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US allows waiver to expire on Russian oil
The U.S. Treasury did not publish a new extension to its waiver on sanctions against Russian oil carried by sea that expired at midnight on Wednesday. However, President Donald Trump and officials of the administration did not confirm if this meant that measures would be reinstated. Trump's administration waived U.S. oil sanctions during the war against Iran to assist vulnerable economies with the energy crises. Washington and Tehran have reached an agreement to end the conflict, which would allow Middle East oil to reach the global market. Trump was noncommittal on Wednesday about the possibility of reimposing sanctions by the United States on?Russia. "We're looking into that." "We're watching how much the price of crude oil drops, and it's really falling," he said to reporters at the G7 summit in France. Trump said on Tuesday that the U.S. would be able to reimpose sanctions if the waiver was ended. He said that "soon we will be able to do that" because oil was now flowing out of the Middle East. Last year, the Trump administration imposed sanctions on Russian oil giants Rosneft & Lukoil in order to pressurize Russia into ending its war with Ukraine by denying Moscow oil revenues. Russia, the United States, and Saudi Arabia are the top three oil exporters in the world. In recent months, the U.S. allowed the waiver to expire only to extend it a few days later. The White House, and Treasury Department’s Office of Foreign Assets Control didn't immediately respond to comments. A senior U.S. government official stated on Tuesday that Tehran could immediately begin selling oil following a signing ceremony, which is expected to take place later this week. It could take several months for oil and gas to flow at normal levels. Fatih Birol, the head of International Energy Agency (IEA), has stated that the Iran War has caused 'the biggest disruption in global energy markets history. Kirill Dmitriev was the special envoy of Russian President Vladimir Putin to the United States. On June 4, Dmitriev said that U.S. officials had understood the waivers role in stabilizing markets. The Kremlin announced on Sunday that U.S. envoys Steve Witkoff, Jared Kushner and who have been leading U.S.-brokered talks aimed at ending Ukraine's war, will soon visit Russia.
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Alison-Madueke, Nigeria's former oil minister, is cleared of all charges following a UK corruption trial
Diezani Alison Madueke, the former 'Nigerian Oil Minister' was found not guilty on Wednesday by a London Jury of?six charges of bribery?after a rare?corruption?trial?of an high-profile?former energy official. Alison-Madueke was the minister of petroleum resources under Goodluck Jonathan between 2010 and 2015. She faced five charges of accepting bribes, and an additional charge of conspiring to commit?bribery. Both of these she denied. The prosecution alleged that Alison-Madueke 65 was granted "a luxurious life" in London by oil and gas industry leaders seeking lucrative contracts for?Nigeria which has been plagued with corruption and mismanagement. The former minister who was briefly president of the Organization for the Petroleum Exporting Countries said that she had never taken bribes, and did not have any real influence on the awarding lucrative government contracts. Alison-Madueke, after a trial in London's Southwark Crown Court and more than 46 hours of deliberation, was acquitted of all six charges. The British authorities have suffered a serious blow with the not guilty verdicts. They began their investigation into corruption allegations against Alison Madueke over a decade ago. Alison Madueke, along with oil industry executive Olatimbo Ayinde (54), was on trial for?bribery in relation to Alison Madueke, and another count?of Bribery of an Foreign Public Official. Doye Agama (69), Alison-Madueke’s brother, was charged for conspiracy to commit bribery along with his sister in relation to payments made?to Agama’s church. Ayinde, as well as Agama, both denied the charges and were acquitted. (Reporting and editing by William James; Sam Tobin)
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INSEE predicts that the French economy will grow by 0.7% by 2026, as a result of the oil shock hitting consumers.
The French economy is set to grow modestly in '2026, as a spike in oil prices squeezes consumers. This will only be partially offset by a recovery in industrial production, according to the national statistics agency INSEE. INSEE's latest outlook forecast that the euro zone's 2nd-largest economy will grow?0.7% in this year following a 0.9% growth last year. The oil price spike caused by the Iran War would be a 0.2 to 0.3 point drag on the economy. INSEE stated that as companies pass higher costs on to consumers, the households will 'bear the brunt' of the energy crisis due to a weakened labour market, which limits their?ability?to secure higher wages. French industrial companies fare better than consumers, who are cutting back on spending and saving. Chemicals producers and refiners have gained market share over Middle East competitors affected by the disruption of Gulf trade. INSEE stated that the shipbuilding and aerospace industries will support economic growth, as full civilian and military orders and shipments are expected to increase 10% this year. After a 0.1% decline at the beginning of the year, the?growth rate is expected to increase to 0.3% on a quarterly basis. In the third and fourth quarters of this year, growth is expected to slow down to just 0.1%. It said that EU-harmonised prices are expected to increase from 2.4% to 3.0% in December, as rising oil prices slowly trickle down to other costs. Reporting by Leigh Thomas, Editing by Gareth Jones
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Trump claims he had a good conversation with Putin and Zelenskiy
On Wednesday, President Donald 'Trump said that he had good talks with Russian President Vladimir Putin as well as?Ukrainian president Volodymyr Zelenskiy at the G7 meeting. Zelenskiy, his European allies and Trump attended the G7 summit this week in Evian-les-Bains to convince Trump that Ukraine’s battlefield fortunes have improved due to its drone incursions into Russia. Trump refused to tell reporters, on the sidelines the meeting, if he believed that Putin was the main cause of the conflict in Ukraine. "Well, I'm not going to comment because 'I'm trying 'to 'get it settled' and that's not easy. Trump said that the desire of Ukraine to build U.S. rockets in Europe will be taken into consideration. "They'd like to be allowed to do that." He said, "We'll look into it." Treasury officials in the Trump administration did not immediately confirm that sanctions had been reimposed on Russian oil. When asked if Russian sanctions will be re-imposed by Trump, he told reporters that "we are looking at it, we're evaluating how much the price of oil has fallen, it is, it really tumbling."
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Trade deal between India and the UK worth $6 billion will start on July 15
The British government announced on Wednesday that the free trade agreement between Britain and India would come into force on July 15. They reached an agreement to 'implement' the deal in spite of a dispute regarding London's upcoming steel tariff regime. Indian officials raised the possibility of reopening the FTA worth PS4.8 billion ($6.5billion) signed last year or delaying its application, out of concern over the 'impact of new UK Steel Trade Measures, which are due to come into effect on July 1'. The two countries have agreed to move forward with the implementation of the deal after the British Prime Minister Keir Starmer met with his Indian counterpart Narendra modi at the G7 summit in France. In a press release, British Business and Trade Minister Peter Kyle said: "The deal gives British Exporters an advantage over international competitors. I encourage all businesses to make sure they are prepared." The deal will see 'India' slash whisky tariffs by 40%, from 150%. Automotives will go from 10% to 100% under a quota. The British government said that businesses have 28 days to register in order to receive tariff reductions.
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G7 creates critical minerals alliance, crisis platform
The G7 leaders agreed 'on Wednesday' to increase coordination -on the critical mineral supply?chains. They also outlined plans to coordinate stockpiling, and a new platform for cooperation with IEA. Western powers are racing against time to diversify the?sources? of metals that are critical for defence, technology and renewable energy?and to reduce their over-reliance upon Chinese products. China shocked?the global economic system last year, when it imposed export restrictions on permanent magnets. This exposed the world's dependence upon a single supplier. In a joint statement, the leaders stated that they were "committed to working toward harmonized and interoperable mechanisms". This would begin with two critical minerals: lithium and nickel. The goal is to avoid undermining competition or imposing excessive costs burdens. They said that the G7 would also create a 'dedicated platform to coordinate policy, data sharing and crisis response. Working with 'the International Energy Agency, they will monitor markets and flag risk, as reported first by. The group stated that the platform would rely on the agency to provide analysis and "early alerts" of market distortions.
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Trump Administration pivots towards buying stakes of critical sectors
As part of its efforts to reduce its dependence on China, the Trump administration is stepping up efforts to secure U.S. supplies chains for essential minerals and semiconductors. Federal grants are being converted into equity stakes within companies. The U.S. Department of Commerce awarded $500 million on Wednesday to SandboxAQ, a company backed by Nvidia. This money will be used to develop new materials to make chips. The following companies are linked to the strategic investments push: SANDBOXAQ In exchange for a small stake in the company, the U.S. Commerce Department awarded $500 million to SandboxAQ, a Nvidia-backed company. The money was used to develop new materials?for semiconductor manufacture. SandboxAQ didn't disclose the size of government stake, but said it did not include voting rights or board seats. If SandboxAQ develops materials in four focus areas, and licenses the formulas to industrial partners for mass-production, the department will receive royalty payments. QUANTUM COMPUTING COMPANIES The Trump administration is investing $1 billion in IBM to launch Anderon, America's first dedicated facility for manufacturing quantum chips. IBM will invest $1 billion into Anderon. The government did not reveal the stake that it holds in Anderon. - GlobalFoundries The U.S. is investing $375 million to help accelerate the development of quantum technology solutions. The government has agreed to invest an equity stake in the company of approximately 1%. - D-Wave, Rigetti Computing, Infleqtion , Atom Computing, PsiQuantum, Quantinuum The Trump administration is investing $100 million in each company to help?solve key technical obstacles that have slowed down the development of powerful quantum computers. They will also take minority equity stakes, but not control. Diraq The government will take a stake in the company in exchange for funding of up to 38 million dollars to help develop and scale up quantum computing technology. USA RARE EARTH Project: rare earth mine to magnet supply chain Sources familiar with the situation said that the Trump administration would take a 10% stake as part of a debt-and equity investment package. Details:?USA Rare Earth is building an integrated U.S. Rare Earth and Magnet Production Chain supported by $1.6 Billion in proposed CHIPS Act Funding. Strategic Value: This effort aims to increase U.S. rare-earth processing capability and strengthen domestic supply chain in critical minerals. KOREA ZINC Stake purchased: around 10% Project: $7.4 billion smelter in Tennessee Details: A joint venture between U.S. and Korean partners will build a $7.4 billion smelter for Korea Zinc in Tennessee. The U.S. Department of Defense holds a 40% stake, and the Commerce Department provides $210 million in subsidies through the CHIPS Act. Korea Zinc will distribute $1.9 billion in new shares to the JV and strategic investors from the United States, giving them about 10% of the company. The JV and strategic investors in the U.S. will receive about 10% of the new shares, worth $1.9? The remainder $5.5 billion will be derived from $4.7 The remaining $5.5 billion will come from $4.7? Construction will begin in 2026 with phased operation starting in 2029. Strategic Value: This project will strengthen U.S. supply chain and reduce reliance on China. China dominates the global supply of critical minerals and has recently restricted antimony and Germanium exports to the United States. TRILOGY METALS Investment includes warrants for an additional 7.5% Project: Upper Kobuk Mineral Projects in Alaska. A JV between Trilogy Metals, an Australian miner South32 and Trilogy Metals. Details: The White House is investing approximately $35.6 million to develop critical mineral resources in the UKMP located in Alaska’s Ambler mining district. Trump signed a second executive order that directed his administration to allow an access road into the Ambler Mining District. Ambler Mining District is a mineral-rich area that has copper, lead and zinc deposits. CRITICAL METALS The stake under discussion is approximately 8% Project: Tanbreez rare earths deposit, Greenland Four people with knowledge of the discussions said that Trump administration officials had discussed taking a stake on Critical Metals. Washington would gain a direct stake in the Greenland rare earths project, which is the Arctic territory Trump had suggested buying. LITHIUM AMERICAS Stakes acquired: 5% of parent company and 5% of the joint venture with General Motors, Thacker Pass Project: The lithium mine at Thacker Pass, Nevada Strategic Value: This project is seen as an important part of Washington’s efforts to increase U.S. lithium production, a metal that can be used to produce batteries for electric cars and other electronic devices. MP?MATERIALS Stake purchased: about 15% Project: Mountain Pass Rare Earth Mine,?California MP operates the sole U.S. rare-earths mine, and is working on boosting domestic processing and magnet manufacturing. The U.S. Department of Defense is the largest shareholder of Las Vegas-based MP. This will be Washington's highest-profile investment in the vital minerals sector to date. INTEL CORP Stake purchased: 9.9% Strategic Value: Intel will use the investment to expand its advanced manufacturing capabilities in the U.S. and strengthen supply chain security. Reporting by Arunima Kumna, Vallari Srivastava and Sumit Saha in Bengaluru, and editing by Maju Samuel, Anil D'Silva and Shilpa Majumdar.
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LME launches contract using Shanghai Futures Exchange Steel Price in October
The London Metal Exchange and its Shanghai counterpart agreed on Wednesday to use Chinese futures prices for a new LME Contract, advancing China's agenda of boosting influence in commodity price. The LME is hoping to??boost volumes and attract new clients by mirroring the Shanghai Futures Exchange's one of the most liquid steel contracts in the world. Launch of the contract is due in October In a joint announcement, the LME and SHFE announced that the trading of the contract?based on the Shanghai Hot-Rolled Coil Futures would begin in October. A steel trader said, "It's a good idea from a 'price discovery' perspective but will require liquidity." The LME must protect its position as the centre for price discovery and the primary market for metals. The Chinese government has pushed Chinese exchanges to innovate and increase their influence in order to achieve its goal of having domestic players have a greater control over global commodities prices. SHFE Chairman Tian Xiangyang said, "This 'cooperation' will further attract global enterprises and financial institutions in order to participate in the price formation and continually enhance the international impact of China’s steel futures product." The SHFE HRC contract has 169 millions lots in 2025, which is equivalent to 1,69 billion metric tonnes, while the LME Chinese HRC futures have only?139.109 lots. The LME/SHFE new contract was born in October 2023 when the LME announced that it had agreed to work with SHFE in?product development. LME Chairman John Williamson stated that the new contract would give companies outside China easy access to one the most liquid commodity contracts in the world, as well as the convenience of trading an LME cash-settled contract. The LME and Hong Kong Exchanges and Clearing Ltd., the parent company of the LME, will have a Dubai-based company that will handle currency conversions and pricing for the new contract. The LME stated at the time that 'the Dubai entity, Commodity Pricing &?Analysis Limited was associated with its plans to launch a?new mechanism to determine how much a premium customers will pay for metals with lower carbon. Eric Onstad is the reporter. Pratima Dasai contributed additional reporting. Alison Williams, Louise Heavens, Mark Potter and Mark Potter (Editing)
Official: Brazil will scrap fuel subsidies when oil prices stabilize at $80 or more
Rogerio Ceron is the executive'secretary' of the Finance Ministry. He said that Brazil would end?subsidies on diesel and gasoline if crude oil prices stabilized around $80 a barrel, due to the progress made towards a U.S.Iran agreement to end their conflict. Ceron stated in a Tuesday interview that a de-escalation of the Middle East will likely improve inflation expectations, and ease pressure on interest rates over long periods. This will give Brazil's central banks more room to continue cutting rates. Brent crude fell by 5.1% to $78.96 per barrel on Tuesday as the details of a preliminary deal to reopen Strait of Hormuz emerged. Ceron stressed caution following sharp fluctuations in oil prices, exchange rates, and interest rates. If oil prices stabilize at $80 per barrel, it will not be necessary to continue these fuel subsidy measures. He said that we would withdraw them with caution.
Since the conflict began late February, Luiz Inacio Lula da Silva has taken emergency measures to cushion rising oil prices. These include tax cuts and subsidies for diesel, gasoline and jet fuel.
The majority of measures are designed to last two months with the option to extend. Ceron says that many expire in July. This gives time to evaluate the effect of a ceasefire.
He said, "There are only two options: either end them sooner or let them expire on schedule." Ceron said that while $80 was higher than $70 earlier in the year, the Brazilian Real has strengthened, from around $5.20 to about $5.50 per dollar. This helped offset some inflationary pressure. He said that the recent increase in inflation predictions was largely due to the war. He rejected the analysis of certain economists who claim government stimulus played an important role.
He said that if you take out the war's impact, there was no inflationary pressure. Oil stabilizing should allow inflation expectations to quickly reverse, allowing monetary policy more room to maneuver, he said, ahead of Wednesday's central bank rate decision.
STIMULUS DISPUTED Private sector analysts estimate that Brazil's economy saw more than 200 billion reais (39 billion dollars) in stimulus during this year, as Lula is heading towards an October reelection bid. This amount comes primarily from subsidies and guaranteed outside the primary budget balance of the government.
Ceron rejected these estimates. If there was a stimulus equal to 2% of the GDP, then growth would be closer towards 3%. He cited recent data, such as retail sales, which showed "significant deceleration." The Finance Ministry predicts GDP growth this year of 2.3%, which Ceron says is within the range of?2.0-2.5%. According to a survey by the central bank, market forecasts are at 1.96%. Ceron stated that some analysts confuse fiscally neutral policies, such expanded income tax exemptions with policies which only marginally increase activity.
GLOBAL ACTORS DRIVING YIELDS Ceron acknowledged the fiscal challenges Brazil faces, but said that high interest rates were not solely driven by fiscal conditions. He pointed to structural factors like low domestic saving. He said that the recent increase in Brazilian debt yields is mainly driven by "strong U.S. data and global repricing".
He said that "our spread relative to the U.S. does not differ from historical levels." Brazil will likely issue sustainable bonds during the second half of this year. Other news is expected to be announced by Finance Minister Dario Dario Durigan when he visits China. Reports indicate that Brazil will announce its first sovereign bond issuance in yuan, also known as Panda Bonds, during Dario Durigan's visit to China.
(source: Reuters)