Drones, sanctions, contamination: supply surprises leave oil unfazed

By Ahmad Ghaddar and Noah Browning

LONDON (Reuters) – They should have started a bull run, but supply shocks that have rocked the oil industry this year have failed to deliver a sustained rise in crude prices.

Drone attacks crippled Saudi Aramco’s oil plants, U.S. oil sanctions knocked out exports from Iran and Venezuela, and massive contamination tainted Russian oil flows.

Yet, instead of sky-high prices, the market has been kept in check by a flood of oil from the U.S. fracking boom and worries about a global recession weighing on the demand outlook.

And there is unlikely to be a spike anytime soon, analysts and data indicate because high-tech industry understands better than ever just how replete their market is with oil.

“Between fears of peak oil demand, unlimited shale growth, a looming global recession and the possibility that millions of barrels of OPEC barrels (sanctioned or otherwise) could return to the market fairly quickly, there is no faith in the future,” said Amrita Sen, chief oil analyst at Energy Aspect.

The Organization of the Petroleum Exporting Countries, which includes Iran, Venezuela and its de facto leader Saudi Arabia, has continued to rein in supply this year but the group’s efforts have not delivered the hoped-for price surge.

Oil futures markets indicate that supply outages have not dealt a boost to prices as investors see the unexpected shocks to oil output will not massively dent overall supply.

SAUDI BOUNCE-BACK

The Sept. 14 attacks on Aramco sites knocked out around 5.7 million bpd of capacity from the world’s biggest oil exporter, nearly 6% of global oil supplies.

Despite the unprecedented damage, Saudi Arabia has swiftly restored its production capacity to 11.3 million barrels per day, just shy of its regular output, sources briefed on Aramco’s operations told Reuters.

Brent oil prices surged 15% in the wake of the attacks but have since lost most of their gains and are trading at around $62 a barrel.

 

While U.S. oil output continues to surge along with the productivity of existing wells, the increasingly sparse number of operating wells could eventually drag on output and provide a boost to prices.

“We think the outlook for U.S. supply growth is far too optimistic,” Mark Hume, portfolio manager at investment giant BlackRock’s Energy and Resources Income Trust.

“There’s a real chance of U.S. growth going to the downside and I think balances will be tighter than one might anticipate right now,” he added.

DATA TRANSPARENCY

Another aspect that has softened the impact of supply shocks on oil prices is the wide availability of data which gives investors a much clearer view on the operations of the market.

BP chief executive Bob Dudley said this week that the reaction to the Saudi attacks was “sensible”.

“It says something about the market – there’s instantaneous data on storage levels which didn’t exist in the past,” he said.

Technology firms increasingly offer real-time data pinpointing storage levels in oil tanks, detecting if a refinery unit is operating using heat cameras and tracking ships.

“The data availability is a bit of a game-changer,” said Norbert Ruecker, head of economics at Swiss bank Julius Baer. “This speeds up what financial markets are all about.”

(Reporting by Ahmad Ghaddar and Noah Browning; Additional reporting by Dmitry Zhdannikov and Ron Bousso in London and Jessica Resnick-Ault in New York; Editing by Edmund Blair)

Trump orders more Iran curbs, Saudi shows attack evidence

By Stephen Kalin and Parisa Hafezi

JEDDAH/DUBAI (Reuters) – U.S. President Donald Trump on Wednesday said he ordered a major increase in sanctions on Iran as Saudi Arabia displayed remnants of drones and missiles it said Tehran used in a crippling weekend attack on its oil facilities.

Trump gave no explanation in a brief Twitter posting announcing the order, but the initiative follows repeated U.S. assertions that the Islamic Republic was behind Saturday’s attack on the kingdom, a close U.S. ally.

“I have just instructed the Secretary of the Treasury to substantially increase sanctions on the country of Iran!,” he wrote.

Iran, however, again denied involvement in the Sept. 14 raids, which hit the world’s biggest crude processing facility and initially knocked out half of Saudi production.

“They want to impose maximum … pressure on Iran through slander,” Iran’s President Hassan Rouhani said.

“We don’t want conflict in the region … Who started the conflict?” he added, blaming Washington and its Gulf allies for the war in Yemen.

Yemen’s Houthi movement, an ally of Iran battling a Western-backed, Saudi-led coalition for more than four years, has claimed responsibility and said it used drones to assault state oil company Aramco’s sites.

However, the Saudi Defense Ministry held a news conference, displaying drone and missile debris it said was “undeniable” evidence of Iranian aggression. A total of 25 drones and missiles were used in the attacks launched from Iran not Yemen, the ministry spokesman added.

Saturday’s attack exposed the vulnerability of Saudi Arabia’s oil infrastructure and threw down a gauntlet to the United States, which wants to curb Tehran’s influence in the region.

Proof of Iranian responsibility could pressure Riyadh and Washington into a response, though both nations were stressing the need for caution.

Trump has said he does not want war and is coordinating with Gulf and European states.

Saudi Arabia’s Crown Prince Mohammed bin Salman said the hit on the world’s biggest crude exporter was a “real test of the global will” to confront subversion of the international order.

His envoy to London, Prince Khalid bin Bander, told the BBC the attack was “almost certainly” Iranian-backed, however: “We’re trying not to react too quickly because the last thing we need is more conflict in the region.”

“COMPELLING EVIDENCE”

U.S. Secretary of State Mike Pompeo was to meet Prince Mohammed in Jeddah on Wednesday to discuss the crisis before heading to the United Arab Emirates.

U.N. officials monitoring sanctions on Iran and Yemen were also heading to Saudi Arabia to investigate.

France, which is trying to salvage an international nuclear deal with Iran that Washington quit last year, said it wanted to establish the facts before reacting.

A U.S. official told Reuters the strikes originated in southwestern Iran. Three officials said they involved cruise missiles and drones, indicating a higher degree of complexity and sophistication than initially thought.

The officials did not provide evidence or explain what U.S. intelligence they were using for evaluating the attack, which cut 5% of global production.

Saudi Arabia said on Tuesday the 5.7 million barrels per day of output lost would be fully restored by the end of the month.

Oil prices fell after the Saudi reassurances, having surged more than 20% at one point on Monday – the biggest intra-day jump since the 1990-91 Gulf War. [O/R]

Saudi Arabia’s finance minister told Reuters on Wednesday the attack had no impact on revenues and Aramco was continuing to supply markets without interruption.

U.S. efforts to bring about a U.N. Security Council response look unlikely to succeed as Russia and China have veto powers and are expected to shield Iran.

Russian President Vladimir Putin, who has offered to sell Riyadh defense systems, called for a “thorough and impartial” probe during a phone call with Prince Mohammed.

The assault exposed serious gaps in Saudi air defense despite billions of dollars spent on Western military hardware and repeated attacks on vital assets during its four-and-a-half year foray into the Yemen war.

“The attack is like Sept. 11th for Saudi Arabia, it is a game changer,” said one Saudi security analyst.

IRAN-U.S. CONFLICT

Already frayed U.S.-Iran ties deteriorated further when Trump quit the nuclear pact and reimposed sanctions, severely hurting the Iranian economy. Iran has ruled out talks with Washington unless it returns to the pact.

Trump said he is not looking to meet Rouhani during a U.N. event in New York this month. Rouhani and his foreign minister may not attend the General Assembly at all unless U.S. visas are issued in the coming hours, state media reported Wednesday.

Washington and its Gulf allies want Iran to stop supporting regional proxies, including in Yemen, Iraq and Lebanon.

Despite years of air strikes against them, the Houthi movement boasts drones and missiles able to reach deep into Saudi Arabia, the result of an arms race since the Western-backed coalition intervened in Yemen in March 2015.

Iran’s clerical rulers support the Houthis, who ousted Yemen’s internationally recognized government from power in the capital Sanaa in late 2014. But Tehran denies it actively supports them with military and financial support.

Iran maintains the largest ballistic and cruise missile capabilities in the Middle East that could overwhelm virtually any Saudi missile defense system, according to think-tank CSIS, given the geographic proximity of Tehran and its proxy forces.

But even more limited strikes have proved too much for Saudi Arabia, including recent ones claimed by the Houthis on a civilian airport, oil pumping stations and the Shaybah oilfield.

(Reporting by Parisa Hafezi in Dubai and Stephen Kalin in Jeddah; Additional reporting by Guy Faulconbridge in London, Michelle Nichols in New York, Rania El Gamal, Davide Barbuscia and Marwa Rashad in Riyadh, Asma Alsharif and Sylvia Westall in Dubai, Alaa Swilam and Hisham El Saba in Cairo, Maria Kiselyova in Moscow; Tim Kelly in Tokyo, John Irish and Sudip Kar-Gupta in Paris, Phil Stewart and Steve Holland in Washington; Writing by Ghaida Ghantous and Andrew Cawthorne; Editing by Andrew Cawthorne and William Maclean)

U.S. lawmakers blast Iran, wary of war, after Saudi oil attack

By Patricia Zengerle

WASHINGTON (Reuters) – Members of the U.S. Congress blasted Iran after the attack on Saudi Arabian oil facilities, but expressed wariness about U.S. military action, especially before they have a clearer picture of who was behind it.

President Donald Trump said the United States was “locked and loaded” to hit back after Saturday’s attack, which knocked out more than half of Saudi Arabia’s oil production and damaged the world’s biggest crude processing plant.

Iran denied U.S. accusations it was to blame and said it was ready for “full-fledged war.”

U.S. lawmakers, especially Trump’s fellow Republicans, were quick to blame Tehran.

Mitch McConnell, the Senate’s Republican majority leader, called it “a brazen attack” with significant implications for the global energy market and said he welcomed Trump’s preparation to potentially release oil from the Strategic Petroleum Reserve to stabilize markets if necessary.

“I hope our international partners will join us in imposing consequences on Iran for this reckless destabilizing attack,” McConnell said as he opened the Senate.

Many lawmakers stressed that Congress, not the president, has the right to declare war and warned against any quick military action.

Congress, with backing from both Republicans and Democrats, has passed – but Trump has vetoed – four bills seeking to push back against Trump’s strong support for the Saudi government, despite its human rights record and steep civilian casualties in the war in Yemen.

Senate aides said the administration was expected to begin providing classified briefings on Saturday’s attack for congressional staff and members as soon as Monday.

Senator Chris Murphy, a Democrat who is on the Senate Foreign Relations Committee, noted that the United States has long been wary of getting involved in conflicts between nations in the Middle East. He noted that Washington does not have a defense treaty with Riyadh.

“Why should the United States get dragged into a conflict that has more to do with Saudi and Iranian power in the Middle East than American power?” Murphy, a critic of Saudi Arabia on rights issues including its role in the Yemen war, told Reuters.

Senator Jim Risch, the Republican chairman of the foreign relations panel, warned of U.S. retaliation in case of an attack on U.S. troops.

“Iran should not underestimate the United States’ resolve,” he said. “Any attack against U.S. forces deployed abroad must be met with an overwhelming response – no targets are off the table.”

Republican Senator Rand Paul, another foreign relations committee member, said on CNN that any attack on Iran would constitute a “needless escalation” of war.

(Reporting by Patricia Zengerle; Editing by Sandra Maler)

Biggest oil price surge since 1991 as ‘locked and loaded’ U.S. points finger at Iran for attack

By Rania El Gamal and Aziz El Yaakoubi

DUBAI (Reuters) – An attack on Saudi Arabia that shut 5% of global crude output triggered the biggest surge in oil prices since 1991, after U.S. officials blamed Iran and President Donald Trump said Washington was “locked and loaded” to retaliate.

The Iran-aligned Houthi movement that controls Yemen’s capital claimed responsibility for the attack, which damaged the world’s biggest crude oil processing plant. Iran denied blame and said it was ready for “full-fledged war”.

Two sources briefed on state oil company Saudi Aramco’s operations told Reuters it might take months for Saudi oil production to return to normal. Earlier estimates had suggested it could take weeks.

Oil prices surged by as much as 19% before coming off peaks. The intraday jump was the biggest since the 1991 Gulf War. [O/R]

Prices eased after Trump announced that he would release U.S. emergency supplies and producers said there were enough stocks stored up worldwide to make up for the shortfall. But traders still spoke of a long-term price increase as markets absorb the proof that global supply can be so sharply hit.

“There is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed!” Trump said on Twitter on Sunday.

U.S. Energy Secretary Rick Perry pinned the blame squarely on Iran for “an attack on the global economy and the global energy market”.

“The United States wholeheartedly condemns Iran’s attack on Saudi Arabia and we call on other nations to do the same,” he said in a speech to an annual meeting in Vienna of the U.N. nuclear watchdog IAEA. He added that he was confident the oil market “is resilient and will respond positively”.

While Iran has denied blame for the attacks, its Yemeni allies have promised more strikes to come. Houthi military spokesman Yahya Sarea said the group carried out Saturday’s pre-dawn attack with drones, including some powered by jet engines.

“We assure the Saudi regime that our long arm can reach any place we choose and at the time of our choosing,” Sarea tweeted. “We warn companies and foreigners against being near the plants that we struck because they are still in our sights and could be hit at any moment.”

U.S. officials say they believe that the attacks came from the opposite direction, possibly from Iran itself rather than Yemen, and may have involved cruise missiles. Wherever the attacks were launched, however, they believe Iran is to blame.

“There’s no doubt that Iran is responsible for this. No matter how you slice it, there’s no escaping it. There’s no other candidate,” a U.S. official said on Sunday.

Saudi Arabia and Iran have been enemies for decades and are fighting a number of proxy wars, including in Yemen where Saudi forces have been fighting against the Houthis for four years.

Tension in the oil-producing Gulf region has dramatically escalated this year after Trump imposed severe U.S. sanctions on Iran aimed at halting its oil exports altogether.

THREATS

For months Iranian officials have issued veiled threats, saying that if Tehran is blocked from exporting oil, other countries will not be able to do so either. However, Iran has denied a role in specific attacks, including bombings of tankers in the Gulf and previous strikes claimed by the Houthis.

Foreign Ministry spokesman Abbas Mousavi called the U.S. accusations of Iranian involvement in Saturday’s attacks “unacceptable and entirely baseless”.

Iran said on Monday it had seized a vessel accused of smuggling diesel fuel to the United Arab Emirates. Tehran has long fought against smuggling of its subsidized fuel.

Russia and China said it was wrong to jump to conclusions about who was to blame for the attack on Saudi Arabia.

“Proposals on tough retaliatory actions, which appear to have been discussed in Washington, are even more unacceptable,” Russia’s Foreign Ministry said in a statement.

Britain – Washington’s close ally but wary of its hardline Iran policy – stopped short of ascribing blame but described the assault as a “wanton violation of international law”.

Washington has imposed its “maximum pressure” strategy on Iran since last year when Trump pulled out of an international deal that gave Tehran access to world trade in return for curbs on its nuclear program.

U.S. allies in Europe oppose Trump’s strategy, arguing that it provides no clear mechanism to defuse tensions, creating a risk that the foes could stumble into war.

Trump has said his goal is to force Iran to negotiate a tougher agreement and has left open the possibility of talks with President Hassan Rouhani at an upcoming U.N. meeting. Iran says there can be no talks until Washington lifts sanctions. Its foreign ministry said on Monday Rouhani would not meet Trump.

Officials in big energy-exporting countries were eager to assert that global markets could cope with the Saudi outage.

“We have spare capacity. There are volumes we can deal with as an instant reaction,” the energy minister of the United Arab Emirates, Suhail al-Mazrouei, told reporters in Abu Dhabi.

Russian Energy Minister Alexander Novak told reporters there was enough oil in commercial stockpiles to cover the shortfall.

The giant Saudi plant that was struck cleans crude oil of impurities, a necessary step before it can be exported and fed into refineries. The attack cut Saudi output by 5.7 million barrels a day, or around half.

Saudi Arabia is not only the world’s biggest oil exporter, it has a unique role in the market as the only country with enough spare capacity to increase or decrease its output by millions of barrels per day, keeping the market stable.

Big countries such as the United States and China have reserves designed to handle even a major outage over the short term. But a long outage would make markets subject to swings that could potentially destabilize the global economy.

(Reporting by Ghaida Ghantous, Rania El Gamal, Aziz El Yaakoubi, Asma El Sharif, Saed Azhar Hadeel Al Sayegh and Dubai bureau, Karin Strohecker and Dmitry Zhdannikov in London, Michael Martina in Beijing, Vladimir Soldatkin in Moscow, Roberta Rampton and Arshad Mohammed in Washington; Writing by Peter Graff; Editing by Mark Heinrich)

Netanyahu tells Hezbollah’s Nasrallah to ‘calm down’ after drone incident

Israeli Prime Minister Benjamin Netanyahu speaks during a news briefing following the talks with Ukrainian President Volodymyr Zelenskiy in Kiev, Ukraine August 19, 2019. REUTERS/Valentyn Ogirenko

By Jeffrey Heller

JERUSALEM (Reuters) – Israeli Prime Minister Benjamin Netanyahu told Hezbollah leader Sayyed Hassan Nasrallah on Tuesday to “calm down” after Nasrallah said his movement was preparing a response to the crash of two Israeli drones in a Beirut suburb.

In a speech on Sunday, Nasrallah accused Israel of carrying out an attack with an exploding drone earlier that day.

“I say to the Israeli army on the border from tonight, stand guard (on high alert). Wait for us one, two, three, four days,” said Nasrallah, whose movement last waged a major war against Israel in 2006.

One of the two crashing drones exploded near the ground, causing some damage to Hezbollah’s media center in the southern suburbs of the capital which it dominates. Israeli officials have declined to comment when asked if Israel was responsible.

“I heard what Nasrallah said. I suggest to Nasrallah to calm down. He knows well that Israel knows how to defend itself and to pay back its enemies,” Netanyahu said in a speech.

Lebanese President Michel Aoun said on Monday his country had a right to defend itself, likening Israeli drone strikes to a “declaration of war”. Lebanese Prime Minister Saad al-Hariri urged diplomats to help prevent “dangerous escalation”.

Late on Saturday, Israeli air strikes killed two Lebanese Hezbollah fighters in Syria, where the group is providing military support to Damascus.

Israel, which regularly strikes Iranian-linked targets in Syria, said it hit a compound controlled by Iran’s Revolutionary Guards Quds force, accusing it of planning killer drone attacks.

Netanyahu, speaking at the groundbreaking for the Jerusalem headquarters of a self-driving car technology firm, also issued warnings to Lebanon and Qassem Soleimani, commander of the Quds force, which the Israeli leader said aspires to destroy Israel.

“Watch what you say, and moreover be careful about what you do,” Netanyahu said.

Soleimani, reacting to the Israeli airstrike in Syria and the Beirut drones incident, wrote on Twitter on Sunday that “these were the last struggles” of Israel.

Andrea Tenenti, spokesman for the United Nations Interim Force in Lebanon (UNIFIL) that patrols the border with Israel, told Lebanon’s state news agency NNA that the situation in the area remains quiet.

“UNIFIL continues to work with the parties to ensure that there are no misunderstandings or incidents that may endanger the cessation of hostilities,” Tenenti said, referring to a U.N. Security Council resolution that called for an end to the fighting in 2006.

In public comments during a visit on Sunday to Israel’s north, where he met army commanders, Netanyahu appeared to hold out the prospect of targeting Lebanon directly for attack if Hezbollah struck Israel.

“Any country that allows its territory to be used for aggression against Israel will face the consequences, and I repeat: the country will face the consequences,” he said, echoing a message Israeli leaders have voiced in recent years.

(Additional reporting by Lisa Barrington in Beirut and Ari Rabinovitch in; Editing by Ari Rabinovitch, Alison Williams and Peter Graff)

Democrats push technology as alternative to Trump wall in shutdown impasse

A visitor walks by the U.S. Capitol on day 32 of a partial government shutdown as it becomes the longest in U.S. history in Washington, U.S., January 22, 2019. REUTERS/Jim Young

By Richard Cowan

WASHINGTON (Reuters) – Democratic leaders in the U.S. House of Representatives floated the idea on Wednesday of ending a partial government shutdown by giving President Donald Trump most or all of the money he seeks for border security with Mexico but for items other than a physical wall.

Representative James Clyburn, the No. 3 House Democrat, told reporters that Democrats could fulfill Trump’s request for $5.7 billion for border security with technological tools such as drones, X-rays and sensors, as well as more border patrol agents.

Representative Steny Hoyer, the second-ranking House Democrat, also said Democrats would be discussing “substantial sums of additional money” for border security as part of a possible deal. He did not say if it would amount to the $5.7 billion sought by Trump.

Trump has demanded funding for a physical wall in a showdown with Democrats that has left 800,000 federal workers without pay amid a partial government shutdown that entered its 33rd day on Wednesday.

Clyburn’s offer would be a significant monetary increase over bills previously passed by Democrats, which included only about $1.3 billion for this year in additional border security, with none of that for a wall.

“Using the figure the president put on the table, if his $5.7 billion is about border security then we see ourselves fulfilling that request, only doing it with what I like to call using a smart wall,” Clyburn said.

As congressional Democrats and Trump battle over border security and government funding, a parallel controversy continued over the president’s upcoming State of the Union address.

Trump sent a letter to House of Representatives Speaker Nancy Pelosi on Wednesday saying he looked forward to delivering it as scheduled on Jan. 29 in the House chamber. Pelosi had earlier asked Trump to consider postponing because security could not be guaranteed during the shutdown.

The U.S. Senate has scheduled votes for Thursday on competing proposals that face steep odds to end the shutdown.

Republican Senate Majority Leader Mitch McConnell plans to hold a vote on Thursday on a Democratic proposal that would fund the government for three weeks but does not include the $5.7 billion in partial funding for a wall on the U.S.-Mexico border.

Its prospects appeared grim. The House has passed several similar bills but Trump has rejected legislation that does not include border wall funding. McConnell previously said he would not consider a bill that Trump did not support.

McConnell also planned to hold a vote on legislation that would include border wall funding and temporary relief for “Dreamers,” people brought illegally to the United States as children, a compromise Trump proposed on Saturday.

Democrats have dismissed the deal, saying they would not negotiate on border security before reopening the government, and that they would not trade a temporary restoration of the immigrants’ protections from deportation in return for a permanent border wall they view as ineffective.

Trump’s plan is “wrapping paper on the same partisan package,” Senate Democratic Leader Chuck Schumer said on Tuesday.

Trump, in a series of morning tweets, pushed fellow Republicans to stand by border wall, which during his 2016 campaign he had said Mexico would pay for. He was scheduled to discuss his immigration plan with local leaders and with conservative leaders at the White House.

White House spokeswoman Sarah Sanders told reporters on Wednesday that Trump also has made calls to Democrats.

Furloughed federal workers are struggling to make ends meet during the longest government shutdown in U.S. history. Many have turned to unemployment assistance, food banks and other support, or have sought new jobs.

 

(Additional reporting by Yasmeen Abutaleb, Roberta Rampton, Eric Beech, Susan Heavey and Doina Chiacu; Writing by John Whitesides; Editing by Peter Cooney and Bill Trott)

Authorities must do more to meet airport drone threat: UK police chief

FILE PHOTO: Passengers wait around in the South Terminal building at Gatwick Airport after drones flying illegally over the airfield forced the closure of the airport, in Gatwick, Britain, December 20, 2018. REUTERS/Peter Nicholls

LONDON (Reuters) – Government and security officials must “up their game” to tackle the illegal use of drones at airports which brought chaos to London’s Gatwick airport in the run-up to Christmas, Britain’s most senior police officer said on Thursday.

Three days of drone sightings at Britain’s second busiest airport lead to about 1,000 flight cancellations and disrupted the travel of 140,000 passengers in what is thought to be the most disruptive incident of its kind.

London’s Metropolitan Police Commissioner Cressida Dick said no police force around the world could be sure of preventing the problem posed by drones at airports.

“I think the whole country and certainly the government will have watched what’s gone on and said we need to up our game here,” Dick told BBC radio.

“You won’t find a police service in the world I think who would be sitting complacently thinking: ‘well we could always deal with a drone’.”

The drones were first spotted at Gatwick on Dec. 19. Every time the airport sought to reopen the runway, the drones returned and authorities only regained control over the airfield after the army deployed military technology to guard the area.

Security Minister Ben Wallace said on Monday that Britain’s security forces now had detection systems that could be deployed across the country to combat the drone threat.

“The drone technology is always changing. We have to keep up with that. There are a whole variety of tactics and technologies that we are now using, can use and in the future they will have to change again I’m sure,” said Dick.

“I’ve been talking to colleagues around the world. I can tell you this is not an easy problem. We are doing our very best here and going into the future I’m sure working closely with others we will get better and better.”

The police investigation into the Gatwick incident is ongoing. Detectives on Sunday released without charge two people they had suspected of flying the drones.

Flying drones within 1 km (0.6 mile) of a British airport boundary is punishable by up to five years in prison.

“We need to work even more closely with the private companies, we need to work even more closely with the military, we need to try to be able to prevent the criminal use of drones for whatever motivation near our airports,” Dick said.

(Reporting by Michael Holden; Editing by William Schomberg)

Off-the-grid dream becomes nightmare in New Mexico compound

Personal articles are shown at the compound in rural New Mexico where 11 children were taken in protective custody after a raid by authorities near Amalia, New Mexico, August 10, 2018. Photo taken August 10, 2018. REUTERS/Andrew Hay

By Andrew Hay

AMALIA, N.M. (Reuters) – One of the leading members of a group prosecutors accused of abusing children at a New Mexico compound struggled with his plan to live off the grid after he underestimated a harsh mountain desert climate and settled on the wrong plot of land.

Relatives and neighbors say things began to go downhill for Lucas Morton, 39, shortly after he arrived in this vast alpine valley about 40 miles (64 km) north of Taos in a white moving van last December.

His brother-in-law Siraj Ibn Wahhaj, wanted in Georgia for child abduction, soon joined them together with his wife, sister, and children.

The families set up home on a 10-acre plot of land that was near to one owned by Morton, a carpenter, but which actually belonged to U.S. Army veteran Jason Badger. The vet filed a court complaint but the Morton and Wahhaj families stayed on the land.

With snow and bitter north winds, the families began to suffer. At the suggestion of neighbors, Morton dug a hole and put a camping trailer in it to seek shelter.

A view of the compound in rural New Mexico where 11 children were taken in protective custody after a raid by authorities near Amalia, New Mexico, August 10, 2018. Photo taken August 10, 2018. REUTERS/Andrew Hay

A view of the compound in rural New Mexico where 11 children were taken in protective custody after a raid by authorities near Amalia, New Mexico, August 10, 2018. Photo taken August 10, 2018. REUTERS/Andrew Hay

Land is cheap in the valley, around $850 an acre, but winter temperatures can drop to -30 Fahrenheit (-34 C). Attempts at communal living in northern New Mexico have struggled or failed, going back to 1970s’ communes.

The adults and 11 children used wood to cook, hauled water from neighbors’ wells and got heat from propane heaters. Their shelters kept blowing away, a neighbor said.

Morton was one of five adults arrested at the compound on Aug. 3 on child abuse charges and accused by prosecutors of giving weapons training to a child to carry out school shootings.

No-one was specifically charged over the school shooting accusation and Defense Attorney Aleksandar Kostich told reporters that prosecutors had provided no evidence of the allegation, which came from a foster parent who is caring for one of the children.

Morton was also charged with harboring a felon, Ibn Wahhaj, who was armed with an AR-15 rifle, five magazines of ammunition, and four handguns when arrested, according to police.

Ibn Wahhaj is accused of abducting his seriously-ill, three-year-old son Abdul-Ghani Wahhaj in December from his mother in Georgia. On Monday a body, believed to be that of the boy was found buried at the compound, police said.

Taos County Sheriff Jerry Hogrefe first referred to the suspects as “extremist of the Muslim belief,” but declined to elaborate when later asked about it by reporters.

Public defenders representing the five adults, who are in Taos County jail, did not respond to requests for comment.

Personal articles are shown at the compound in rural New Mexico where 11 children were taken in protective custody after a raid by authorities near Amalia, New Mexico, August 10, 2018. Photo taken August 10, 2018. REUTERS/Andrew Hay

Personal articles are shown at the compound in rural New Mexico where 11 children were taken in protective custody after a raid by authorities near Amalia, New Mexico, August 10, 2018. Photo taken August 10, 2018. REUTERS/Andrew Hay

‘GET OUT OF SOCIETY’

Morton and his 15-year-old nephew Mohammed last November attended a four-week, $2,500 course in Taos on how to build an “earthship” – an eco-house made largely of earth-filled tires.

“All they wanted to do was get out of society, get away, homestead and live a peaceful life by themselves,” said Morton’s father Gerard Jabril Abdulwali, 64.

Inside Morton’s abandoned van at the compound, “I love my family” is written over hearts drawn on the first page of a notebook belonging to “Aisha,” one of his four children.

There are signs the group made friends locally.

A local man gave Morton hundreds of tires to build an earthship home. A neighbor gave him wood to build bunk beds, and another helped them hook up solar panels.

These people said police drones began to circle the area in late May or June. Badger told local media he had earlier informed Georgia police that the abducted boy was at Morton’s home.

In the next months, the home began to look more like a compound. The families stacked tires around it and built what look like defensive walls. A 150-foot tunnel leads to what appear to be escape holes among sagebrush and Chamisa bushes.

“I got the feeling Lucas didn’t want what he was in anymore,” said neighbor Tyler Anderson, 41, a car-body technician, who showed Morton how to wire up solar panels.

Anderson said near daily target shooting at the house stopped once the drones appeared.

The arrests at the compound made one neighbor, who described himself only as “Quincy,” stand at his gate and cry.

He and other locals disputed police reports the Morton and Wahhaj children were found ragged and starving.

“I made sure everyone in that place had shoes and clothes. They weren’t hungry,” said the man.

Morton’s wife Subhannah Wahhaj, 35, regularly went grocery shopping with Quincy’s wife. Their last trip, was on Aug. 2, Quincy said. Police launched the raid the next day.

(Adds name of army veteran in paragraph 4, corrects name to Morton from Morgan in paragraph 5)

(Reporting by Andrew Hay; Editing by Alistair Bell)

Venezuela arrests six over drone explosions during Maduro speech

Venezuela's President Nicolas Maduro speaks during a meeting with government officials the Miraflores Palace in Caracas, Venezuela August 4, 2018. Miraflores Palace/Handout via REUTERS

By Brian Ellsworth and Vivian Sequera

CARACAS (Reuters) – Venezuelan authorities said on Sunday they have detained six people over drone explosions the day before at a rally led by President Nicolas Maduro, as his critics warned the socialist leader would use the incident to crack down on adversaries.

People look at the damage in a building after an explosion in Caracas, Venezuela August 5, 2018. REUTERS/Adriana Loureiro

People look at the damage in a building after an explosion in Caracas, Venezuela August 5, 2018. REUTERS/Adriana Loureiro

The suspects launched two drones laden with explosives over an outdoor rally Maduro was holding in downtown Caracas to commemorate the National Guard, Interior Minister Nestor Reverol said. One was “diverted” by security forces while the second fell on its own and hit an apartment building, Reverol

said.

The attack highlights Maduro’s challenges in maintaining control over the OPEC nation, where widespread food and medicine shortages have fueled outrage and despair everywhere from hillside slums to military barracks.

“These terrorist acts represent a slap in the face to the expressed desire of the President of the Republic, Nicolas Maduro, for national reconciliation and dialogue,” Reverol said in a statement read on state television.

State television footage of the rally showed Maduro startled by what appeared to be an explosion and footage later panned to soldiers lined up on a boulevard who chaotically broke ranks in what appeared to be a reaction to a second blast.

Venezuela's Interior and Justice Minister Nestor Reverol speaks during a news conference in Caracas, Venezuela August 5, 2018. Ministry of Interior and Justice/Handout via REUTERS

Venezuela’s Interior and Justice Minister Nestor Reverol speaks during a news conference in Caracas, Venezuela August 5, 2018. Ministry of Interior and Justice/Handout via REUTERS

The president later described the attack, which injured seven soldiers, as an assassination attempt.

One of the suspects had an outstanding arrest warrant for involvement in a 2017 attack on a military base that killed two people, Reverol said, an incident that followed four months of anti-government protests.

A second suspect had been detained during a wave of anti-Maduro protests in 2014 but had been released through “procedural benefits,” Reverol said, without offering details.

He did not name the suspects.

The arrests suggest the attack was less a military uprising than an assault led by groups linked to anti-Maduro street protesters, dubbed “The Resistance,” who have led two waves of violent demonstrations that left hundreds dead.

That is consistent with the shadowy group that claimed responsibility for the attack, The National Movement of Soldiers in T-Shirts, whose website says it was created in 2014 to bring together different groups of protesters.

Reuters was unable to independently confirm the involvement of the group, which did not respond to requests for comment on the arrest announcements or identify any of its members.

‘I SAW THE LITTLE PLANE’

Bolivar Avenue of downtown Caracas, where the incident took place, was calm on Sunday.

Joggers and cyclists were taking up two of the lanes that are traditionally used for weekend recreation. The stage where Maduro spoke had been removed.

Witnesses said they heard and felt an explosion in the late afternoon, then saw a drone fall out of the sky and hit a nearby building.

“I heard the first explosion, it was so strong that the buildings moved,” said Mairum Gonzalez, 45, a pre-school teacher. “I went to the balcony and I saw the little plane … it hit the building and smoke started to come out.”

Two witnesses said they later saw security forces halt a black Chevrolet and arrest three men inside it.

The security forces later took apart the car and found what appeared to be remote controls, tablets, and computers, said the two, who identified themselves as Andres and Karina, without giving their last names.

Opposition critics accuse Maduro of fabricating or exaggerating security incidents to distract from hyperinflation and Soviet-style product shortages.

Leopoldo Lopez, formerly mayor of Caracas’ district of Chacao, for example, is under house arrest for his role in 2014 street protests that Maduro described as a coup attempt but his adversaries insisted were a form of free expression.

“We warn that the government is taking advantage of this incident … to criminalize those who legitimately and democratically oppose it and deepen the repression and systematic human rights violations,” wrote the Broad Front opposition coalition in a statement published on Twitter.

Maduro’s allies counter that the opposition has a history of involvement in military conspiracies, most notably in the 2002 coup that briefly toppled socialist leader Hugo Chavez.

“I have no doubt that everything points to the right, the Venezuelan ultra-right,” Maduro said on Saturday night. “Maximum punishment! And there will be no forgiveness.”

Maduro, who blames the country’s problems on an “economic war” led by adversaries, during the course of his five-year rule has often announced having foiled military plots against him that he says are backed by Washington.

U.S. national security adviser John Bolton told Fox News in an interview on Sunday that the United States was not involved in the blast.

(Additional reporting by Alexandra Ulmer,; Editing by Grant McCool and Bill Trott)

Syrian, Iraqi forces say U.S. bombs military border positions, U.S. denies

FILE PHOTO: Popular Mobilisation Forces (PMF) march during a military parade in Daquq, nearby Kirkuk, Iraq August 5, 2017. REUTERS/Ako Rasheed/File Photo

By Angus McDowall

BEIRUT (Reuters) – Syrian state media said on Monday that U.S.-led coalition aircraft had bombed a Syrian army position near the Iraqi border, causing deaths and injuries, but the U.S. military denied it was responsible.

The attack took place in al-Harra, southeast of the town of Albu Kamal, state news agency SANA said, citing a military source. SANA said the attack caused an unspecified number of deaths and injuries.

A commander in the alliance fighting alongside Damascus told Reuters that drones that were “probably American” had bombed the positions of Iraqi factions between Albu Kamal and Tanf, as well as Syrian military positions.

The commander, who is not Syrian and spoke on condition of anonymity, said the strike had killed and injured some Iraqi fighters but he did not give any numbers.

Iraq’s Popular Mobilisation Forces, a grouping of mostly Iran-backed Shi’ite paramilitaries, said a U.S. air strike on the Iraqi border with Syria killed 22 of its members and wounded 12 others.

“At 22:00 last night a U.S. plane hit a fixed headquarters of the Popular Mobilisation Forces’ 45th and 46th brigades defending the border strip with Syria using two guided missiles which led to the martyrdom of 22 fighters,” it said in a statement.

It demanded an explanation from the United States.

“No member of the U.S.-led coalition carried out strikes near Albu Kamal,” Major Josh Jacques, a U.S. Central Command spokesman, told Reuters.

The U.S.-led coalition uses air power and special forces to back an alliance of Syrian Arab and Kurdish militia fighting Islamic State northeast of Albu Kamal. U.S. forces also are based around the Tanf crossing, southwest of the town in the Syrian desert near the borders of Iraq and Jordan.

President Bashar al-Assad’s army, with the help of Iran-backed militias including Hezbollah and Iraqi groups, drove Islamic State from Albu Kamal and its environs last year but the jihadists have since staged attacks there.

The Popular Mobilisation Forces have been officially included in Iraq’s governmental forces but many of them still maintain loyalties to their former leaders and political groups. They said the base that was hit was 700 meters into Syrian territory and the Syrian government was aware of their presence.

A U.S. official, speaking on the condition of anonymity, said the U.S. military was concerned that Popular Mobilisation Forces could retaliate against American forces in Iraq. The official said the Pentagon was going out of its way to publicly make clear that it was not involved in the strike in order to minimize the risk of retaliation.

The United States acknowledges that it has about 5,200 troops in Iraq that are part of a coalition fighting Islamic State militants.

“OCCUPYING FORCES”

The Syrian Observatory for Human Rights, a war monitor, said unidentified planes had struck Lebanon’s Shi’ite Hezbollah and other allied foreign militias around Albu Kamal.

The UK-based Observatory said the strikes had killed 52 people. Reuters could not independently verify the Observatory’s report of casualties.

Asked about the reported air strikes, an Israeli military spokeswoman said: “We do not comment on foreign reports.”

Throughout Syria’s seven-year war, Israel has carried out scores of strikes within the neighboring country against what it describes as Hezbollah or Iranian targets.

Israel, alarmed about the clout of arch enemies Iran and Hezbollah, has pressed Russia, Assad’s other key ally, to make sure Tehran does not entrench its military sway in Syria.

Prime Minister Benjamin Netanyahu told his cabinet he had “repeated and clarified” his Syria policy in weekend phone calls with Russian President Vladimir Putin and U.S. Secretary of State Mike Pompeo.

“First of all, Iran must clear out of all of Syria,” Netanyahu said on Sunday, according to a statement from his office. “Secondly, we will take action, and are already taking action, against the attempted military entrenchment of Iran and its proxies, both close to the border and deep within Syria.”

In an interview last week, Assad called Hezbollah “a basic element” in the war and said “the need for these military forces will continue for a long time”.

He said the United States was an occupying power in Syria and that his state supported “any act of resistance, whether against terrorists or against occupying forces, regardless of their nationality.”

(Reporting By Laila Bassam, Angus McDowall, Ellen Francis and Lisa Barrington in Beirut; Additional reporting by Idrees Ali in Washington, Dan Williams in Jerusalem, Ulf Laessing and Ahmed Aboulenein in Baghdad; Editing by William Maclean and Bill Trott)