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Bousso: Trump's "Donroe doctrine" could cost US oil companies their jobs if it targets China.
Donald Trump has announced his intention to import Venezuelan oil that was previously sanctioned into the U.S. This will disrupt the global energy game plan and highlight the seriousness of Trump's administration's ambitions to dominate the Western Hemisphere. This "Donroe doctrine" - Trump's rebranding a 19th century doctrine that asserted Washington’s zone of influence throughout the Americas - may ultimately target China. But?U.S. Oil companies may suffer unintended consequences. Trump said on Tuesday that Caracas had agreed to export $2 billion of Venezuelan crude oil to the U.S. It was only days after the U.S. ousted Venezuelan president Nicolas Maduro, and demanded that the Latin American nation open its energy sector to American oil firms - or face further military intervention. Trump announced in a post on social media that Venezuela would "turn over" 30 to 50 million barrels sanctioned oil. Although the timeframe of the deal has not been revealed, it is likely that shipments will begin soon. Chris Wright, the Energy Secretary of the United States, said that U.S. Needs to Control Venezuelan oil revenues and sales will be used to fuel the desired changes in Venezuela. Trump's plan is primarily aimed at China, who accounted for around 400,000 barrels of oil per day in Venezuela's exports last. According to Kpler, this is more than 50% of Venezuela's total oil exports and two-thirds according to ROI calculations. The U.S. could seize the equivalent of four months' worth of Chinese oil supplies, and about 55 days of Venezuelan production, which is currently around 900,000 barrels per day. The Trump administration also reportedly instructed Venezuela's interim President Delcy Rod to cut economic ties with China. PetroSinovensa is the largest Chinese oil asset in Venezuela. It's a joint venture between Venezuelan state-owned PDVSA, and China National Petroleum Corp. The JV is located in the Orinoco Belt, and produces around 65,000 barrels per day. The Trump administration's actions against Venezuela are part of a broader geopolitical plan. This is more than just rerouting barrels that were originally destined for China's refiners. Bob McNally is a former White House official and president of Rapidan Energy Group, a consultancy. He says that it'signals President Trump’s intention to push China and Russia out of their strongholds in Venezuela. "DONROE DOCUMENT" IN ACTION The White House released its National Security Strategy late last year. The document called for a cementing of U.S. power in the Western Hemisphere, by pushing out rivals and restoring American control on energy and supply chains. The "Donroe Doctrine", as it is known, is a reference to the former U.S. president James Monroe's 1823 declaration that the Americas would no longer be open for future colonisation by European countries. Trump's threats to seize Greenland this week, an Arctic island that is a part of Denmark and has its own self-governing government, also align with these ambitions. Investors may want to take the White House national security strategy, and its words, more seriously. He told reporters that the "dominance of America in the Western Hemisphere" would never be questioned again. BLOWBACK FROM BEIJING U.S. oil companies are in a tough position because of the American actions in Venezuela. Exxon Mobil and Chevron, for example, could be facing legal issues if they enter into an agreement with Venezuela's government to invest in assets that were previously owned by Chinese or Russian firms. Trump's unilateral action could also lead to China's retaliation, which would put the assets of U.S. firms abroad at risk. U.S. major oil companies have a number of joint ventures with Chinese firms. Exxon, for example, wholly owns and runs a massive petrochemical facility in southern China that began operations last year after a $10 billion investment. Chevron also owns stakes?in joint ventures upstream in China, as well as in downstream operations for fuels and oils. Both companies have also signed large contracts for the supply of liquefied gas to Chinese customers. Of course, the risk extends beyond China. If American companies are increasingly seen as state-owned, host governments may be more reluctant to work with them. Although the U.S. President may not see any downside to ignoring international conventions and rules, American companies might. Subscribe to my Power Up newsletter to receive my weekly column, plus additional energy insights, and links to trending articles every Monday and Thursday. Subscribe to my Power Up Newsletter here. You like this column? Open Interest (ROI) is your essential source for global commentary on financial markets. ROI provides data-driven, thought-provoking analysis. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X.
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New York Times Business News - January 8, 2019
These are the most popular stories from the business pages of the New York Times. ? These stories have not been?verified? and we cannot vouch for the accuracy of these reports. Google and chatbot maker Character.AI have agreed to settle the lawsuit that accused them of providing 'harmful chatbots' which allegedly contributed 'to the suicide of 14-year old Florida boy. Warner Bros Discovery on Wednesday urged its shareholders to reject the latest bid from Paramount Skydance, saying that the rival offer was more risky than the blockbuster Netflix deal struck last month. Alaska Airlines announced that it will buy '110 Boeing jets, its largest ever order. This is to boost growth plans after acquiring Hawaiian Airlines. The U.S. administration of President Donald Trump outlined a plan to?control Venezuela's oil sale, claiming it had'reached an accord with Venezuela's Government, even though the state oil company PDVSA said that negotiations were still ongoing.
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Protesting French farmers brought tractors to Paris center
On Thursday, French 'farmers' blocked sites in Paris in protest of a sweeping trade agreement the European Union was about to sign with South American nations as well as other local grievances. Farmers of the Coordination Rurale Union called for protests to be held in Paris over their anger at a free-trade agreement between the European Union (EU) and South American bloc Mercosur. They are concerned that the agreement could flood the country with cheap imports and they also objected to the government's handling of a cattle disease. "We are caught between resentment, and despair. "We feel abandoned, just like Mercosur." "We've been abandoned for a spaceship, an Airbus or a vehicle," Stephane Pelletier said, the deputy president of the union of Vienne in central France. The protest comes just days after the European Commission announced that it would make 45 billion euros in EU funding earlier available to farmers, and cut import duties for some fertilizers to try to win over countries who were hesitant to support Mercosur. Germany, Spain and Italy are all in favor of the deal. The Commission appears to have secured the necessary votes to pass the agreement with or without French backing. The deal will be voted on on Friday. Farmers are also calling for an end to the culling of cows, prompted by a number of Highly contagious lumpy Skin Disease They consider this to be excessive and recommend vaccination. Several tractors have been parked along the Seine river bank, below the Eiffel tower. They are blocking some of the city's access points from the Peripherique. This includes the Porte d'Auteuil. The French police imposed an absolute ban, but they still managed to reach the centre of the city. (Reporting and editing by Lincoln Feast, Richard Lough and Richard Lough; Inti Landauro, Sybille de la Hamaide and Camille Raynaud)
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Bousso: Trump's "Donroe doctrine" could cost US oil companies their jobs if it targets China.
Donald Trump has announced his intention to import Venezuelan oil that was previously sanctioned into the U.S. This will disrupt the global energy game plan and highlight the seriousness of Trump's administration's ambition to control the Western Hemisphere. China could be the ultimate?target of this "Donroe doctrine" - Trump's rebranding a 19th century doctrine that asserted Washington’s zone of control in the Americas. U.S. Oil Companies could be the unintended "victims". Trump announced on Tuesday that Caracas had agreed to export Venezuelan crude worth up to $2 billion to the U.S. It was only a few days after the U.S. ousted Venezuelan president Nicolas Maduro, and demanded that the Latin American nation open its energy sector to American oil firms - or face further military intervention. Trump announced in a post on social media that Venezuela would "turn over" 30 to 50 million barrels sanctioned oil. Although the timeframe of the deal has not been revealed, it is likely that shipments will begin soon. Chris Wright, the Energy Secretary of the United States, said that U.S. Needs to Control Venezuelan oil revenues and sales will be used to fuel the desired changes in Venezuela. Trump's plan is primarily aimed at China, who accounted for about 400,000 barrels of oil per day in Venezuela's exports last. According to Kpler, this is more than 50% of Venezuela's total oil exports. ROI calculated that around two thirds of Venezuelan sanctioned exports were in this category. The U.S. could seize the equivalent of four months' worth of Chinese oil supplies, and about 55 days' worth of Venezuelan production, which is currently around 900,000. The Trump administration has also reportedly instructed Venezuela's interim President Delcy Rod to cut economic ties with China. PetroSinovensa is the largest Chinese oil asset in Venezuela. It's a joint venture between Venezuelan state-owned PDVSA, and China National Petroleum Corp. The JV is located in the Orinoco Belt, and produces around 65,000 barrels per day. The Trump administration's actions against Venezuela are part of a broader geopolitical plan. This is more than just redirecting barrels originally headed for China's refiners. Bob McNally is a former White House official and president of Rapidan Energy Group. He says that it signals President Trump's intention to?push China, Russia and Iran out from their deep footholds within Venezuela. "DONROE DOCUMENT" IN ACTION The White House released its National Security Strategy late last year. The document called for a cementing of U.S. power in the Western Hemisphere, by removing competitors and restoring American control on energy and supply chains. The "Donroe Doctrine", as it is known, harks back to former U.S. president James Monroe's foreign policy in 1823 when he declared that the Americas would no longer be open for future colonisation by European power. Trump's threats to seize Greenland this week, an Arctic self-governing island that is part of Denmark, also align with these ambitions. Investors may want to take the White House national security strategy, and its words, more seriously. He told reporters that the "dominance of America in the Western Hemisphere" would never be questioned. BEIJING BLOWBACK The actions of the 'Americans in Venezuela' have put U.S. firms, especially oil companies, in a difficult position. Exxon Mobil and Chevron, for example, could be facing legal issues if they enter into an agreement with Venezuela's government to invest in assets that were previously owned by Chinese or Russian firms. Trump's unilateral action could also lead to China's retaliation, which would put the assets of U.S. firms abroad at risk. U.S. major oil companies have a number of operations that are jointly owned by Chinese firms. Exxon, for example, wholly owns a petrochemical complex in southern China that began operations last year after a $10 billion investment. Chevron also owns stakes both in upstream joint ventures, as well as in downstream operations for fuels and lubricants. Both companies have also signed large contracts for the supply of liquefied gas to Chinese customers. Of course, the risk extends beyond China. If American companies are increasingly seen as state-owned, host governments may be more reluctant to work with them. Although the U.S. President may not see any downside to ignoring international conventions and rules, American companies might. Subscribe to my Power Up newsletter to receive my weekly column, plus additional energy insights, and links to trending articles every Monday and Thursday. Subscribe to my Power Up Newsletter here. You like this column? Open Interest (ROI) is your essential source for global commentary on financial markets. ROI provides data-driven, thought-provoking analysis. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X.
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US withholds $160M in funding for California due to foreign driver licenses
The U.S. Department of Transportation announced on Wednesday that it is withholding federal funds of $160 million from California for failing to cancel 17,000 commercial driver's licences improperly issued by non-U.S. Citizens. First, the department warned that it would take action in September. USDOT stated that California failed to revoke licenses within the agreed upon deadline of January 5, A spokesperson for California Governor Gavin Newsom declined to comment immediately, but previously stated that the state's commercial drivers license holders "had a deadly crash rate nearly 40 percent lower than the average national." Texas, the only state with more commercial drivers than California, has a rate that is almost 50% higher. USDOT reported that an audit revealed more than?25% commercial truck driver's licenses issued by California to non-U.S. citizens were illegal. Derek Barrs said, "We won't accept a plan of correction that leaves thousands of drivers with non-compliant licenses at the wheel of 80,000 pound?trucks and in direct defiance of federal safety regulations." California filed a lawsuit against USDOT last month for the withholding of more than $33 millions in federal funding. The U.S. Transportation Department claimed that the state had not met the rules requiring English competency for truck drivers. California dropped its separate lawsuit in December, which it filed after USDOT withdrew $4 billion of high-speed rail funds. The Trump administration has taken several steps to address "concerns" about foreign truckers who don't speak English. In August, Secretary Marco?Rubio announced that the United States would immediately suspend the issuance all commercial truck driver visas. After a fatal accident in Florida, the?Transportation Department issued an emergency rule to restrict commercial drivers licenses?to those who are not U.S. citizens. Trump has threatened funding to large cities led by Democrats. This includes?for major projects in Chicago and New York, and commercial driver licenses granted by Minnesota, New York, and California to non-U.S. citizens. In 2023, FMCSA reported that approximately 16% of U.S. drivers were born abroad.
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Peru considers private investors to help Petroperu, which is in dire need of cash
The head of the government’s investment promotion agency told an interviewer on Wednesday that Peru may consider'seeking private firms to invest in the state-owned oil company Petroperu, including its $5.6 billion Talara refinery. Luis Del Carpio of Proinversion said that cash-strapped Petroperu will also seek private capital to build a 1,100-kilometer (684-mile) oil pipeline in the north of the nation, known as the Norperuano pipe, which is currently inactive. Petroperu has received government funding for many years, totaling $5.3 billion between 2022-2024. Just before the New Year, a reorganization of assets was approved. Del Carpio stated that an increase in the private ownership of Petroperu does not constitute privatization. Del Carpio explained that "it... involves finding a private investor who will take over management of the refinery and inject capital." Petroperu is one of the biggest oil companies in the country. Its financial problems are partly caused by debts from the Talara Refinery Overhaul, which was 'double the original estimate' and cost the company its investment grade rating in 2022. Petroperu operates or holds concessions on six crude oil blocks that have a?limited output, and it has a fuel marketing and distribution network. Del Carpio stated that a major goal was to pay?creditors', including crude oil suppliers and bondholders on the international market. He said that a meeting with bondholders will take place within the next few weeks. (Reporting and editing by Daina Beth Solon)
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CANADA-CRUDE-Canadian crude at 18-month low versus WTI as Venezuelan turmoil rattles market
Investors digested the U.S. dollar's impact on the price of West Texas Intermediate futures, which is the benchmark for North American crude oil. The deal between President Donald Trump and Venezuelan oil producers to import up $2 billion in Venezuelan crude is now the largest discount for 18 months. WCS for Hardisty, Alberta delivery in February settled at $14.45 per barrel below U.S. benchmark WTI, said brokerage CalRock. This compares to $13.80 a day earlier. This was the largest discount Canadian heavy crude settled at since early July 2024. Over the long term, an increase in Venezuelan barrels may compete with Canadian heavy oil of similar quality in the US Gulf Coast. This threat has caused the oil sands sector in Canada to be spooked. Cenovus Energy, and Canadian Natural Resources are down respectively 5.5% and 8.8% year-to date. Analysts believe that there is the 'potential of further WCS weakness in the months ahead if Venezuela can?rapidly ramp up its oil production. Canada is partially protected by its size, infrastructure and rule-of law advantage. On Wednesday, global oil prices fell for a second straight session. This was the day that Energy Secretary Chris Wright said the U.S. must control Venezuela's revenue and oil sales indefinitely to help stabilize the economy.
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Avelo to end US deportation flights, close Arizona base
Avelo Airlines is a Texas-based budget carrier that announced on Wednesday it would stop deportation flights operated by the U.S. Department of Homeland Security in late January. It will also close its Arizona base citing high costs. Avelo, who previously stated that the opportunity was 'too valuable to not pursue,' faced backlash both from customers and employees over its decision to operate deportation flight under a contract with?Trump Administration. The airline said that the program had some short-term advantages, but ultimately did not generate 'enough predictable and consistent revenue to offset its operational costs and complexity. According to an internal memo, the airline will close its Mesa Arizona base on January 27, where it had stationed 3 aircraft for deportation flight under a "charter-only" operation. Avelo signed an agreement with DHS in April last year to transport migrants from the United States to detention facilities within and outside of the country. The company claimed that boycott calls had not affected its business. Avelo reported that it would carry a record number of 2.6 million passengers on its scheduled commercial service in 2025, an increase of 11% year-over-year. (Reporting from Doyinsola Oladipo in New York, editing by Nia William)
Peru is expecting to enter 10 new markets for agro-exports this year
Sources from the industry and government said that Peru will enter 10 new markets this year for its agricultural exports, including Indonesia, Israel and the Philippines, as the South American nation posted strong shipments.
According to data from the government, Peru's agricultural exports increased by 22% last year to $12.8 billion.
In a press briefing, Julio Perez of the Peruvian exporters' association ADEX said that the goal was to expand into at least 10 new countries this year, including the Philippines, and Israel. This would consolidate Peru's presence in Asia and Middle East.
Perez stated that while the United States and Europe currently are Peru's primary markets for agricultural products, Peru is expecting to grow their Asian markets in the next few years, thanks to the new mega-port on the Pacific, Chancay. The first phase was inaugurated at the end of last year. Chancay has helped to reduce shipping times from the Pacific Ocean.
Officials said that the Andean nation whose economy is traditionally based on mining also wants to export more blueberries as global demand increases.
Peru is the largest exporter of blueberries in the world since the turn-of-the decade. Last year, shipments abroad of this small fruit increased by 36% and reached $2.3 billion. The United States bought more than half the country's exports.
Peru hopes to now add Indonesia, the fourth most populous nation in the world with more than 280 million people to its list.
Late last year, Peru and Indonesia signed a free-trade agreement.
It has 21 of these agreements in place, including those with the U.S.A. and China - the two largest economies on the planet. The country has also signed sanitary agreements with 240 countries.
On May 24, Peru's top agro-exporters will meet with buyers in Lima in a forum designed to boost trade.
(source: Reuters)