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Portugal approves a 33% windfall Tax on Oil Companies' Excess Profits
Portugal's government announced on Thursday that it has approved a windfall tax of 33% on profits earned by oil and refinery companies in 2026 as a result of a surge in energy prices triggered by the Iran War. In a press release, the finance ministry stated that the windfall taxes would be applied to the portion of 2026 profits for companies that exceeded by 20% the average profit recorded in 2024 and 2025. The report said that while oil and refinery companies had made extraordinary profits, it was due to external market conditions. It said: "It's fair and necessary to create a mechanism of solidarity by taxing a part of these exceptional profits in order to finance measures that will offset the impact of increased fuel prices on the households and businesses most vulnerable." It said that the measure would also support investments to reduce dependence on fossil fuels, and contribute to an economy more "sustainable and resilient". The tax is similar to one Portugal introduced during the energy crisis of?2022, which was sparked by Russia's invasion in Ukraine. The levy will 'hit all oil companies in Portugal. This includes Galp Energia which reported a 45% increase?in adjusted net profit for the second quarter to EUR540million on Monday, as the Iran War boosted crude prices and refinery margins. This prompted the company to increase its dividend by 10%. Now, the measure will be presented to Parliament for approval. It is expected that all opposition parties will support it.
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Sinochem, a Chinese company, sells a 14% Pirelli share to Michal Strnad (a Czech billionaire).
Sinochem sold a 14% share in Pirelli to Czech billionaire Michal Strnad on Thursday. The Chinese state-owned group has significantly reduced its investment in the Italian tyremaker. Sinochem said it sold shares as part of its 34.1% overall shareholding in a block trade deal, reducing its stake to 20,1%. This made Pirelli the second largest shareholder. Strnad’s investment company Lumina Crown issued a statement saying it had acquired a 14% stake in Pirelli, making it the third largest shareholder. It said that the investment was a “long-term” one. Strnad, the largest shareholder in the Czechoslovak Group (CSG), is a defence and industrial company. According to the data published on the Italian stock exchange's website, the shares sold for EUR6.50 each, which values the 14% stake around EUR987million ($1.14billion). Pirelli shares closed at 6.51 euro on Thursday. The sale puts an end to years of tensions that had existed between Pirelli's principal investors after Italy took steps to limit Sinochem's power at the company. Camfin, the vehicle of Marco Tronchetti Provera - an Italian businessman, who has been the Executive Chairman of the Milan-based tire maker for over 30 years - is now Pirelli's biggest shareholder, with a 26 percent stake. Sinochem's influence over the company has been severely curtailed after the Italian government intervened two times, in 2023 and this year. They used their so-called golden power rules to protect strategic resources. Sinochem is only allowed to have three representatives on the 15-member Pirelli board. The board, however, is controlled by Camfin. Sinochem's appointees also are barred from holding executive positions such as chief executive or chairman. Jefferies advised Lumina Crown in the deal. BNP Paribas advised Sinochem. $1 = 0.8674 euro (Reporting and editing by Keith Weir, Susan Fenton and Elvira pollina)
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Ameren analysis shows that Ameren’s mega-gas plant will not end the power crisis in US Midwest.
Ameren’s proposed mega?gas facility for the Midwest will still?leave the utility with a lack of?the?power and reserves required to meet the surging demand for data centers, according to the company's analysis ahead of an important approval process next week. The projected shortfall highlights the mounting strain on U.S. electricity grids, as demand for data centers grows faster than generation and transmission capacities needed to support them. Ameren, based in St. Louis, is in a rush to complete the project after signing contracts this year with Amazon and Alphabet’s Google to supply electricity to their data centers being developed in rural Missouri. Ameren states that the 2,100 megawatt West Alton Energy Center would be necessary but not restore enough reserve cushion to meet projected demand. The project will be located next to a coal-fired power plant along the Mississippi River, about 45 km (28 miles) north of St. Louis. Matt Michels, Ameren's Director of Corporate Analysis and?Reserve Margin, testified before the Missouri Public Service Commission on July 24, "The company’s resource capacity falls far short of the total demands" and planned?"reserve margin". Ameren will begin the approval process to build the power plant on August 20th with a prehearing hearing. Ameren expects the plant to be operational by late 2031. Michels testified that Ameren would have a capacity shortfall of 1,500 MW in winter 2032 and 2,300 MW in the following year. Ameren executives said the utility will also build capacity by upgrading existing power sources, developing sites for solar and battery storage energy?and buying power from the local grid. Ameren’s service area is part of the Midcontinent ISO. This ISO?manages? the flow of electricity for a territory which includes all or parts of 15 U.S. States in the Midwest and South. Ameren stock's total return over the last 12 months was 12.7%. This is higher than the 8.4% of the S&P 500 Utilities sector, because investors expect strong earnings growth in the next decade. Morningstar's Andrew Bischof said this week that Ameren expects to see more than $70 Billion in additional investment opportunities within the next 10 years. This will provide a runway for?growth. Bischof stated that the most promising opportunities include supporting data centers in Illinois and Missouri; new generation in Missouri; modernizing the grids in Illinois, Missouri and across the Midcontinent. (Reporting by Tim McLaughlin, editing by Timothy Gardner and Bill Berkrot).
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Sources say that the oil refinery in Ryazan, Russia has stopped processing after a drone attack.
Two?industry? sources said that the Ryazan oil refining plant, one of Russia's largest plants, stopped crude oil processing 'after a drone attack' on Wednesday. Ukraine said on Wednesday its military struck Rosneft's Ryazan oil refining plant overnight. The Ryazan refinery ceased operations on Wednesday. One source said on Thursday that the shutdown would last two weeks. Rosneft did not immediately respond to an inquiry for comment. Pavel Malkov, the governor of Ryazan's region, said that Russian air defences?shot down 45 unmanned drones over the area overnight. He said that falling debris was the cause of fires at industrial sites. Industry sources stated that the refinery may be closed for up to two weeks. This is because restarting refining operations after an unscheduled stop usually requires significant time. It takes this much time to bring back primary and secondary processing, adjust technological processes, and restore product specifications. The infrastructure of the refinery was?damaged by a drone attack that occurred on May 15th, which led to a suspension in operations. Despite the shutdown of the refinery, it continued to sell refined products at the St. Petersburg International Mercantile Exchange on Thursday. Data from the exchange showed that diesel and gasoline fuels were offered for sale on Thursday. Sources in the industry claim that the refinery will process 13.1 million tons of crude oil by 2024. This is equivalent to 4.9% of Russia's total refining capacity. Last year, it produced?2.2 millions tons of gasoline and 3.4 million tonnes of diesel fuel.
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Wildfires in England's east rage, but pose no threat to nuclear plants nearby
Officials and operators confirmed that a wildfire in east England forced the evacuation of several communities, as well as road closures. However, it was not expected to spread toward nuclear facilities, which are only a few miles away. The fire has spread across Dunwich Heath. This is a rare area of coastal heathland that supports protected bird species as well as other wildlife. The size of the fire reminded many of scenes from southern Europe. Residents, holidaymakers, and caravan owners were forced to leave on short notice for fear that the blaze would change directions. "I'm incredibly emotional," said Jude Bayly (73), a retired midwife who owns caravans near the evacuation zone. Bayly reported that she had seen black smoke and towering flames rise over the?heath during the night. "It was black smoke and flames that went up to the sky. It's horrifying." Some people fleeing the country leave behind their belongings. Peter Barnes, an 77-year old retired farmer and owner of a holiday lodge in the region, said: "We've just had to abandon it." He said that they had to leave only with their car and clothes. "Everything else was just left." The fire, described as one of its most challenging incidents by Suffolk Fire and Rescue Service, occurred a few kilometers north of French utility EDF’s Sizewell B, which produces electricity, and Sizewell C a nuclear plant that is under construction. The fire service's Jon Lacey said that the terrain and land between them,?the flames, and Sizewell B & C meant that there was no significant concern about fire spreading. He added that both sites are being monitored and that authorities have been in consultation with their operators. FIRE IS STILL DEVELOPING Lacey stated that the fire was "developing", "progressing", and could burn for up to 36 hours. He also said it would be moving inland. He said that the combination of high temperatures, dry weather and coastal winds created a fire that moved quickly and was difficult to control. Sizewell C reported that its offices and sites continued to run normally, and it was evaluating the effects of smoke on local roads. EDF stated that the blaze was not affecting the operations at Sizewell A, which is separated by a body of water. The Prime Minister Andy Burnham stated that the government is closely monitoring the incident. He told reporters that "all the support required will be there." Sam Tabahriti reported from London, Marissa Davison from Dunwich and Sam Tabahriti wrote the article. James Davey edited it and Alex Richardson was in charge of editing.
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Wildfires threaten Bordeaux's wine industry
Wildfires burning in the countryside of Bordeaux are a reminder of climate challenges that France's largest wine region is facing. Producers are struggling with?severe heat, rising temperatures, and a decline in wine consumption. Although growers claim that the fires do not pose an immediate threat to Bordeaux’s famous vineyards, two months of severe drought and repeated heatwaves has intensified stress and led to one of the earliest vintages in history. Thomas Duroux said that the fires in Margaux did not affect the quality of the wine. He said that warning signs were everywhere. The scorching summer in France has exacerbated drought conditions, stretched water supplies, and dried out vegetation, causing wildfires to spread and endangering crops throughout the country. Wake-up Call The first ones to be affected were young vines whose roots had not yet reached deep enough to find moisture underground. "What we're experiencing this year should be a wake-up. We're facing a situation we've never seen before. "We must not only limit the damage but also consider the future," said?Duroux. He added, "Our priority today is water resources -?because we won't be able plant vines under these conditions -- and adapting the vineyard to become more resilient to these climate conditions." Some local wine authorities sought exemptions to allow irrigation this year of vines in production, a rare step for a region that has traditionally only watered young and fragile grapes. Duroux says that many chateaux don't have enough water for their entire vineyard. He said that climate change has brought benefits to date, such as riper grapes and richer wines, and in hot years like 2020, 2022, and 2025, exceptional qualities. Growers warned that without rain, vines may shut down in order to protect themselves. Grapes will shrivel if there is no rain. This would threaten both yields and quality, pushing harvest dates to the earliest ever recorded. Climate change isn't the only industry challenge. Depressed prices have plagued many French producers for years due to?falling consumption, weaker demand from exports and an oversupply. Some are forced to sell their wine at a loss. The crisis led to a "vine-pull" scheme, where producers are paid for uprooting vineyards in order to reduce production and rebalance markets. Even the most prestigious wines are not immune to this downturn. According to the Liv-ex Bordeaux 500 Index, the Bordeaux fine wine market has lost nearly a fifth in value over 'the last five years. The once booming en premierur market in the region, where buyers buy wines as they age in barrels, has also lost its momentum. This led several chateaux, to reduce prices. (Reporting by Sybille de La Hamaide. Gabriel Stargardter contributed additional reporting. Mark Potter (Editor)
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Microsoft rally boosts stocks; 30-year Treasury yield reaches 19-year high
U.S. stock prices rose on Thursday, as Microsoft's results surpassed expectations, and eased investor concerns about AI spending. Meanwhile, 30-year Treasury yields reached a record high after the Federal Reserve kept interest rates at the same level on Wednesday, fueling fears about inflation in longer-term. Microsoft rose by 14% as the company beat Wall Street expectations for current-quarter cloud sales growth and issued a capital expenditure outlook that was below Wall Street expectations. It also said it expected to continue generating cash until fiscal 2027, which just began. Investors are concerned about the rising costs of AI at large technology companies, even though they have reported strong earnings. Alphabet's and Tesla's negative cash-flow reports last week led to a sell-off in AI stocks. Chip stocks were also affected by investors questioning high valuations. Sanjiv Tumkur is the head of equity analysis at Rathbones. The Dow Jones Industrial Average rose by 0.68%, to 51,945.26,?the S&P 500 was up by 1.29% at 7,410.61 while the Nasdaq Composite gained 2.43% to 25,037.38. MSCI All Country World Price Index.MIWD00000PUS rose 1.30% to 1,105.11 after falling earlier to its lowest level since June 11. South Korea's KOSPI dropped 1.23%, ending its third consecutive day of losses. The pan-European STOXX 600 Index rose by 0.88% while Europe's FTSEurofirst 300 Index rose by 0.89%. The highest 30-Year Yields since 2007 The Fed's decision not to raise interest rates sparked fears that inflation, which is already well above the Fed target, could rise further. The decision to leave policy on hold drew dissents from three of the 12 ?FOMC members, who had wanted a quarter-percentage-point hike instead. Fed Chairman Kevin Warsh’s preference for less guidance in the future has left traders less confident about the Fed’s next move. Warsh pointed out that bond yields have risen significantly since the Fed’s last policy meeting. This is because investors are pricing in future rate hikes. He welcomed the move but added that it didn't mean that the central bank had to follow suit. Oscar Munoz is the head of US Economics at TD Securities. "He is pointing out that the market does the job of the Fed. But at some point, there must be some follow-through." The recent rise in oil prices has pushed yields up ahead of the Fed's meeting as the war against Iran resumed. Fed funds futures traders now price in 64% odds of a Fed hike during the September meeting. The yield on the interest rate-sensitive 2-year Treasury US2YT=RR fell by 1.28 basis points, to 4.223%. Meanwhile, the yield on U.S. benchmark 10-year notes US10YT=RR increased by 4.51 basis to 4.667%. The 30-year yields rose 6.94 basis points to 5.2124% before reaching 5.2444%. This is the highest since mid-2007. Data released on Thursday revealed that U.S. Inflation slowed down in June. The Personal Consumption Expenditures Index rose 3.7% over the past 12 months, after a 4.1% increase in May, which was not revised. This is the biggest gain since April 2023. Separately the U.S. economy slowed down in the second quarter due to an expanding trade deficit. However, a surge in consumer spending as well as robust investment in AI infrastructure showed underlying strength. Investors were weighing the talks between Oman, Iran and Washington over the Strait of Hormuz as they weighed oil prices on Thursday. The dollar index (which measures the greenback in relation to a basket of currencies, including the yen, the euro and others) fell by 0.77%, while the euro rose 0.5%, at $1.1521. The pound rose 0.49%, to $1.3432. The Bank of England held interest rates at?on-hold as expected. However, a third policymaker supported a rate hike citing renewed conflict between Iran and the United States. The Japanese yen has gained sharply, sparking speculation about possible Japanese intervention to support the currency. Last seen at 159.16 dollars per yen, it was up 2.59%. Bank of Japan will likely keep its rates at 1% this Friday. A second rate hike after the June increase would be rare. Spot gold increased by 0.93%, to $4.102.91 per ounce.
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Tata Steel India beats its profit forecast on the back of improved steel prices
Tata Steel reported better-than expected first-quarter profits on Thursday. The company, India's largest?steelmaker, grew its net profit by 11.6% from a year earlier, despite higher costs for?coking coke. The Tata Group's company reported a net profit of 23.18 billion rupees (about $242.3 million) for the quarter ending June 30. This was an increase of 11.6% compared to a year ago. According to data compiled and analyzed by LSEG, analysts had on average expected a net income of 22.95 bn rupees. Elara Capital analysts said that prices of domestic flat steel products such as cold-rolled and hot-rolled coils rose both sequentially and year-over-year due to a weaker rupee. Tata Steel's production of domestic crude steel increased by over 10% compared to a year ago, to 5.76 millions tonnes. This was largely due to higher output from its Kalinganagar and Jamshedpur facilities. Deliveries also rose by nearly 9%, to 5.17 million tonnes. The company's total revenue for the first quarter of operations increased 14.3% compared to a year ago, reaching 607.94 billion rupies. This was higher than analysts' expectations (586.65 billion rupies). Nevertheless, lower production outside India, and higher raw material costs such as iron ore and coal, have eroded some of the gains. The cost of coking coal, a major input for steelmakers, remained high. This pushed material costs up by 12%. Total expenses during the quarter increased 13.1% compared to a year ago, reaching 569.40 billion rupees. In the Netherlands, Tata Steel's quarterly production volume dropped by 8.8% compared to a year ago, while Thailand production was flat. Delivery volumes in the Netherlands and UK dropped 6.7%, 20%, and 3% respectively. The company also approved a 4.8 million-tonnes-per-annum steelmaking capacity expansion at subsidiary Neelachal ?Ispat Nigam -- at an estimated capex ?of 338.73 billion rupees -- to expand ?its long products portfolio. JSW Steel announced a better-than-expected quarterly profit in July due to higher steel prices and stable volumes.
Fuel prices in Europe are near record levels due to refinery attacks
This week, European refiners made bumper profits from producing fuels such as gasoline and diesel. A wave of attacks against oil?refineries? in the Middle East and Russia tightened up supply and pushed prices higher globally. Fuel prices are rising, affecting consumers and businesses around the world. Fuel prices are increasing as a result of attacks on refineries caused by the wars in Iran, Ukraine and elsewhere. These attacks have destroyed a number of plants that convert crude oil into fuel. This is despite crude oil falling to $90 per barrel, which is well below 2008’s record of $147.
The premium that European gasoil futures command compared to the crude oil price. This effectively captures refiners' profit margins from processing?crude into diesel
Jeffrey Baird of Merritt Point Partners said, "The market signals that refining is now at least as important a problem as crude oil scarcity if not more so." Saudi ?Arabia shut down its 400,000-barrel-per-day Jizan ?oil refinery on July 27 following an attack by Yemen's Houthis. According to Kpler's data, the refinery has exported over 200,000 barrels per day of fuels in the last three months. Diesel and gasoil were the two main products. A power outage also forced parts of Kuwait's Al-Zour refinery to shut down. This is another major diesel producer. The Kremlin has imposed a ban on gasoline and diesel exports due to the drone attacks from Ukraine. Lukoil Perm refinery, with a capacity of 260,000 bpd was the last to shut down a crude distillation unit on Thursday after a drone strike. In recent weeks, gasoline refining margins have also reached multi-year highs. The premium of Eurobob gasoline to Brent futures on Wednesday was $42.21 per barrel, which is not far from the record high of $44.94 reached on July 17.
According to LSEG, the margins for European jet fuel refining remained at or above $80 per barrel on July 29, although they were?down since their all-time peak of $109 in march. The LSEG data shows that the margins had never exceeded $80 before 2026. The margins of U.S. refiners also soared as fuel exports and domestic demand were both strong. U.S. gasoline cracked spreads reached $60 per barrel in mid-July. This was a level last reached in April 2020. Diesel?crack split hit a record high of $93.44 per barrel this week. Valero Energy is the second-largest U.S. refiner based on capacity. Valero Energy told investors on Thursday that it believes the industry's structural shift has occurred to a higher midcycle refining environment, based on their projections for future demand and planned additions. (Reporting from Robert Harvey in London, Additional reporting by Nicole Jao, Editing by Alex Lawler and Kirsten Donovan; David Gregorio, Kirsten Doovan & David Gregorio).
(source: Reuters)