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Sources say that Russia is preparing a 10% cut in 'non sensitive' spending by 2026.
Sources say that the Russian government may cut?10% of all "non sensitive" expenditures in the budget for this year. However, the final decision depends on the'sustainability' of the rise in oil prices triggered by the war with Iran. Russia faces a double blow as the war in Ukraine enters its fifth year. It is experiencing a drop in budget revenues due to energy sales, and an economic slowdown that affects other tax revenue streams. To prevent the fund from being depleted, the government plans to transfer more money to it. This measure may be accompanied with a cut in expenditure. The Finance Ministry informed the agencies that distribute budget funds of the need to reduce spending. "They are sitting around, 'thinking about what to cut,'" said one source who spoke under condition of anonymity because of the sensitive nature of the situation. CUTTING WON'T be 'ACROSS the Board' Two of the four government sources who have access to Finance Ministry communications mentioned the 10% cut, while the two other sources said that the reduction is being discussed, but without specifying the number. The Finance Ministry did not reply to a comment request from. The sources said the cuts will not be across the board and will spare politically-sensitive military spending as well ?as socially-sensitive spending, such as salaries to public sector workers or welfare payouts. This is done by reducing non-essential expenditures. Construction or road repairs will be put on hold. Another source stated that these projects are likely to face cuts. The average Russian has been affected by the rising price of goods, but not by the economic slowdown caused by high interest rates. Neither have cuts to government spending led to mass layoffs. Western sanctions are making the economic situation worse, as they hurt Russia's energy sales around the world. Russia's budget revenue from energy fell by half in the first two month of 2026 while total revenues dropped by 11%. Russia, who had to increase the estimate of its budget deficit twice last year, is planning a deficit in 2026 of 1.6%. WAITING FOR OIL PRICES TO CHANGE After the U.S., Israel and Iran attacks and the closing of the Strait of Hormuz, the situation changed dramatically. Oil prices skyrocketed and demand for Russian oil increased. The U.S. considered lifting sanctions against Russia. Third source: 'The oil price increase will not be sustainable on the long-term and the current budget situation demands spending cuts regardless short-term fluctuations in oil prices. Sources stressed that no decision had been made yet. The sources said that no decision had been made on the amount of spending cuts. In February, Russian President Vladimir Putin met with his government at the Kremlin in a meeting that lasted for many hours, according to Prime Minister Mikhail Mishustin. After?this meeting, Finance Minister Anton Siluanov announced that the government would lower the so-called "cutoff" price for oil, which is currently $59 and above which energy revenue flows into the reserve fund. This will bring it in line. The average price of Russian crude oil calculated for taxation was 24 percent below the "cut off" price in February. This meant that the government needed to use the National Wealth Fund to cover its deficit. Reporting by Gleb Brynski, Writing by Guy Faulconbridge, and Editing by Sharon Singleton.
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Europol's operation against illegal waste trade leads to arrests of more than 330 people
Europol announced on Wednesday that more than 330?people?were arrested in 70?countries as part of a crackdown against organised crime 'networks' accused of?trafficking illicit waste?in Europe and exporting them to Africa, Asia, and Latin America. The authorities seized 127.149 metric tonnes of waste and 602 tons of polluting agents, along with 75 tons?of plant protection chemicals and 2.3 tons?of mercury, as well as nearly?10 millions euros ($11.6 million) of cash and bank account. Officials said that the seized 'waste' could have generated illicit profits of at least 31 million euros. The Guardia Civil of Spain, which was involved in the operation and co-led it, has said that illegal waste trafficking is a worldwide problem. It operates through parallel criminal networks. It said: "These criminal 'networks' not only fraudulently handle urban and industrial waste but also systematically resort to document fraud and forgery to move hazardous materials causing negative impacts on the environment and risk to public health." The Spanish police announced last year that they had arrested an Italian gang suspected of smuggling?more than 40,000 tons of untreated urban waste from Italy into Spain. $1 = 0.8627 Euros (Reporting and editing by Charlie Devereux, Alex Richardson).
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India is prepared for unprecedented demand for coal power in the summer
The 'Coal Ministry' said that India had enough coal to meet what was expected to be a 'unprecedented spike in demand over the summer months. This comes after the gas supply disruptions caused bythe U.S./Israeli war against Iran. In a statement, the Ministry of Energy said that the total coal supply in the country was 210 million tons. This would be enough to?fuel consumption for 88 days. South Asia still depends on coal to generate three-fourths?of its electricity, despite a record-breaking increase in renewable energy production. India is expected to increase its coal power use in order to meet summer demand, after the Middle East conflict has affected the country's natural gas supplies, mostly from Qatar. According to the ministry, coal stocks in the country's power stations were 54.05 millions tons, which would be enough to last about 24 days at the current consumption rate. Coal India produces three quarters of India's production and had a record-breaking 121.4 million tons in its pithead stock as of March 9. The statement said that "Coal production, supply and consumption continue to be higher than the consumption in the fiscal year ending March 31". India's increased domestic production also led it to increase the blending of domestic coal into power plants that were designed to operate with imported coal. Reporting by Sethuraman NR and Tanvi Mehta; Editing and YPrajesh by Andrei Khalip
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OPEC confirms large Saudi oil production increase ahead of Iran War, but holds forecasts steady
OPEC announced?on?? Wednesday that Saudi Arabia increased its oil production sharply in February, ahead of U.S. & Israeli attacks on Iran. It also maintained its forecasts regarding a relatively strong growth in global oil demand this year. Sources familiar with the plan stated in February that Saudi Arabia increased output and exports in preparation for a possible U.S. strike against Iran, which could disrupt Middle?East supply. The attack occurred on February 28, and the ensuing conflict caused oil exports to be disrupted, production to stop and prices to soar. In a report published on OPEC's website, Saudi Arabia informed the group that its February supply was 10,111 million barrels of oil per day. Meanwhile, OPEC reported that production reached 10.882 millions bpd. The Saudi Arabian kingdom reported a January production of 10,10 million barrels per day. Saudi Arabia has intervened on the oil markets for years, either adding barrels when there are disruptions in supply or reducing output when oversupply is detected. Sources said that the February increase echoed last year's contingency plan, when they moved more oil into storage. OPEC, citing secondary source, also reported that the output of OPEC+ (which includes the Organization of the Petroleum Exporting Countries and other producers like Russia) averaged 42.72 mbpd during February, an increase of 445,000 bpd over January. The "supply to market" is usually the sum of exports, domestic refineries and power plants plus oil that has been shifted into storage. Saudi Arabia's supply to the market in February stayed close to?OPEC+ quota despite production being well above target. OPEC has not changed its prediction that the world's oil demand will increase by 1,38 million bpd - this year. Its estimate of 2026 demand remains higher than other analysts, including those at the International Energy Agency. In the report, OPEC stated that it was too early to tell if the current geopolitical developments would have any impact on economic growth. The OPEC+ agreement to maintain output targets for the first three months of the year was not a factor in the?Saudi Arabian and OPEC increase in February. The next forecast update from the IEA is due Thursday. Alex Lawler is the reporter. (Editing by Louise Heavens, Mark Potter and Mark Potter).
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Aluminium rallys focus on Middle East supply disruptions
After a brief drop in prices triggered by Donald Trump's comments on the Iran war, aluminium prices rose?on Wednesday. Benchmark aluminium at the London Metal Exchange was 1.1% higher, trading at $3.442 per metric ton. It reached $3,544 per ton earlier this week, its highest level since April 2022. Trump predicted on Monday that the conflict would be over well before the four-week timeline he set out. Due to the closing of the Strait of Hormuz, the war has effectively frozen shipments and posed a threat to global supplies of aluminium for use in packaging, construction and transport. Around seven million metric tons of aluminium smelting is located in the Middle East, which represents 9% of global smelting capacity. Aluminium?Bahrain, or Alba, one of the largest smelters in the world, announced force majeure last week to warn customers of delays. Meanwhile, Qatalum, a smelter in Qatar, began to shut down. Aluminium stocks in LME approved warehouses are a further source of concern about supply. On Tuesday, the number of cancelled warrants, or metals earmarked for deliveries, was 177,325, which is 40%, up from 9% the previous day, before the Middle East turmoil began. Fears about a shortage of aluminium have led to a 'premium 'or 'backwardation in the cash contract for the three-month future on the LME. Concerns about global economic growth are putting pressure on industrial metals as a whole, due to soaring oil and dollar prices. Dollar-priced materials become more expensive for holders of currencies other than the dollar, which could reduce demand. Lead retreated by 0.5% at $1,933.5. Tin was down by 0.7% to $50,100. Nickel fell 0.6% to $17.375.
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CleanTech Lithium begins partner search in Laguna Verde after Chile contract agreement
CleanTech Lithium will formally begin the search for "a strategic partner" for its Laguna Verde Lithium project after publishing a prefeasibility report later this month. The process is expected to take between nine and twelve months, according to Chief Executive Ignacio Mehech. The timeline provides a better idea of how fast the London-listed firm hopes to progress one of only a few private-sector projects in Chile that are moving forward. New supply has not been forthcoming despite high long-term expectations. CleanTech announced on Tuesday it had 'agreed contractual terms with Chile’s mining ministry for an exclusive lithium operating contract (CEOL)?for Laguna Verde. This is its flagship project located in northern Chile. Before it can be signed, the decree must still be ratified by Chile's comptroller-general. Mehech said that the process of finding partners would begin as soon as the company releases its pre-feasibility report, which is expected to be released in the next few weeks. "That's what allows a company to review a project seriously," he added, adding that the firm was searching for a partner who would provide both equity and debt assistance. He said that potential partners include automakers, mining companies, battery manufacturers or cathode producers. Mehech stated that the next steps for the company after the CEOL will be to complete the feasibility study and advance the environmental permitting, along with the search for a partner. He said that these processes could run parallel, and the company may be able to make an investment decision within the next two years. Mehech did not provide any further details, but said that the terms of the CEOL were in line with those previously awarded in Chile. Mehech stated that the company expected the review by the comptroller to be fairly straightforward because the mining ministry had already addressed the issues raised during previous contract reviews. The company expects to ratify in the second quarter. CleanTech previously reported a resource estimation for Laguna Verde of 1.9 million metric tonnes of lithium carbonate. However, the company stated that this figure could be revised due to an area adjusted in the contract. (Reporting and editing by Andrea Ricci; Kylie Madry)
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McGeever: Higher oil prices cloud Wall Street's optimistic earnings outlook
Investors might need to reconsider their optimistic 2026 earnings estimates for U.S. corporations, even if Iran's war is over soon. The consensus forecast for 2026 for oil was a bit bearish while Wall Street's earnings predictions were surprisingly optimistic. This has not changed. According to LSEG data as of Friday, the full-year earnings growth estimate for 2026 was nearly 16%. This is up from 14% in 2017 and 12% last year. Those rosy forecasts assumed an average 'oil price' this?year of $60 per barrel – an expectation that vanished into thin air when the U.S. and Israeli strikes on Iran took place on February 28, along with the subsequent disruption in supply. The oil market has seen wild volatility. Crude oil recorded its largest weekly increase on record last weekend, and continued to rise to almost $100 a barrel in this week's trading before falling on hopes of a quick end to the war. The damage has been done. The global energy system, which was finely tuned, has been completely upended. Infrastructure has also been damaged and the anticipated supply glut has disappeared. The average oil price this year is likely to be higher than what businesses budgeted for at the beginning of the year. The companies will absorb a portion of the increase and consumers will feel it. In either case, corporate profits will be squeezed. RUPTURE THE FORECASTS In a December poll, the average consensus forecast for Brent crude in 2026 was $61.27 a barrel, with the oversupply expected offset any possible disruption of supply from the brewing U.S.Iran tensions. This would have been a 7% drop from the average price of $68.20 in 2025. The forecasts were subsequently discarded. Analysts at HSBC raised their forecasts for Brent crude to $80 per barrel in 2026 from $65 per barrel and U.S. West Texas intermediate crude to $76 per barrel from $61 per barrel on Tuesday. This represents increases of 23% and 25 %, respectively. The U.S. Energy Information Administration also raised its forecast for 2026 Brent crude to $79, up from $58 last month. This is a 36% rise. Energy price increases will have a significant impact on the economy. Fuels such as gasoline, jet fuel and fertilizer will be more costly, and this will affect industries like transportation, manufacturing, metals and retail. Joe Brusuelas is the chief economist of RSM US LLP. He says that as prices increase, consumers are affected and corporate earnings suffer. It's a GAS! Goldman Sachs equity strategists believe that the impact of "modestly higher" oil prices on S&P500 earnings will be relatively muted. However, an extended period of disruption in supply or uncertainty is much more dangerous to economic activity. They say that for every percentage point of decline in the real U.S. growth rate, S&P 500 earnings could drop by 3-4%. According to other estimates, a 30% increase in oil prices can knock 4% off the earnings of S&P 500, with the most severe impact felt in transportation, consumer discretionary, and industrial sectors. Around 70% of the U.S. economy is based on consumer spending. Energy costs are likely to rise sharply, and household budgets will be squeezed. Alarm bells have already started to ring. According to data from the American Automobile Association, average gasoline prices in the United States are now above $3.50 per gallon. This is up 17% since the start of the war. Of course, there's also a negative side. Energy sector profits are likely to grow by double digits if oil prices continue to rise. Energy only makes up 4-5% of the total S&P500 earnings, so it is unlikely that this will offset any margin losses elsewhere. AI ARMS RACES - EVEN MORE EXPENSIVE TODAY There is an incredibly large dispersion between the 11 sectors in current earnings growth forecasts for 2026. The energy sector EPS was minus 1,2% as of Friday. This is the gloomiest and only forecast that points to a decline in profits. Tech's 2026 EPS estimate was 35.9% - comfortably the highest of all sectors, and up from 30,8% in January 1. In recent years, tech has contributed the majority of earnings growth for the S&P 500. Higher energy prices will hurt the mega-cap companies leading the race for artificial intelligence. UBS analysts predict that capex expenditures by "hyperscalers", this year, will reach $770 billion. Construction and operation of data centers may become more expensive. Investors are already worried about future returns. The cost of?energy is likely to increase significantly, which will further exacerbate their concerns at a time where risks in many other sectors have also increased. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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Germany releases oil reserves to combat the energy price spike caused by Iran war
Katherina Reiche, Germany's Economy minister, said that the International Energy Agency has recommended the release 400 million barrels from its stockpiles. This is the largest?such move? in IEA's history. Reiche confirmed to reporters in Berlin that the government intends to limit petrol price increases to one per day at filling station and introduce "more stringent antitrust regulations of the sector." She did not provide a definite time frame for these measures but said that the United States, Japan and other countries would contribute the most to the release. Reiche stated that the situation is tense as oil supplies are strained due to the Strait of Hormuz being virtually impassable. Reiche, speaking about the IEA request, said that Germany would comply and contribute its share because it supports the principle of mutual solidarity which is the most important to the IEA. According to a statement by Reiche's Ministry, Germany will contribute 2,64 million tons. This is equivalent to 19.51 million barrels. Reiche said that there is no shortage of supply in Germany. Germany is legally required to maintain a reserve of oil, oil products and petroleum products that will 'cover 90 days demand. The IEA has taken this step as a number of countries are struggling with soaring oil prices in the wake of the U.S./Israeli war against Iran. (Reporting and editing by Holger Hansen, Matthias Williams and Thomas Seythal).
After US inflation, stocks drop and the dollar edge up; oil is in focus
?Global shares fell and the dollar remained steady on Wednesday after data showed U.S. Inflation picked up in February as expected.?Most investors focused on?the price of oil and the possibility that the U.S. and Israeli?war 'on Iran? could have a long-term effect on economic growth. The Labor Department reported that the consumer price index increased 0.3% in the month of February. This was in line with expectations and higher than the 0.2% rise in January. CPI increased 2.4% over the past year, matching expectations. The core rate, which excludes energy and food prices, rose at 2.5% in line with predictions. The dollar gained 0.1% versus a basket currencies, while U.S. stocks futures fell 0.1%.
The report fails to capture the sharp rise in gasoline prices since the Middle East war began 12 days ago. The markets already indicate that traders are concerned about the rising likelihood of central banks raising interest rates.
"February's numbers of inflation were going in the right directions, but the Middle East conflict has changed the course." We will see inflation instead of deflation due to energy. As the fertiliser markets are in chaos, food prices could be showing signs of an acceleration of inflation.
Oil had another volatile session, but the price movements were muted in comparison to Monday's record-breaking price swings. Three sources told reporters on Wednesday that the International Energy Agency would recommend releasing 400 million barrels, a record amount for the IEA. This will help to bring down prices. Japan and Germany have announced that they will begin releasing reserves.
Brent crude futures rose by around 4% to $91 per barrel after rising earlier by up to 6%.
The MSCI All-World Index eased by 0.1% as European shares fell, resulting in a 0.7% drop for the STOXX 600.
Investors are on edge, as the Middle East conflict could freeze global energy trading and cause a price spike. This is a threat that world leaders have been scrambling to mitigate. Since the start of the U.S. - Israel war, Iranian threats against vessels have prevented ships from entering the Strait of Hormuz. Christine Lagarde, President of the European Central 'Bank said that the ECB will do all it can to control inflation to prevent a repeat occurrence of the energy price shock in 2022. Several ECB officials are in favour of a wait and see approach before taking any action. The euro dropped 0.2% to $1.1591 while the pound remained unchanged at $1.341. The dollar rose 0.3% to 158.51 after the yen fell further.
BOND YIELD?SURGE ADDS ADDS TO OVERHEATING RESPONSES
Due to the fear of continued energy price pressures, bond yields have risen this week. This has 'added to worries about other market segments at risk of being overheated, such as private credits and vast investments in AI project. The Financial Times, citing its sources, revealed that JPMorgan Chase JPM.N was reducing the value of loans held by private credit groups, and tightening lending in the sector. Investors have pulled out of private credit vehicles including BlackRock’s HPS Corporate Lending Fund, which has a $26 billion value. They are concerned about the deteriorating quality of credit, particularly in light AI-led disruptions within the software industry. U.S. Treasuries dropped again on Wednesday. The yield on the benchmark 10 year note increased by nearly 5 basis points, to 4.183%. Rae Wee contributed additional reporting from Singapore, and Pooja Maclean, Bernadettebaum, William Maclean edited the story.
(source: Reuters)