South Asia Investor Review

The United States is the biggest export market for India. Among its top 5 trading partners, the US is also the only country with which India runs a trade surplus. This surplus is now at risk with the 50% tariff recently imposed by President Donald Trump on imports from India. Can Prime Minister Narendra make up for it by cozying up to China and Russia ? Recent trade data shows he can't.  While India has enjoyed a significant surplus in trade with the US,  the South Asian nation has been running large trade deficits with China and Russia. Last year, for example, India had a $100 billion trade deficit with China and a $62 billion deficit with Russia. On the other hand, India ran over a $40 billion trade surplus with the US. Given these figures, it's hard to understand what India hopes to achieve by getting closer to Beijing and Moscow. The fact is that the US is the world's biggest economy that offers the largest and most profitable export market for most countries. Loss of t...

What good is a currency in global trade if it can not be used to buy products and services from other nations that a country needs?  The answer to this question came when Russia said it has accumulated billions of rupees in Indian banks which it can not use. “This is a problem”,  Russian Foreign Minister Sergei Lavrov told reporters in India’s Western state of Goa on the sidelines of the Shanghai Cooperation Organization meeting.  “We need to use this money. But for this, these rupees must be transferred in another currency, and this is being discussed now”.  Russia has decided it won't take any more Indian rupees. Moscow has rejected New Delhi's proposal for the Kremlin to invest rupees from oil and military equipment payments back into Indian capital markets so the currency doesn't pile up. Global Export Map 2023. Source: World Population Review Only the currencies issued by the governments of the world's largest exporters are useful for buying products and service...

"It may be dangerous to be America's enemy, but to be America's friend is fatal" Henry Kissinger India is emerging as the biggest beneficiary of the Ukraine War and the US efforts to check China's rise. Indian businesses are busting US sanctions to take advantage of the vacuum left in Russia by the exit of western businesses since the start of the Ukraine War.  At the same time, the US is rewarding India by promoting it as an alternative to China in the global supply chain.  Meanwhile, Beijing is warning New Delhi that India "will be the biggest victim" of America's "proxy war" against China.  L to R: Modi, Putin, Xi and Biden Soaring Russia-India Trade:  Since the start of Russia's invasion of  Ukraine , India has ramped up its imports of  Russian oil  by a whopping 33 times, according to the  Christian Science Monitor .  Dr. Nivedita Kapoor, an Indian expert at the Higher School of Economics in Moscow, told the Monitor: “Right now the...

India, a western ally, is openly buying Russian coal, oil and weapons worth tens of billions of dollars at deep discounts. These actions amount to busting western sanctions and financing President Vladimir Putin's war on Ukraine. Many smaller developing countries, including Bangladesh and Pakistan, are abiding by these sanctions and suffering from the consequences in terms of high prices of fuel and food. Why these double standards? Do these policy contractions serve the broader US interests in the Asia region?  India's Russian Imports Soaring Since the Start of Ukraine War. Source: Reuters India's Russian coal imports are up 6-fold from May 27 to June 15, 2022, according to  Reuters . Delhi's Russian oil buying has jumped 31-fold in this period.  Bulk shipments of Russian thermal coal to India began in the third week of May, 2022.  India is defying western sanctions to buy millions of barrels of discounted Russian crude oil, hiding their origin and exporting refined...

India is defying western sanctions to buy millions of barrels of discounted Russian crude oil, hiding their origin and exporting refined petroleum products with a big markup to make a huge profit. China has yet to increase its oil imports from Russia, according to news reports. Meanwhile, India's neighbors Bangladesh and Pakistan are abiding by western sanctions and paying much higher market prices to buy oil for their domestic needs, and hurting their people. Such double standards are not going unnoticed.  India's Refined Petroleum Exports.Source: MarketWatch India is importing large amounts of deeply discounted Russian crude, running its refiners well above capacity, and capturing the economic rent of sky-high crack spreads and exporting gasoline and diesel to Europe, according to MarketWatch .  “As the EU weans from Russian refined products, we have a growing suspicion that India is becoming the de facto refining hub for Europe,” said Michael Tran, global energy strategist ...

Oil consumption in Pakistan jumped 19% to 20.8 million tons in 2021, a strong indication of the country's economic recovery from the COVID-impacted 2020. In addition to oil, Pakistanis also consumed nearly 4 billion cubic foot of natural gas every day. Energy is fundamental to the functioning of any economy.  Pakistan Oil Consumption. Source: Arif Habib Pakistan's furnace oil consumption has been declining for several years as power producers continued to switch fuel to liquified natural gas (LNG) in recent years. However, the sudden jump in LNG prices forced them to use more furnace oil in  year 2021  than in 2020. There was also a big jump in diesel (HSD) and petrol (MS) with a rise in number of vehicles on the nation's roads.  Pakistan LNG Imports 2017-2021 in million tons    Pakistan Natural Gas Consumption in Billion Cubic Feet Per Day “Year 2021 proved to be remarkable for the automobile sector as there was a volumetric sales growth of 90% on a year-o...

What is the importance of the Middle East for the West? Is it energy resources to fuel the  industrialized West ? Or the key trade and shipping routes passing through the Persian Gulf and the Suez Canal used by ships to sail from Asia to Europe and North America? Map of Greater Middle East (Morocco to Pakistan) Why is oil, the most traded commodity, priced and traded in  US Dollars ? Does oil trade help maintain the US Dollar as the international trade and reserve currency and solidify US control of the global financial system, giving the US a very powerful tool to control the world? What is the history of West's involvement in the Middle East? Can it be traced back to the fall of the Ottoman Empire in early 20th century? When did the United States take over where  Britain and France  left off? Cold War? Iranian leader Mosaddegh's overthrow by CIA? Suez Crisis? Energy revolution is in full swing in  Silicon Valley  with widespread use of so...

Who are the members of Pakistan's top new economic leadership team? Who's Reza Baqir? Who's Shabbar Zaidi? Why were the changes necessary? Were the latest changes made to remove previous PMLN government's loyalists considered to be responsible for the  current economic crisis ? Did their policies and actions contribute to large twin deficits? Did the International Monetary Fund (IMF) force these changes as a condition for the country's bailout? Pakistan's External Debt. Source: Wall Street Journal Pakistan Current Account Deficit. Source: State Bank of Pakistan As Pakistan awaits the news of the discovery of  large offshore oil reserves , what lessons should Pakistan learn from the governance failures in Venezuela? Is Venezuela suffering because of its government's hostility toward the United States? Will large oil reserves be a panacea for Pakistan's economic problems? Viewpoint From Overseas host Faraz Darvesh discusses these questions ...

Prime Minister Imran Khan has recently raised Pakistanis' hopes of ExxonMobil and ENI being on the verge of a massive discovery of offshore oil and gas reserves in Pakistan. Is this real? Or mostly hype? What is the size of these reserves? Will it be more than sufficient to meet Pakistan's current needs of over  200 million barrels  of oil per year? Will Pakistan become a net exporter of oil and gas like major OPEC nations? Top 3 Offshore Drilling Sites in Asia-Pacific. Source: Bloomberg Why is it taking so long to get confirmation from the companies involved? What are the technical issues in getting confirmation of these huge reserves? Why is there such a big concern about blow-out? Is it because the  1.5 billion barrels  pre-drill estimate of Kekra-1 well in block G of the Indus basin off the Karachi coast? Could such a large reserve cause a major blow-out accident like the one British Petroleum had in Gulf of Mexico near Louisiana in the United States? How...

Blowout concerns have stopped offshore drilling in Pakistan yet again. It was underway to confirm discovery of oil and gas in at Kekra-1 well in G-bloc with pre-drill estimate of over  1.5 billion barrels  of oil. It was scheduled to restart on April 20, 2019 after pause of 12 days, according to Pakistani media reports. Now it is delayed until the blowout preventer equipment is fixed and ready to use again. Offshore Blowout Preventer Stack. Courtesy: British Petroleum Blowout Preventer Problem:  The drilling was stopped on April 8 at the depth of 4,810 meters for cementing and casing process which took almost 12 days to complete. Now there are concerns about the proper functioning of the blowout preventer (BOP). Once the BOP repair is completed,  Mobile Exxon and ENI  as joint operators at Kekra-1 well will resume drilling of the remaining 650-800 meters. Time required to drill the remaining 650-800 meters will depend on the rate of penetration (RoP)....

Pakistan's consumption of oil and gas has rapidly grown over the last 5 years, an indication of the nation's accelerating economic growth. Pakistan is among the fastest growing LNG markets , according to  Shell 2017 LNG report . Pakistan Oil Consumption in Barrels Per Day. Source: CEIC.com Oil consumption in Pakistan has shot up about 50% from 400,000 barrels per day in 2012 to nearly 600,000 barrels per day in 2017. During the same period, Pakistan's gas consumption has risen from 3.5 billion cubic feet per day to nearly 4 billion cubic feet per day, according to British Petroleum data . Pakistan is among the fastest growing LNG markets, according to  Shell 2017 LNG report .  The country has suffered a crippling energy shortage in recent years as demand has risen sharply to over 6 billion cubic feet per day,  far outstripping the domestic production of about 4 billion cubic feet per day. Recent LNG imports are beginning to make a dent in Pakistan's ong...

Pakistan made two key oil and gas discoveries in the third quarter and another three discoveries in the fourth quarter of 2017. These discoveries may have prompted the US-based Exxon-Mobil to join off-shore drilling efforts in Pakistan. American energy giant's entry in Pakistan brings advanced deep sea drilling technology, its long experience in offshore exploration and production and its deep pockets to the country. US Energy Information Administration  (EIA) estimates  that Pakistan has technically recoverable deposits of 105 trillion cubic feet (TCF) of gas and 9.1 billion barrels of oil. Exxon-Mobil is expected to accelerate exploration and lead to more discoveries and increased domestic oil and gas production. Top Countries Discovering Oil and Gas: Russia led with 10 discoveries, followed by Australia with seven discoveries and Colombia with four discoveries. Pakistan and the UK each had three discoveries in the fourth quarter of 2017, according to  Global Oil an...