TITLE: The People Who Profit When It Rains Bombs
https://newrepublic.com/article/176277/shell-oil-profit-israel-hamas-war
EXCERPT: The defense sector is downstream of U.S. policy in obvious ways. Governments buy the products that arms manufacturers sell, and the Department of Defense—with its ever-expanding budget—buys a lot of them. As Treasury Secretary Janet Yellen said yesterday, there is no shortage of U.S. public funds available to support a steady flow of weapons to both Ukraine and Israel. Beyond sending over even more of its own supplies, the Pentagon is already putting pressure on defense contractors to expedite the delivery of pending Israeli orders.
Energy has a no less abstract relationship to U.S. foreign policy. Compared to most other major oil-producing countries—where governments have some amount of say over production decisions and even prices—the U.S. has relatively limited control over how much and how fast American oil and gas companies drill. That doesn’t mean it can’t use oil as a carrot and stick, though, opening and closing markets so as to suit foreign policy objectives.
The war in Ukraine was a major reason why U.S. oil majors raked in record profits last year. Russia produces about one-tenth of the world’s crude oil and has been a major supplier of gas to Europe; Western-led sanctions on Russia post-invasion opened up new markets for both oil and gas producers to sell more expensive fuels. Executives were hailed as patriots and protectors of global order.
This week, lawmakers are pushing more restrictions with potential upsides for the industry. U.S. intelligence still shows no signs that Iran, which has historically backed Hamas, was involved in planning the group’s attacks on southern Israel. That hasn’t stopped a growing bipartisan fervor to draw Iran into a broader regional conflict by tightening sanctions on its oil supply. On Monday night, 110 members of Congress—including 60 Democrats—sent Biden a letter saying he should go so far as to block Iran’s sale of oil to China, its biggest customer.
To its credit, the White House has so far resisted this kind of escalation. It has, however, said it will refreeze $6 billion in Iranian oil revenue it had agreed to release as part of a prisoner swap last month, following pressure from right-wingers who falsely argued that Iran funneled that money to Hamas to carry out its October 7 incursion. The funds had never been accessed and could only have been directed toward humanitarian aid, not government coffers.
With flows of Iranian oil potentially up in the air, it was fortunate timing, then, for the United States to have reached a deal with Venezuela on Monday to ease crushing sanctions on the country’s oil sector in exchange for President Nicolás Maduro allowing a “competitive, internationally monitored presidential election next year,” per The Washington Post.
For the U.S, the stakes of petro diplomacy in general are low. If the White House excludes big producers from certain markets, gas prices here might go up a bit. But oil is still extraordinarily affordable by global standards. Booming U.S. production means we’re also more insulated from such fluctuations. U.S.-based fossil fuel corporations would naturally be thrilled to pick up the slack left by producers who find themselves on the wrong side of Washington. For countries largely dependent on oil revenue, though, energy sector sanctions can be catastrophic. Venezuela is in the midst of a multiyear humanitarian crisis spurred on by cratered oil revenues, which has driven many Venezuelans to come to the U.S. In Iran, U.S.-imposed sanctions fueled a two-year recession.
Members of Congress are free to benefit from these international conflicts through stock trades or campaign contributions. New Jersey Democratic Congressman Josh Gottheimer—who serves on the House Permanent Select Committee on Intelligence—had the good fortune to snap up as much as $15,000 worth of Northrop Grumman stock at the end of last month. He’s been one of the main ringleaders behind calls for Biden to tighten sanctions on Iran, and in a closed-door meeting last week appeared to suggest that all Muslims were “guilty” of Hamas’s attacks, The Intercept reported. (Gottheimer’s office has denied the report. Politico reported differing accounts about whether he was referring to Muslims.)*
For the time being, there’s probably not much to be done about the fact that some companies see dollar signs in rising death tolls. Politicians in the U.S. without much to lose—or with something to gain—seem content to watch as the lines representing casualties, stocks, and emissions go up.
TITLE: Middle East War Adds to Surge in International Arms Sales
https://www.nytimes.com/2023/10/17/us/politics/israel-gaza-global-arms-sales.html
EXCERPT: The conflict between Israel and Hamas is just the latest impetus behind a boom in international arms sales that is bolstering profits and weapons-making capacity among American suppliers.
The surge in sales is providing the Biden administration with new opportunities to tie the militaries of other countries more closely to the United States, the world’s biggest arms exporter, while also raising concerns that a more heavily armed world will be prone to careen into further wars.
Even before Israel responded to the deadly Hamas attack, the combination of Russia’s invasion of Ukraine and the perception of a rising threat from China was spurring a global rush to purchase fighter planes, missiles, tanks, artillery, munitions and other lethal equipment. The surge in sales is also being driven by the rapid pace of technological change in warfighting, pressuring even well-armed nations to buy new generations of equipment to stay competitive.
The push to supply more weapons to Israel comes as American military contractors are already struggling to keep up with demand to resupply Ukraine in its war against Russia and help other U.S. allies in Europe like Poland bolster their own defenses.
Billions of dollars in orders are pending from allies in Asia, driven by the perception of a rising threat from China.
Worldwide military spending last year — on weapons, personnel and other costs — hit $2.2 trillion, the highest level in inflation-adjusted dollars since at least the end of the Cold War, according to the Stockholm International Peace Research Institute, which prepares an annual tally.
TITLE: South Korea hosts arms fair amid wars in Europe and Middle East
https://asia.nikkei.com/Business/Aerospace-Defense-Industries/South-Korea-hosts-arms-fair-amid-wars-in-Europe-and-Middle-East
EXCERPT: Numerous corporate executives, high-ranking government and military officials flocked to the airfield in the Seoul suburb of Seongnam to see the latest technologies and weapons in the aerospace and defense industry on display at the Seoul International Aerospace and Defense Exhibition. The country has hosted it every other year since 1996.
Speaking at the opening ceremony, President Yoon Suk Yeol introduced jets, helicopters, tanks and howitzers made by Korea Aerospace Industries (KAI), Hanwha Aerospace and Hyundai Rotem.
"Our defense industry is making new history, creating something from nothing," Yoon said. "A country which relied on aid and imports now has leaped to a level that makes state-of-the art fighter jets and exports them. The government will create an ecosystem where our defense industry can continuously grow."
South Korea, which has long faced threats and provocations from North Korea, has over the years developed a world-class arms industry. In recent years it has emerged as a major arms supplier, selling an array of weapons to countries in Europe, the Middle East, Southeast Asia and Australia.
Khaled Biyari, Saudi Arabia's assistant defense minister, was one of the participants showing interest in South Korean arms. He visited the booths of Hanwha Aerospace and Hyundai Rotem and spoke with their executives.
Hanwha Aerospace CEO Jae-il Son gave the Saudi official a miniature of the company's multiple rocket launcher. Hanwha last year signed a deal with Poland to export more than 200 multiple rocket launchers to the European country that is a frontline state to the war in neighboring Ukraine.