G7 to study Russia’s ‘malign behavior’

The G7 is to more closely examine Russia’s attempts to sow “doubt and confusion” abroad, Britain’s foreign secretary has said. The announcement was made on the sidelines of a ministerial meeting in Canada.

Canada - G7 foreign ministers stand for a photo in Toronto (picture-alliance/dpa/XinHua/Zou Zheng)

The Group of Seven (G7) industrialized countries have agreed to set up a working group to study Russia’s “malign behavior,” British Foreign Secretary Boris Johnson said on Monday.

G7 foreign ministers made the agreement, which has come amid heightened tensions with Russia over Syria and Ukraine, during a two-day meeting in Canada ahead of a G7 leaders’ summit in June.

Read more: G7 not planning swift return for Russia

What Johnson said:

  • Johnson said: “What we decided yesterday was that we were going to set up a G7 group that would look at Russian malign behavior in all its manifestations – whether it’s cyber warfare, whether it’s disinformation, assassination attempts, whatever it happens to be and collectively try to call it out.”
  • “Russia is so unbelievably clever at kind of sowing doubt and confusion and spreading all this fake news and trying to muddy the waters.”
  • “We think there’s a role for the G7 in just trying to provide some clarity.”

Read more: G7 gives Africa the cold shoulder

Canada - G7 meeting in Toronto - German Foreign Minister Heiko Maas speaks to reporters (Imago/photothek/T. Trutschel)German Foreign Minister Heiko Maas told reporters: “There will be no political solution in Syria without Russia”

From G8 to G7: The current G7 countries decided in 2014 to expel Russia from what was at the time called the G8 after Russia annexed the Crimea peninsula from Ukraine. Current members include: The US, UK, Canada, France, Italy, Germany and Japan.

Russia’s transgressions: G7 countries have in recent years criticized Moscow’s foreign policy, including its support for separatist rebels in eastern Ukraine, its intervention in the Syrian civil war and its cyber attacks on the US and European countries.

US sends deputy: The US was represented at the G7 meeting in Canada by Deputy Secretary of State John J. Sullivan. Mike Pompeo, who has been nominated to be the next US Secretary of State, could not attend because he still needs to be confirmed by the US Senate.

Watch video00:36

G7 to Russia: Help end war in Syria

Iran factor: German Foreign Minister Heiko Maas said on the sidelines of the meeting that Germany and France would push Trump to stay in the 2015 Iran nuclear deal in the next few weeks. The deal’s future is uncertain after US President Donald Trump set May 12 as a deadline to “fix the terrible flaws” of the agreement or reapply US sanctions on Iran.

What happens next? Government leaders including US President Donald Trump and German Chancellor Angela Merkel are set to meet for a two-day summit on June 8-9 in the eastern Canadian town of Charlevoix.

Read more: France’s Emmanuel Macron urges Donald Trump not to ditch Iran deal

Watch video01:17

G7 spotlight on Africa

amp/rt (AFP, Reuters, dpa, AP)

Each evening at 1830 UTC, DW’s editors send out a selection of the day’s hard news and quality feature journalism. You can sign up to receive it directly here.

COURTESY: DW

Why Mike Pompeo’s Senate confirmation is historic — and not in a good way for Trump

The Fix

 April 23 at 1:22 PM 
 1:26
Pompeo braces for key Senate vote

The Senate Foreign Relations Committee will vote on April 23 on President Trump’s secretary of state nominee, CIA Director Mike Pompeo. 

Update: Minutes before the Senate’s foreign relations committee was set to vote, Sen. Rand Paul (R-Ky.) announced he has changed his mind and will support CIA Director Mike Pompeo to be President Trump’s secretary of state. That means, instead of making history for the opposition to his nomination, Pompeo is expected to get approval from the committee and be confirmed by the full Senate later this week.

Senator Rand Paul

@RandPaul

President Trump believes that Iraq was a mistake, that regime change has destabilized the region, and that we must end our involvement with Afghanistan.

Senator Rand Paul

@RandPaul

Having received assurances from President Trump and Director Pompeo that he agrees with the President on these important issues, I have decided to support his nomination to be our next Secretary of State.

It has been more than 70 years since a cabinet nominee had such a hard time making it out of the Senate while still being confirmed.

In at least one way, no secretary of state nominee has had as much trouble as CIA Director Mike Pompeo is having getting confirmed: By the end of the day Monday, he’s expected to become the first secretary of state nominee to fail to get voted out of a Senate committee. But by the end of the week, he could be the first Cabinet member since 1945 to get a vote in the full Senate anyway.

There are a couple of factors that play off each other, making life hard for Pompeo and President Trump, but they mainly boil down to one: partisanship.

Donald J. Trump

@realDonaldTrump

Hard to believe Obstructionists May vote against Mike Pompeo for Secretary of State. The Dems will not approve hundreds of good people, including the Ambassador to Germany. They are maxing out the time on approval process for all, never happened before. Need more Republicans!

On Monday afternoon, Pompeo’s committee approval vote is expected to fall short by one vote, as Sen. Rand Paul (R-Ky.) will join all 10 Democrats on the Senate Foreign Relations Committee to vote against Pompeo.

That’s the first time that has ever happened to a secretary of state, said Matt Green, a political-science professor at Catholic University. While Cabinet nominations like the attorney general tend to have partisan confirmation processes, secretaries of state have generally received broad bipartisan support in the Senate, Green said.

That doesn’t mean Trump has to go back to the drawing board. Senate GOP leaders are expected to bend procedural rules and bring Pompeo’s nomination up for a full vote in the Senate, anyway, later this week.

There, with more votes in play, Pompeo is expected to narrowly gain confirmation, thanks to two Democrats who will make up for Paul’s defection: Sens. Heidi Heitkamp (N.D.) and Joe Manchin III (W.Va.).

Senator Joe Manchin

@Sen_JoeManchin

After meeting with Mike Pompeo, discussing his foreign policy perspectives, & considering his distinguished time as CIA Director & his exemplary career in public service, I will vote to confirm Mike Pompeo to be our next Secretary of State.

Heitkamp and Manchin are running for reelection in states that Trump won by double digits in 2016, so they have an incentive to be seen as working with the president. (Even though, notably, neither voted for Trump’s premiere legislative accomplishment, the GOP tax overhaul, last year.)

Anyway. Back to our history lesson. If/when Pompeo does finally get confirmed by the Senate, he’ll have done it in such a roundabout way as to make history again.

Green and Senate records say Pompeo is on the cusp of becoming the first Cabinet nominee to fail a committee vote since 1945. That time, Franklin D. Roosevelt’s former vice president, Henry Wallace, couldn’t get enough support from conservative Southerners in his own party to get through a committee vote to be commerce secretary, but he did get through the full Senate.

There are a couple of similarities between now and then that are instructive to understanding Pompeo’s historic struggles:

Wallace was a Democrat who didn’t make it out of a Democratic-controlled committee, thanks to factions within the party, Green pointed out. Pompeo is a Republican who probably won’t make it out of a Republican-controlled committee for some of the same reasons. Paul represents a relatively small but vocal noninterventionist wing of the party.

It’s like deja vu for Trump, who was extremely frustrated in the summer when an effort to repeal Obamacare failed by one vote in a Republican-controlled Congress because the party was so divided.

Donald J. Trump

@realDonaldTrump

Can you believe that Mitch McConnell, who has screamed Repeal & Replace for 7 years, couldn’t get it done. Must Repeal & Replace ObamaCare!

Pompeo also doesn’t have the traditional résumé of a secretary of state. A congressman before he became CIA director, Pompeo doesn’t have the relationship with senators or diplomatic experience on which most secretaries of state have been able to rely, Green pointed out.

That has led to skepticism among Democrats in particular that Pompeo may be swayed by Trump’s controversial views on Russia and more nationalistic tendencies. At his confirmation hearing, he refused to explicitly say whether Trump asked him to get the FBI to back off an aspect of the Russia investigation.

It’s also one reason many of Trump’s nominees have struggled to get confirmed: They’re often novices in the job. The secretary of state Trump fired for Pompeo, Rex Tillerson, had no government experience. He got approved by a 13-vote margin, which would be big for Pompeo but is remarkably tight, compared with previous secretaries of state. Green calculated that going back to the Carter era, secretaries of state were approved by an average margin of 91 votes.

There’s a dynamic factoring into Pompeo’s nomination that is uniquely 2018: hyperpartisanship when it comes to the president. Democrats voting against Pompeo have their policy reasons, but it’s undeniable that the politics of sticking it to Trump are a winner among their base.

Opposing Trump is popular among Democrats because Trump is so extremely unpopular. His approval ratings have risen slightly, but he’s still one of the most unpopular presidents in history at this moment in his presidency.

All of that combined makes Trump’s life extremely difficult. His party has such a narrow majority in the Senate that losing one or two senators is all it takes to sink a key vote. He’s nominating people for the Cabinet who would be controversial even in calmer times. And the Senate is so partisan right now that even the historically bipartisan secretary of state position is getting caught up in it.

“Need more Republicans!” Trump tweeted in frustration on Monday morning about the makeup of the Senate. On that, he’s partially right. Pompeo’s Senate snub will make history, but let’s not forget it’s happening, in part thanks to a Republican senator.

9 dead, 16 injured after van plows into pedestrians in Toronto (PHOTOS, VIDEOS)

9 dead, 16 injured after van plows into pedestrians in Toronto (PHOTOS, VIDEOS)
Nine people have been killed and 16 more are injured after a white van struck a number of pedestrians in Toronto, police said.

The incident on Yonge Street and Finch Avenue East occurred just after 1 pm local time, according to the Toronto Police Department.

Photos and videos from the scene show groups of onlookers gathered behind police cordons as emergency services deal with the aftermath of the incident. One video shows a person bleeding heavily while another shows a body covered with a piece of tarpaulin.

According to local reports, police have detained the driver of the vehicle. The area has been closed off.

Toronto’s Sunnybrook Hospital says it received seven patients after the incident. The hospital said on Twitter that its emergency department is on lockdown as an “added precaution.”

Eyewitness Alex Shaker told CTV News that the van mounted the curb at high speed before travelling southbound.

“He started going down on the sidewalk and crumbling down people one by one,” Shaker said.

Bystanders have posted images to social media showing the aftermath and a number of emergency vehicles tending to the scene.

Obelix@henrimiller100

White Van seen plowing into people on injuries everywhere

The thoroughfares of Yonge Street and Finch Avenue East are located close to a metro station in east-west Toronto. The Toronto Transport Commission has closed off the Yonge Street station due to the police investigation.

The scene of the incident is approximately 30 kilometers from downtown Toronto, where government ministers from France, US, Colombia, Croatia, and Colombia were meeting about an upcoming G7 summit.

Police have dismissed reports of a shooting in the area.

Toronto Police OPS

@TPSOperations

Shooting:Dundas and Chestnut area. Reports of a male with a lower body injury. Further when I get more. ^gl

Toronto Police OPS

@TPSOperations

Update: Upon further investigation this seems to be NO shooting. we are clearing ^gl

Courtesy: RT

Trump is creating a vetting center. Is it ‘extreme’ enough to end his travel ban?

A girl dances with an American flag at Dallas/Fort Worth International Airport in Texas while women pray behind her during a protest against the travel ban imposed by President Trump. (Laura Buckman/Reuters)
 April 23 at 6:00 AM 
“Extreme vetting” was a frequent campaign promise of President Trump’s, and within days of taking office he ordered broad restrictions on travelers from several Muslim-majority countries, measures he deemed necessary until such a system was in place.

Trump directed Department of Homeland Security officials to effectuate his ideas, and in February the White House announced the creation of a National Vetting Center, or NVC, that would bring unprecedented rigor to screening foreigners.

Since then, however, the administration has not explained how the center will vet travelers more extremely than the array of other federal agencies already performing the task. It is also unclear whether the White House plans to lift the controversial travel restrictions once the NVC is up and running.

On Wednesday, the U.S. Supreme Court will hear arguments challenging those restrictions, alleging that the ban is a form of religious discrimination and that the president exceeded his authority in ordering it.

Trump has given security, intelligence and other agencies until August to submit proposals for how they will work with the new center and share information with it.

“The Federal Government’s current vetting efforts are ad hoc, which impedes our ability to keep up with today’s threats,” the White House said in a Feb. 6 memo. “The NVC will better coordinate these activities in a central location, enabling officials to further leverage critical intelligence and law enforcement information to identify terrorists, criminals, and other nefarious actors trying to enter and remain within our country.”

 6:42
Vetted, then blocked: Will this Syrian family make it to their final destination?

After President Trump’s immigration order, follow this Syrian refugee family as they learn their fate.

Former DHS officials and security analysts agree that this sounds like a good idea, but they note that the United States already has a unified, state-of-the-art nerve center to screen travelers and share information among federal databases: the National Targeting Center in Sterling, Va.

Established after the Sept. 11, 2001, terrorist attacks, the center is responsible for checking U.S.-bound cargo and foreign travelers by gathering information across federal agencies and assessing security risks.

“I don’t know why you would want to duplicate something that has already been built when we already have the National Targeting Center, which does and is capable of doing serious vetting with respect to any foreign national seeking to enter the United States,” said Robert Bonner, a former U.S. attorney who led U.S. Customs and Border Protection under President George W. Bush and established the center.

The targeting center begins screening travelers as soon as they book flights to the United States. Airlines automatically forward their reservations to the center, in part to avoid having their passengers turned back if U.S. customs agents don’t admit them.

In response to questions about the NVC’s future role, a U.S. Customs and Border Protection official said the new center will “use and expand upon some of the physical infrastructure at CBP’s National Targeting Center” but will also use “virtual relationships” to save costs and “overcome the logistical challenges that required co-location can present.”

The official, who spoke on the condition of anonymity because planning for the NVC is not complete, said the new center is not intended to replicate or supplant the screening efforts performed by other federal agencies.

Instead, the official said, it will “improve the connection between information about potential threats and the U.S. officials who have the authority to use that information to make their own determinations.”

The NVC will “work closely” with the National Targeting Center, the Terrorist Screening Center, the National Counterterrorism Center and the intelligence community, the official added, “to ensure there is appropriate coordination and minimize duplication of effort.”

When Trump toured the National Targeting Center on Feb. 2 before issuing his order, Homeland Security Secretary Kirstjen Nielsen told him it stops “70 terrorists a day” from entering the country.

Calling it “quite a facility,” Trump told the staff: “We’ve really put a lot behind [the National Targeting Center], and we’re going to be putting a lot more behind it.”

According to the limited descriptions of the NVC provided by the White House and DHS, it could play a wider role in screening foreigners already present in the United States who may be seeking to obtain residency or citizenship. The Feb. 6 White House memo said the NVC will screen those “who seek a visa, visa waiver, or an immigration benefit, or a protected status.”

Trump renewed his calls for “extreme vetting” in October after Uzbek immigrant Sayfullo Saipov allegedly plowed a rental truck into cyclists and pedestrians in a Manhattan terrorist attack that killed eight and injured 11.

Weeks later, Akayed Ullah, a Bangladeshi national, allegedly attempted to detonate a pipe bomb in a New York subway tunnel while swearing allegiance to the Islamic State.

Investigators believe both men were radicalized after arriving in the United States, a scenario no form of travel screening could have prevented. The work of tracking foreigners who develop extremist views after living in the United States is primarily the responsibility of the FBI and other law enforcement agencies.

Homeland Security officials have not outlined how those agencies will work with the NVC.

report published this month by the libertarian Cato Institute found that U.S. security agencies already practice “extreme vetting” and have been highly successful at stopping terrorist plots and potential attacks.

“I would argue it’s quite extreme as it currently exists,” said David Bier, the report’s author. He said the only post-9/11 instance of a “vetting failure” was San Bernardino attacker Tashfeen Malik, whose extremist views went unnoticed during her visa application process.

“The threat to American lives as a result of vetting failure in post-9/11 America is incredibly small,” Bier said, “so the idea that we should invest a billion dollars in a new center to prevent such a small risk doesn’t make sense.”

“The more agencies that any individual has to go through to receive approval to travel to the United States, the more we delay travelers’ entry,” he continued. “They’re prevented from spending money as a tourist or being able to work in the U.S. and increase the size of the U.S. economy. Those are costs that need to be considered when talking about delaying people’s ability to travel and immigrate.”

Foreign travelers who need U.S. visas typically apply through American embassies and consulates abroad, and the State Department runs their information through terrorism watch lists and other security databases. Information considered “derogatory” is identified and could be forwarded to DHS and other U.S. agencies for additional screening to determine whether the applicant has a criminal background, potential links to extremists, or could be planning to immigrate illegally.

Travelers then submit to biometric screening and other personal data collection — all of which is forwarded to the Transportation Security Administration and centralized through the National Targeting Center.

When asked to cite specific examples of vetting deficiencies, Homeland Security officials say screeners need to do more to check the social media profiles of foreigners seeking to enter the United States or obtain residency. But skeptics of the administration’s proposals argue that such functions do not require the creation of a new screening center, and could be enhanced at existing DHS and intelligence facilities.

Down In Saudi Arabia, They’re Partying Like It’s 2008

Trump aside, OPEC should look at its own unhappy history before getting carried away with the oil price.
Photographer: ADAM JAN/AFP/Getty Images

Is this really 2018? It started to sound a lot like 2008 in Saudi Arabia on Friday, as the kingdom’s oil minister argued that the world could tolerate a higher crude price.

“I haven’t seen any impact on demand with current prices,” Khalid Al-Falih told reporters at the meeting of OPEC and non-OPEC producers in Jeddah. Arguing that the energy intensity of global economic growth hadn’t declined, he offered the view that “there is the capacity for higher prices.”

President Trump certainly didn’t appreciate the sentiment, firing off a tweet that accused OPEC of promoting “artificially high prices” which “will not be accepted.”

Yet setting aside Trump’s unique approach to geopolitics, the Saudi comments are indeed troubling. They are an eerie echo of comments made almost exactly a decade earlier by a former OPEC grandee: Libya’s Shukri Ghanem. The world economy “has not reached the tipping point where it can’t accept higher prices,” Ghanem said back in April 2008.

Little did he realize just how close that tipping point was. West Texas Intermediate crude, which had touched a record $116.97 a barrel the previous day, continued to climb for another 3 months as OPEC insisted it didn’t need to raise production. But then the collapse came, and it was quite a crash. After trading above $145 a barrel in the first half of July, WTI was below $40 by the end of the year.

What Goes Up…

High oil prices brought about their own demise in 2018, when demand collapsed

Source: Bloomberg

Of course, oil prices are nowhere near as high as a decade ago. But it’s startling how quickly the lessons of 2008, or indeed the last price crash of 2014, are being ignored — even if they’re unlikely to have been forgotten.

When OPEC met in May, oil ministers were talking quite casually about $50 a barrel as a good price for crude. By the time of the December meeting, several were suggesting that a “fair” price for oil was $70 a barrel and at least one put it higher. Now that OPEC’s basket of crudes has reached that $70 level, the target appears to have mysteriously moved upwards again. This is mission creep, OPEC-style.

Global demand does indeed seem remarkably robust. OPEC sees it increasing by 1.6 million barrels a day this year. If that happens, it would be the first time since the early 1970s where we’ve had four consecutive years of oil demand growing by more than 1.5 million barrels a day.

Stronger for Longer

Global oil demand growth hasn’t been so strong for so long since the early 1970s

Source: Bloomberg, BP, OPEC

While higher crude prices would naturally be expected to boost spirits in the oil-dependent economies of the Middle East and elsewhere, they may have a chilling effect elsewhere. The growth of U.S. gasoline demand has already started to slow after pump prices rose late last year, and prices are still heading up.

If crude reaches $80 a barrel by the middle of the summer driving season, those gasoline prices could be pressing $3.30 a gallon. Al-Falih might not have seen any demand impact yet, but that could change very quickly — especially with Trump on the rampage.

Gasoline Rising

U.S. retail gasoline prices are the highest for the time of year since 2014 and heading upwards

Sources: Bloomberg, American Automobile Association

Not everyone was as sanguine as Mr Ghanem a decade ago. OPEC’s then Secretary General Abdalla el-Badri sounded a warning a couple of months later. High prices were “not a bonanza” for OPEC because they had the potential to “destroy everything” by curbing oil demand, the chief revenue-generator for most of his group’s members. Al-Falih and his boss Mohammed bin Salman, would do well to remember his words.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Julian Lee in London at jlee1627@bloomberg.net

To contact the editor responsible for this story:
James Boxell at jboxell@bloomberg.net

Before it’s here, it’s on the Bloomberg Terminal.

Courtesy: Bloomberg

Trump Hails ‘Big Progress’ as Kim Vows to Extend Freeze on Tests

  • Leader Kim Jong Un speaks at party meeting on Friday
  • Comes ahead of summit with South Korean president next week

U.S. President Donald Trump hailed “big progress” as North Korean leader Kim Jong Un pledged to halt nuclear testing, a largely symbolic gesture that appeared aimed at softening the ground for talks between the two leaders.

Kim told a ruling party meeting in Pyongyang on Friday his regime would suspend tests of atomic bombs and intercontinental ballistic missiles after achieving its goal of building a nuclear arsenal, the official Korean Central News Agency reported. North Korea will shutter its Punggye-ri test site, a secluded mountain facility believed to be damaged after a hydrogen bomb test in September.

Donald Trump and Kim Jong Un.

Photographer: Jung Yeon-Je/AFP via Getty Images

While the moves mostly affirm the status quo — North Korea hasn’t conducted a major weapons test in almost five months — Kim’s remarks to a domestic audience could signal flexibility in upcoming talks with the U.S. and South Korea. He’s set to meet South Korean President Moon Jae-in on April 27 at a border village, possibly paving the way for an unprecedented summit with Trump in May or June.

Trump called Kim’s statement “very good news for North Korea and the World.” “Big progress!” Trump said in a tweet. “Look forward to our Summit.”

Later, he noted that North Korea would “shut down a nuclear test site in the country’s Northern Side to prove the vow to suspend nuclear tests.” A spokesman for Moon called Kim’s moves a positive sign.

Satellite image of Punggye-ri Nuclear Test Site in North Korea on March 17, 2018.

Source: DigitalGlobe/38 North via Getty Images

Although U.S. and South Korean officials say Kim has expressed a willingness to discuss “denuclearization,” North Korea’s media has steered clear of the term. Kim’s remarks made no commitment to give up the estimated 60 nuclear bombs and the unknown number of ICBMs he already has.

Read more: Here Are Nine Potential Locations for Trump-Kim Summit

Shin Beomchul, a professor at the Korean National Diplomatic Academy, called Kim’s comments a “very carefully coordinated calculation to build hopes of the world that it’s open to changes that could possibly follow the summits.”

“It’s still hard to tell from the statement if it has genuine intent to denuclearize,” Shin said. “Contents-wise, there’s no real change in its position.”

Two U.S. officials who asked not to be identified said there was no reason not to believe Kim’s pledge was genuine. U.S. pressure had changed the calculus for Kim, one official said.

North Korea’s arsenal represents the achievement of three generations of Kims and is so central to the regime that its status as a “nuclear state” is enshrined in the constitution. The weapons provide a potent deterrent to any U.S.-led military action similar to what occurred in Iraq, Libya or Syria.

Read more: How to Tell If North Korea Is About to Test a Nuclear Bomb

Past negotiations with Kim’s late father, Kim Jong Il, over North Korea’s weapons program collapsed amid disputes over inspections, economic aid and U.S. security guarantees.

The Workers’ Party meeting expressed only general support for “worldwide disarmament.” “Our decision to suspend nuclear tests is part of the world’s important steps for nuclear disarmament and our republic will join global efforts to completely suspend nuclear tests,” Kim said.

North Korea has already effectively halted weapons tests since firing a missile in late November believed to be capable of reaching any city in the U.S. After that launch, which prompted the most restrictive United Nations sanctions yet, Kim declared his regime’s decades-long quest for nuclear weapons “complete” and opened talks with South Korea.

Read more: Why Hope Battles History as Trump, Kim Plan to Meet

Meanwhile, commercial satellite imagery of the Punggye-ri site has shown no recent evidence of major activity, according to the 38 North website, which monitors North Korea. Tunnels there have caved in after each of the country’s six nuclear tests, said Hong Tae-kyung, a professor of geophysics at Seoul’s Yonsei University.

“There’s even a possibility of radioactive leaks there,” Hong said. “Realistically, it’s highly unlikely they can be used for nuclear tests any more.”

Still, North Korea has been feeling the weight of economic sanctions and Kim’s statements to the party meeting signaled a desire to prioritize the development of his impoverished country. That shift that could make any offers of outside aid or sanctions relief more appealing in negotiations.

China’s Global Times newspaper, which is published by the Communist Party, called on Japan, South Korea and the U.S. to immediately lift all unilateral sanctions on North Korea. Foreign Ministry spokesman Lu Kang said in a statement that Kim’s promises would help promote a political settlement to the tensions.

Japan, however, expressed skepticism. Prime Minister Shinzo Abe told reporters Kim’s pledge wouldn’t change how Japan handles the regime, Kyodo News reported.

“We have made many promises with North Korea. We paid money on the condition that they would end a test facility and such,” Finance Minister Taro Aso told reporters in Washington. “But I remember that they just took our money.”

— With assistance by Mike Dorning, Nick Wadhams, Toru Fujioka, Sam Kim, Jennifer Jacobs, Margaret Talev, Janet Ong, and Peter Pae

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Who’s to Blame for Costly Oil: Saudis, Russia and Trump Himself

  • Trade turmoil, Venezuela, Permian shortages add to pressure
  • Brent crude nearing $75 a barrel, highest since late 2014
Trump One of Many Wildcards in Oil Market, Says Citi’s Eric Lee

Trump One of Many Wildcards in Oil Market, Says Citi’s Eric Lee

Rising oil prices are now the latest target in President Donald Trump’s cross-hairs. The nation’s tweeter-in-chief complained Friday about OPEC fueling an “artificially Very High” cost for crude that he said “will not be accepted!”

So what’s behind the jump in prices? Market outcomes, like success, can claim a thousand fathers, but here’s a potential rogue’s gallery for Trump following Brent crude’s move to almost $75 a barrel on Thursday, its highest level in more than three years:

  • The Saudis – Trump’s right on this one. The world’s biggest oil exporter has signaled it wants to push prices even higher, to around $80 a barrel, as it seeks to fund the expansive (and expensive) economic agenda of Crown Prince Mohammed Bin Salman and support the valuation of state energy giant Aramco before an initial public offering. The kingdom spearheaded the successful effort by OPEC, Russia and other major producers to curtail global supply and boost prices. In a meeting this week, oil ministers signaled a willingness to see prices rise further.
  • Russia – Saudi Arabia’s most important ally in cutting output has backed extending the effort through the end of this year. Meanwhile, tensions are rising between the West and the world’s largest crude producer. The U.S. and Europe announced tough sanctions on Russia in recent weeks, including limits hitting oligarchs in the energy sector, although Trump did reverse a plan earlier this week to impose more restrictions.
  • The Iran Deal – Fears that Trump will reimpose sanctions on Iran when the nuclear deal is reviewed, largely arising from the president’s public comments, are adding to uncertainty in the market. The Obama administration’s agreement with Iran has boosted production from the nation by more than 1 million barrels a day. A Bloomberg survey of oil-market analysts found a 50-50 chance of a sanctions “snap-back,” which could halt as much as 800,000 barrels a day of exports from OPEC’s third-largest producer within six months. Watch prices rise then.
  • Venezuela’s Meltdown – This OPEC member has seen its output decline amid political and economic strife. Trump has added to the pressure, with a drive to impose tough sanctions to punish President Nicolas Maduro. Among those hit by sanctions are the former chief financial officer for the state-owned oil producer, Petroleos de Venezuela SA. A cryptocurrency introduced by Maduro, based on the nation’s massive oil reserves, may also face sanctions, the U.S. has warned.
  • Trade Wars – Trump’s tough trade talk, and tit-for-tat tariffs between the U.S. and China, have roiled global markets and raised the specter of further restrictions, at a time when American oil and gas exports are rising. In March, the industry said a new White House levy on steel imports could increase the cost of steel for wellsby 25 percent and discourage pipeline construction as well.
  • And about those pipelines: The Permian Basin, the heart of the shale boom, is running into shortages with labor, equipment and, perhaps most critically, pipeline capacity. The output above pipeline space could grow to almost 1 million barrels a day in the year ahead, with no significant new pipes coming online until the second half of 2019.
  • Pipes aren’t the only things carrying oil. The Jones Act – Section 27 of a law enacted in 1920 requires that goods transported by ship between U.S. ports be carried on vessels built and flagged in the U.S. and owned and manned by U.S. citizens. That drives up the cost of shipping U.S. crude from the Gulf Coast, for example, to refineries on the East Coast, which often use international oil instead. Arizona Republican Senator John McCain, among others, has called for the act to be annulled.
  • Finally, the world’s consumers can blame themselves. Global oil demand likely climbed by 2.6 million barrels a day in this year’s first quarter, the biggest year-over-year jump since 2010, Goldman Sachs Group Inc. said on Thursday. Rising consumer spending as well as cold weather in Europe and the U.S. helped boost demand, keeping Brent on track to reach $80 in the coming months, the Goldman analysts said.
  • Meanwhile, there’s one lever Trump could pull to tamp down oil prices: releasing crude from the U.S. Strategic Petroleum Reserve. The emergency supply currently holds about 665 million barrels, according to the Energy Department. The backup has been tapped in the past to deal with market disruptions such as Libya’s civil war and Hurricane Katrina.

— With assistance by Tina Davis, and Laura Blewitt

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