Saudi maintains crude supply to Asian refiners despite OPEC+ cuts

Saudi Aramco logo is pictured at the oil facility in Abqaiq, Saudi Arabia October 12, 2019. REUTERS/Maxim Shemetov

State oil giant Saudi Aramco will supply full crude contract volumes loading in May to several North Asian buyers despite its pledge to cut output by 500,000 barrels per day, several sources with knowledge of the matter said on Monday.

This comes after the Organization of the Petroleum Exporting Countries (OPEC) and allies, known as OPEC+, surprised markets last week by announcing an extra output cut of 1.16 million barrels per day (bpd) from May for the rest of the year.

Saudi Aramco’s monthly allocation was being keenly watched by investors as an indicator of whether planned output cuts could tighten supplies in Asia, the world’s biggest crude import market.

People are wondering whether the additional voluntary cut will actually affect supply, or whether it is designed just to shore up oil prices, said a source at an Asian refiner who declined to be named as he is not authorised to speak to media.

The OPEC+ announcement caused Brent and US West Texas Intermediate crude futures to jump 6% last week, returning to levels last seen in November.

Last week, Saudi Aramco also surprised the market by raising prices for the flagship Arab Light crude it sells to Asia for a third month in May.

It also increased the prices of other oil grades to Asian clients amid expectations of tighter market supply.

Asia’s oil demand had been expected to weaken in the second quarter as several refiners in Asia, namely Sinopec, South Korea’s third largest refiner and Aramco affiliate S-Oil Corp, Japan’s Fuji Oil and Idemitsu Kosan are shutting a combined 1.15 million bpd of crude distillation capacity in May.

Still, some investors are bullish about a recovery in China’s oil demand and expect global oil markets to tighten in the second half this year and push prices towards $100 a barrel.

Meanwhile, the Abu Dhabi National Oil Company (ADNOC), a state-owned oil giant from the United Arab Emirates, has informed at least three buyers in Asia that it will supply full contractual volumes of crude in June, trade sources said.

The UAE plans to cut 144,000 bpd from May as part of the OPEC+ cuts.

Oil rallied as much as 8.4% on Monday, the most in more than a year, after an unexpected decision by the Organization of Petroleum Exporting Countries and its allies to cut more than 1 million barrels in daily output starting next month. Saudi Arabia, the cartel's de facto leader along with Russia, agreed to slash production by 500,000 barrels a day.

The move blindsided the global crude market and prompted some banks to hike their price forecasts.

Traders and refiners had been eagerly awaiting the release of Saudi official prices since the start of this week on expectations of an OSP hike. Some buyers were also concerned about potential cuts in their cargo liftings from Aramco, or so-called allocations, prompting them to begin speaking with other non-OPEC+ suppliers for replacement or alternative supplies. Prices for US buyers also rose.

"These prices show that, despite the production cuts they announced, the Saudis still expect strong Asian demand," said Giovanni Staunovo, commodity analyst at UBS Group AG. "For the US, it may be possible that less supply will be flowing to the region with the higher prices."

Saudi Aramco can shape the overall amount of oil it exports in a given month through the setting of its official prices relative to those other competing suppliers. It can also do so via an allocation process where it decides how much of each grade it will supply to each customer. Allocations are typically known by the 10th of each month.

The producer also maintained prices for customers in northwest Europe and the Mediterranean.

Aramco sells about 60% of its crude shipments to Asia, most under long-term contracts, pricing for which is reviewed monthly. China, Japan, South Korea and India are the biggest buyers.

The company's pricing decisions are often followed by other Gulf producers such as Iraq and Kuwait.

LIVE UPDATES - Russian Air Defenses Shoot Down 100 Bayraktar Drones During Special Operation

UCAV Bayraktar-TB
©REUTERS/Aziz Karimov

More than 100 Bayraktar-TB drones, supplied to Ukraine, have been destroyed during the special operation, Lieutenant-General Andrey Demin, the commander of the Air Defense Force, deputy commander-in-chief of the Aerospace Force, has said.

"There are practically no fundamental distinctions between fighting against strategic drones like the US Global Hawk (RQ-4) or Reaper (MQ-9) or Turkey’s operational-tactical Bayraktar-TB and counteraction to crewed aircraft. The elimination of more than 100 Bayraktars, delivered to Ukraine during the whole period of the special military operation is clear evidence of this," Demin said in an interview to the Russian army daily Krasnaya Zvezda.

He said the incident with the US MQ-9 over the Black Sea, when as a result of sharp maneuvering it went out of control, lost altitude and collided with the water surface "makes it clear to the Western world community that for Russia’s air defenses such aerial targets are no problem."

The U.S. Air Force's MQ-9 Reaper drone went down in international waters of the Black Sea on March 14. The Russian Defense Ministry said that the drone had been flying towards the Russian border with its transponders turned off and entered the area of "a temporary regime of using airspace" imposed in connection with the special military operation.

The aircraft lost control as a result of sharp maneuvering and crashed. The Russian fighters escorting it did not use on-board weapons or made contact with the drone, the Defense Ministry added. According to the US version, two Russian Su-27s intercepted the MQ-9 on a reconnaissance mission and dropped fuel several times. Eventually, according to Washington, one of the fighters hit the drone’s propeller, which led to its crash.

MOD: Russian Aviation Strikes Ukrainian Positions in Krasny Liman Direction

Russian attack aircraft and TOS-1A "Solntsepek" (Blazing Sun) thermobaric rocket launchers have inflicted a defeat on the manpower of Ukrainian troops in the Krasny Liman direction, a Russian Defense Ministry spokesperson told Sputnik.

"In the Krasny Liman direction, air defense crews … discovered and destroyed unmanned aerial vehicles of the Armed Forces of Ukraine. Operational-tactical aviation carried out airstrikes using high-explosive aerial bombs on temporary deployment locations and an enemy ammunition depot. Attack aircraft, using unguided missiles, attacked the firepower and manpower of Ukrainian nationalists. Heavy flamethrower systems TOS-1A ‘Solntsepek’ inflicted fire damage with thermobaric shells. The enemy suffered losses in personnel and equipment," the spokesperson said.

Scouts of the Central Military District and the "Brave" group continue to work on the Kremensky sector of the front in the Donbass. The fighters spoke about the capture of a strong point and showed how they train in rare moments of rest.

Russia launched its special military operation in Ukraine on February 24, 2022, after the Donetsk and Luhansk people’s republics appealed for help in defending themselves against Ukrainian provocations. In response to Russia’s operation, Western countries have rolled out a comprehensive sanctions campaign against Moscow and have been supplying weapons to Ukraine.

On September 30, 2022, Russian President Vladimir Putin and the heads of the Donetsk and Luhansk people's republics, as well as Kherson and Zaporozhye regions, signed agreements on the accession of these territories to Russia, following referendums that showed that an overwhelming majority of the local population supported becoming part of Russia.

Western countries have significantly increased their economic and military support for Kiev, which now includes air defense and multiple rocket launching systems, tanks, self-propelled artillery, anti-aircraft guns, armored vehicles and various types of ammunition. Kremlin spokesman Dmitry Peskov said in January that arms supplies to Ukraine by Western countries testify to their direct and growing involvement in the conflict.

Special operation, 8 April. Main:

▪️The interdepartmental coordination headquarters of the Russian Federation for humanitarian response in Ukraine reported that Kyiv was going to carry out a provocation in the Sumy region and accuse Russia of using poisonous substances

▪️The New York Times writes that a new portion of secret US documents on Ukraine, China and the Middle East allegedly leaked to the network, the information is being investigated by the Pentagon and the Department of Justice

▪️in the Donetsk, Krasnolimansk, Kupyansk, Yuzhnodonetsk, Zaporozhye and Kherson directions, Kyiv's losses per day amounted to almost 600 military killed and wounded, the Russian Defense Ministry reported

▪️according to the head of Crimea Aksyonov, a rocket launched from Ukraine was shot down over Feodosia, debris fell in one of the settlements, no one was injured

▪️Ukrainian troops shelled Yasinovataya in the DPR, as a result, at least 7 civilians were injured

▪️DPR Ombudsman Morozova stated that international structures have never taken proper measures against Ukraine for the torture of DPR servicemen, which have been massive since 2014

▪️Blinken ruled out negotiations between Russia and Ukraine at the moment, saying that this requires a willingness to "constructive" negotiations on the part of Moscow

▪️Medvedev said that nobody needs Ukraine, therefore it will disappear and it will not be on the planet, and the pieces of Russia called Ukraine within the borders of 1991 are a misunderstanding.

Special operation, 9 April. Main:

▪️The New York Times, citing leaked US secret documents on Ukraine, writes that the authorities in Kiev were forced to deploy elite troops near Artemovsk, which they counted on for a counteroffensive, and this led to "strategic costs"

▪️According to the NYT, the leaked documents have complicated Washington's relations with its allies and could harm its diplomatic relations with Western countries due to spying on them.

▪️in Donetsk, Kherson, Krasnolimansk, Kupyansk, Yuzhnodonetsk, Zaporozhye directions, Kyiv's losses per day amounted to 420 soldiers, the Russian Defense Ministry reported

The work of a sniper of the 1st Slavic brigade with a Lobaev rifle in the special operation zone. Footage of the use of long-range weapons, filmed with a thermal imager, was at the disposal of RIA Novosti - they show the defeat of one of the enemy's targets.

▪️Matviyenko said that Hollande and Merkel deceived Russia for 8 years to prepare Ukraine for conflict, talking about their commitment to the Minsk agreements instead of really forcing Ukraine to peace

▪️Peskov called the Minsk agreements a game of thimbles: this deception largely untied the hands of the Kyiv regime to arrange a massacre of Russians in their country

▪️The representative of the command of the Ukrainian Air Force, Ignat, said that the air defense systems promised by the West should soon arrive in Ukraine.

Elon Musk refuses to delete Russian security official Medvedev’s post on Twitter

Elon Musk
©AP Photo/ Susan Walsh, File

American entrepreneur Elon Musk, who heads Tesla and SpaceX and owns Twitter, refused to delete a statement posted earlier by Russian Security Council Deputy Chairman Dmitry Medvedev on the Twitter social network.

One of Twitter subscribers earlier turned attention of Musk to Medvedev’s tweet on Saturday, when he stated why no one needs Ukraine any more.

The billionaire explained his decision by the fact that any news is essentially propaganda, so people must decide for themselves how they relate to this or that statement.

American billionaire Twitter owner Elon Musk refused to remove a propaganda post by Deputy Chairman of the Security Council of the Russian Federation Dmitry Medvedev about Ukraine. Relevant statement the businessman did today, April 10, in response to one of the questions from social network users.

He commented on this by saying that any news is essentially propaganda, and people should decide for themselves how they relate to this or that statement. We are talking about Medvedev’s statement the day before that “Ukraine is of no use to anyone and there is no one to protect it.

The American billionaire responded that all news is propaganda to a certain degree and people should make decisions on their own adding that the platform at the issue was not intended to restrict or promote accounts of Russian state structures.

He also said that he himself was almost a victim of propaganda, because someone on the network spread information that Putin allegedly called him a war criminal for helping Ukraine.

“I was told that Putin called me a war criminal for helping Ukraine, so he’s not exactly my best friend,” he said.

Musk also emphasized that Twitter would not “neither promote nor restrict” Russian government accounts. But there will be no “censorship” either.

Recall, on April 8, Twitter testing showed that in recommendations to other users, the system issues the official account of Russian President Vladimir Putin, the page of the Russian Ministry of Foreign Affairs and the Russian Embassy in the UK, which were previously under restrictions.

Musk has repeatedly called on Ukraine to give up its territories to the Russian Federation in order to avoid a third world war.

On March 6, Twitter stopped protecting users from Russian propaganda. And in February, the billionaire called the Revolution of Dignity “a coup.

In April last year, Twitter announced that it would block social network users, who have accounts affiliated with the state authorities that allegedly restrict access to the "open Internet." A spokesman for the company said back then that the measure would primarily affect the Russian government and would involve more than 300 accounts.

GCC condemns Israeli escalations and violation of Al-Aqsa Mosque sanctity

Jassem Mohamed Albudaiwi criticized the violation of the sanctity of Al-Aqsa and the lack of respect shown by Israeli forces during Ramadan. (@GCCSG)

The Secretary-General of the Gulf Cooperation Council (GCC) has condemned Israel’s escalation in Jerusalem and repeated attacks by Israeli soldiers on Al-Aqsa Mosque.

Jassem Mohamed Albudaiwi criticized the violation of the sanctity of Al-Aqsa and the lack of respect of Israeli forces during Ramadan.

Albudaiwi said that Israeli aggression during the holy month and the continuation of the incursions at the mosque were a violation of the sanctities of the holy sites.

He called on the international community to protect Palestinian civilians and stop Israeli attempts to change Jerusalem’s legal character, demographic composition and arrangements for the Islamic holy place.

The GCC has detailed violations by Israeli forces, including harassment, assault and expulsion of worshipers, as well as the closing of the Ibrahimi Mosque.

Albudaiwi said such acts were a provocation to Muslims around the world, an assault on the legal status of holy places, a violation of historically agreed status quo arrangements and a serious breach of international law and UN resolutions.

He added that the ongoing brutal attacks were an alarming turning point for which the Israeli government bears all responsibility.

The statement came days after Albudaiwi condemned the actions of Israeli settlers’ storming of Al-Aqsa Mosque on March 29, under the protection of Israeli soldiers.

He said that such actions during Ramadan constituted a dangerous escalation, a flagrant violation of international law and a violation of the historical and legal status quo in Jerusalem.

Japan following China's Taiwan drills with 'great interest'

A ship of Navy Force under the Eastern Theatre Command of China's People's Liberation Army (PLA) takes part in a combat readiness patrol and "Joint Sword" exercises around Taiwan, at an undisclosed location in this handout image released on April 8, 2023. Eastern Theatre Command/Handout via REUTERS

Japan has been following China's military drills around Taiwan consistently and "with great interest", a top government spokesperson said on Monday, on the last scheduled day for the exercises where Beijing has simulated striking the island.

China announced the three days of drills on Saturday, after Taiwan's President Tsai Ing-wen returned to Taipei following a meeting in Los Angeles with U.S. House of Representative Speaker Kevin McCarthy.

China claims democratically-governed Taiwan as its own territory and has never renounced the use of force to bring the island under Beijing's control.

Japan has long worried about China's military activities in the area given how close its southern islands are to Taiwan.

"The importance of peace and stability in the Taiwan Strait is not only important for the security of Japan, but also for the stability of the international community as a whole," Chief Cabinet Secretary Hirokazu Matsuno told reporters.

The southern Japanese island of Okinawa hosts a major U.S. air force base and last August when China staged war games to protest the visit of then-U.S. House Speaker Nancy Pelosi to Taipei Chinese missiles landed within Japan's exclusive economic zone.

The United States has said it is also watching China's drills closely.

China's military simulated precision strikes against Taiwan in the second day of drills around the island on Sunday.

The People's Liberation Army's Eastern Theatre Command on Monday released a short video on its WeChat account showing a nuclear-capable H-6 bomber flying in what it said was the skies to the north of Taiwan.

"The missiles are in good condition," an unidentified voice says, as the video shows images from the cockpit.

"Start the fire control radar, lock on the target," another voice says, showing images of a missile under the aircraft's wing.

It then shows a pilot readying the fire control button for what it describes as a simulated attack, and then pressing the button, though it did not show any missiles being fired.

Taiwan's military has been scrambling fighters and sending warships to shadow China's forces, but said it would respond calmly and not provoke conflict.

On Monday morning, releasing a map of the previous 24 hours Chinese air force activities, it showed fighters again crossing the sensitive median line of the Taiwan Strait as well as four carrier-based Chinese J-15 fighters operating over the Pacific Ocean to Taiwan's east.

While the ministry did not provide details, Taiwan said last week it was tracking the Chinese carrier the Shandong to its east.

The ministry separately released pictures on Monday of mobile launchers for the Taiwan-made Hsiung Feng anti-ship missiles at an undisclosed location, as well as missile-armed fast attack boats at sea.

Four killed, nine injured in avalanche near Mont Blanc in French Alps

The aftermath of an avalanche at the Armancette glacier on Sunday. REUTERS

Four people have died and nine others have been injured in an avalanche southwest of Mont Blanc in the French Alps, interior minister Gerald Darmanin said on Sunday.

The avalanche occurred in the middle of the day on the Armancette glacier, he wrote on Twitter.

Those caught up in it were backcountry skiing in the mountains, said Emmanuel Coquand, spokesperson for the local authorities of Haute-Savoie, adding that they were still confirming the identity of the victims.

He said the avalanche was extensive, covering an area of one km by 500 metres (half a mile by 550 yards) at an altitude of 3,500 metres and that its causes are being investigated.

The glacier lies near the village and ski resort of Les Contamines-Montjoie.

It happened at the Armancette glacier near Mont Blanc in south-eastern France around midday on Sunday local time.

The local deputy mayor has confirmed that two of the dead were mountain guides.

Several injured people have been taken to hospital, and two people are still missing.

Jean-Luc Mattel, deputy mayor of the nearby Contamines-Montjoie village, said the avalanche was caused by a slab of snow detaching from the top of the mountain.

Search and rescue dogs and mountain-rescue teams worked all day to try to reach those who were caught, who are all thought to have been backcountry skiing.

The search for two missing people is expected to resume on Monday.

Mr Mattel said the risk level on Sunday morning was "reasonable" and the guides, both of them locals, were highly experienced.

"Today, we are mourning, and there is great sadness among all of us mountaineers, friends of Les Contamines, those who died are people we knew, and all our thoughts go out to their families," he said.

Mr Darmanin and French President Emmanuel Macron have also expressed their sympathy.

Before the incident, a nearby ski resort called Les Contamines-Montjoie posted a video on social media showing a huge wall of snow moving down from the Dômes de Miage, which the glacier is a part of.

It is not clear if the video shows the avalanche in which the people died.

One eyewitness told France Television that she was hiking just in front of the Armancette glacier when she saw the avalanche happening and took out her phone to film it.

"I had put the phone in front of me but then I was looking with my eyes more than in the lens and suddenly there was a huge, huge, huge cloud that came down to the bottom, it split into two," she said.

"I think of the families, I think of the people, of those who got out of it, who had the fright of their life, of those who are still there."

The nearby resort urged people to be careful if they were venturing off-piste - away from the prepared ski runs.

Officials have told the AFP news agency that a further avalanche could not be ruled out.

Two brothers died in an avalanche on the same glacier in 2014. They were both experienced mountaineers and had been properly equipped.

Tesla to build Shanghai factory to make Megapack batteries

A Tesla sign is seen at its factory in Shanghai, China, May 13, 2021. REUTERS/Aly Song

Tesla Inc (TSLA.O) is opening a factory in Shanghai, capable of producing ten thousand Megapack energy product per year, to supplement output of Megapack factory in California, the company said in a tweet on Sunday.

The news was first reported by Chinese state media outlet Xinhua.

Elon Musk's automaker will break ground on the plant in the third quarter and start production in the second quarter of 2024, Xinhua reported from a signing ceremony in Shanghai.

Complementing a huge existing Shanghai plant making electric vehicles, the new factory will initially produce 10,000 Megapack units a year, equal to around 40 gigawatt hours of energy storage, to be sold globally, Xinhua said.

With the new Shanghai plant, Tesla will take advantage of China's world leading battery supply chain to ramp up output and lower costs of its Megapack lithium-ion battery units to meet rising demand of energy storage globally as the world shifts to use more renewable energy.

Tesla generates most of its money from its electric car business, but Musk has committed to grow its solar energy and battery business to roughly the same size.

Chinese battery giant CATL (300750.SZ) has also been deepening its collaborations with clients including Tesla in energy storage battery supplies, which its Chairman Robin Zeng expected to have a larger market than batteries powering electric vehicles (EV).

Tesla currently has a Megafactory in Lathrop, California, capable of manufacturing 10,000 Megapacks per year.

The company began producing Model 3 cars in Shanghai in 2019 and now is capable of producing 22,000 units of cars per week.

Tesla planned to expand the Gigafactory Shanghai, its most productive automaking plant, to add an annual capacity of 450,000 units, Reuters reported last May.

The U.S. company, however, had grappled with rising inventory in Shanghai as demand started weakening in the third quarter, leading to aggressive price cuts in its major markets globally in January.

EV sales growth in China, the world's largest auto market, has slowed to 20.8% in the first two months of 2023, from 150% in the same period a year ago.