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Blackwater USA – Daily Brief

Coming Up This Week

  • NSA Bolton and Commerce Secretary Ross will attend a summit on Venezuela in Peru this week, at which Ross is expected to lay out the U.S. plan for post-Maduro recovery.
  • The eighth round of U.S.-Taliban negotiations began on Saturday, and will continue this week. The Taliban says its co-founder, Mullah Baradar, might meet directly with U.S. envoy Zalmay Khalilzad for the first time, and both sides say they hope this will be the final round of talks.
  • Hong Kong activists are staging a city-wide strike today, and some civil servants are defying their bosses to participate.
  • Hajj begins this Friday, and lasts through August 14th. Over two million pilgrims are expected to participate, though Congolese Muslims won’t be among them: Saudi blocked visas for pilgrims from DRC over Ebola fears.

U.S.

  • Two mass shootings—one in Dayton, Ohio; and one in El Paso, TX—killed a total of at least 29 people over the weekend. The El Paso shooter had announced his plan just before the event in an anti-immigrant tirade on 8chan, while the Dayton shooter’s motive seems unclear.
  • 8chan’s ISP said it was dropping the anonymous posting site, which its CEO called a “cesspool of hate” (8chan’s own CEO called for the site to be shut down, too).
  • The shootings are bound to make gun control a hot topic in the presidential primaries.
  • Senate Majority Leader Mitch McConnell fractured his shoulder in a fall at home.

Mexico

  • Mexico detained 18,758 would-be migrants in July. That’s around 40% fewer than in June, which probably means fewer migrants are attempting the journey. However, it’s also triple the number of apprehensions in December 2018 (Pres. AMLO was initially very hands-off about migration, which led to large migrant flows, but he got serious about preventing it when Pres. Trump threatened to impose tariffs on Mexican exports in June).
  • Mexico is considering options to potentially extradite the vendor of the gun used in El Paso, and charge him with terrorism (six Mexicans were killed—and likely targeted for their race—in the attack).

Iran

  • Iran’s IRGC says it seized another tanker that it accused of “smuggling” fuel in the Persian Gulf. The IRGC originally said it was an Iraqi diesel tanker, but Iraq says it has no ties to the ship, and does not even export diesel in the first place.
  • SecDef Esper said the U.S. has gotten good responses from allies to its request for help patrolling the Gulf and protecting against further tanker seizures, but still couldn’t name any ally besides the UK who had actually committed to help. EU countries seem to want to stay out of the fray.
  • Meanwhile, a new NYT report suggests that China has been importing more Iranian oil than previously suspected, using ghost tankers that turn off their tracking systems as they reach the Pacific. Article pasted below.

India/Pakistan

  • India has deployed thousands of troops to Kashmir, after warnings of an aborted terror attack caused a flare-up in tensions with Pakistan. Top politicians in Kashmir have been ordered to house arrest.

Afghanistan

  • An Afghan policeman turned his gun on his colleagues in Kandahar, killing seven of them. The Taliban then claimed the infiltration and attack.
  • An Afghan interpreter who had moved to the U.S. under a special immigrant visa was charged with falsifying documents to help smuggle two other Afghans into the U.S.

DPRK

  • North Korea said that Kim Jong Un personally supervised Saturday’s rocket launcher test, which reminds me of the great web album Kim Jong Un Looking At Things.

Libya

  • A drone attack—reportedly by Haftar loyalists—killed around 40 people attending a wedding in Murzuq, southwestern Libya. The GNA then said it had shot down an LNA drone, but it’s not clear if it’s the one that staged the attack.

Sahel

  • Al Qaeda affiliate JNIM claimed a July 22nd suicide attack on a French base at the airport in Gao, Mali. JNIM says it killed several French troops, but France hasn’t said anything about the attack.

Other News

  • Peru’s Pres. Vizcarra ordered the army to keep order at the Matarani Port Terminal, where anti-mining activists are organizing a protest against Southern Copper Corp’s plans for a $1.4 billion project at the Tia Maria mine.

Defying U.S. Sanctions, China and Others Take Oil From 12 Iranian Tankers (NYT)

China and other countries are receiving oil shipments from a larger number of Iranian tankers than was previously known, defying sanctions imposed by the United States to choke off Tehran’s main source of income, an investigation by The New York Times has found.

At least 12 Iranian tankers have loaded and delivered oil across Asia and the Mediterranean since May 2. Countries that take the oil risk economic penalties from the United States.

At least six of those ships unloaded their cargo at ports in China.

Other ships have sailed to the Mediterranean through the Suez Canal. That oil may have gone to Syria or Turkey, analysts say.

The Times examined the movements of more than 70 Iranian tankers since May 2, when the American sanctions took full effect.

Twelve of the tankers loaded oil after May 2 and delivered it to China or the Eastern Mediterranean, where the buyers may have included Syria or Turkey. Only some of those 12 tankers were previously known to have recently delivered Iranian oil, and an analyst said the scale of the shipments documented by The Times investigation is greater than what had been publicly known.

The continued flow of oil underscores the difficulty the Trump administration has had in using sanctions to bring Iranian oil exports to zero after breaking with allies and partners on Iran policy. The Obama administration had worked with China, Russia and three European allies on the 2015 agreement intended to restrict Iran’s ability to pursue a nuclear program. President Trump’s decision to withdraw from the deal and to impose sanctions was opposed by those countries.

“You can’t make these kinds of threats if you can’t operationalize it,” said Richard Nephew, a scholar at Columbia University and a former White House and State Department official who helped enforce Iran sanctions during the Obama administration. President Barack Obama did not have a goal of bringing Iran’s oil exports to zero while pressuring Tehran to negotiate.

“It adds up to a decision that makes them look weak and feckless,” he added. “That shows there are limitations to U.S. power. China and other places are prepared to say, ‘No, we’re not going to follow the U.S. lead.’”

The Times reviewed data from MarineTraffic and Refinitiv, two ship-tracking services, as well as satellite imagery from Planet Labs and analysis from shipping and energy experts.

“U.S. sanctions have not stopped Iran from moving oil to the Mediterranean and Asia,” said Noam Raydan, an analyst at ClipperData, which tracks global crude shipments.

It is not illegal under international law to buy and haul Iranian oil or related products. The Trump administration’s oil sanctions, which mainly went into effect last November after the United States pulled out of the Iran nuclear agreement, are unilateral. The administration granted eight governments permission to continue buying Iranian oil despite the sanctions, but ended those exceptions on May 2.

Foreign companies that ignore the sanctions and do business with American companies or banks risk being punished by the United States.

American officials have said that sanctions are aimed at cutting off money to the Iranian government to force leaders there to make political change, transform their foreign policy and offer more concessions on the country’s nuclear and missile programs.

While Iran continues to export oil, the sanctions have had a substantial impact. In April 2018, before Mr. Trump withdrew from the nuclear deal, Iran exported 2.5 million barrels of oil per day. One year later, that figure was at one million. And in June, after the end of the exceptions or waivers, ships in Iranian ports loaded about 500,000 barrels per day, according to Reid I’Anson, an energy economist at Kpler, a company tracking seaborne commodities.

Since the sanctions came into full effect on May 2, low-level hostilities between Iran and the United States in the Persian Gulf have increased, despite attempts by European nations to ramp down tensions and get Iran to comply with the nuclear deal, which it had been doing until it breached limits on nuclear fuel last month.

The State Department said any new purchase of Iranian oil after May 2 would be subject to sanctions. “Our firm policy is to completely zero out purchases of Iranian oil,” it said.

Japan and South Korea, fearful of secondary sanctions imposed by Washington if they do business with Iran, have complied with the American sanctions. Turkish officials said in late May they are halting imports of Iranian oil but do not agree with the American sanctions.

In July, the British marines and port authorities in Gibraltar seized a supertanker that they said was carrying crude oil from Iran to Syria. Though the Europeans do not endorse the American sanctions on Iran, the shipment violated European Union sanctions against Syria.

The Trump administration is starting to intensify sanctions enforcement to try to end the exports to China, which continues to be the largest buyer of Iranian oil. On July 22, Secretary of State Mike Pompeo announced sanctions against Zhuhai Zhenrong, a Chinese state-owned enterprise, and its top executive, Li Youmin, for “violating U.S. restrictions on Iran’s oil sector.”

“We have a pretty good bead on where these ships are moving around,” Mr. Pompeo told Bloomberg TV on July 25. “Wherever we find violations, we will do our level best to enforce them completely and thoroughly.”

But that does not satisfy some Republican members of Congress who are national security hawks.

“While I’m glad the administration sanctioned an initial round of Chinese actors, it must step up strong enforcement to deter Chinese and other foreign actors from violating U.S. sanctions against Iran,” said Senator Marco Rubio, Republican of Florida. “The Iranian regime has blatantly shipped millions of barrels of oil to China.”

To really tighten the screws on China, the Trump administration would need to punish the People’s Bank of China or other Chinese banks that engage in transactions with the Central Bank of Iran, Mr. Nephew said. The United States could also penalize the energy giant Sinopec, which, like Zhuhai Zhenrong, also imports oil from Iran. But sanctioning the banks or Sinopec would have far-reaching consequences for global trade and deepen the divide between Washington and Beijing.

The two nations are already embroiled in a bitter trade war and at odds over global security issues, and Mr. Trump is eager to reach a trade deal with President Xi Jinping of China.

A Chinese Foreign Ministry spokesman, Geng Shuang, said on July 19 that the Trump administration’s “maximum pressure” campaign against Tehran was the “root cause of the current tensions” involving Iran and that Washington should “correct its wrongdoing.”

Before the end of the sanctions exceptions on May 2, China had been importing 500,000 barrels of Iranian oil per day. In the past month, China’s imports have dropped to about 360,000 barrels per day, according to Kpler.

The National Iranian Tanker Company, which is specifically targeted by American sanctions, owns or manages 11 of the 12 tankers.

In the case of Devrez, an Iranian-managed oil-product tanker, its owner was listed as Great Sparkle Investments Ltd., which is registered in Hong Kong but has an office in Mumbai, India, according to the International Maritime Organization website. The tanker likely discharged its cargo in early June, Mr. I’Anson said.

When they travel, Iranian tankers sometimes turn off their automatic identification system, making them harder to track, said Tom Kenison, an analyst at FGE, an energy consultancy. This is common practice among smugglers — ships carrying armored Mercedes sedans and other luxury goods for North Korean buyers in violation of United Nations sanctions do the same.

Several Iranian tankers stopped reporting their positions after they crossed the Suez Canal, but shipping data suggests they unloaded their cargo in the Eastern Mediterranean. Destinations could include Syria or Turkey, analysts said.

The Times was able to estimate when and where a tanker offloaded its cargo by using data for each ship’s position and draft, or how high it was riding in the water. The draft indicates whether a ship is loaded.

When a vessel enters a berth and there is a draft change, for example, “we can be pretty confident that volume is being offloaded,” said Mr. I’Anson.

Two Iranian tankers, Snow and Sarak, traveled to China and left without an apparent change in draft, so it was unclear whether they unloaded cargo.

Draft is manually entered by the crew, and updates may sometimes be delayed, said Stellios Stratidakis, head of data at MarineTraffic.

Maria III delivered its cargo of gas to China. Five other tankers loaded oil before May 2 and delivered cargo to India and China.

Some of the Iranian ships have been previously identified in reports by Reuters, Bloomberg, and TankerTrackers.com, which uses satellite technology to monitor ships.

Since June, at least three ships have taken iron ore from Iran to China, Mr. I’Anson said, which could also be a violation of American sanctions.

Other Iranian tankers are waiting in the Persian Gulf loaded with crude oil, ready to move when they can find a buyer, he said. Iran is selling some of the oil at a discount.

Some countries watching the continuing imports of Iranian oil by China might start pressuring the Trump administration to grant them exceptions, Mr. Nephew said. Or they might decide to just go ahead and buy the oil, perhaps in secret. In June, after a meeting with Prime Minister Shinzo Abe of Japan, President Hassan Rouhani of Iran said Mr. Abe told him “Japan was interested in continuing to buy Iran’s oil.”