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How serious are Indonesian wildfires?
Indonesia is on high alert to prevent the devastation caused by the wildfires that are raging in the country. Indonesia has deployed cloud seeding and firefighting planes to try to stop fires and smoke spreading. This is especially true in five provinces of Borneo Island, which are home to large stretches of?peaty lands. WHAT ROLE DOES EL NINO PLAY? El Nino may not be the direct cause of fires but it can act as a catalyst. The additional heat and drying conditions allow them to spread faster. Indonesian authorities have said that the El Nino index for this year has already exceeded levels of 2015. Columbia University climate scientist James Hansen described it as "off-the-charts". According to Copernicus' climate monitoring service, which monitors the European Union, global mean sea surface temperatures rose to an unprecedented 21.1 degrees Celsius on August 22. HOW DOES INDONESIA COMPARE WITH OTHER PARTS? Wildfires have exploded in the Northern Hemisphere due to drought, causing air pollution, and increasing greenhouse gas emissions?in North America, Eurasia, and even the Arctic. After a wildfire surge that occurred in July, the United States saw homes destroyed in Nevada and Washington. Canada also had to issue evacuation orders. In southwest France, fires destroyed hundreds homes. According to EU data more than 680,000 hectares (1.68 millions acres) of land has been burned in Europe this year. According to Copernicus Fire Emissions Watch the carbon emissions from Indonesian forest fires reached 17,1 million metric tonnes in the past seven days, 429% more than the seasonal average and second only behind Russia. The data revealed that the fire emission intensity in Indonesia was 1,302kg/sqkm, compared with 185kg/sqkm in Russia. How do Indonesia's wildfires compare to 2015? In July, wildfires in Indonesia destroyed 95,000 hectares. This is nearly double the damage caused in the six months prior. The average temperature for the month was the highest it has been in 35 years. According to the fire monitoring service of the Ministry of Forestry, Sipongi, hotspots reached over 9,000 in august, a significant increase from the 5,077 in August 2015. However, it is still below the monthly record of?17302 set in October that same year. Wildfire damage is still not comparable to the devastation caused 11 years ago. Indonesian wildfires in?2015 generated more carbon dioxide daily emissions than the entire EU. Later studies estimated that the pollution from wildfires caused over 100,000 extra deaths throughout Indonesia and Malaysia. Why is Indonesia prone to fire? Indonesia has a long history of burning forests for agricultural purposes and other economic activities. Deforestation also puts Indonesia at risk, as it lowers water tables and reduces soil moisture. Borneo is a difficult place to control fires because of the vast expanses of peatland that can support blazes for much longer at lower temperatures. Indonesian authorities promised that they would focus on preventing forest fires instead of putting them out after 2015. The government crackeddown on law-breaking businesses and promised to restore the water table and rehabilitate degraded and drained peatlands. Experts say this could have contributed to the reduction of fires this year.
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Shanghai copper prices fall as fears over rate rises offset supply support
On Monday, copper fell on the Shanghai Futures Exchange, after bets that U.S. interest rates would rise for a longer period of time offset supply concerns. Earlier, the metal had seen a monthly increase in August. The SHFE's most traded copper "contract" fell 0.2% to 108.400 yuan (16,129.27 dollars) per ton. The London Metal Exchange was shut on Monday due to a British public holiday. Analysts at Chinese broker Galaxy Futures stated in a report that the hawkish comments by U.S. Federal Reserve chairman Kevin Warsh about interest rates are pushing down copper prices. Warsh said in a speech at the Jackson Hole Symposium last Friday that the Fed might need to?raise rates? if inflation remains above target. According to CME's FedWatch, traders on Sunday had priced in a 60% probability that the Fed would raise interest rates at its meeting in September, up from 40% just a week ago. Rates that are higher for longer can be a problem for commodities such as copper, which depend on economic growth. After Warsh's address, the dollar also rose, hovering at a two-week peak. This weighed on copper prices, which are traded in U.S. dollars, making them?more costly for buyers who use other currencies. SHFE copper, despite a slight decline on Monday, was expected to close higher in August, with a gain of 2.97%. Price has been supported due to inventory concerns, as the commodity has been sucked in by the U.S. before a possible tariff on imported refined copper. The total amount of copper in SHFE monitored warehouses was revealed on Friday. Last week, metal stocks on-warrant - those not yet marked for withdrawal – were down by more than 19%. The price of SHFE metals rose 0.13% for aluminum, 0.4% for zinc, 0.62% and 1.3% for tin. Zinc gained 5.87% in August amid concerns about supply.
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Scientists say coral bleaching occurs too often for reefs recover.
Scientists said that coral reefs experience bleaching so often, they don't have the time to recover before another one strikes. The global coral cover is now below "normal" levels and faces irreversible decline. Coral reefs are vital to the world, supporting a quarter all marine life. They also make coasts more resilient, and provide food and livelihoods to millions. But their survival is threatened by pollution, and by mass bleaching due to rising ocean temperatures. In a report that was based on data collected over 40 years from more than 37,000 reef sites in 120 countries, the Global Coral Reef Monitoring Network, a group?of scientists?, said that there is now a five- or six-year gap between bleaching. Manuel Gonzalez Rivero, the lead author of the article, said: "They have a capacity to recover if we give them enough space." But we haven't yet seen that amount of time allowed. The frequency of these bleaching events have almost doubled. Corals can bleach when they expel the colorful algae that live in their tissues. Corals become pale, and more susceptible to disease and starvation without the algae. A bleached coral is not dead but the ocean temperature must be cooled if there is any hope for recovery. The release of the report coincides with the gathering of Pacific leaders in Palau, Monday, for their annual Pacific Islands Forum. Leaders are expected to coordinate their climate priorities ahead of the COP31 conference in December. The findings show that the climate change has a negative impact on coral reef ecosystems. Hard coral cover is down 9.5% from the historical average between 2020 and 2024. Gonzalez Rivero stated that coral cover had been relatively constant for 40 years around the globe. Since 2010, there has been an extremely steep change. STAIRCASE OF DECLINE Scientists have recorded three mass bleaching events since 2010. Reefs recover quickly when temperatures drop. Reefs recovered?6% of their coral cover between 2017 and 2019, nearly compensating for the 6.6% that was lost during the 2016 bleaching. The most recent bleaching of 2023 affected 77% of coral reefs around the world, as part of what Gonzalez?Rivero called a "staircase decline". He said that with El Nino intensifying weather patterns and ocean surface temperature reaching a record high of 21 degrees Celsius (69.98 deg F) on August 22, a second bleaching event may strike the world's coral reefs this year. The temperatures make it very likely. The report stated that rapid cuts in emissions and management of local threats -- such as unsustainable fishing or excessive coastal development -- can limit further losses. David Obura is the chair of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services. He said: "We need to act now to stop this decline and invest into solutions that reduce pressures and increase resilience." Delay in action can lead to irreversible loss.
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Nepal requested early warnings from China before the flood disaster.
Experts and officials from Nepal and China met in Kathmandu three months before the wall of mud, water and rock that 'hurt down' a Himalayan Valley bordering Nepal and China killed hundreds. The agenda for the meeting, held in the capital of Nepal on May 27, included 10 Nepali officials and 12 Chinese officials, including those from the Tibet region, where the disaster occurred. They discussed ways to strengthen cooperation between the two countries to monitor and respond effectively to hazards such as floods, bad weather, and glacier-related hazards. Participants called for "joint measures to reduce risk, including inventories and mapping of hazards. Two Nepali officials said to? After the meeting, two Nepali officials told? We wanted to know early if there were any glacier movements and movements in that area. This is what we still want," said Sauhardra Joshi, an hydrologist from Nepal's Flood Forecasting Division who attended the meeting. CHINA SAYS ITS DATA SHARE HAS BEEN TIMELESS Experts and officials have not placed blame on either side. The natural disaster will cost Nepal's economy a tenth of its annual output. Nepali officials claim that the priority for them is to intensify their cooperation with China. The Chinese foreign ministry has not responded to a question about the meeting in May or Nepal's request for more information. Binod Paraajuli, another Nepalese government hydrologist, told Binod that the Chinese refused to sign the agreement, stating they had no authority to do so. The meeting was not reported in detail, nor were the Nepalese demands for greater cooperation to monitor the glaciers which threaten the communities on both sides. China's embassy said on Saturday in a X statement that Beijing and Kathmandu have been in constant contact and made "substantial" progress at the May meeting on promoting disaster information sharing across borders. Officials said that Nepal expressed similar concerns last year. However, experts and officials cautioned against assuming that the slow progress they described was a factor in the recent disaster. A?glacier slide unleashed a devastating mudslide in both countries that killed more than 800 people and left over 3,000 missing. The Chinese Embassy rejected criticisms from Nepali social media users who claimed that China failed to give adequate warnings. It said Chinese and foreign experts had significant difficulties monitoring hazards in remote Himalayan regions. It said that Chinese teams shared vital information with Nepal in a "timely manner". Last year, Nepal expressed concern about a flooding in the same region, which was triggered by a sudden release of water in Tibet from a glacial ice lake. At least nine people died in Nepal, and more than a dozen are still missing. Parajuli explained that "when the Chinese side observes heavy rainfall forecast in the Tibet region, they will provide us with this forecast and these observations." But "not avalanche, water level, landslides or extreme events." China started sharing forecasts of heavy rainfall in Tibet via WeChat and email about a month back, according to Parajuli. TIMELINE FOR CALAMITY In an email sent to Nepali officials 12 days prior to the disaster, the World Meteorological Centre of China warned them that a monsoon was predicted for the region from August 14-19. China warned that "additional rainfall will likely occur in a large part of Nepal. We wish to bring your attention to secondary hazards such as landslides, flash floods, etc." The Chinese Embassy said that China had been sharing data, including on the lake formed from debris left over after last week's disaster. Discussions over data sharing highlight the difficulty of monitoring, forecasting, and providing early warnings in a region dominated by geopolitical rivals such as China and India who control remote mountainous regions that hold vast quantities of snow and ice. According to Austin Lord, a senior fellow with the Washington-based Stimson Center, the collapse of a glacier in an area that was relatively unmonitored was the cause of Wednesday's disaster. Lack of bilateral cooperation did not play a major role in Nepal's reaction, Lord said. "That doesn't excuse the fact that it's not really a well articulated system." There is very little exchange between Nepalese and Chinese," said Lord. He is part of the team that supports Nepal's government in disaster and climate risk reduction. "Chinese researchers have a greater capacity and have more resources to monitor than the Nepali side in general." The time it took for the torrent to reach Nepal is a good example of the importance of early warning systems, said Parajuli. Surveillance footage has been used to define the disaster. Around 8:32 am Nepal time, on Wednesday morning, a deluge hit a border crossing as people tried?to escape. Parajuli received a call 26 minutes later from the head of Nepal's National Disaster Risk Reduction and Management Authority alerting him about a flooding on the Trishuli River. Parajuli and his team discovered that a border station monitoring station hadn't transmitted data since 8:40. He said that the team tried to contact stations downstream, but they were unable to post data. This led them to believe the devices had been washed out. Parajuli said that after contacting local Nepali officials to confirm the flooding his team sent an alert to mobile users at 9:13. According to the Nepali government, the flood carried 57.4 millions cubic metres of water (2 billion cubic feet), more than twice as much as usual. "HUGE GUSHES OF MUD COMING DIRECTLY AT US" According to the Stimson Center, the floodwaters that swept through Nepal damaged 19 bridges, 40 km of highway and more than 10 percent of the country's electricity generation capacity. "It wasn't water. Keshav Baral, a resident of Tupche Village about 25 km (15 mi) downstream from the border, described a massive gush coming straight at them. "I tried to grab the hand of my wife, but she was carried away by the mud." According to Nepali authorities, when a part of the glacier shattered and crashed to the valley's floor, hundreds of meters below, it unleashed flash floods at high speeds. The Hindu Kush Himalayas are home to millions of people, from?Afghanistan through to Myanmar. They contain the largest amount of ice in the world outside of the poles. There are 63,700 ice glaciers that cover nearly 56,000 sq km (22,200 sq miles), an area almost as large as Croatia. This ice can store up to 1,400 cubic miles (5,700 cubic kilometers) of ice. Basanta Adhikari is the director of Nepal's Centre for Disaster Studies at the Tribhuvan University. He estimates that the chunk of glacier responsible for the recent disaster contained 5 million cubic meters of ice, rock and other debris. According to a study from the International Centre for Integrated Mountain Development, climate change is driving glacier melting as snow cover decreases and snowfall becomes erratic. The centre project that these changes will lead to more floods and landslides as mountain communities also deal with hazards such as erosion and sedimentation. Many of Nepal's main river systems begin in Tibet and flow through one the most seismically-active and flood-prone areas of the world. Parajuli, Nepal's Minister of Home Affairs, said that Nepal will work with China on research and building systems to monitor avalanches as well as the release of water in glacial lakes - major risks to mountain communities. He said that his department would propose an agreement for data sharing with China along the lines of one Nepal has with India. This will allow more frequent information about precipitation, river levels and not only high-precipitation predictions. He said that Nepal would seek data from satellites every 10 minutes, so "we could warn and save our people." "Our primary goal is to not miss any future catastrophe."
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South Korea's SK On signs deal with US company NeoVolt Power for energy storage batteries
SK On, a South Korean battery manufacturer, announced on 'Monday that it had signed a contract to supply U.S. -based NeoVolta Power 9 Gigawatt Hours (GWh), of lithium iron phosphate?battery cells. These will be used in energy storage systems over a five-year period starting 2027. In a press release, SK On said that the pouch-type cells would be manufactured at its factory in Georgia. SK On has not disclosed the value of the deal but industry estimates place it at approximately 1.5 trillion won ($1.09billion). SK On has entered into an agreement to expand its energy storage systems business in order to counteract a 'weaker demand' for electric cars. The company signed an agreement with U.S. based Flatiron Energy Development last year to supply LFP batteries for energy-storage systems. SK On announced that it 'also plans to extend its 'partnership with NeoVolta Power by a separate contract later this year. Under the agreement, it would supply an additional 9 GWh LFP battery cell. NeoVolta will assemble the battery packs with its packaging expertise. The two companies will be able to work together on 18 GWh of electricity. SK On has set a goal of securing over 20 GWh of global energy storage systems this year. It also said that it was 'in?talks' with several U.S. clients about additional supply contracts amounting to more than 10 GWh. As U.S. subsidies for EVs phase out, other South Korean battery'makers, such as LG Energy Solution and Samsung SDI have repurposed EV battery production lines into batteries for energy storage system. Energy storage batteries are similar to automotive batteries, and they store electricity in facilities like data centres. They help balance the power supply and demand.
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Nepal requested early warnings from China before the flood disaster.
Experts and officials from Nepal and China met in Kathmandu three months before the wall of mud, water and rock that hurled down a Himalayan Valley bordering Nepal and China killed hundreds. The agenda for the meeting, held in the capital of Nepal on May 27, included 10 Nepalese officials and 12 Chinese officials, including those from the Tibet region, where the disaster occurred. They discussed ways to strengthen cooperation between the two countries to monitor and respond effectively to hazards such as floods, bad weather, and glacier-related hazards. Participants called for joint measures to reduce risk, such as inventories of ice-lakes and hazards mapping. Two Nepali officials said they didn't receive enough information from China about glacier risks and the water levels following the meeting. They feared that insufficient data sharing would hinder their ability to prepare and anticipate major disasters. We wanted to know early if there were any glacier movements and movements in that area. This is what we still want," said Sauhardra Joshi, an hydrologist from Nepal's Flood Forecasting Division who attended the meeting. CHINA SAYS ITS DATA SHARE HAS BEEN TIMELESS Experts and officials have not placed blame on either side. The natural disaster will cost Nepal a tenth of its annual economic output. Nepali officials claim that the priority for them is to intensify their cooperation with China. The Chinese foreign ministry has not responded to a question about the meeting in May or Nepal's request for more information. Binod Paraajuli, a Nepali government hydrologist, told Binod that the Chinese refused to sign the agreement because they didn't have the authority to do so. They asked for further discussion. The meeting was not reported in detail, nor were the Nepalese demands for greater cooperation to monitor the glaciers which threaten the communities on both sides. In a statement posted on X, the Chinese embassy in Nepal stated that Beijing and Kathmandu have been in constant contact and made "substantial" progress at the May meeting on promoting disaster information sharing across borders. Officials in Nepal expressed similar concerns in 2013. However, experts and officials warned that the slow progress they described was not a factor in the recent disaster. A glacier collapse unleashed an epic mudslide in both countries, which has left nearly 800 dead and more than 3,000 people missing. The Chinese Embassy rejected criticisms from Nepali social media users who claimed that China failed to give adequate warnings. It said Chinese and foreign experts had significant difficulties monitoring hazards in remote Himalayan regions. It said that Chinese teams shared "important information" with Nepal in a timely fashion. Last year, Nepal expressed concern about a flooding in the same region, which was triggered by a sudden release of water in Tibet from a glacial ice lake. At least nine people died in Nepal, and more than a dozen are still missing. Parajuli explained that "when the Chinese side observes heavy rainfall forecast in the Tibet region, they will provide us with this forecast and these observations." But "not for extreme events, such as landslides and avalanches." China started sharing heavy rain forecasts in Tibet via WeChat and email about a month back, according to Parajuli. TIMELINE FOR CALAMITY In an email sent to Nepali officials 12 days prior to the disaster, the World Meteorological Centre of China warned them that a monsoon was predicted for the region from August 14-19. China warned that "additional rainfall is expected across much of Nepal and we wish to bring your attention to secondary and cascading risks, including but not limited to flash floods and landslides." The Chinese Embassy said that China had been sharing data, including on the lake formed from debris left over after last week's disaster. Discussions over data sharing highlight the difficulty of monitoring, forecasting, and providing early warnings in a region dominated by geopolitical rivals such as China and India who control remote mountainous regions that hold vast quantities of snow and ice. According to Austin Lord, senior Fellow at Washington's Stimson Center, the collapse of a glacier in an area that was relatively unmonitored was the cause of Wednesday's disaster. Lack of bilateral cooperation did not play a major role in Nepal's reaction, said Lord. "That doesn't excuse the fact that it's not really a well articulated system." There is very little exchange between Nepalese and Chinese," said Lord. He is part of the team that supports Nepal's government in disaster and climate risk reduction. "Chinese researchers have a greater capacity and have more resources to monitor than the Nepalese side in general." Parajuli stated that the time it took for the torrent to reach Nepal is a good example of the importance of early warning systems. According to the?surveillance video that has become the defining image of this disaster, around 8:32 am Nepal time on Tuesday, the deluge blasted a border crossing into Tibet as people tried to flee. Parajuli received a call 26 minutes later from the head of Nepal's National Disaster Risk Reduction and Management Authority alerting him about a flooding on the Trishuli River. Parajuli and his team discovered that a border station monitoring station hadn't transmitted data since 8:40. He said that the team tried to contact stations downstream, but they were unable to post data. This led them to believe the devices had been washed out. Parajuli stated that after contacting local Nepali officials to confirm the flooding his team sent a public warning to mobile phone users around 9:13. According to the Nepali government, the flood carried 57.4 millions cubic metres of water (2 billion cubic feet), more than twice as much as usual. "HUGE GUSH of MUD Coming Straight At Us" According to the Stimson Center, the floodwaters that swept through Nepal damaged 19 bridges, 40 km of highway and more than 10 percent of the country's electricity generation capacity. "It wasn't water. Keshav Baral, a resident of Tupche Village, located about 25 km (15miles) downstream from the border, described a gush of mud that was coming straight at them. "I tried grabbing my wife's hands, but she was swept by the mud." According to Nepali authorities, when a part of the glacier shattered and crashed to the valley's floor, hundreds of meters below, it unleashed flash floods of high speed. The Hindu Kush Himalayas are home to millions of people, from Afghanistan to Myanmar. They contain the largest amount of ice in the world outside of the poles. There are 63,700 ice glaciers that cover nearly 56,000 sq km (22,200 sq miles), an area almost as large as Croatia. These glaciers can store up to 5,700 cu km (1,400 cu miles) of frozen water. Basanta Adhikari is the director of Nepal's Tribhuvan University's Centre for Disaster Studies. He estimates that the chunk of glacier responsible for the latest disaster contained 5 million cubic meters of ice, rock and other debris. According to a study from 2023 by the International Centre for Integrated Mountain Development, climate change is driving glacier melting as snow cover decreases and snowfall becomes erratic. The centre believes that these changes will lead to more floods and landslides as mountain communities are also faced with hazards such as erosion and sedimentation. Many of Nepal's main river systems begin in Tibet and flow through one the most seismically active, flood-prone areas of the world. Parajuli, Nepal's Minister of Home Affairs, said that Nepal will work with China on research and building systems to monitor avalanches as well as the release of water in glacial lakes - major risks to mountain communities. He said that his department would propose an agreement for data sharing with China along the lines of one Nepal has with India. This will allow more frequent information about precipitation, river levels and not only high-precipitation predictions. He said that Nepal would seek data from satellites every 10 minutes, so "we could warn and save our people." "Our primary goal is to not miss any future catastrophe."
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Niger claims it has regained control of an airbase following a mutiny by soldiers
Niger's military regained the control of an important military airbase after a day-long mutiny by soldiers. This is the latest challenge for military ruler Abdourahamane Tiani, as his government struggles to contain insurgent jihadists. The attack highlighted tensions in Niger's armed services, who have repeatedly suffered battlefield losses fighting West Africa's al Qaeda affiliates and Islamic State. Early Saturday morning, gunfire and explosions echoed throughout Niamey. This included the area around the military base and the presidential palace. On Sunday, three security sources said that the government forces had retaken Niamey's airbase following hours of fighting. Residents reported that the capital was calm on Sunday as aircraft circled overhead and authorities removed roadblocks put up during the unrest. The airbase, located in the same complex of Niamey’s civilian airport, is home to military aircraft and drones, as well as the counter-terrorism unit of Alliance of Sahel States, which includes Niger Mali Burkina Faso. There are also Italian and Russian forces. Viktor Voropaev said that the Russian Ambassador to Niger had given an interview with TASS on Saturday. The Niger presidential office reported that Algeria also sent assistance in the form four fighter jets and a refueling aircraft delivered on Sunday. Before Saturday's attack, the airbase was already targeted twice in this year - by the regional Islamic State affiliate in January and by the regional al Qaeda affiliated in June. Niger's state media reported late Saturday night that "hundreds" of soldiers were involved in the attack and that it lasted several hours. Forces loyal to Tiani, the military leader, tried to regain power. The footage was purported to show mutineers surrendering. The report by the state-run media has not been independently verified. Three security sources reported that the Presidential Guard came to Tiani's defense. Tiani hadn't made any public appearances by Sunday. Since a coup in July 2023 that removed President Mohamed Bazoum, the Niger, an oil-rich nation in West Africa, is ruled by military officials. SAHEL LEADERS FIGHT AGAINST JEHADISTS Tiani has not made any progress against the jihadists, as his counterparts have in Burkina Faso and Mali. In the past month, 18 soldiers were killed in an attack by the Islamic State affiliate on the Niger military. Soldiers from Niamey, as well as those in the nearby localities of Ouallam Tera and Dosso where the army has suffered heavy losses, were involved in the mutineers operation. Security sources and analysts say that frustration with the government has increased within the frontline units. This creates another vulnerability for Tiani, beyond the insurgents. Since gaining power, 'Tiani’s government has shifted its focus away from Western allies, 'deepened ties to Russia, and broken with regional ECOWAS - bloc. As authorities tighten their control on the uranium industry, Orano in France has been forced to sell assets. Niger was a major supplier of nuclear fuels to Europe. It accounted for 15% of Orano’s uranium at full capacity.
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Trump announces that the US Strategic Petroleum Reserve will be refilled with Venezuelan oil
U.S. President Donald Trump announced 'on Sunday' that oil from the recently negotiated deal with Venezuela will be used to replenish the Strategic Petroleum Reserve. This reserve has been depleted in recent years due to global supply disruptions, and high fuel prices. Trump stated in a post on social media that the "topping-out" process would begin soon, and described the Venezuelan oil as a gift from Venezuela to "the People of the United States." The speed at which the Venezuela deal could deliver oil to the reserves or provide any immediate benefit to U.S. drivers is not clear. The agreement Trump announced Friday is intended to revive Venezuela's battered oil industry. However, it will take significant investment and infrastructure improvements before production can increase substantially. As of August 21, the reserve contained about 290 million 'barrels. This is a 44-year-low after the United States reduced its stockpiles under the Biden and Trump Administrations to respond to global supply disruptions.
MORNING BID EUROPE - Oil prices rise as missiles are fired in the Gulf
Wayne Cole gives us a look at what the future holds for European and global markets.
This week began with a bang in Iran, as U.S. troops struck two missile launchers in the Strait of Hormuz on Larak Island. Meanwhile, Tehran attacked U.S. Forces in Jordan. The post by President Trump that Kharg Island was Iran's main oil port, "was being blown to smithereens" did not help, though the military had not confirmed this.
It seems that Iran tried to use rockets for laying naval mines in strait. This is a challenge to U.S. Military who claimed last week they had cleared the main passageway for shipping.
The problem is that Iran can do this from any shore and regularly, so it will be difficult for the U.S. Brent crude oil quickly rose 2.4%, pushing the equity markets to a new high of $90 per barrel.
Goldman estimates that total Gulf oil exports are 15-16 million barrels per day, which is 7 to 8 millions below the pre-war level, but 5-6 million above March's trough. The ships are allegedly travelling at night without their transponders, and therefore not being detected by tracking sites.
While President Trump claimed that oil from the recently concluded deal with Venezuela would be used to replenish Strategic Petroleum Reserve. This seems optimistic, given analysts' assumption that it could take years, if not ever, before production can be increased meaningfully.
Most stock markets in Asia are down, and European and U.S. futures are down 0.4% to 0.5 %. Japanese bond yields have followed the sell-off of Treasuries on Friday, as 10-year yields are again at their highest level since 1996.
Markets indicate that there is a 70% probability the Bank of Japan may hike rates when it meets September 18. Treasury Secretary Scott Bessent has offered some not so subtle encouragement.
The?politicians have a very busy month. New Zealand's central banks is likely to raise rates on Wednesday for the second time in a row, while the Bank of Canada will probably remain on hold due to the potential damage that a trade conflict with the U.S. can do to the Canadian economy.
The markets are 'wagering heavily' on a hike by the ECB during its meeting on the 10th of September,?while implying a probability of 58% that the Federal Reserve will act on the 16th.
When G20 finance minsters and central bankers meet on Monday and Tuesday in North Carolina, rates, bonds and inflation will likely be on the'menu. The markets assume that the tone of the meeting will be hawkish, with oil at $90 per barrel and the Gulf conflict not ending in sight.
Market developments on Monday that may have a significant impact
- German CPI and HICP for August
G20 Finance Ministers and Central Bankers Meet
(source: Reuters)