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India agrees to an immediate ceasefire after a call from Pakistan's head of military operations for a ceasefire. The conflict started with attack on tourism that was reviving the Kashmir economy after three decades through a terrorist attack killing 26 tourists in Phalgam, Kashmir on  April 22, 2025 in the mountains near the Pir Panjal range. 24 million tourists visited Kashmir in 2024. Indian response was swift on May 7 early morning hours attacking 18 terrorist camps inside Pakistan occupied Kashmir and inside Pakistan. India called it a act of self-defense to Pakistan sponsored state terrorism going back to 1947. What is different in this brief 4 day war is that India made it economic with efforts at IMF to make terrorism an issue for loans to Pakistan, and ending the Indus Waters Treaty on water sharing. Pakistan economy is struggling with no debt relief from China, making it turn to the IMF, a politically split population with Opposition leader Imran Khan in jail, and continued domination by the military over civilian govenrment. On May 9 drone attacks were launched from Pakistan using Turkish made drones in large numbers on cities and towns in Gujarat, Rajasthan, Punjab. Blackouts were placed in India by May 8 in all cities in the north and in Pakistan. India responded with its own drones and missile attacks on three military airbases as the war broadened to military targets on May 10. US mediated a ceasefire through Saudis and Turkey. Earlier Saudis and Iran were in New Delhi with whom India has good relations to get a ceasefire. Mr. Trump's efforts behind the scenes secured an agreement. VP Vance had cut short an Indian trip in Jaipur on April 22. India and the US are allies in the Indo-Pacific, and India and Russia have decades of friendly relations. China now uses Pakistan as a proxy state, but does not provide the economic aid it needs, for which it has turned to the IMF.    ...

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Decades of investment in car manufacturing and EV's is paying off for China. It now exports 5.7 million cars of which 1.7 million are EV's. EV exports are twice that of Germany. Car production capacity in China surged as the Chinese market expanded to be larger than Europe and the US combined. The production capacity is twice the size of the domestic market- 40 million gasoline cars from 100 factories.  As domestic sales have slowed down there is a push for exporting this excess capacity. The US and the EU are imposing tariffs on Chinese cars to protect their domestic manufacturing. The push to become a leader dates back to premier Wen Jiabao 20003-2013. Wen chose Audi engineer Wan Gang as minister of science and technology, and gave him the task of making China the leader in electric vehicles. Manufacturers were given subsidies, tax breaks, cheap land and electricity. By one estimate the EV manufacturers and battery makers in China received $230 billion in subsidies since 2009.  This is one reason the EU and the US are imposing tariffs to protect their domestic manufacturers. As the shift to EV's continues in China- half of the cars in 2024 EV's- the gasoline models are shipped overseas. China has now replaced the western brands in Russia with it's gasoline models.  China makes great savings in batteries as it controls the supply chain in batteries. It makes EV's at 30% lower cost with these efficiencies. ...

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Israelis from across the political spectrum say the nuclear deal with Iran in negotiations with the U.S., Britain and France, threatens Israel. Israel's nuclear experts say the 12 month breakout window for Iran to break the agreement and rush to develop a nuclear weapon in 12 months is not sufficient, because of the time it takes for detection and develop the response. Israelis have a deep distrust of Iran's intentions. On the other side of the Middle East the Saudis are also expressing serious concerns about the negotiations giving Iran enough leeway to keep the nuclear program and make a weapon at a future date. The proposed agreement creates further disagreement between prime minister Netanyahu and U.S. president Obama.

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Kia Motors, a maker of lower priced cars, plans to use better design to get higher prices for its cars. It hired VW car designer Schreyer, who worked on the Audi TT sports car, to design the new Optima sedan. This has helped increase sales by 44% in the first 4 months of 2010 over 2009. Chung, son of Hyundai Motor chairman Chung Mong Koo, made the decision as President of Kia to hire Schreyer. He expressed his strategy by saying that he would attempt to make the new Kia cars a design choice, without the high price tags associated with such cars.

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The NYT report that provides details on what Iran agreed to in the deal reached in Geneva on November 23, 2013 with western nations and the P5+1 that includes Russia and China. It provides a 6 month period in which additional steps to secure that Iran's program is limited to peaceful uses can be achieved. It also slows the Iranian nuclear weapons program by about one month according to this report, and gives additional warning if Iran moves in that direction. Not enough to dismantle Iran's nuclear enrichment program which is what Israel, Saudi Arabia want to see. France has called for tougher steps to limit the nuclear program in prior negotiating sessions. U.S. president Obama has looked for a compromise which would provide the opportunity to do this at a later stage, possibly through a series of smaller agreements. The sticking point is Iran's insistence that it has the right to develop nuclear energy for peaceful purposes like other signatories to the UN Nuclear Non-Proliferation treaty. This may be the only agreement that could be reached at this time, leaving tougher negotiations for a later stage when more trust and credibility is achieved, without the risk of jeopardizing a future agreement that goes further and seriously tackles the problem....

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Relations between Iran and Arab Sunni states Saudi Arabia and UAE are improving especially as Arabs distance themselves from the Bush Administration after faulty inelligence estimates about Iran were corrected by the CIA concluding that Iran wasnot pursuing a nuclear weapons program. The Arab Sunni states arenot altogether happy with the US policy in Iraq and Palestine. Note that that even before this there is a stron economic link between UAE and Iran. About 400,000 Iranian expatriates live in the Emirates and 9000 part Iranian owned firms are registered with the Dubai Chamber of Commerce and Industry. One look at the map show why Dubai is closest to Iran just a short strip of water dividing the two countries. This bodes well for oil prices as any volatility in the region would only increase pressure on oil prices. Peace in the Gulf region would do a lot to decrease the volatility affecting oil prices. It would also give Iran confidence to address its own role as a supplier by modernizing its oil industry. See the link to Mexico where President Calderon wants to transform Pemex and Mexico's oil industry over 10 years after Petrobras was pushed into reform by President Cardozo in Brazil. Commerce and Industry...

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Sharp drop in oil prices in Dec. 2015.

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India Middle East Economic Corridor or IMEC is a proposal backed by US and France, Britain for rail, shipping and other connections from India to Europe. India, Saudis and UAE back this Economic Corridor plan. Turkey for geostrategic reasons had operated as a route for east-west trade and has wanted a plan of its own. India has improved ties with Qatar and this could bring other nations into the plan. France hopes to bring planners together over the next 2 months. Saudis had committed $20 billion for rail investment for IMEC.

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The narcotics revenue source is only one of three sources, says Defense Sec Gates. The other two are funds generated locally from the Pashtun minority in Pakistan, and funds generated from outside sources like people in Saudi Arabia and Kuwait. A 2006 World Bank report says the hawala system- an informal money transfer system using a network of money brokers with little oversight- "carries out the majority of the country's cash payments and transfers." Of the local sources, its only now that the Pakistan government is making a serious effort to freeze these bank accounts traced to the Taliban. The CIA says it has identified the charities and organizations that send money, but it is not clear if these sources have been suspended. The implications of this is that the war could be sustained by the Taliban even if the opium crop was destroyed, or smuggling routes and labs were destroyed. Gates points out that the very same external funding channels for sending money by wealthy Muslims that the US supported in the 1980's to help Muslim militants expel the Russians may still be open today. His comment that "it would't surprise me if some of those channels were still open today," suggests that even the Defense Dept does not know how these channels operate because of their extreme secrecy. In a way this shows how the war and the people that the US supported have come back to hurt the US, just as the people on the Pakistani side find that the people they supported in the Afghan and tribal areas and the Taliban organization they created is now coming back to hurt Pakistan. What makes it deeply disconcerting is that as Gates points out, there is so little time before the patience of the American public wears out with rising casualties. And on the Pakistani side there is so little time also because the war is spreading to Pakistani cities. See the link to The Taliban's war on the ill trained Pakistani police forces across the country in the WSJ May 28, 2009. ...

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The Berlin conference in 2020 on Libya is an effort taken seriously by chancellor Merkel and French president Macron, supported by president Trump, for an "inner-Libyan reconciliation process" with "a sovereign Libya" that would prevent another larger large scale emigration to Europe from North Africa. On one side is a UN backed government of Mr. Fayez Sarraj, that controls Tripoli and the west and on the other a group of Militias under Mr. Haftar that controls the south and east.  Various foreign powers are fueling the conflict and the goal is have them disengage and drop support for their faction- Turkey for the Tripoli government and the Saudis and UAE, with Egypt, Russia supporting the rival government. All hope to gain influence, for what that means, at the risk of large scale refugees and further destruction, and dislocation of European unity through large scale emigration to Europe. It is almost like the Thirty Years War when Sweden, Austria, and the French fought proxy wars in Europe in other countries mainly in German states and central Europe. That period? - 1618-1648, losses of 8 million dead from wars, famine and plague, with loss of 20% of the German population. What started as Catholic- Protestant ended up with Austrian Hapsburg- French rivalry wars, today local religious factions conflict with secular factions ending with rival power conflict.  The foreign policy expert for Merkel Mr. Hardt says "it is key to the further stabilization of North and West Africa. If we succeed in leading Libya into a peaceful future, it would be a milestone for the entire region." ...

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Scholars and experts on the Middle East have offered their assessment and understanding of the Middle East seen through its long history. This includes Bernard Lewis at Princeton, Ramadan at Oxford, and Efraim Karsh of King's College, London. Karsh's new book "The Tail Wags the Dog," describes the story of British, Russian and American involvement in the Middle East in the 20th century and into the 21st century. Karsh offers a corrective assessment to many myths about the Middle East in 2015 with sectarian and religious conflicts, and historical volaltility- that the events in these countries are dependent on the foreign powers and influences. Karsh shows how the people in the Middle East have influenced their own narrative thorugh passions, conflicts and failure to bring together different opinions and strains of thought for peaceful progress. He sees the surge of Islamist politics in the midst of the Arab Spring as stemming from the way large parts of the population remained unaffected by the changes of twentieth century technological developments and modernization. The religious conflicts of the seventeenth century in Europe that took place just as Europe began to open up to new ideas and influences and the modern period, show how religious conflict can take place for long periods covering a continental region, before it recedes into the background. Ultimately it is the actors in these countries that have to find a way forward without engaging in continuous strife and violence, sectarian conflicts, and pulling together for a consensus around pushing economic development and progress. ...

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Thomas Friedman of the NYT sees a climate change as an area in which Trump has ignored the information of eminent scientists. He sees a weakness of the Trump administration in Trump's putting no importance to briefings by experts from climate change to national security briefings. Friedman sees Russia and hacking as a major issue facing the new Trump administration, including the new hearings in Congress from leading Republicans on the cyberattacks.

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Oil supplies are not expected to go up with Mexicio and Russia's aging fields crimping production, non opec production barely budging with 1% increase this year according to IEA. Indonesia production down by half from its peak. Countries in the middle east like Iran are consuming more and have less available for export. And the Saudis plan to build huge chemical aluminium and other plants as well as cities in the desert, and increase electricity production. This will take up some of the oil production and make less available for export. Militant strikes have shut down over 25% of production of Nigeria's 2.5 million barrels a day of production repeatedly in the last few years. And Saudi Arabia has according to CERA only 2 million barrels a day of spare capacity or 2.3% that it can add, all of the safety cushion in one country according to Daniel Yergin. Yergin sees prices up to $150 barrel based on the supply constraints. The demand side is showing declining consumption in the USA but not by enough to compensate for growing consumption in China by 5% this year, and the increase in consumption in India, Russia, Brazil and other developing countries including Middle East. The reason for continuing consumption increases in the rest of the world is that price impact has been less severe in Europe because of the strong euro and oil priced in US dollars, and in China because Petrochina is required to put price caps so gasoline price increases are not that harsh. And India also cushions the price impact to some extent to protect consumers. And autos are just taking off in large numbers in China, Russia, India, Brazil and other countries. The drop in consumption in the USA has to be large enough to have an impact. And the shift to fuel efficient targets in the new fuel efficiency regulations in the USA are too modest and over a number of years to have any impact in the short term or in the next 1-3 years. In February US oil demand dropped to 19.7 million barrels a day, down 1 million barrels a day from the US average for 2007, but this insufficient conservation to impact price. Even though new cars are shifting to higher fuel efficient small cars the impact on the total fleet is gradual as cars on the road purchased in the last 5-10 years are still on the road. Even as the consumption falls in the US the offset is occurring in the other countries like China, Russia and India. Some of this is due to the euro and some to speculation but the supply constraints are real and demand momentum is still there in China, Middle east, Russia and India to keep offsetting savings elsewhere and keeping supplies tight. The euro increased in value by 2% while oil prices increased by 10% since the 1st week of April so there is more than the weakening dollar and some speculation to this surge, which may be why the normally cautious Yergin says the price rise to $150 is realistic and says, its not just that the genie is out of the bottle, a hundred genies are out of the bottle. That is to say for the immediate future of demand momentum and supply sluggishness which could run 6-24 months, to the Olympics and maybe a year or so from then. This ties in with the thinking behind the Goldman's estimate and CERA's estimate. ...

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Christian Ude, the mayor of Munich from the Social Democrats party, says the Christian Social Union's (CSU) hold on power in Bavaria is likely to be challenged in coming elections. One of the reasons for this is that people are moving to Munich from all over Germany because many companies are hiring. Siemens, Audi, BMW and many Mittelstand companies are based in Munich, and unemployment is the lowest in Germany. The CSU, a partner in Merkel's coalition government, is particularly critical of measures to aid Greece, and steps taken by the ECB to buy the bonds of Spain and Italy to reduce borrowing costs, making it difficult for Merkel to provide flexibility in her negotiations with other eurozone countries.

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Information about the supply of services to the oil industry, including engineering professionals, from supply services company Schlumberger. Investment in petroleum exploration and production is expected to be $178 billion, a 10% increase over $162 billion in 2004, according to an estimate by Schlumberger's CEO, Mr. Gould, from figures published by energy companies. Gould personally thinks it will be higher. Mr. Smith CEO of John Herold , an oil industry consulting firm said that one oil industry executive told an industry gathering that drilling one onshore well now costs $1.5 million compared to $800,000 15 months ago. So the oil industry is getting much less for its buck with skyrocketing costs of exploration. Saudi Arabia plans to invest $50 billion over the next 5 years to expand its petroleum industry. Minister Naimi said that energy project costs have gone up by about 60%, due to shortages of engineering professionals, and equipment. To get some sense of the shortage of experienced professionals consider the figures from the American Petroleum Institute API. The oil industry peaked with 860,000 jobs in 1982, then lost 500,000 jobs by 2000. "A lot of skilled people have either been laid off, or have retired from the industry in the last 18 years," says Schlumberger's Mr. Gould. "Recruiting and training their replacements takes time and requires a global approach." ...

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Inozemtsev of the Institute of Post-Industrial Studies in Moscow, asks the question wht if the Russian economy shows no growth in 2017, and 2015-2016 become the beginning of a serious downturn. If oil prices remain low for an extended period as now looks likely with factors such as shale oil technologies, Iranian oil, and Saudi policy, playing an increasingly long term role, Russia could face some of the problems former finance minister, Alexei Kudrin, other business leaders including head of Sberbank, warned about. A major problem that Inozemtsev points to is the change in the business climate for foreign investment in 2012-2016 as the Russian economy looks more inward, and the departure of many foreign companies. During the period 2000-2008, a major boost to the economy came from foreign investment which brought with it management and technological improvements. No emerging market country, including China, can have a bright future without access to new technologies and investments from foreign investment. The current period starting in 2009 stands in sharp contrast to the earlier period with the Russian economy lacking the boost from foreign investment, facing capital outflows, and international conflicts creating a long term effect on oil prices. Russia needed time to move its economy away from commodity dependence through technological improvements and investment, yet this does not appear to be happening, raising serious questions....

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In his foreign policy address following the northeast state primaries Donald Trump outlines a policy with less foreign engagement in trouble spots, and greater reliance on partners in Europe and Asia contributing to joint defense. It also includes building up the military and nuclear arsenal. It criticizes the Bush administration for intervention in Iraq that benefitted Iran, and the Obama administration for policies that led to the rise of Islamic State. Because Trump is not for supporting foreign engagements in trouble spots the difference in Trump's policies is not announcing or signalling in advance what U.S. response would be, instead keeping it unpredictable. It is not clear how much this would work given that any president would inherit the situation before him, and also the complexity of the situation would not change, such as the need to have Iranian cooperation and Saudi cooperation to tackle Islamic State. The Bush administration started with a similiar intention to focus on domestic policy, till the 9/11 surprise attack steered it away towards nationbuilding overseas. The pendulum swung in the latter years of the Bush adminstration to the Iraq intervention, Abu Ghraib and Guantanamo, followed by a swing in the other direction to allowing Libya and Syria disntegrate leading to millions of refugees. Complexity, surprises, and swings of popular opinion, are unlikely to go away, even as caution is exercized and military capabilities enhanced....

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China, India, Brazil, Mexico, South Africa, Argentina, Saudi Arabia, countries that are part of the G-20 are not part of the G-8. Without the developing countries no real progress can be made on climate change or on emissions control. Climate change was a key focus of this summit in Itlay for the G-8 but with India and China only on the sidelines and acting more as an opposition excluded from the main deliberations the whole climate change agenda had to be shelved. The European countries lose influence in an enlarged summit so the G-8 keeps going along. Sweden holds the rotating Presidency of the EU, so the Swedes are there also. And so is Portugal in away with Manuel Barroso representing the European Commisssion. Except Japan, Asia is not represented, and no country from Africa or Latin America is represented. The European club looks like an anachronism and it is. Merkel and Sarkozy say they know this, but there is too much resistance in Europe to giving up this privilege. When the Guardian reported that Italy may be left out in future meetings of an expanded summit. the Italian press and the Italian prime minister Berlusconi denounced the report. Other countries that lose influence in an expanded arrangement are Canada and Japan. ...