month said https://www.reuters.com/markets/commodities/japans-tepco-build-underwater-tunnel-fukushima-water-release-2021-12-21 it would build a tunnel reaching into the sea for the operation.

On Sunday, Tepco spokesperson Tsuyoshi Shiraishi said about four tonnes of a calcium chloride solution used to maintain the ice wall had leaked in what was the eighth such leakage.

“We’re now confirming the reason,” he said.

The last leak in December 2019 saw 16 tonnes spilled, likely due to metal fatigue resulting from vibrations caused by construction vehicles, Shiraishi said.

There was no immediate impact on the wall’s function as it takes several months for the wall to thaw in the absence of coolant, he said.

Separately, a group of six men and women is set to file on Jan. 27 a lawsuit against Tepco claiming they developed thyroid cancer due to exposure to radiation from the Fukushima disaster, the Mainichi newspaper reported.

The plaintiffs, who were minors living in Fukushima prefecture at the time of the 2011 disaster, are seeking 616 million yen ($5.42 million) in compensation from the electricity provider, the Mainichi said.

If the complaint was served, Tepco would respond in good faith after hearing the contents of the claims and arguments in detail, the firm said in a statement.

($1 = 113.6800 yen)

(Reporting by Daniel Leussink; Editing by Christopher Cushing)

S.Korea says Iran to regain UN vote after delinquent dues paid with frozen funds

SEOUL (Reuters) – Iran is expected to regain its vote in the U.N. General Assembly after South Korea paid Tehran’s delinquent dues to the world body with frozen Iranian funds in the country, South Korea said on Sunday.

Iran had regained https://www.reuters.com/world/asia-pacific/iran-regains-un-vote-after-us-enables-un-payment-2021-06-11 its U.N. voting rights in June after a similar payment, but said this month it had lost https://en.irna.ir/news/84613258/Envoy-hopes-for-end-of-suspension-of-Iran-s-right-to-vote-in them again because it could not transfer the funds to pay its dues as a result of U.S. sanctions.

Release of Iran’s frozen funds requires the approval of the United States, which joined its European allies this week in saying only weeks remain to salvage https://www.reuters.com/world/middle-east/iran-nuclear-talks-need-change-approach-february-decisive-french-source-2022-01-20 the 2015 Iran nuclear deal.

Then-President Donald Trump took Washington out of the deal in 2018, re-imposing U.S. sanctions. Iran later breached many of the deal’s nuclear restrictions and kept pushing well beyond them.

Seoul “on Friday completed the payment of Iran’s U.N. dues of about $18 million through the Iranian frozen funds in South Korea, in active cooperation with related agencies such as U.S. Treasury’s Office of Foreign Assets Control and the United Nations Secretariat,” the finance ministry said in a statement.

The Seoul U.N. office was not reachable for comment outside business hours.

Iran urgently asked South Korea last week to help pay the U.N. contribution with the frozen funds on concerns of the loss of its right to vote in 193-member General Assembly, the South Korean ministry said.

Tehran has repeatedly demanded the release of about $7 billion of its funds frozen in South Korean banks under U.S. sanctions, saying Seoul was holding the money “hostage”.

A South Korean finance ministry official declined to say much Iranian frozen funds are left after the payment of U.N. dues, citing confidentiality laws.

(Reporting by Joori Roh; Additional reporting by Dubai newsroom; Editing by William Mallard)

EU in touch with partners to boost gas supplies, energy commissioner says

(Reuters) – The European Union is talking with partners about the potential for increasing gas supplies to the bloc, Energy Commissioner Kadri Simson said after a meeting with European energy ministers in France on Saturday.

A gas supply crunch in Europe, widely blamed on a dearth of gas flows from Russia, has caused energy prices to soar. Moscow denies manipulating supplies.

Simson said she would attend conferences in Azerbaijan and Washington in February to discuss ways for increasing gas deliveries to Europe.

“The gas storage levels in the EU are significantly lower than usual at this time of the year,” she told reporters.

Ministers meeting in the city of Amiens had discussed uncertainty in the market caused by the Ukraine crisis and significant falls in flows from Russia in recent months, Simson said.

“My message is that Europe has a robust, well diversified and resilient gas infrastructure and clear procedures of solidarity in case of emergencies,” Simson said.

“But we need to remain extremely vigilant, improve our risk-preparedness and reinforce solidarity between the member states.”

Chancellor Olaf Scholz signaled this week that Germany may be ready to discuss halting the Nord Stream 2 pipeline – which is to transport Russian gas to Germany bypassing Ukraine – should Russia attack Ukraine.

Simson highlighted a Commission proposal presented in December, designed to revise gas supply regulations to improve coordination among member states over gas storage.

“The objective is to enable a more efficient use of storage capacities and to ensure adequate gas storage levels,” Simson said. “But …the only lasting solution to our dependence on fossil fuels…is to complete the green transition.”

(Reporting by Sabine Siebold; Editing by Ros Russell)

Germany cries foul over nuclear energy in EU’s green investment rule book

By Michael Nienaber

BERLIN (Reuters) – German Chancellor Olaf Scholz’s three-party coalition government has voiced its objections to a European Union draft plan to label nuclear power plants as a sustainable energy source in a formal letter to Brussels, ministers said on Saturday.

The EU taxonomy aims to set a gold standard for green investments, helping climate-friendly projects to pull in private capital and stamping out “greenwashing”, where investors and companies overstate their eco-credentials.

“As the federal government, we have once again clearly expressed our rejection of the inclusion of nuclear energy. It is risky and expensive,” Vice Chancellor and Economy Minister Robert Habeck said in a joint statement with Environment Minister Steffi Lemke, both senior members of the Greens party.

In its letter to Brussels, published by the Economy Ministry on its web page, the German government also pointed to the lack of any safety requirements regarding nuclear power plants.

“Serious accidents with large, cross-border and long-term hazards to humans and the environment cannot be excluded,” Berlin said in its letter, adding that the question of where to store radioactive waste in the long term was still unanswered.

Habeck and Lemke said that, if the European Commission disregarded Germany’s objections and left the draft plan unchanged, Berlin should reject the plan in their opinion.

However, German government sources told Reuters earlier this month that coalition parties wanted to avoid an escalation in the EU dispute and agreed in coalition talks behind closed doors to abstain in any upcoming vote.


The EU rules have been long delayed, with countries split over whether nuclear energy and natural gas deserve a green badge. Austria has already said it would take legal action if the European Commission proceeds with its draft plan to label both as sustainable investments.

The German government said in its letter it supported a temporary green label for natural gas as a bridge solution on the bloc’s path to climate neutrality.

“Gas-fired power plants can facilitate the rapid transition to renewable energies and the reduction of emissions in the energy sector as a whole,” it said.

During months of debate on the proposals, Germany and other EU member states argued that gas investments were needed to help them quit more-polluting coal. Others said labelling a fossil fuel as green would undermine the credibility of the EU as it seeks to be a global leader in tackling climate change.

Emissions-free nuclear energy is similarly divisive. France, the Czech Republic and Poland are among those saying that nuclear power should have a big role in curbing global warming. Austria, Germany and Luxembourg are among those opposed.

The Commission hopes to adopt a final text by the end of the month.

(Reporting by Michael Nienaber; Editing by Alex Richardson)

Saudi-led coalition denies targeting detention centre in Yemen’s Saada

CAIRO (Reuters) – The Saudi-led coalition fighting Iran-aligned Houthis in Yemen denied targeting a detention centre in Yemen’s Saada province, saying the facility hit was not a site restricted from strikes, the Saudi official news agency SPA reported on Saturday.

A Reuters witness said several people, including African migrants, died in the Friday attack that reportedly killed at least 60 people https://www.reuters.com/world/middle-east/several-killed-air-strike-detention-centre-yemens-saada-reuters-witness-2022-01-21.

“The coalition will inform the Office for the Coordination of Humanitarian Affairs in Yemen (OCHA) and the International Committee of the Red Cross (ICRC) on the facts and details,” the state news agency said, citing a coalition spokesman.

He said the target in Saada was not on no-targeting lists agreed upon with the OCHA, was not reported by the ICRC and did not meet the standards stipulated by the Third Geneva Convention for Prisoners of War.

(Reporting by Ahmad Elhamy; Editing by William Mallard)

Union faults BP’s proposals in local refinery negotiations

HOUSTON (Reuters) – The United Steelworkers union (USW) on Friday said proposals by energy giant BP Plc would undermine its 56-year-old national program for refinery and chemical plant worker contracts.

People in the USW familiar with the matter said BP has put forward proposals in local negotiations at its U.S. refineries to require waiting periods of up to 120 days between the expiration of a contract and the possible start of a strike.

“BP’s position at local tables attacks the National Oil Bargaining Program,” the union said in a message to members and seen by Reuters. “Pipeline & refinery locals stand together to fight back!”

A BP spokesperson declined to discuss the details of proposals in contract negotiations.

“BP is negotiating in good faith with the United Steelworkers union to improve the competitiveness of our business and create a sustainable future for all,” said company spokesperson Cameron Nazminia.

A union spokesperson was not immediately available to discuss the USW’s message.

Since 1966 the union has at many refineries won a common expiration date for refinery and chemical plant contracts. The common date raises the possibility workers will strike at multiple plants simultaneously, as happened in 2015, during the last nationwide strike.

“We’re standing the line,” said a union source, who described the BP proposals as taking refineries off the common contract expiration date, allowing the company to “influence the contract behind the scenes.”

While not changing the formal expiration date, the 120-day no strike period changes the date in practice, potentially reducing the power of collective action available to the USW with a common expiration date.

One company that has used no-strike or so-called labor peace periods is Exxon Mobil Corp, which locked out 650 workers at its Beaumont, Texas, refinery nearly nine months ago, following a 75-day no-strike period.

“We don’t believe Exxon is the best example to follow,” a union source said.

The USW is negotiating a new national agreement for 30,000 U.S. refinery and chemical plant workers with Marathon Petroleum Corp, the industry’s lead negotiator.

At the same time, USW local unions are negotiating site-specific issues with plant managers.

(Reporting by Erwin Seba; Editing by William Mallard)

‘Smells like death’: Peru oil spill clear-up drags on as fishermen count cost

LIMA (Reuters) – Spanish energy firm Repsol said on Friday a clear-up operation for a major oil spill on the coast near Peru’s capital Lima would take until the end of February, in an environmental incident declared a ‘catastrophe’ by the government.

Dead seals, fish and birds have washed up on the shore covered in oil, while fishing activities in the area have been suspended, the government has said. Repsol said it had enlisted fishermen to help clear-up the oil.

“I used to collect crustaceans, but now, when I walk to the shore, they are dead,” fisherman Walter de la Cruz told Reuters. “Fishermen used to go sell the seafood that we collect. But now everything smells like death.”

The Pacific Ocean off Peru is a significant source of marine life and seafood for Peruvians, who cherish dishes such as ceviche.

The government has said Repsol spilled some 6,000 barrels of oil into the ocean last week near its La Pampilla refinery, which the company has blamed on unusual waves triggered by a volcanic eruption in Tonga.

The company has declined to state the magnitude of the spill, saying its still evaluating the impact.

Repsol added in a statement to Peru’s securities regulator SMV that oil refining operations are continuing normally and that it does not expect an official investigation to “significantly affect” the subsidiary’s business position.

“This incident has not affected the continuity of our operations, or our capacity to supply the market,” Repsol said in a statement. “The event has not had a significant impact on the productive activities of the refinery.”

Peru’s environmental agency OEFA said on Thursday that about 1.7 million square meters (420.08 acres) of soil and 1.2 million square meters of ocean had been affected by the spill.

Leftist Peruvian President Pedro Castillo described it as the biggest “ecological disaster” to affect the Andean nation in recent years.

Repsol added it had deployed about 840 people to help with cleaning tasks. Repsol’s La Pampilla accounts for 54% of Peru’s refining capacity.

(Reporting by Marco Aquino and Reuters TV; Editing by Daniel Wallis)

Mexico faces risks to growth, credit rating from energy bill -JP Morgan

(Reuters) – Mexico faces risks to economic growth and potential for a credit rating downgrade in the medium term from political developments including the likely passage of a controversial energy bill, JP Morgan said in a report.

According to the bank, President Andrés Manuel López Obrador’s plan to tighten state control of the electricity market could trigger sovereign debt rating downgrades from Moody’s and Standard & Poor’s. U.S. Energy Secretary Jennifer Granholm raised concerns about the risks to investors from the energy market initiative during talks with Mexican officials this week.

The JP Morgan report, dated Thursday, stressed that the energy bill was likely to pass at some point this year, even if in watered-down form. The opposition PRI party could support the legislation, potentially fragmenting the opposition to Lopez Obrador.

The bill’s approval could enable Lopez Obrador to increase the strength of the presidency and undercut the roles of independent institutions and regulators, JP Morgan economist Gabriel Lozano wrote in the report.

In addition to the bill’s passage, Lopez Obrador is likely to get a boost from gubernatorial victories for his Morena party as well as his own expected win in a recall referendum scheduled for April 10, Lozano said.

Against this backdrop, he expects the Mexico Central Bank to boost interest rates to 7.25% this year and to 8% in 2023 from the current 5.5% level.

“If there are some doubts on whether Banxico (Mexico Central Bank) should follow the Fed throughout 2023 or not, this year’s political events will probably dictate the extent of the coupling, ” the bank said.

(Reporting by Carolina Pulice; Editing by Cynthia Osterman)

California’s battle to cut emissions with biofuels burns in new truck engines

(This January 20 story corrects to reflect changes to LCFS would align with carbon neutrality goals; adds line regarding statistical significance of NOx increase in study)

By Laura Sanicola

(Reuters) – Renewable diesel is touted as a cleaner-burning fuel, but a recent study has shown the fuel falls short on one measure of reducing pollution from new truck engines – giving pause to California regulators who support increased production.

The state, the largest vehicle market in the country, has aggressively moved to curtail fossil fuel emissions from all vehicles while also encouraging production of renewable diesel – seen as key for reducing emissions in hard-to-electrify sources like trucking.

The efforts are part of California’s Low Carbon Fuel Standard (LCFS), a rule designed to decrease the carbon intensity of the state’s transportation fuel.

Renewable diesel lowers greenhouse gas emissions compared with petroleum-based diesel. The fuel has also been promoted as a way to cut emissions of oxides of nitrogen (NOx), a harmful pollutant that contributes to ozone deterioration and causes respiratory problems.

However, engines made more recently emit more NOx when running on renewable diesel when blended with 35% biodiesel or more, compared with conventional diesel, according to a study released by California Air Resources Board (CARB) in November.

CARB found in these new technology diesel engines, or NTDEs, running on 100% renewable diesel, NOx emissions increases were not statistically significant compared with CARB diesel,

That could affect the way regulators revise the LCFS, which spurred investment in renewable diesel, made from fats and vegetable oils.

State regulators are considering changes to the LCFS that align with a 2022 update on how to bring the state to carbon neutrality by 2045. The study means regulators could have to consider whether renewable diesel increases emissions in areas with worse air quality.

CARB said it has “identified several questions about the study results” that require further evaluation, and will be accepting public comment on the study until the end of January.

Regulators did not respond to a request for comment.

Heavy-duty vehicles are one of the largest contributors to NOx emissions – a precursor of ozone and particulate matter formation. Improved emissions control technology has helped NOx emissions fall by 60% between 1990 and 2019 nationwide, according to the U.S. Environmental Protection Agency.

Companies and regulators had previously purported that renewable diesel reduced NOx emissions by 10%, citing the results of earlier studies that examined the fuel’s performance in older engines.

But trucks with newer engines that ran renewable diesel did not meaningfully lower NOx emissions, according to the study. While these NTDEs are present in only 43% of the state’s commercial vehicle registrations, they account for more than 75% of the miles traveled among the state’s heavy-duty fleet.

“CARB threw caution to the wind and opened the door to renewable diesel’s unlimited use without having properly studied NOx emissions impact in NTDEs,” said Pat McDuff, chief executive officer at Glendale-based California Fueling, in a public comment submitted in January.

He urged California regulators to reverse regulatory changes that prohibit his company from selling fuel additives meant to decrease NOx emissions in biodiesel.

The state is trying to bring 19 regions into compliance with air quality standards enacted in 2015. In two regions – the south coast and the San Joaquin Valley Air Basin – CARB has targeted lowering NOx emissions as one way of improving air quality. In 2020 regulators adopted a new regulation to reduce NOx emissions 90% by 2027.

Renewable diesel generally cuts greenhouse gas emissions and other pollutants, said Tristan Brown, associate professor of energy resource economics at SUNY and advisor on New York’s Climate Action Council.

Brown noted most biodiesel blending in the United States is 20% or less. “The real question is what amount of NOx is emitted by NTDE engines at volumes of 10% and 20% biodiesel blend levels, and that is not reported by the study,” Brown said.

(Reporting by Laura Sanicola; Editing by Marguerita Choy and Daniel Wallis)

Oil slides on Friday, but climbs for 5th week on supply concerns

By Scott DiSavino

NEW YORK (Reuters) -Oil prices slid for a second day in a row on Friday, pressured by an unexpected rise in U.S. crude and fuel inventories while investors took profits after the benchmarks touched seven-year highs earlier in the week.

However, both crude benchmarks rose for a fifth week in a row, gaining around 2% this week. Prices were up more than 10% so far this year on concerns over tightening supplies.

Brent futures fell 49 cents, or 0.6%, to settle at $87.89 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 41 cents, or 0.5%, to settle at $85.14.

Earlier in the week, both Brent and WTI rose to their highest levels since October 2014.

“The latest pullback is most likely due to a combination of pre-weekend profit-taking and the absence of fresh bullish catalysts,” said PVM analyst Stephen Brennock, noting Thursday’s bearish data from the Energy Information Administration (EIA).

The EIA reported the first U.S. stock build since November and gasoline inventories at an 11-month high, against industry expectations.

“Energy traders were not surprised to see the oil price rally slow down,” said Edward Moya, senior market analyst at OANDA. “WTI crude fell after a surprise build with U.S. stockpiles and following a bloodbath on Wall Street that sent risky assets into freefall.”

“Crude prices may not have a one-way ticket to $100 oil, but the supply-side fundamentals certainly support that could happen by the summer,” Moya said.

Other analysts also said they expect the current pressure on prices to be limited owing to supply concerns and rising demand.

OPEC+, which groups the Organization of the Petroleum Exporting Countries (OPEC) with Russia and other producers, is struggling to hit its monthly output increase target of 400,000 barrels per day (bpd).

In the United States, energy firms cut oil rigs this week for the first time in 13 weeks. [RIG/U]

Tensions in Eastern Europe and the Middle East are also heightening fears of supply disruption.

Top U.S. and Russian diplomats made no major breakthrough at talks on Ukraine on Friday but agreed to keep talking to try to resolve a crisis that has stoked fears of a military conflict.

“With low spare OPEC+ capacity, low inventories and geopolitical tensions rising,” analysts at Bank of America said they expect to see Brent at around $120 a barrel in mid-2022.

UBS expects crude oil demand to reach record highs this year and for Brent to trade in a range of $80-$90 a barrel for now.

Meanwhile, Morgan Stanley has raised its Brent price forecast to $100 a barrel in the third quarter, up from its previous projection of $90.

On the demand side, quarterly results of energy firms Schlumberger NV and Baker Hughes Co both beat expectations as higher crude and natural gas prices drove demand for their services.

(Reporting by Scott Disavino in New YorkAdditional reporting by Rowena Edwards in London and Yuka Obayashi in TokyoEditing by Marguerita Choy and Matthew Lewis)

Royal Dutch no more – Shell officially changes name

By Ron Bousso

LONDON (Reuters) -Shell officially changed its name on Friday, ditching “Royal Dutch”, which has been part of its identity since 1907, following plans to scrap its dual share structure and move its head office from the Netherlands to Britain.

“Shell announced the Board’s decision to change its name to Shell plc on December 20, 2021. This change has now taken effect,” Shell said in a filing.

The London and Amsterdam stock exchanges will reflect the name change on Jan. 25 while the New York Stock Exchange will follow on Jan. 31.

The change will not affect share ownership and the A shares and B shares will remain unchanged for the time being, Shell said.

The shares are planned https://www.shell.com/media/news-and-media-releases/2021/shell-sets-out-expected-timetable-of-simplification.html to be assimilated into a single line of ordinary shares on Jan. 29.

Shell announced in November https://www.reuters.com/world/uk/shell-proposes-single-share-structure-tax-residence-uk-2021-11-15 it would scrap its dual share structure and move its head office to London from The Hague, pushed away by Dutch taxes and facing climate pressure in court as the energy giant shifts from oil and gas.

The firm has been in a long-running tussle with the Dutch authorities over the country’s 15% dividend withholding tax on some of its shares, making them less attractive for international investors. Shell introduced the two-class share structure in 2005 after a previous corporate overhaul.

Shell held its first board meeting in London on Dec. 31.

(Reporting by Ron BoussoEditing by Chris Reese and David Evans)

How a Russian-Ukraine conflict might hit global markets

LONDON (Reuters) – A potential invasion of Ukraine by neighbouring Russia would be felt across a number of markets, from wheat and energy prices and the region’s sovereign dollar bonds to safe have assets.

Below are four charts showing where a potential escalation of tensions could be felt across global markets:


Inflation at multi-decade highs and impending interest rate rises have made for a bad month for bond markets, but an outright Russia-Ukraine conflict could change that.

Two-year U.S. Treasury yields have seen the biggest monthly jump since 2016 and 10-year rates appeared headed for the key 2% level. In Germany, 10-year yields rose above 0% for the first time since 2019.

A major risk event usually sees investors rushing back to bonds, which represent the safest assets on planet and this time may not be different, even if a Russian invasion of Ukraine risks further fanning oil prices — and therefore inflation.

“Clearly if the Ukraine story was to go wrong there would be quite a significant bid for Treasuries, and this notion of the 10-year getting to 2% would be put on hold,” said Padhraic Garvey, regional head of research, Americas at ING.

Other safe-havens include gold, already at two-month peaks as well as the yen.

(Graphic: ‘Safe haven’ prices as Ukraine tensions build, https://fingfx.thomsonreuters.com/gfx/mkt/gdvzyklegpw/One.PNG)


Any interruption to the flow of grain out of the Black Sea region is likely to have a major impact on prices and add further fuel to food inflation at a time when its affordability is a major concern across the globe following the economic damage caused by the COVID-19 pandemic.

Four major exporters – Ukraine, Russia, Kazakhstan and Romania – ship grain from ports in the Black Sea which could face disruptions from any military action or sanctions.

Ukraine is projected to be the world’s third largest exporter of corn in the 2021/22 season and fourth largest exporter of wheat, according to International Grains Council data. Russia is the world’s top wheat exporter.

“Geopolitical risks have risen in recent months in the Black Sea region, which could influence wheat prices ahead,” said Dominic Schnider, strategist at UBS.

(Graphic: Soaring food prices fuel inflation pressures, https://fingfx.thomsonreuters.com/gfx/mkt/zgpomagzlpd/Soaring%20food%20prices%20fuel%20inflation%20pressures.PNG)


Energy markets are likely to be hit if tensions turn into conflict. Europe relies on Russia for around 35% of its natural gas, mostly coming through pipelines which cross Belarus and Poland to Germany, Nord Stream 1 going directly to Germany, and others through Ukraine.

In 2020 volumes of gas from Russia to Europe fell after lockdowns suppressed demand and did not recover fully last year when consumption surged, helping to send prices to record highs.

As part of possible sanctions in the case Russia invaded Ukraine, Germany has said it could halt the new Nord Stream 2 gas pipeline from Russia that was expected to increase gas imports to the bloc but also underlines Europe’s energy dependence on Moscow.

SEB commodities analyst Bjarne Schieldrop said markets would see natural gas exports from Russia to Western Europe likely significantly reduced both through Ukraine and Belarus in the event of sanctions and gas prices revisit Q4 levels.

Oil markets could also be affected. JPMorgan said the tensions risked a “material spike” in oil prices and noted that a rise to $150 a barrel would reduce global GDP growth to just 0.9% annualised in the first half of the year, while more than doubling inflation to 7.2%.

(Graphic: European gas prices hit record highs in December, https://fingfx.thomsonreuters.com/gfx/mkt/znvnelrqxpl/European%20gas%20prices%20hit%20record%20highs%20in%20December.PNG)


Russian and Ukrainian assets will be at the forefront of any markets fallout from potential military action.

Both countries’ dollar bonds have underperformed their peers in recent months as investors trimmed exposure amid escalating tensions between Washington and its allies and Moscow.

Ukraine’s fixed income markets are chiefly the remit of emerging market investors, while Russia’s overall standing on capital markets has shrunk in recent years amid sanctions and geopolitical tensions, somewhat cushioning any threat of contagion through those channels.

However, Russia’s rouble and Ukraine’s hryvnia have also suffered, making them the worst performing currencies in the emerging markets universe so far this year.

Geopolitics on the Ukraine-Russian border presented “substantial uncertainties” to foreign currency markets, said Chris Turner, global head of markets at ING.

“The events of late 2014 remind us of the liquidity gaps and U.S. dollar hoarding that led to a substantial drop in the rouble at that time,” said Turner.

(Graphic: Ukraine Russia bonds feeling the heat, https://fingfx.thomsonreuters.com/gfx/mkt/byvrjmynnve/Ukraine%20Russia%20bonds%20feeling%20the%20heat.PNG)

(Reporting by Karin Strohecker, Sujata Rao, Nigel Hunt and Susanna Twidale in London; Writing by Karin Strohecker; Editing by Alison Williams)

Siemens Energy, wind division lose $5 billion in value after profit warning

By Isla Binnie and Christoph Steitz

MADRID/FRANKFURT (Reuters) – Shares in wind turbine maker Siemens Gamesa tumbled on Friday after it cut its financial outlook for the third time in nine months, dragging down the market value of its rivals as well as German parent Siemens Energy.

Siemens Gamesa shares slumped as much as 16.2% to their lowest since July 2020, while Siemens Energy fell as much 17.4%, its biggest intraday loss ever, wiping out 4.6 billion euros ($5.2 billion) in market value between them.

Profit margins at wind turbine makers have been squeezed by a surge in costs for vital materials such as steel, forcing companies such as Siemens Gamesa and Danish rival Vestas to increase their prices.

The companies face a perfect storm, said Sydbank analyst Jacob Pedersen. “Their costs have sky-rocketed for the wind turbines they were paid for a few quarters ago and this is a huge challenge.”

Shares in Vestas and smaller German rival Nordex both fell 8% on Friday.

Siemens Gamesa’s warning also forced Siemens Energy to cut its outlook https://reut.rs/3FT1jbP on Thursday, raising the pressure on its Chief Executive Christian Bruch to buy the 33% of the wind business it does not own so it can get a better grip on the problems.

Bruch said last year it was too early to talk about buying the remaining shares but it would become an issue at some point.

Factoring in Friday’s share price slide, the 33% stake is now worth about 3.8 billion euros, roughly half a billion less than on Thursday and down from 6.1 billion euros when Bruch made the comments in May.


Reporting a first-quarter loss of 309 million euros, Siemens Gamesa executives said supply chain glitches due to the pandemic would last longer than previously expected, and that they had reconsidered how to decide on projects.

“Our development timeline was maybe here and there a bit optimistic,” Chief Executive Andreas Nauen said. “Logistics costs have also been kind of exploding in recent months.”

Siemens Gamesa said its core profit margin this year might now slump to minus 4% and would only reach 1% at best, whereas previously it had been expecting a margin of 1% to 4%.

Siemens Energy, which makes turbines for gas-fired power plants, heat pumps as well as power transmission equipment, trimmed one point off the top of its own margin forecast, saying it would not go above 4%.

Nauen said negotiations with clients about increasing prices were difficult because customers also had their own limits.

“Some customers originally say (that) doesn’t fly … when we push back they finally sign because the project is approved with our turbine and they have little choice,” he said.

Siemens Gamesa’s order book was worth 33.6 billion euros at the end of December but 2 billion euros of those orders did not have a positive margin, Siemens Gamesa Chief Financial Officer Beatriz Puente said.

($1 = 0.8814 euros)

(Reporting by Isla Binnie in Madrid and Christoph Steitz in Frankfurt; Additional reporting by Stine Jacobsen in Copenhagen and Anika Ross in Frankfurt; Editing by David Clarke and Susan Fenton)

Schlumberger expects ‘supercycle’ as demand lifts profit above forecast

By Arunima Kumar and Liz Hampton

(Reuters) – Schlumberger beat expectations with a rise in fourth-quarter profit on Friday as higher crude and natural gas prices drove demand for the world’s largest oilfield services company.

Oil prices surged about 50% last year and are trading at seven-year highs on a COVID-19 vaccine-fueled demand recovery and tight supplies. The global rig count was 1,563 at the end of the fourth quarter, up around 42% from a year ago, Baker Hughes data shows.

“Absent any further COVID-related disruption, oil demand is expected to exceed pre-pandemic levels before the end of the year and to further strengthen in 2023,” Schlumberger Chief Executive Olivier Le Peuch said.

Current market conditions are “strikingly similar to those experienced during the last industry supercycle”, he added.

Schlumberger expects 2022 capital spending of between $1.9 billion and $2 billion, versus just under $1.7 billion in 2021, and plans to increase spending in North America by at least 20%, Le Peuch said on a call with investors.

Schlumberger shares were down 1.75% as Brent oil futures fell about 1.45% to $87.14 a barrel.

Wall Street analysts said the results were positive, with the exception of a decision to keep its dividend flat after the company generated around $1.3 billion in free cash flow for the quarter and $3 billion for the full year 2021.

“There was an expectation of a dividend raise. I believe they will raise the dividend once the leverage targets are met,” said James West, a senior managing director with Evercore ISI.

Schlumberger’s fourth-quarter adjusted net income rose to $587 million, or 41 cents per share, above Wall Street estimates of 39 cents per share, according to Refinitiv IBES. The company beat last year’s fourth-quarter earnings of $309 million, or 22 cents per share.

Fourth-quarter revenue of $6.23 billion also topped analysts’ forecast of $6.09 billion.

GRAPHIC – Schlumberger’s revenue on recovery mode


In North America, strong offshore and land drilling activity and an uptick in exploration data licensing for the U.S. Gulf of Mexico and Permian Basin drove a 13% sequential jump in revenue.

Schlumberger also said it sold $109 million in shares of Liberty Oilfield Services during the quarter, bringing its stake to 31%. Last year, it closed on the sale of its U.S. fracking business to Liberty in exchange for a 37% equity stake.

(Reporting by Arunima Kumar in Bengaluru; Editing by Amy Caren Daniel, Mark Porter, Paul Simao and Alexander Smith)

U.S. safety firm withdraws certification for two oil tankers over Iran sanctions

By Jonathan Saul

LONDON (Reuters) – Two tankers have had their environmental and safety classification withdrawn by a U.S. company that provides such certification, after accusations by a U.S. advocacy group that they had shipped cargoes of Iranian oil, documents seen by Reuters show.

Countries targeted by tougher U.S. sanctions, including Iran and Venezuela, have responded to the mounting pressure with elaborate strategies to circumvent restrictions on their oil exports.

Top oil shipping companies say they have in turn responded by tightening guidelines and deploying technology to prevent accidental sanctions breaches, which U.S. officials have said could lead to them being cut out of the dollar financial system and having assets seized.

Several shipping sources involved in legal advisory and insurance services to the industry have told Reuters that inadvertent breaches are also a growing danger for ship certification societies such as American Bureau of Shipping (ABS), which in the past month withdrew cover for the two tankers.

“Classification societies are faced with the challenge of keeping up with Iran’s tactics in order to avoid facing sanctions themselves,” Claire Jungman, chief of staff at United Against Nuclear Iran (UANI), said.

Classification societies provide services such as checking that ships are seaworthy.

UANI, the U.S. group, which monitors Iran-related tanker traffic through ship and satellite tracking, alerted ABS in December to what it said were transfers of Iranian oil involving several vessels, including the Panama-flagged Karo and the Belize-flagged Elsa, correspondence between the two groups seen by Reuters shows.

Reuters was not able to find email or telephone numbers for the owners of the two tankers.

Iran views U.S. sanctions as illegal and has said it will make every effort to sidestep them. “There is strong will in Iran to increase oil exports despite the unjust and illegal U.S. sanctions,” Iran’s oil minister Javad Owji told state TV in September, without elaborating on how Tehran planned to overcome sanctions.

Iranian officials, who do not divulge details about their efforts to bypass the sanctions, did not answer a call or respond to an email request for comment from Reuters on Friday, which is the weekend in Iran.

ABS is the only U.S. firm among the top 12 ship classification societies, which are otherwise based in Europe and Asia, are essential to the running of thousands of vessels in the global shipping fleet.

Without their certification, vessels are unable to secure insurance cover or call at most international ports.

The ABS website shows that so-called class cover, which includes vessel safety inspections, for a ship named the Elsa was withdrawn on Dec. 17, with sanctions cited as the reason, while cover for a second ship, the Karo, was withdrawn on Jan. 13, with sanctions also cited as the reason for the move. No further details were given.

An ABS spokesperson said that as a U.S. company it “strictly follows U.S. sanctions law and takes seriously and investigates all claims and information received that might suggest that any vessel in ABS class is trading with a sanctioned country”. 

“In the event that the information is confirmed, ABS has and will cancel the involved vessel’s ABS class, in accordance with our policies and procedures,” the spokesperson said, declining to comment on individual cases.

In a Dec. 21 letter to UANI, seen by Reuters, ABS said that after completing an independent investigation it had found “material evidence” that on or about Dec.8 the Elsa had “engaged in illicit transshipment operations with an Iranian tanker” and had as a result cancelled all classification services.

ABS said in another letter on Jan. 14 it had completed a separate independent investigation of the Karo and also cancelled all certification services associated with it.

Hong Kong-based Delta Lines is listed as the owner of the Elsa, which is its only ship, according to the Equasis public database, which aims to provide transparency in shipping by publishing maritime data.

Delta Lines is listed in a corporate registry office in Hong Kong, but staff at the premises could not provide any details about the company when contacted by Reuters on Thursday.

India-based Karo Shipping Services is listed as the owner of the Karo, which is its only ship, data on Equasis showed.

An office listed in shipping databases as the contact address for Karo Shipping Services near the city of Mumbai had closed down when visited by Reuters on Tuesday.

Eikon ship tracking data showed the Elsa’s last reported position was off Singapore on Jan. 20, while the Karo’s last reported position was off the coast of Taiwan on Jan. 18.

(Additional reporting by Rajendra Jadhav in Mumbai, Farah Master in Hong Kong and Dubai bureau; Editing by Alexander Smith)

Factbox-Ukraine’s energy options limited in case of conflict with Russia

KYIV (Reuters) – Ukraine, with a population of 41 million, is one of the largest energy consumers in Europe and is also a key transit country for Russian gas to Europe.

Following are some ways energy supplies could be hit in the event of an open military conflict with Russia, according to official sources and experts:


The domestic gas supply system is integrated into transit gas pipelines and is heavily reliant on gas supplies from Russia to Europe. Transit gas pipelines make it possible to maintain the necessary level of pressure in the Ukrainian gas network to supply gas both to Europe and to domestic consumers.

Ukraine has not imported gas directly from Russia since 2015, but it buys it from Western traders as part of Russian gas that goes through Ukrainian territory to Europe.

Ukraine consumed 27.3 billion cubic meters (bcm) of gas with its own production of about 19.8 bcm in 2021. Imports amounted to 2.6 bcm, while 4.9 bcm of gas was taken from underground storage.

Households used 32% of the consumed gas; heat producers 24%; industry, the army and other consumers 44%.

If Russia maintains gas transit through Ukraine and transit gas pipelines remain operational, Ukraine is able to provide the population and industry with gas.

During the cold season, Ukraine consumes about 140-150 million cubic meters (mcm) of gas per day, including its own production of 55 mcm. Up to 90 mcm can be taken from underground storage.

Ukraine has not been importing gas in recent months but has 11.3 bcm of gas in storage owned by Ukrainian companies.

In case of termination of transit or destruction of transit pipelines, according to sources familiar with the situation in the sector, Ukraine would be able to provide gas to households and critical infrastructure for 5-7 days, depending on weather and other conditions.

After transit were halted, the pressure in the system would begin to decrease and Ukraine would not have sufficient volumes of gas in storage to maintain pressure and supply gas to consumers.

Shutting off gas supplies to industry could extend the life of the system by several days, sources said.

In theory, gas could be imported up to 40 mcm per day, but this is barely feasible due to a lack of freely available resources in Europe and funds to buy it.

Replacing gas with another type of energy, such as electricity, is only partially possible as the country uses gas to produce some of its electricity and has insufficient coal reserves for its coal-fired plants.


According to the energy ministry, Ukraine consumes about 23,000 megawatts and has an additional capacity to produce another 3,400 megawatts.

About 55% of production is provided by four Ukrainian nuclear power plants, and 29% by thermal plants.

However, part of the thermal generation is fired by gas, consuming up to 10 mcm per day, meaning that would suffer a knock-on effect of any disruption to gas supplies.

Other thermal plants are powered by coal. In 2014, pro-Russian separatists gained control of almost all Ukrainian coal mines that previously supplied coal to the country’s thermal power plants, and Ukraine is forced to import coal, mainly by sea.

The government says the power generating companies have contracts for supply of imported coal until the end of the heating season. However, the small amounts of coal reserves at thermal stations mean they cannot increase generation.

Ukraine also imports electricity from Belarus, but its supplies depend on the political will of Minsk, an ally of Russia, and the safety of the power lines.

Ukraine does not have the technical ability to import electricity from Europe for consumers in all regions.


Ukraine is almost 50% dependent on imports of gasoline from Belarus, supplies of which increased by 17% in 2021 to around 1 million tonnes. In the diesel fuel sector, important for the armed forces, the share of Russian supplies stood at about 30% or 2 million tonnes.

(Reporting by Pavel Polityuk; Editing by Frances Kerry)