Saudi Arabia says it ‘won’t bear any responsibility’ for oil shortages
Saudi Arabia said Monday it “won’t bear any responsibility for any shortage in oil supplies to global markets” after attacks by Yemen’s Iran-backed Houthi rebels affected the kingdom’s production.
The announcement comes as the kingdom remains lockstep with OPEC and other oil-producing countries in a deal limiting increases in production and as energy prices rise higher amid Russia’s war on Ukraine. Already, Americans have had to pay record-breaking prices at the pump for gasoline.
The state-run Saudi Press Agency quoted the Foreign Ministry as saying that “the international community must assume its responsibility to maintain energy supplies” in order to “stand against the Houthis.”
The repeated Houthi attacks will affect “the kingdom’s production capacity and its ability to meet its obligations,” the statement added, threatening the “security and stability of energy supplies to global markets.”
Benchmark Brent crude oil stood at over $112 a barrel in trading Monday.
On Sunday, Yemen’s rebels launched a series of attacks targeting the kingdom’s oil and natural gas production. The Saudi Energy Ministry had said the attacks at the Yanbu petrochemicals complex on the Red Sea coast led to a temporary drop in oil output.
The drone and missile strikes ignited a fire at a tank at a petroleum distribution in the Saudi port city of Jiddah and affected production at the gas facility in Yanbu. The overall extent of damage at the installations remained unclear.
The Saudi government condemned the attacks as posing a threat to the security of oil supplies “in these extremely sensitive circumstances” in the global energy market.
The relentless wave of strikes on Sunday marked one of the most intense Houthi barrages on the kingdom, exposing Saudi defense vulnerabilities and recalling the dramatic September 2019 attacks on two key oil installations that knocked out half of Saudi Arabia’s total oil production.
Oil markets could lose 3 million barrels a day of Russian crude next month, IEA warns
LONDON — Oil markets could lose three million barrels per day (bpd) of Russian crude and refined products from April, the International Energy Agency (IEA) said on Wednesday, exceeding the one million bpd per day demand drop high prices are expected to cause.
The Paris-based watchdog said sanctions and buyer reluctance to purchase Russian crude were pushing up oil prices in a way that would hit personal budgets, drive up inflation, which has already hit multi-decade highs, and undercut economic recovery.
“The impact of loftier prices for oil and other commodities will … increase inflation, reduce household purchasing power and are likely to trigger policy reactions from central banks worldwide – with a strong negative impact on growth.”
“Surging energy and other commodity prices, along with financial and oil sanctions against Russia, are expected to depress world GDP and oil demand,” it said in a report.
It was the first monthly report on oil from the IEA, which represents 31 mostly industrialized nations but not Russia, since Russia’s invasion of its neighbour briefly sent Brent crude to a 14-year high of nearly US$140 a barrel.
“We see a reduction in total (Russian) exports of 2.5 million bpd, of which crude accounts for 1.5 million bpd and products 1 million bpd,” the IEA said in its monthly oil report.
Additionally, it projected lower Russian domestic demand for oil products.
“These losses could deepen should bans or public censure accelerate,” the Paris-based IEA said.
Russia exports 7 million to 8 million barrels of crude and products daily.
The IEA lowered its forecast for world oil demand for the second to fourth quarters of 2022 by 1.3 million bpd. For the full year it cut its growth forecast by 950,000 bpd to 2.1 million bpd for an average of 99.7 million bpd.
That would mean a third year of demand below pre-pandemic levels. Previously, the agency had expected demand to recover in 2022.
The Ukraine crisis has exacerbated the issue of limited output capacity.
Top OPEC+ producers Saudi Arabia and United Arab Emirates, which are rare among global producers, in having surplus capacity, are not fully opening their taps and the IEA does not expect output rises from Canada, the United States and others to eliminate global undersupply.
The world is set for a supply deficit of 700,000 bpd in the second quarter, the IEA said.
Storage levels in OECD countries in January stood at their lowest levels since April 2014, it said.
CP RAIL: The work stoppage comes at a bad time for Canada’s already strained supply chain
Canadian Pacific Railway Ltd. is winding down operations across the country after the company and union failed to reach an agreement by the 12:01 a.m. deadline on March 20.
The latest development since negotiations began in September has ended in finger pointing, with both sides claiming that the other initiated the work stoppage.
At 11:42 p.m. on March 19, Stéphane Lacroix, a spokesperson for Teamsters Canada Rail Conference (TCRC), issued a statement that said a lockout would begin after midnight.
“We are very disappointed with this turn of events,” said Dave Fulton, Teamsters spokesperson at the bargaining table. “They set the deadline for a lockout to happen tonight, when we were willing to pursue negotiations. Even more so, they then moved the goalpost when it came time to discuss the terms of final and binding arbitration.”
In the statement, the union clarified the differences between a lockout, which is initiated by the employer, and a strike, which is initiated by unionized employees.
At 2:20 a.m. on Sunday, CP released a statement saying that prior to the midnight deadline, Teamsters issued a news release that “completely misrepresented the truth.”
“Contrary to the TCRC Negotiating Committee’s claim, the work stoppage was initiated by the TCRC. In reality, it was CP, with the Director General, Federal and Conciliation Services, that remained waiting at the table with the desire to continue bargaining,” CP said in the statement.
Minister of Labour Seamus O’Regan Jr said in a tweet just after midnight that the railway and Teamsters were still at the table with federal mediators.
CP is one of the largest railway operators in Canada and the Teamsters union represents 3,000 locomotive engineers, conductors, train and yard workers across the country. A work stoppage comes at bad time for Canadian farmers, who depend on trains to deliver their supplies of fertilizer and pesticide before spring planting.
Russia’s invasion of Ukraine, a top supplier of grains, has put pressure on Canada’s grain growers to pick up some of the slack and help avoid a global food crisis.
But a delay in shipments of fertilizer to farms this spring could reduce crop yields later in the year when global supplies may be tighter than usual due to the war, according to Saskatoon-based Nutrien Ltd., the world’s biggest maker of crop nutrients. About 75 per cent of fertilizer in Canada travels by rail, and fertilizer supply chains were “already stretched” this year, said Christine Gillespie, Nutrien’s vice-president of distribution and logistics.
Saudi Arabia regained the spot as China’s top crude supplier in the first two months of 2022, having been leapfrogged by Russia in December, while Russian shipments dropped 9 per cent as a cut in import quotas led independent refiners to scale back purchases.
Arrivals of Saudi crude totalled 14.61 million tonnes in January-February, equivalent to 1.81 million barrels a day, down from 1.86 million b/d a year earlier, data from the General Administration of Customs showed on Sunday.
Imports from Russia totalled 12.67 million tonnes in the two months, or 1.57 million b/d. That compares with 1.72 million b/d in the corresponding 2021 period.
Demand for Russia’s flagship ESPO crude from Chinese independent refineries, known as teapots, was hit by Beijing’s crackdown on tax evasion and illegal trading of import quotas.
The government also cut its first batch of 2022 crude import allowances to teapots, aiming to eliminate inefficient refining capacity.
Imports from Russia could tumble in March as buyers worldwide shun its cargoes in the wake of the intensifying Ukraine crisis. But Reuters reported that Russian producer Surgutneftegaz was working with China to bypass Western sanctions and keep up oil sales.
Sunday’s customs data showed that 259,937 tonnes of Iranian crude oil arrived in China in January, around the same level as in December, 2021, the first imports recorded by official Chinese data since December, 2020.
The shipments came as Tehran and Western countries hold talks on reviving a 2015 nuclear deal, pointing to a possible lifting of U.S. sanctions on Iranian oil exports.
No Iranian cargo were recorded by Chinese customs in February.
China’s official data also showed no imports from Venezuela, which is under U.S. sanctions as well, in January and February.
The Bank of Nova Scotia headquarters in Toronto on Dec. 16, 2013.CHRIS HELGREN/REUTERS
Bank of Nova Scotia’s BNS-T +0.06%increase online brokerage, Scotia iTrade, is the latest financial institution to stop selling mutual funds with embedded advisory fees in preparation of coming regulatory changes that will no longer allow online trading platforms to collect trailing commissions.
Scotia iTrade stopped all sales of investment funds that include trailing commissions as of March 1, spokesperson Katie O’Dell said in an e-mail.
Earlier this year, Canadian Imperial Bank of Commerce and Royal Bank of Canada were the first to announce they would stop selling any mutual funds that pay trailing commissions in their discount brokerage businesses as of March 7, in order to align with regulatory changes that take effect on June 1.
Trailing commissions are payments a mutual fund company gives annually to an investment dealer for selling its investment products. They are supposed to compensate financial advisers for providing continuing advice to investors, and are embedded in a fund’s management expense ratio. But discount brokers are prohibited from providing advice to investors under regulatory rules,meaning they have collected billions in commissions without providing the intended service.
In September, 2020, after years of industry consultation, the Canadian Securities Administrators, or CSA, an umbrella group for all provincial and territorial securities commissions, announced the sales ban for discount brokers.
As a result, discount brokerages have been reviewing their product shelves and re-evaluating their mutual fund trading fees, which historically have been waived for mutual funds in favour of collecting trailing commissions from fund companies.
The same platforms typically charge around $10 a trade for stocks or bonds.
Scotiabank is still reviewing its mutual fund trade fees. Prior to March 1, Scotia iTrade waived fees for all mutual fund trades.
Both CIBC and RBC have already begun to charge fees for mutual fund trades. On March 7, CIBC Investor’s Edge began charging an upfront fee of $6.95 a trade when clients buy or sell mutual funds.
RBC Direct Investing, the online brokerage of Royal Bank of Canada, notified clients that, as of March 14, mutual fund purchases are now subject to a fee of 1 per cent of the gross trade amount, up to a maximum of $50. There will be no charge for selling mutual funds on the platform.
Canada’s largest online discount brokerage, TD Direct Investing, will continue to provide zero-fee trades for buying or selling mutual funds on its online platform even after June 1.
Bank of Montreal and National Bank of Canada have not yet released details of when they will stop selling trailing commissions from their platforms.
National Bank launched zero-fee commissions trades in 2021, and spokesperson Stéphanie Rousseau said the company will “keep offering free electronic mutual funds” trades, as it already does for stocks and exchange-traded funds, after June 1.
The coming changes have left many investors confused as to whether they will be automatically converted to a fund that no longer charges the fee, or if they have to provide verbal or written details to their online brokerage to move their funds.
On Friday, the CSA published an order for Ontario outlining the steps required by investment fund managers and discount brokerages to move investors away from mutual fund series with trailing commissions. Other CSA jurisdictions anticipate publishing exemptions shortly, the release said.
The order stated that, in most cases, investors will be switched to an equivalent fund that does not include a trailer fee, or a substantially similar series of the same fund, such as a fee-based F series fund. There will be no fees or tax implications for investors as a result of the switch. Discount brokerages will communicate the trades to investors once completed.
In a small percentage of cases, where an equivalent fund is not available, a management fee rebate will be given to an investor for a limited time.
Discount brokerages and fund organizations will also have a temporary exemption for up to 45 days after June 1 to accept any client who is transferring accounts to a discount broker and may have mutual funds with trailers. The exemption will allow the discount broker to accept and hold the fund, while a switch is initiated into another series of fund.
Laura Paglia, chief executive officer of the Investment Industry Association of Canada, said most fund companies have already identified the most appropriate non-trailer-paying series for each of their funds.
“The only difference for investors in the new series is that they will pay a lower management fee and, in some cases, may have a different distribution policy and/or currency in which the units are reported,” Ms. Paglia said. “In the limited circumstances where a non-trailer paying series of the same fund is unavailable, investors will be provided with information about their options.”
Asset managers, which manufacture the fund products, have begun to develop non-trailing versions of most funds. Last week, Purpose Investments announced it would be transferring its Series D funds into non-trailing funds, such as Series F, which is used for fee-based clients.
RBC Direct Investing said it is working with mutual fund companies to identify any trailer-paying funds held in clients’ accounts so that “applicable mutual fund companies can arrange to automatically switch such units into the equivalent non-trailer paying series.” The switches began last Friday.
“We believe that for the vast majority of our clients, these automatic switches will be the most straightforward approach to alignment with the new rules,” RBC spokesperson Kathy Bevan said in an e-mail.
Conductors, engineers on picket line as CP Rail, union can’t reach deal
OTTAWA — Canadians expect a swift end to a work stoppage at CP Rail, federal Labour Minister Seamus O’Regan said Sunday, hours after thousands of workers ended up on the picket line and trains came to a halt nationwide.
There is already pressure on O’Regan to end the labour dispute, but his spokeswoman said Sunday morning the government believes the best deal is reached at the bargaining table.
“There are always challenges in bargaining, but you push through them to get the agreement you need,” O’Regan said on Twitter. “CP and Teamsters Rail continue their work today. Canadians are counting on a quick resolution.”
More than 3,000 CP Rail conductors, engineers, train and yard workers represented by Teamsters Canada Rail Conference are off the job after a midnight deadline set by the company to agree on a contract failed to secure a deal.
Dozens of industry groups asked the government to intervene last week and get a binding arbitration process in place before any strike or lockout.
On Sunday, Canadian Chamber of Commerce President Perrin Beatty said O’Regan must table back to work legislation immediately.
“This work stoppage will have a deep and adverse impact for all Canadian businesses — both big and small — who rely on rail for their supply chain,” Beatty said. “This severe damage to Canadian supply chains at a time of heightened global uncertainty will extend beyond our borders and harm our reputation as a reliable partner in international trade.”
The House of Commons resumes Monday following a two-week break so legislation could come Monday if the government wanted.
Fertilizer Canada also said Ottawa must take “immediate action.”
“A disruption to essential rail service during the crucial spring seeding season will have devastating effects on farmers, the economy, and domestic and international food security,” the group said.
The company and union both blamed the other for causing the work stoppage, though both also said they were still talking with federal mediators Sunday.
The union said in a statement that the company had locked the workers out, but later issued another statement saying that the workers were also on strike.
The original statement posted to the TCRC website late Saturday said the union wanted to continue bargaining but the company “chose to put the Canadian supply chain and tens of thousands of jobs at risk.”
“As Canadians grapple with a never-ending pandemic, exploding commodity prices and the war in Ukraine, the rail carrier is adding an unnecessary layer of insecurity, especially for those who depend on the rail network,” the statement said.
But CP Rail said it was the company that wanted to keep talking past the midnight deadline, and the union that pulled its employees off the job.
CP President Keith Creel said in a news release the union “failed to respond” to a new offer presented by mediators before the midnight deadline.
“Instead, the TCRC opted to withdraw their services before the deadline for a strike or lockout could legally take place,” he said. “The TCRC is well aware of the damage this reckless action will cause to the Canadian supply chain.”
The company said the union’s insistence that it was a lockout was a “failure” to bargain in good faith and it is taking steps to address “this egregious behaviour.”
CP Rail said it is “executing a safe and structured shutdown” of train operations nationwide.
The CP Rail dispute will impact supply chains that are already being hammered by ongoing effects of the COVID-19 pandemic, were hit by trucker convoy protests blocking border crossings in February, and now are dealing with the effects, particularly on global fuel supplies, of the Russian invasion in Ukraine.
All the disruptions pushed inflation to a three-decade high, with essentials such as food and fuel facing some of the sharpest price hikes.
CP and the union have been negotiating since September, with wages and pensions a sticking point. For the union, a clause on where employees take their federally mandated break periods is also an issue.
CP Rail says this is the fifth work stoppage since 1993 and the eighth time in nine trips to the bargaining table that contract talks resulted in a need for federal conciliation.
News that Saudi Arabia is considering pricing oil sales to China using the Chinese yuan instead of the U.S. dollar has Sen. Ben Sasse, R-Neb., concerned the U.S. could be losing its footing on the world stage.
In an interview with “Fox News Sunday,” Sasse said this development, along with how the war between Russia and Ukraine develops, could send a message to the rest of the world that could have a significant impact.
“Just this point of the Saudis pricing some of their commodity in Chinese currency or signaling that that’s where they’re headed, that is a big, bad thing,” Sasse said. “But let’s take a bigger step up. The 10-year-out existential battle on the globe is between the United States and Western values against the Chinese Communist Party’s exported surveillance state oppression of peoples around the globe.”Video
Sasse then addressed why, if China is really a main concern, he is so worried about Russia and Ukraine.
“Partly because Chairman Xi greenlit this invasion,” Sasse explained. “And so we need to recognize that defeating Vladirmir Putin or helping the Ukrainians defeat Putin here is an important shot across the bow of Chairman Xi, who wanted to see if the West had any will to stand up to Putin because Xi desires to seize Taiwan.”
Sasse went on to say that China’s objective of trying to “displace the dollar” is something the U.S. must monitor.
Sen. Ben Sasse, R-Neb.
“We need to keep our eye on this because we need to demonstrate that freedom-loving peoples around the world would rather have U.S. leadership than Chinese oppression,” Sasse said.
Sasse claimed that other countries would not gravitate toward China out of preference for its policies but out of concern that “America is weak.”
“We need our commander in chief to be strong, both in these conversations with Chairman Xi but more proximately in this moment with arming the Ukrainians immediately and rapidly,” Sasse concluded.
North Korea fires multiple-rocket launcher, South Korea says
North Korea appeared to have fired a short-range multiple rocket launcher on Sunday, South Korea’s military said, amid heightened military tensions on the peninsula after a spate of larger missile launches by the nuclear-armed North.
While they garner much less attention than the massive intercontinental ballistic missiles (ICBMs), North Korea has displayed several new types of multiple launch rocket systems in recent years, adding to an already large arsenal of artillery and rockets ideal for potentially striking targets in the South.
“This morning there was firing in North Korea which is assumed to be multiple rocket launcher shots, and our military was monitoring the related situation and maintaining a readiness posture,” South Korea’s Joint Chiefs of Staff said in a statement, without elaborating.
North Korea’s military fired four shots around 7:20 a.m. (2220 GMT on Saturday) for about an hour toward its west coast from an unidentified location in South Pyongan Province, Yonhap news agency reported.
South Korea’s National Security Council held an emergency vice-ministerial meeting over the launches.
Last year South Korea approved plans to pursue a $2.6-billion artillery interception system, similar to Israel’s “Iron Dome,” designed to protect against North Korea’s arsenal of long-range guns and rockets.
About half of South Korea’s 52 million people live in the capital Seoul and the surrounding areas, within range of the neighbor’s long-range guns and multiple rocket launchers.
Pyongyang has conducted an unusually high pace of missile launches this year. South Korea and the United States warn that the North could resume test-firing its largest ICBMs for the first time since 2017 amid stalled denuclearization talks.
North Korea also appears to be preparing to launch a spy satellite, and new construction has
WASHINGTON — President Joe Biden held a nearly two-hour phone call on Friday morning with Chinese President Xi Jinping to discuss Russia’s invasion of Ukraine.
The call was seen as a critical test of whether Biden can convince China to stay on the sidelines of the conflict in Ukraine, and to turn down Russian requests for military or economic aid.
According to a readout of the call from the Chinese Ministry of Foreign Affairs, Xi told Biden that the United States and China each had an obligation to promote peace.
The White House has yet to issue a formal readout of the call, but said it began just after 9 a.m. and lasted just shy of two hours. That’s an unusually long time for a presidential call with the leader of a U.S. adversary.
It was unclear from the Chinese readout of Xi’s call with Biden on Friday whether the American president had shifted Xi’s thinking on Russia in any way.
“The world is neither peaceful nor tranquil,” Xi reportedly said to Biden, and “the Ukraine crisis is not something we want to see.”
Xi also reportedly expressed his belief that “conflict and confrontation are not in anyone’s interest, and peace and security are what the international community should treasure the most.”
The Chinese summary of the call said Xi told Biden that the U.S. and China, as permanent members of the UN Security Council and the world’s two largest economies, “must not only lead the development of China-US relations on the right track, but also shoulder our due international responsibilities and make efforts for world peace and tranquility.”
Pentagon officials said last week that Moscow has asked Beijing for military and economic assistance to wage its war against Ukraine, and that initial intelligence reports suggested China had agreed.
Spokesmen for both the Russian and Chinese governments publicly deny that Moscow has reached out to Beijing for help.
But the unprecedented economic sanctions imposed on Russia by NATO members and G-7 countries in response to the invasion have left Russia isolated and, some analysts say, desperate for financial assistance and military supplies.
Beijing has little interest in becoming embroiled in the economic battle between Moscow and the rest of the developed world.
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