TheChek News Flow

OPEC will welcome the return of Iran to the international oil market once the U.S. lifts sanctions from Tehran, the secretary general of the cartel said.

"We believe that Iran is a responsible player amongst its family members, the countries in the OPEC group. I’m sure there will be good work together, in synchronization, to ensure that the market will remain balanced as OPEC has continued to do over the past many years," Haitham Al Ghais said during a visit to Tehran, as quoted by local media.

The Trump administration reimposed U.S. sanctions on Iran in a bid to put an end to its nuclear program back in 2016. The sanctions have specifically targeted, among other things, Iran’s oil and gas industry.

As a result of the U.S. punitive action, Iranian exports of oil and gas have become troubled although they never stopped completely as some U.S. legislators hoped they would because of the sanctions.

Since the sanctions were reimposed, Iran’s biggest oil buyer has been China, as well as some ally countries in the Middle East such as Syria.

In the past couple of years, there have been tentative attempts to get the United States and Iran to resolve their differences and have the sanctions lifted but talks have broken down repeatedly signaling some potentially unresolvable differences.

The strongest impetus for a resolution presented itself last year as oil and gas prices soared in the wake of Russia’s invasion of Ukraine but even that wasn’t enough to get the U.S. and Iran to agree on a scenario that would see the sanctions lifted.

Meanwhile, Iran and Saudi Arabia have been working to restore their diplomatic relations with the help of mediation from China. The two earlier this year agreed to reopen their respective embassies and forge closer economic ties.

Mission to relieve space-station crew shows nation’s growing capability and drive to rival U.S. beyond Earth

SINGAPORE—China sent its first civilian astronaut into orbit Tuesday as part of a new crew for its space station, showcasing the nation’s expanding capabilities in space at a time when mounting military and technological competition with the U.S. is stoking geopolitical tension.

The rocket carrying the Shenzhou-16 spacecraft and its three crew lifted off from a launch site in northern China’s Gobi Desert in the morning, beginning a trip of more than six hours to the Tiangong Space Station. The mission is the first since China finished building and fitting out the permanently manned orbital base, and as it prepares to venture deeper into space, sending astronauts to the moon and a probe to Mars.

Washington sees Beijing’s space program as another front in the deepening rivalry between the two, and has restricted exports of some technology and parts to prevent China from gaining an edge. The U.S. is gearing up for a potential conflict in space and has been strengthening its deterrence against China. In March, the White House proposed a $30 billion annual budget for its Space Force, almost $4 billion more than the previous year.

China accuses the U.S. of trying to contain its rise by denying access to the latest technologies. Chinese leader Xi Jinping has said that the “space dream is an important part of the dream to make China stronger,” while making a broad push for technological self-reliance. The country has invested heavily in its space program and has raced to build up a satellite-communications network. It has also developed ground-based missiles, lasers and more surveillance capabilities to deny adversaries access to space-based assets.

“Such demonstration of independent space capabilities adds to China’s great power status and as a rival alternative space power to the world,” said Namrata Goswami, an Alabama-based independent scholar on space policy.

Veteran astronaut Jing Haipeng, on his fourth mission, is accompanied by two first-timers, spaceflight engineer Zhu Yangzhu and payload specialist Gui Haichao, a professor at Beihang University in Beijing.

“We’re 20 years apart in age, which makes this a cross-generational team,” the 56-year-old Jing said Monday.

After a five-day handover, they will take over from the three crew members who have been aboard the Tiangong—which means “Heavenly Palace” in Chinese—since November. During their five-month mission, the newly arrived crew will conduct spacewalks, assist with the docking and departure of cargo and other spacecraft, and carry out scientific experiments.

The inclusion of a civilian dovetails with Beijing’s strategy of opening the space industry to the private sector, said Liu Bojian, a research assistant at the National University of Singapore who studies China’s activities in space. Previously, astronauts were all from the People’s Liberation Army’s Air Force.

“China is trying to make sure that in the next two decades it will have enough well-trained astronauts, both experienced and young, to prepare for even larger missions, such as landing on the moon, and even on Mars,” said Liu.

Lin Xiqiang, deputy director of the China Manned Space Agency, said on Monday that China aims to put astronauts on the moon before 2030, as the space race with the U.S. heats up. The U.S. plans its first return to the lunar surface in more than five decades as early as 2025.

The U.S. and Chinese space programs have developed independently of each other. Since 2011, China has been excluded by U.S. law from working with NASA, and its astronauts are barred from the International Space Station. But China’s Tiangong could be the only space station in operation if its older counterpart is decommissioned as planned in 2030.

“China’s space program is integrated into its civil-military fusion strategy…[and it] plans to challenge U.S. dominance on the moon within this framework,” said Goswami, who is the co-author of “Scramble for the Skies: The Great Power Competition to Control the Resources of Outer Space.” She points to China’s goal to bring back samples from the lunar South Pole and to set up a permanent research base on the moon.

In preparation for the mission, the Chinese space agency said it is developing a new carrier rocket, spacecraft and spacesuit, as well as a lunar lander.

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Re-elected Erdoğan insists interest rates should stay low despite inflation running at more than 40%

Turkey’s lira weakened in the aftermath of Recep Tayyip Erdoğan’s re-election, as analysts warned that the next big test for the victorious president would be addressing the country’s shaky $900bn economy.

Many economists argue that Erdoğan’s policies of low interest rates and emergency measures to prop up the currency cannot continue as Turkey’s stores of currency reserves rapidly decline.

The lira fell 0.6 per cent to a near record low of 20.2 against the US dollar as trading resumed in London, the primary hub for European currency trading, on Tuesday after a public holiday.

“The current policy stance has become unsustainable,” said Liam Peach at Capital Economics in London. “Turkey cannot continue with very low interest rates, very loose fiscal policy and burning through all sorts of foreign currency reserves for much longer.”

Turkey’s reserves have dropped by about $27bn this year as the country has attempted to prop up the lira and finance a current account deficit at near record levels.

Official data puts the reserves, including foreign currency and gold, at just above $101bn.

However, net reserves, a figure that strips out liabilities, are in effect zero, and deeply negative when excluding tens of billions of dollars in money borrowed from the local banking system, according to JPMorgan.

Clemens Grafe, an economist at Goldman Sachs in London, said reserves were now “close to levels when previously lira volatility sharply increased”.

But immediately after securing his victory in Sunday’s run-off vote with 52 per cent, Erdoğan insisted he would maintain his low-interest rate policy, even though inflation is currently above 40 per cent.

“If anyone can do this, I can do it,” he said. “[The central bank’s main interest rate] has now been reduced to 8.5 per cent and you’ll see inflation will also fall.”

He added that “eliminating the problems of price increases caused by inflation and the loss of welfare are the most urgent topics of the coming days” but gave no specifics.

Investors are also concerned about the equivalent of $121bn that Turks have put in special savings accounts paying out at the government’s expense if the lira depreciates.

The measure has slowed the rate at which Turks have been purchasing foreign currencies, but Nureddin Nebati, finance minister, said the accounts had cost the country roughly TL95.3bn ($4.7bn) since they were introduced in 2021.

The hit to public finances could increase rapidly if the lira falls faster in coming weeks.

Yet Erdoğan may be able to draw on new funding from allies in the Middle East and Russia, analysts maintain.

The president said last week that unnamed Gulf states had contributed funds to help stabilise Turkey’s markets, but he did not elaborate.

Erdoğan would probably receive a short-term boost from summer tourist cash receipts that tend to ease strains on the country’s finances, said Wolf Piccoli at the Teneo consultancy.

Turkey’s Bist 100 stock index, which has been boosted by locals seeking refuge from high inflation, also jumped more than 4 per cent on Monday. It has generally been lifted by high inflation as local investors seek opportunities for returns that can compete with rapid consumer price growth.

Some economists say that Erdoğan may appoint a new economic team, bringing back names that are well known to foreign investors.

“With the elections behind us, all eyes will be on the composition of the economic team and the credibility of the initial policy response,” said Ilker Domac at Citigroup.

But Domac also warned that it would be “increasingly challenging” for Turkey’s central bank to keep interest rates far below inflation, “particularly during the last quarter of the year and thereafter”.

Other economists signalled a greater degree of alarm.

“Be ready for the worst, which may entail formal capital controls or serious deposit flight from the banking system,” wrote Atilla Yesilada at the GlobalSource Partners consultancy in Istanbul.