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Category: Economics/Business

For Western oil companies, war in Iran means bigger profits, and risks

For Western oil companies, war in Iran means bigger profits, and risks

The New York Times reports: Western companies that pump and process oil and natural gas are among the biggest beneficiaries of the war with Iran, which has snarled production and shipping of fuels in the Persian Gulf. But even as many of them reap the rewards of much more expensive energy, executives are worried that what comes next could be bad for business. Should the war end — a possibility made real when President Trump said on Monday that the…

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How to measure a good life – tips for moving beyond GDP

How to measure a good life – tips for moving beyond GDP

Richard Heys, Himanshi Bhardwaj and Cliodhna Taylor write: For decades, economists have known that using gross domestic product (GDP) alone to guide policy is problematic. The metric is mainly a measure of market production, albeit one with strong marketing and branding, and misses key elements of what makes a good life. Nevertheless, failure to agree on alternatives has held back the debate over what should replace it. This year will be pivotal for changing how policymakers use data to guide…

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I predicted the 2008 financial crisis. What is coming may be worse

I predicted the 2008 financial crisis. What is coming may be worse

Richard Bookstaber writes: At the start of the 2008 financial crisis, I was at a hedge fund. By its end, I was at the U.S. Treasury. At both, I worked with people only a few years out of college. The drama of 2008 was all they knew about financial markets. “Remember what’s happening,” I told them. “You’ll never see anything like this again.” Now I’m not so sure. Maybe they’ll see worse. We have returned to a period of risk,…

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Iran war puts global energy markets on the brink of a worst-case scenario

Iran war puts global energy markets on the brink of a worst-case scenario

Wired reports: On Thursday, Israel launched a series of strikes on various oil and gas facilities in the region, most notably the South Pars gas field, the world’s biggest natural gas field, which is jointly controlled by Iran and Qatar. Iran retaliated with counterstrikes, including on the world’s largest oil export facility in Qatar. Oil prices temporarily shot up to nearly $120 a barrel. These strikes appear to have damaged infrastructure that’s crucial to the world’s fossil fuel supply. Qatar…

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Iran attacks wipe out 17% of Qatar’s LNG capacity for up to five years, QatarEnergy CEO says

Iran attacks wipe out 17% of Qatar’s LNG capacity for up to five years, QatarEnergy CEO says

Reuters reports: Iranian attacks ‌have knocked out 17% of Qatar’s liquefied natural gas (LNG) export capacity, causing an estimated $20 billion in lost annual revenue and threatening supplies to Europe and Asia, QatarEnergy’s CEO and state minister for energy affairs told Reuters on Thursday. Saad al-Kaabi said two of Qatar’s 14 LNG trains and one of its two gas-to-liquids (GTL) facilities were damaged in ​the unprecedented strikes. The repairs will sideline 12.8 million tons per year of LNG for three…

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West Point analysis warns that Strait of Hormuz blockade will strangle U.S. defense industry

West Point analysis warns that Strait of Hormuz blockade will strangle U.S. defense industry

The Guardian reports: The closure of the strait of Hormuz is causing a “paralyzing, real-time problem” for any prospective manufacturing surge in the US defense industrial base, and even for the repair of defense equipment damaged by Iranian attacks, according to analysis published by West Point’s Modern War Institute. In particular sulphur, a vital upstream input in the extraction of critical minerals including copper and cobalt, has seen a “near total” disruption of seaborne trade in the straits, which makes…

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How the rest of the world is struggling with the economic crisis that Trump and Netanyahu triggered

How the rest of the world is struggling with the economic crisis that Trump and Netanyahu triggered

The Washington Post reports: As the United States wages war with no clear endgame, large swaths of the globe are suffering worse than Americans from the economic fallout, weathering gasoline shortages, falling currencies and more severe energy shocks. Iran’s retaliatory attacks have largely blocked the Strait of Hormuz, turning the transit point for one-fifth of the world’s crude into a trial by fire for cargo ships and sending oil prices soaring. That is triggering hikes at the pump — on…

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Major escalation: Israel strikes Iran natural gas facility in coordination with U.S.

Major escalation: Israel strikes Iran natural gas facility in coordination with U.S.

Axios reports: The Israeli Air Force struck a natural gas processing facility in southwestern Iran, two senior Israeli officials said. Why it matters: This is the first time Israel has struck natural gas facilities in Iran, which are key to Iran’s economy. The Israeli officials said the strike was coordinated with and approved by the Trump administration. A U.S. Defense official confirmed that. The semi-official Tasnim News Agency reported that several facilities in the South Pars gas field near Bushehr were targeted. According to the report, emergency teams…

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Trump foolishly miscalculated the risk of Iran blocking the Strait of Hormuz

Trump foolishly miscalculated the risk of Iran blocking the Strait of Hormuz

The Wall Street Journal reports: Before the U.S. went to war, Gen. Dan Caine, the chairman of the Joint Chiefs of Staff, told President Trump that an American attack could prompt Iran to close the Strait of Hormuz. Caine said in several briefings that U.S. officials had long believed Iran would deploy mines, drones and missiles to close the world’s most vital shipping lane, according to people with knowledge of the discussions. Trump acknowledged the risk, these people said, but…

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Nothing to lose: Iran’s bankruptcy is its best weapon against the wealthy Gulf states

Nothing to lose: Iran’s bankruptcy is its best weapon against the wealthy Gulf states

A commentator at bne IntelliNews writes: There is an old saying, attributed to the British Foreign Office in colonial days: “Keep the Persians hungry, and the Arabs fat.” Washington appears to have taken that advice to heart. The trouble is, when the hungry finally have nothing left to lose, it is the fat who pay the price. There is something darkly rational about Iran’s approach to this war. The Islamic Republic entered the conflict already ruined. Inflation was running above…

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Iran’s conventional navy is largely gone. The threat to the Strait of Hormuz is not

Iran’s conventional navy is largely gone. The threat to the Strait of Hormuz is not

RFE/RL reports: The United States and Israel have largely destroyed Iran’s conventional naval fleet in a massive bombing campaign since February 28. But Tehran’s threat to the Strait of Hormuz, one of the world’s most important shipping routes, has not diminished. Iran has effectively closed the narrow waterway, through which 20 percent of the world’s oil supplies flow, by using asymmetric warfare tactics. Besides Iran’s conventional navy, the powerful Islamic Revolutionary Guards Corps (IRGC), the elite branch of the country’s…

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Attacks on ME desalination plants highlight risks of near-total dependence on ‘fossil fuel water’

Attacks on ME desalination plants highlight risks of near-total dependence on ‘fossil fuel water’

Inside Climate News reports: Recent attacks in the Middle East on desalination plants, facilities that remove salt from seawater, raise the potential for a humanitarian crisis if the region’s freshwater production facilities are subjected to more widespread destruction. The attacks also underscore the region’s heavy reliance on an energy-intensive method of producing drinking water that is powered almost entirely by fossil fuels. On Saturday, Iranian Foreign Minister Abbas Araghchi accused the United States of striking a desalination plant in southern…

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Escalating Hormuz crisis raises specter of prolonged closure

Escalating Hormuz crisis raises specter of prolonged closure

The Wall Street Journal reports: Escalating Iranian attacks and the U.S. government’s decision to hold off on military escorts for oil tankers through the Strait of Hormuz are raising the prospect of a prolonged closure that would choke off exports through the world’s most important energy-transport route. On Wednesday, the Islamic Revolutionary Guard Corps struck three cargo ships attempting to transit the waterway, the only sea route out of the Persian Gulf. It warned that any other vessels trying to…

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Oman evacuates key oil port as Iran war intensifies

Oman evacuates key oil port as Iran war intensifies

OilPrice.com reports: Oman has ordered the evacuation of vessels from its key Mina Al Fahal oil port, which sits outside the Strait of Hormuz, in a sign that the disruption to oil supply is spreading in the Middle Eastern ports that don’t need passage through the world’s most critical chokepoint. All vessels were told to evacuate Mina Al Fahal, Bloomberg reported on Thursday, as attacks on regional energy infrastructure intensify and tankers and cargo vessels are now being targeted more…

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The other global crisis stemming from the blocking of the Strait of Hormuz

The other global crisis stemming from the blocking of the Strait of Hormuz

Noah Gordon and Lucy Corthell write: The Gulf region is a key producer not only of liquified natural gas (LNG) and oil products but also of fertilizer. About one-third of global seaborne trade in fertilizers typically passes through the Strait of Hormuz, which has been nearly entirely closed since the United States and Israel attacked Iran on February 28. In particular, Gulf countries are important producers of nitrogen fertilizers, which depend primarily on natural gas burned at high pressure in the presence of hydrogen to synthesize ammonia. (The…

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How ‘Handala’ became the face of Iran’s hacker counterattacks

How ‘Handala’ became the face of Iran’s hacker counterattacks

Wired reports: Since the United States and Israel first unleashed a broad campaign of air strikes across Iran in late February, the cybersecurity industry has warned that the country’s retaliatory measures would include punishing, disruptive cyberattacks against Western targets. Late Tuesday night, the first of those attacks arrived in the US: a devastating breach of the medical technology firm Stryker that has reportedly disabled as many as tens of thousands of computers and paralyzed much of the company’s global operations—all…

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