North Korea’s Kim in China; US, South Korea suspend military drill

The motorcade that is believed be carrying North Korea leader Kim Jong Un, passes by policemen as it leaves the Beijing Capital International Airport in Beijing, on Tuesday, June 19, 2018. (AP)
Updated 19 June 2018
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North Korea’s Kim in China; US, South Korea suspend military drill

  • The US-South Korean exercise calendar hits a high point every spring with the Foal Eagle and Max Thunder drills, which both wrapped up last month
  • Troops who would have been involved in the exercises would still require training and certification, which would still cost mone

BEIJING/SEOUL: North Korean leader Kim Jong Un arrived in Beijing on Tuesday, where he will likely brief Chinese President Xi Jinping on his summit with US President Donald Trump last week, as Washington and Seoul agreed to suspend a major joint military exercise.
This is Kim’s third trip to China this year, coming less than a week after he met Trump in Singapore for historic talks.
Following the Singapore summit, Trump agree to work with Kim toward complete denuclearization of the Korean peninsula, committed to provide the North’s regime with security guarantees and pledged to end “war games,” which Pyongyang and Beijing have long seen as provocative.
In an unusual move, Chinese state media announced Kim’s visit and said he would stay for two days. Previously China would only confirm Kim had visited after he had left the country. No other details were provided.
A Kim trip to China to discuss his summit with Trump had been widely anticipated in diplomatic circles. China is North Korea’s most important diplomatic and economic backer but has been angered by Pyongyang’s nuclear and missile tests.
Police tightened security along Beijing’s main Changan Avenue, which leads to the Great Hall of the People where Chinese leaders normally meet visiting heads of state, and also outside the Diaoyutai State Guest House, where Kim stayed with his wife during his March visit to Beijing.

“DUAL SUSPENSION“
China has welcomed the warming of ties between Washington and Pyongyang, and offered to help.
Beijing has been particularly pleased by Trump’s announcement to suspend military drills, which China has long pushed for under its “dual suspension” proposal, whereby North Korea stops weapons tests and the United States and South Korea stop military drills, so both sides can sit down for talks.
“South Korea and the United States have agreed to suspend all planning activities regarding the Freedom Guardian military drill scheduled for August,” according to a South Korean defense ministry statement.
A Pentagon statement confirmed the suspension and added that there would be a meeting between the secretaries of defense and state as well as Trump’s national security adviser on the issue this week.
Last year, 17,500 American and more than 50,000 South Korean troops participated in the Ulchi Freedom Guardian drills, although the exercise is mostly focused on computerized simulations rather than live field exercises that use weapons, tanks or aircraft.
The US-South Korean exercise calendar hits a high point every spring with the Foal Eagle and Max Thunder drills, which both wrapped up last month.
The decision to halt military exercises in South Korea has bewildered many current and former US defense officials, who only learned about it when Trump made his remarks after the Singapore meeting.
Japan’s Chief Cabinet Secretary Yoshihide Suga said on Tuesday there would be no changes to joint drill plans between the United States and Japan, both of which also engage in regular deterrence exercises against North Korea.
“The United States is in a position to keep its commitment to its allied nations’ defense and our understanding is there is no change to the US commitment to the Japan-US alliance and the structure of American troops stationed in Japan,” Suga said in a regular briefing.

COST OF DRILLS?
The Pentagon has yet to publicly release the cost of previous and future joint military exercises with South Korea, a week after Trump cited their “tremendously expensive” cost as a reason for halting them.
Spending data for previous military exercises in Korea and elsewhere, however, suggest that the cost of a single exercise would be in the low or perhaps tens of millions of dollars in a US military budget this year of nearly $700 billion.
In response to repeated requests for cost data, Pentagon spokesman Lt. Col. Christopher Logan, said: “We are currently evaluating the costs of the exercises.”
Calculating the cost of military exercises is a complicated process, often requiring data from different branches of the military and spread over several budgets over different years.
Troops who would have been involved in the exercises would still require training and certification, which would still cost money, said Abraham Denmark, a former deputy assistant secretary of defense for East Asia under President Barack Obama.
“To me, the idea of this as a cost saving measure doesn’t really make much sense,” Denmark said.


Is the United States after Venezuela’s oil?

Updated 6 sec ago
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Is the United States after Venezuela’s oil?

  • Companies from the US have pumped Venezuelan crude from the first discoveries there in the 1920s
  • Venezuela exports about 500,000 barrels per day on the black market, mainly to China and other Asian countries

CARACAS: As US forces deployed in the Caribbean have zoned in on tankers transporting sanctioned Venezuelan oil, questions have deepened about the real motivation for Donald Trump’s pressure campaign on Caracas.
Is the military show of force really about drug trafficking, as Washington claims? Does it seek regime change, as Caracas fears? Could it be about oil, of which Venezuela has more proven reserves than any other country in the world?
“I don’t know if the interest is only in Venezuela’s oil,” Brazil’s leftist President Luiz Inacio Lula da Silva, who has offered to mediate in the escalating quarrel, said last week.
The US president himself has accused Venezuela of taking “all of our oil” and said: “we want it back.”
What we know:

- Oil ties -

Companies from the United States, now the world’s leading oil producer, have pumped Venezuelan crude from the first discoveries there in the 1920s.
Many US refineries were designed, and are still geared, specifically for processing the kind of heavy crude Venezuela has in spades.
Until 2005, Venezuela was one of the main providers of oil to the United States, with some monthly totals reaching up to 60 million barrels.
Things changed dramatically after socialist leader Hugo Chavez took steps in 2007 to further nationalize the industry, seizing assets belonging to US firms.

- And now? -

Down from a peak of more than three million barrels per day (bpd) in the early 2000s, Venezuela today produces about a million barrels per day — roughly two percent of the global total.
US firm Chevron extracts about 10 percent of the total under a special license.
Chevron is the only company authorized to ship Venezuelan oil to the United States — an estimated 200,000 barrels per day, according to a Venezuelan oil sector source.
The South American country’s domestic industry has declined sharply due to corruption, under-investment and US sanctions in place since 2019.
Analysts say the high investment required to rebuild Venezuela’s crumbling oil rigs would be unappetizing for US firms, given the steady global supply and low prices.
According to Carlos Mendoza Potella, a Venezuelan professor of petroleum economics, Washington’s actions were likely “not just about oil” but rather about the United States “claiming the Americas for itself.”
“It’s about the division of the world” between the United States and its rivals, Russia and China,” he added.
Venezuela exports about 500,000 barrels per day on the black market, mainly to China and other Asian countries, according to Juan Szabo, a former vice president of state oil company PDVSA.

- Blockade -

Trump on December 16 announced a blockade of sanctioned oil vessels sailing to and from Venezuela.
Days earlier, US forces seized the M/T Skipper, a so-called “ghost” tanker transporting over a million barrels of Venezuelan oil, reportedly destined for Cuba.
Washington has said it intends to keep the oil, valued at between $50 and $100 million.
Over the weekend, the US Coast Guard seized the Centuries, identified by monitoring site TankerTrackers.com as a Chinese-owned and Panama-flagged tanker.
An AFP review did not find the Centuries on the US Treasury Department’s sanctions list, but the White House said it “contained sanctioned PDVSA oil” — some 1.8 million barrels of it.
On Sunday, officials said the Coast Guard was pursuing a third tanker, identified by news outlets as the Bella 1 — under US sanctions because of alleged ties to Iran.
The PDVSA insists its exports remain unaffected by the blockade.
This was critical, according to Szabo, as the company only has capacity to store oil for several days if exports stop.

- Impact -

Whatever Trump’s goal with Venezuelan oil, the blockade, if it continues, is likely to scare off shipping companies and push up freight rates.
Szabo expects Venezuela’s oil exports will fall by nearly half in the coming months, slashing critical foreign currency income from Venezuela’s black market sales.
This would asphyxiate the already struggling economy of Venezuela, piling more pressure on Nicolas Maduro.
The Trump administration has tip-toed around explicitly demanding for Maduro to leave.
While Trump has said he does not anticipate “war” with Venezuela, he did say Maduro’s days “are numbered.”
US Homeland Security Secretary Kristi Noem told Fox News on Monday that the oil tanker seizures send “a message around the world that the illegal activity that Maduro’s participating in cannot stand, he needs to be gone.”