Tag Archives: Iran

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)

U.S. blames Iran for Saudi oil attack, Trump says ‘locked and loaded’

A satellite image shows an apparent drone strike on an Aramco oil facility in Abqaiq, Saudi Arabia September 14, 2019. Planet Labs Inc/Handout via REUTERS

By Roberta Rampton and Arshad Mohammed

WASHINGTON (Reuters) – U.S. President Donald Trump said on Sunday the United States was “locked and loaded” for a potential response to the attack on Saudi Arabia’s oil facilities, after a senior U.S. administration official said Iran was to blame.

Trump also authorized the use of the U.S. emergency oil stockpile to ensure stable supplies after the attack, which shut 5% of world production and sent crude prices soaring more than 19% in early trade on Monday, before moderating to show a 10% gain.

“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.

Earlier in the day, a senior U.S. official told reporters that evidence from the attack, which hit the world’s biggest oil-processing facility, indicated Iran was behind it, instead of the Yemeni Houthi group that had claimed responsibility.

U.S. Secretary of State Mike Pompeo also said there was no evidence the attack came from Yemen, where a Saudi-led coalition has been battling the Houthis for over four years in a conflict widely seen as a proxy war between Saudi Arabia and Shi’ite Muslim rival Iran.

“Amid all the calls for de-escalation, Iran has now launched an unprecedented attack on the world’s energy supply,” Pompeo said.

Iranian Foreign Ministry spokesman Abbas Mousavi dismissed the U.S. allegations that it was responsible was “pointless”. A senior Revolutionary Guards commander warned the Islamic Republic was ready for “full-fledged” war.

“All American bases and their aircraft carriers in a distance of up to 2,000 kilometers around Iran are within the range of our missiles,” the semi-official Tasnim news agency quoted Commander Amirali Hajizadeh as saying.

Tensions between Washington and Tehran were already running high because of a long-running dispute between the two nations over Iran’s nuclear program that led the United States to impose sweeping sanctions.

Oil prices surged as much as 19% in early Asian trade on Monday on worries over global supply and soaring tensions in the Middle East.

Brent crude posted its biggest intra-day percentage gain since the start of the Gulf War in 1991.

State oil giant Saudi Aramco said the attack on Saturday had cut output by 5.7 million barrels per day.

The U.S. official, who asked not to be named, said on Sunday there were 19 points of impact in the attack on Saudi facilities and evidence showed the launch area was west-northwest of the targets – not south from Yemen.

The official added that Saudi officials indicated they had seen signs that cruise missiles were used in the attack, which is inconsistent with the Iran-aligned Houthi group’s claim that it conducted the attack with 10 drones.

“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,” the official told reporters.

Riyadh has accused Iran of being behind previous attacks on oil-pumping stations and the Shaybah oil field, charges that Tehran denies, but has not blamed anyone for Saturday’s strike. Riyadh also says Tehran arms the Houthis, a charge both deny.

Richard Nephew, a program director at Columbia University’s Center on Global Energy Policy, said if Iran was responsible for the attack, it may be as retribution for U.S. sanctions.

“They are making decisions about whether and how to respond to what they see as a massive attack on their interests from the U.S. via sanctions by attacking U.S. interests in turn, and those of U.S. partners they believe are responsible for U.S. policy,” he said.

Aramco gave no timeline for output resumption. A source close to the matter told Reuters the return to full oil capacity could take “weeks, not days”.

Riyadh said it would compensate for the damage at its facilities by drawing on its stocks, which stood at 188 million barrels in June, according to official data.

Trump said he had “authorized the release of oil from the Strategic Petroleum Reserve, if needed, in a to-be-determined amount sufficient to keep the markets well-supplied.”

CALLS FOR RESTRAINT

Consultancy Rapidan Energy Group said images of the Abqaiq facility after the attack showed about five of its stabilization towers appeared to have been destroyed, and would take months to rebuild – something that could curtail output for a prolonged period.

“However Saudi Aramco keeps some redundancy in the system to maintain production during maintenance,” Rapidan added, meaning operations could return to pre-attack levels sooner.

The Saudi bourse closed down 1.1% on Sunday, with banking and petrochemical shares taking the biggest hit. Saudi petrochemical firms announced a significant reduction in feedstock supplies.

“Abqaiq is the nerve center of the Saudi energy system. Even if exports resume in the next 24 to 48 hours, the image of invulnerability has been altered,” Helima Croft, global head of commodity strategy at RBC Capital Markets, told Reuters.

Some Iraqi media outlets said the attack came from there. Baghdad denied that on Sunday and vowed to punish anyone using Iraq, where Iran-backed paramilitary groups wield increasing power, as a launchpad for attacks.

Kuwait, which borders Iraq, said it was investigating the sighting of a drone over its territory and coordinating with Saudi Arabia and other countries.

U.N. Secretary-General Antonio Guterres condemned Saturday’s attacks and called on all parties to exercise restraint and prevent any escalation. The European Union warned the strikes posed a real threat to regional security, and several nations urged restraint.

The attack came after Trump said a meeting with Iranian President Hassan Rouhani was possible at the U.N. General Assembly in New York this month. Tehran ruled out talks until sanctions are lifted.

But Trump appeared on Sunday to play down the chances he might be willing to meet with Iranian officials, saying reports he would do so without conditions were not accurate.

As recently as last Tuesday, Pompeo said Trump “is prepared to meet with no preconditions”.

Saudi de facto ruler Crown Prince Mohammed bin Salman told Trump that Riyadh was ready to deal with “terrorist aggression”. A Saudi-led coalition has responded to past Houthi attacks with airstrikes on the group’s military sites in Yemen.

The conflict has been in military stalemate for years. The Saudi alliance has air supremacy but has come under scrutiny over civilian deaths and a humanitarian crisis that has left millions facing starvation.

(Reporting by Roberta Rampton and Arshad Mohammed; Additional reporting by Rania El Gamal and Parisa Hafezi, Saeed Azhar and Hadeel Al Sayegh in Dubai, David Shepardson and Timothy Gardner in Washington, William James in London, John Irish in Paris, Alex Lawler, Julia Payne and Ron Bousso in London, Robin Emmott in Brussels and Devika Krishna Kumar and Michelle Nichols in New York; Writing by Ghaida Ghantous and Richard Valdmanis; Editing by William Maclean, Peter Cooney & Simon Cameron-Moore)

Iran says U.S. should avoid ‘warmongers’ after Bolton departure

Iranian President Hassan Rouhani speaks during the cabinet meeting in Tehran, Iran, September 11, 2019. Official President website/Handout via REUTERS

By Parisa Hafezi

DUBAI (Reuters) – Iran said on Wednesday Washington should distance itself from “warmongers” after the resignation of hawkish White House National Security Adviser John Bolton, and Tehran stood by its demand that sanctions be lifted before any talks.

The departure of Bolton removes one of the strongest advocates of a hard line towards Iran from President Donald Trump’s White House and raises the prospect of steps to open up negotiations after more than a year of escalating tension.

“America should understand that … it should distance itself from warmongers,” Iran’s semi-official Tasnim news agency quoted President Hassan Rouhani as saying on Wednesday, without mentioning Bolton.

“Iran’s policy of resistance will not change as long as our enemy (the United States) continues to put pressure on Iran,” said Rouhani, a pragmatist who won two landslide elections in Iran on promises to open it up to the world.

Last year, the United States pulled out of an international accord between Iran and world powers under which Tehran accepted curbs on its nuclear program in return for access to world trade.

Washington says the agreement reached by Trump’s predecessor Barack Obama was too weak because many of its terms expire in a decade and it does not cover non-nuclear issues such as Iran’s missile program and regional behavior.

The White House has followed what the administration calls a policy of “maximum pressure”, including sanctions aimed at halting all Iranian oil exports, saying its ultimate aim is to push Tehran to the table for talks on a new, tougher deal.

Immediately after Bolton’s departure, U.S. Secretary of State Mike Pompeo said on Tuesday that Trump could meet with Rouhani at an upcoming U.N, meeting with “no preconditions”.

“SIGH OF RELIEF”

Iran has rejected talks unless sanctions are lifted first. It said on Wednesday that Bolton’s exit had not changed that position.

“The departure of … Bolton from President Donald Trump’s administration will not push Iran to reconsider talking with the U.S.,” Iran’s U.N. envoy, Majid Takhteravanchi, was quoted as saying by state news agency IRNA.

Foreign Minister Mohammed Javad Zarif slammed the United States for ordering new sanctions on Iran despite Bolton’s departure.

“As the world … was breathing a sigh of relief over the ouster of #B_Team’s henchman in the White House, (Washington) declared further escalation of #EconomicTerrorism (sanctions) against Iran,” Zarif tweeted. “Thirst for war —maximum pressure— should go with the warmonger-in-chief (Bolton).”

Zarif has often said that a so-called “B-team” including Bolton could goad Trump into conflict with Tehran.

The United States on Tuesday announced sanctions on a “wide range of terrorists and their supporters”, including Iran’s Revolutionary Guards.

Iran says it hopes to save the deal but cannot do so indefinitely if it gets none of its economic benefits. It has responded to U.S. sanctions with steps to reduce its compliance with the accord and has said it could eventually leave it unless other parties shield its economy from penalties.

“Iran’s commitments to the nuclear deal are proportional to other parties and we will take further steps if necessary,” Rouhani said.

Iran started using advanced centrifuges last week to ramp up output of enriched uranium and reduced its commitments to the nuclear deal, but said it was giving European countries another two months to come up with a plan to protect its economy.

France has proposed giving Iran a multi-billion dollar credit line which would shield it from some impact of U.S. sanctions, although any such deal would require the Trump administration’s tacit approval.

(This story was refiled to correct spelling of ‘weak’ in paragraph 6)

(Additional Reporting by Tuqa Khalid; Writing by Parisa Hafezi; Editing by Peter Graff/William Maclean)

Explainer: Israel’s election – will Netanyahu survive?

By Maayan Lubell

JERUSALEM (Reuters) – Israelis vote next week for the second time in less than six months in an election that could see Prime Minister Benjamin Netanyahu win a record fifth term – or end his decade-long dominance of Israeli politics.

He faces new and formidable challengers to his reign and, after the vote, possible criminal charges in three corruption cases. Recent polls have shown Netanyahu’s right-wing Likud party tied with the centrist Blue and White. They also show that neither party will secure an outright majority.

Here are a number of possible scenarios for how the Sept. 17 election could play out:

1. NETANYAHU WINS CONTROL OF MAJORITY OF KNESSET SEATS

Likud, together with the three right-wing and religious parties that have already declared their support for him, win a majority. With at least 61 lawmakers, Netanyahu would have relatively little trouble assembling a coalition similar to his outgoing cabinet, which supported his hawkish position on Iran and its 2015 nuclear deal and took a tough stance on the Israeli-Palestinian conflict. In the run-up to the election, Netanyahu has vowed to annex the settlements Israel has built in the occupied West Bank – land the Palestinians want for a state. Such a move would delight Netanyahu’s far-right allies.

2. NO CLEAR WINNER AND NETANYAHU UNITY GOVERNMENT

After election day, Israel’s president consults with party leaders, asking them who they would support for prime minister. President Reuven Rivlin then asks the candidate he believes has the best chance to try and form a government. Netanyahu had his opportunity after the previous election in April but failed within the allocated 42 days. Rather than risk Rivlin appointing someone else to try, Netanyahu opted for a second election.

If he is again chosen, and again faces a stalemate, Netanyahu could go outside his bloc of right-wing and Jewish religious parties to form a so-called “national unity” government with those who are not his natural allies.

That would likely mean his strongest rival, Benny Gantz, leader of the centrist Blue and White. But Gantz has said he would not join a Netanyahu-led government, citing looming possible corruption indictments against Netanyahu. But Israeli politics are famously fluid, with ever-shifting fealties.

3. NO CLEAR WINNER, CENTER-RIGHT GOVERNMENT FORMED WITHOUT NETANYAHU

If Netanyahu again fails again to form a government, his own party could oust him to pave the way for a governing coalition between Likud and Gantz’s Blue and White, leaving Netanyahu in the political wilderness.

So far, no one in Likud has publicly broached such an idea. But that could change if Netanyahu again comes up short in coalition talks.

4. NETANYAHU CLEARLY DEFEATED, CENTER-LEFT GOVERNMENT

If the center and left-wing parties garner a majority in parliament, Gantz would head a government that could include his own party as well as the Labour Party and the newly-formed, environmentalist and secularist Democratic Camp, without needing an alliance with the right. It would be the first time since the 1990s that the left controlled parliament although, with an electorate shifting steadily toward the right, polls are not showing much likelihood of such a scenario. However, if a left-leaning coalition were ultimately formed, it would likely pursue peace talks with the Palestinians and be more open to concessions toward them as part of a lasting peace accord. It could also be more accepting of the nuclear deal struck between world powers and Iran.

5. NO CLEAR WINNER, NEW ELECTIONS

If no candidate can form a government, Israel would head to another snap election. But lawmakers are likely to do all they can to avoid a third this year.

HOW DOES THE ISRAELI ELECTION WORK?

The 120 Knesset seats are allocated by proportional representation to party lists. In order to win seats, a party must get at least 3.25 percent of the national vote, equivalent to 4 seats. In the election in April, Likud and Blue and White came out on top, tied at 35 seats each. No one party has ever won an outright majority of the 120-seat Knesset (parliament) in 71 years of nationhood. This makes post-election coalitions the key to victory, and negotiations can stretch on for weeks.

WHO’S THE KINGMAKER?

According to the polls, it’s Avigdor Lieberman, Israel’s hawkish ex-defense minister. Polls suggest the ultra-nationalist settler will double his seats from five to around 10. Lieberman, head of the Israel Beitenu party, has said he would only join a unity government comprised of Likud and Blue and White.

However, Lieberman is something of a wild card and has made unpredictable moves in the past.

WHAT ABOUT NETANYAHU’S LEGAL WOES?

Israel’s attorney-general, who has announced his intention to indict Netanyahu in three corruption investigations, is expected to decide whether to formally charge him by the end of 2019 after a pre-trial hearing in October, during which Netanyahu, who denies wrongdoing, can argue against indictment.

A majority in the Knesset could grant Netanyahu immunity from prosecution until the end of his term. Some of his prospective allies signaled they would support such a move, but it would probably draw a public outcry and legal challenges at the Supreme Court. Yet even if indicted, Netanyahu would not be under strict legal obligation to step down. His right-wing and religious allies are not expected to pressure him to resign, even if he is charged.

WHAT ABOUT TRUMP’S “DEAL OF THE CENTURY”?

Netanyahu has said he expects U.S. President Donald Trump to release his long-delayed plan for Israeli-Palestinian peace soon after the election. If Netanyahu wins and forms a right-wing cabinet, he would have a hard time getting his far-right allies to sign on to any peace plan involving concessions to the Palestinians. This could either destabilize the government or bury the Trump plan. A cabinet with Gantz in it would likely be more open to give-and-take negotiations with the Palestinians.

(Writing by Maayan Lubell; Editing by Jeffrey Heller and Mark Heinrich)

Netanyahu: Iran had secret nuclear weapons development site in Abadeh

Israeli Prime Minister Benjamin Netanyahu speaks at a news conference in Jerusalem September 9, 2019. REUTERS/Ronen Zvulun

JERUSALEM (Reuters) – Israeli Prime Minister Benjamin Netanyahu said on Monday that Iran had been developing nuclear weapons at a secret site near the city of Abadeh, but that Tehran destroyed the facility after learning it had been exposed.

It was the first time Netanyahu had identified the site, which, he said, was discovered in a trove of Iranian documents Israel previously obtained and disclosed last year.

“In this site, Iran conducted experiments to develop nuclear weapons,” Netanyahu said in broadcast remarks, showing an aerial picture of several small buildings, including their coordinates, that he said were taken at the Abadeh facility late in June 2019.

“When Iran realized that we uncovered the site, here’s what they did,” he said, showing a picture from a month later in which the buildings no longer appeared. “They destroyed the site. They just wiped it out.”

Netanyahu’s comments followed a Reuters report revealing that the International Atomic Energy Agency found traces of uranium at a different site in Iran that the Israeli leader had first pointed to during a speech last year at the United Nations.

Iran had yet to explain the traces of uranium at that site, though it denies ever having sought a nuclear weapon.

Netanyahu, who strongly opposed a 2015 nuclear deal between Iran and world powers, made the remarks in a televised speech about a week before a general election in Israel in which he is in a tight race to win another term.

“I call on the international community to wake up, to realize that Iran is systematically lying,” Netanyahu said.

“The only way to stop Iran’s march to the bomb, and its aggression in the region, is pressure, pressure and more pressure.”

(Reporting by Ari Rabinovitch,; Editing by Stephen Farrell and Jonathan Oatis)

Britain will support U.S. in Iran talks if deal can be made: UK defense minister

FILE PHOTO: Britain's Defence Secretary Ben Wallace walks outside Downing Street in London, Britain, September 2, 2019. REUTERS/Simon Dawson

LONDON (Reuters) – Britain will always help the United States along a path to talks with Iran if a deal can be made, British defense minister Ben Wallace said on Friday, although he cautioned that Iran should be judged by its actions rather than words.

“Actions speak louder than words, so I think we’ll take them (Iran) at their actions rather than their words,” Wallace said at a news conference in London with his U.S. counterpart Mark Esper, who earlier said Iran was “inching” towards a place where talks could be held.

“But if there is a deal to be made, we will of course always help the United States along that path, because I think peace and stability in that region is the most important thing,” Wallace added.

(Reporting by Idrees Ali, writing by Alistair Smout; editing by Stephen Addison)

Israel says Iran boosting effort to set up Hezbollah precision-missile plants in Lebanon

FILE PHOTO: A general view picture shows the Lebanese village of Adaisseh on the left-hand-side of the Israel-Lebanon border, as seen from Kibbutz Misgav Am in northern Israel August 26, 2019. REUTERS/Amir Cohen/File Photo

JERUSALEM (Reuters) – Israel accused Iran on Thursday of stepping up efforts to provide its Hezbollah allies in Lebanon with precision-guided missile production facilities, a veiled warning to Beirut that Israeli counter-strikes could escalate.

Israel and Hezbollah, which last fought a war in 2006, are on high alert after Israeli drones were used at the weekend to attack what a security official in the region described as a target related to the militia’s precision-guided missile project.

Hezbollah has said it will retaliate for the rare strike in Beirut. The heavily armed Shi’ite movement has denied harboring such missile facilities. Lebanon has accused Israel of seeking pretexts for aggression.

Without claiming responsibility for the drone attack, the Israeli military went public with what it said were details about an extensive Iranian-sponsored project to provide Hezbollah with the means to produce precision-guided missiles.

Lieutenant Colonel Jonathan Conricus, an Israeli military spokesman, said Iran had in recent months increased the pace of the project such that it was “faster in terms of buildings, facilities, locations, conversion and manufacturing facilities, and it means more people, operatives involved in doing so”.

“It is time for them (the Lebanese government) to understand their responsibility and understand the fact that what they are letting Hezbollah and Iran do on Lebanese soil is their responsibility,” Conricus said.

“They are the ones who are complicit in endangering Lebanon and Lebanese civilians which Hezbollah and Iran are using as human shields.”

(Reporting by Dan Williams; Editing by Jeffrey Heller and Frances Kerry)

Trump says ready to meet Iran’s president to solve nuclear impasse

U.S. President Donald Trump attends a joint press conference with French President Emmanuel Macron (not seen) at the end of the G7 summit in Biarritz, France, August 26, 2019. REUTERS/Christian Hartmann

By John Irish and Michel Rose

BIARRITZ, France (Reuters) – U.S. President Donald Trump said on Monday he would meet Iran’s president under the right circumstances to end a confrontation over a 2015 nuclear deal and that talks were underway to see how countries could open credit lines to keep Iran’s economy afloat.

But Trump, speaking at a G7 summit in the French resort of Biarritz, ruled out lifting economic sanctions to compensate for losses suffered by Iran.

Trump told reporters it was realistic to envisage a meeting between him and President Hassan Rouhani in coming weeks, describing Iran as a country of “tremendous potential”.

“I have a good feeling. I think he (Rouhani) is going to want to meet and get their situation straightened out. They are hurting badly,” Trump said.

French President Emmanuel Macron, host of the G7 summit, told the same news conference that Rouhani had told him he would be open to meeting Trump. Macron said he hoped a summit between the two men could happen in coming weeks. Trump and Rouhani head to the United Nations General Assembly in September.

Rouhani is not Iran’s top decision-maker. That role is held by the fiercely anti-American Supreme Leader Ayatollah Ali Khamenei – and anything agreed at a Trump-Rouhani encounter would be subject to Khamenei’s approval.

European leaders have struggled to calm the deepening confrontation between Iran and the United States since Trump pulled Washington out of Tehran’s 2015 nuclear deal with world powers and reimposed sanctions on the Iranian economy.

But Macron has spent the summer trying to create conditions for a period of pause to bring the two sides back to the negotiating table.

“What I hope is that in coming weeks, based on these talks, we can manage to see a summit between President Rouhani and President Trump,” Macron said, adding that he believed if they met a deal could be struck.

Macron’s efforts took a surprise turn on Sunday when Iranian Foreign Minister Mohammad Javad Zarif, who is under U.S. sanctions, flew to the French seaside town of Biarritz where the Group of Seven leaders were meeting.

“VERY VIOLENT FORCE”

Appearing to refer to Iran’s recent combative rhetoric about its ability to attack U.S. interests, Trump suggested Iran would meet “violent force” if it followed through on its threats.

“They can’t do what they were saying they were going to do because if they do that, they will be met with really very violent force. So I think they are going to be good,” he said.

Trump said he was not open to giving Iran compensation for sanctions on its economy. However he said that the idea under discussion would be for numerous countries to give Iran a credit line to keep it going.

“No we are not paying, we don’t pay,” Trump said.

“But they may need some money to get them over a very rough patch and if they do need money, and it would be secured by oil, which to me is great security, and they have a lot of oil… so we are really talking about a letter of credit. It would be from numerous countries, numerous countries.”

The 2015 deal between Iran and six world powers, reached when Trump’s predecessor Barack Obama was in office, aimed to curb Iran’s disputed uranium enrichment program in exchange for the lifting of many international sanctions on Tehran.

Since ditching the deal last year, Trump has pursued a policy of “maximum pressure” to try to force Iran into broader talks to restrict Iran’s ballistic missile program and end its support for proxy forces around the Middle East as well.

During his brief visit on Sunday, Zarif held talks with Macron and British and German officials before returning home.

Though potentially a diplomatic minefield, Macron’s gamble with Zarif appears to have worked out for now, as Trump on Monday endorsed the French president’s initiative and toned down his usual harsh rhetoric on Tehran.

“MAKE IRAN RICH AGAIN”

While Trump reaffirmed Washington’s goal of extracting further-reaching security concessions from Iran, he said he wanted to see “a really good Iran, really strong”, adding that Washington was not looking for regime change.

“I knew (Zarif) was coming in and I respected the fact that he was coming in. We’re looking to make Iran rich again, let them be rich, let them do well, if they want,” Trump said.

While Trump’s European allies also want fresh negotiations with Iran, they believe the nuclear deal must be upheld to help ward off the risk of wider war in the Middle East. Macron had already met Zarif in Paris on Friday ahead of the G7 summit.

“What we want is very simple. It’s got to be non-nuclear (as well),” Trump said. “We’re going to talk about ballistic missiles…, about the timing. But they (Iran) have to stop terrorism. I think they are going to change, I really do.”

Trump said it was too early for him to meet Zarif himself.

Rouhani signaled a readiness to meet Trump if that helped Iran, according to the official presidency website.

“If I know that in meeting with somebody the problem of my country would be solved, I wouldn’t hesitate because the central issue is the national interests of the country,” Rouhani said.

(Additional reporting by Jeff Mason, Marine Pennetier, and Babak Dehghanpisheh in Geneva; Writing by John Irish; Editing by William Maclean and Gareth Jones)

Trump moves to cool tension over China, Iran as G7 summit wraps up

French President Emmanuel Macron and U.S. President Donald Trump attend a joint press conference at the end of the G7 summit in Biarritz, France, August 26, 2019. REUTERS/Christian Hartmann

By Jeff Mason and Richard Lough

BIARRITZ, France (Reuters) – U.S. President Donald Trump on Monday offered an olive branch to China after days of intense feuding over trade that has spooked financial markets and he opened the door to diplomacy with Iran, easing tensions on the last day of a strained G7 summit.

The leaders of the world’s major industrialized nations, meeting in the French coastal resort of Biarritz, agreed on a deal to provide $20 million in emergency help to Brazil and its neighbors stop the Amazon forest fires.

While they were not expected to leave Biarritz with a more comprehensive set of agreements or even a joint communique, Trump and his Western allies appeared to have at least agreed cordially to disagree on issues dividing them.

These ranged from Washington’s escalating trade war with China, which many fear could tip the slowing world economy into recession; how to deal with the nuclear ambitions of both Iran and North Korea; and the question of whether Russian President Vladimir Putin should be readmitted to the group.

Trump, a turbulent presence at last year’s G7 gathering, insisted during the Biarritz meeting that he was getting along well with other leaders of a group that also comprises Britain, Canada, France, Germany, Italy and Japan.

The trade war between the United States and China, the world’s two largest economies, escalated last Friday as both sides leveled more tariffs on each other’s exports.

On Sunday, a White House spokeswoman said that when Trump told journalists that he had had second thoughts about last week’s tariff blow against China, they were regret for not raising them more.

However, the mood-music changed abruptly on Monday, hours after China’s yuan fell to an 11-year low against the dollar amid fears that the quickening Sino-U.S. trade war would inflict more damage on the world’s largest economies.

Speaking on the sidelines of the G7 summit on Monday, Trump said he believed China wanted to make a trade deal after it contacted U.S. trade officials overnight to say it wanted to return to the negotiating table.

Trump hailed Chinese President Xi Jinping as a great leader and said the prospect of talks was a very positive development.

“He understands, and it’s going to be great for China, it’s going to be great for the U.S., it’s going to be great for the world,” he said.

In Beijing, Foreign Ministry spokesman Geng Shuang said he had not heard that a phone call between the two sides had taken place.

“MAKE IRAN RICH AGAIN”

Trump also backed away from confrontation over Iran on Monday, a day after French President Emmanuel Macron stunned other leaders by inviting Iran’s foreign minister to Biarritz for talks on the stand-off between Washington and Tehran.

Trump told journalists that they had been wrong to report that he was blindsided by the five-hour visit of Mohammad Javad Zarif to the summit’s sidelines, and said that while he thought it was too soon for a meeting he had no objections to it.

European leaders have struggled to calm a confrontation between Iran and the United States since Trump pulled his country out of Iran’s internationally brokered 2015 nuclear deal last year and reimposed sanctions on the Iranian economy.

Macron has led efforts to defuse tensions, fearing a collapse of the nuclear deal could set the Middle East ablaze.

Trump indicated an openness to discussions with Iran on a nuclear deal and said he was not looking for regime change.

“I’m looking at a really good Iran, really strong, we’re not looking for regime change,” he said. “And we’re looking to make Iran rich again, let them be rich, let them do well.”

Trump and Macron met over a long lunch on the first day of the summit and, as they gathered with other leaders for further talks on Monday, they greeted each other warmly and smiled.

DIGITAL TAX

Taking more heat out of the annual meeting, French and U.S. negotiators meeting behind the scenes reached a compromise agreement on France’s digital tax, a levy that had prompted Trump to threaten a separate tax on French wine imports.

The row had threatened to open up a new front in the trade spat between Washington and the EU as economic relations between the two appeared to sour.

France’s 3% levy applies to revenue from digital services earned by firms with more than 25 million euros in French revenue and 750 million euros ($830 million) worldwide.

Trump skipped a session of G7 leaders on climate change at which they agreed to the $20 million technical and financial help for the Amazon. Macron said Trump agreed on the initiative but could not attend because of bilateral meeting engagements.

A record number of fires are ravaging the rainforest, many of them in Brazil, drawing international concern because of the Amazon’s importance to the global environment.

Macron shunted the blazes fires to the top of the summit agenda after declaring them a global emergency. Last week he accused Brazilian President Jair Bolsonaro’s government of not doing enough to protect the area and of lying about its environmental commitments.

(Reporting by Richard Lough, John Irish, Crispian Balmer, Marine Pennetier, John Chalmers, Jeff Mason, William James, Andreas Rinke and Michel Rose; Writing by John Chalmers; Editing by Alison Williams)

Iran says top waterways won’t be as safe if its oil exports cut to zero

FILE PHOTO: Iranian President Hassan Rouhani speaks during the cabinet meeting in Tehran, Iran, August 14, 2019. Official President website/Handout via REUTERS

GENEVA (Reuters) – If Iran’s oil exports are cut to zero, international waterways will not have the same security as before, its president said on Wednesday, cautioning Washington against upping pressure on Tehran in an angry confrontation between the longtime foes.

The comment by President Hassan Rouhani coincided with a remark by Iranian Foreign Minister Mohammad Javad Zarif that Tehran might act “unpredictably” in response to “unpredictable” U.S. policies under President Donald Trump.

“World powers know that in the case that oil is completely sanctioned and Iran’s oil exports are brought down to zero, international waterways can’t have the same security as before,” Rouhani said while meeting Supreme Leader Ayatollah Ali Khamenei, according to Khamenei’s official website.

“So unilateral pressure against Iran can’t be to their advantage and won’t guarantee their security in the region and the world.”

Tensions between Tehran and Washington have risen since Trump’s administration last year quit an international deal to curb Iran’s nuclear ambitions and began to ratchet up sanctions. Iranian officials have denounced the new penalties as “economic warfare”.

In a speech at the Stockholm International Peace Research Institute, Zarif appeared to echo Rouhani’s tone.

“Mutual unpredictability will lead to chaos. President Trump cannot expect to be unpredictable and expect others to be predictable. Unpredictability will lead to mutual unpredictability and unpredictability is chaotic,” Zarif said.

Global commodity trading has been rocked in recent months after a series of attacks on international merchant vessels, which the United States has blamed on Iran, and the seizure of a British tanker. Tehran has denied the accusations.

Washington, which has by far the strongest Western naval contingent in the Gulf, has been calling for its allies to join it in an operation to guard shipping in the Strait of Hormuz, a vital gateway for the world’s oil industry.

So far, Britain, Australia and Bahrain have joined the U.S.-led security mission to protect merchant vessels traveling through key Middle East waterways.

Reiterating Iran’s chilly response to the security mission, Iranian Rear Admiral Ali Fadavi, a deputy commander of the elite Revolutionary Guards, said no one can secure the Gulf other than Iran and countries of the region, according to the semi-official Fars news agency.

“Securing the Persian Gulf is the responsibility of Iran and the countries of the region,” Fadavi said. “Other than us, no one can secure the Persian Gulf.”

(Reporting By Babak Dehghanpisheh; additional reporting by Simon Johnson in Stockholm and Tuqa Khalid in Dubai, Editing by William Maclean)