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Fed's Waller says current oil prices shock will not have a persistent impact on inflation. BBG TV
The U.S. Federal Reserve's Christopher Waller stated on Friday that while the price of gas may have risen after the U.S. launched airstrikes in Iran, the increase in global oil prices is unlikely to cause a 'persistent rise in inflation, or to warrant a monetary policy change. You'll see an increase in gas prices. "Americans will be shocked when they see the price of gasoline at the pump," Waller said on Bloomberg Television. "If the coil is unwound within a few weeks, or even two months then it won't be a major factor in the future." Oil prices have risen to almost $90 per barrel, compared to $72 just before President Donald Trump launched an air attack on Iran in order to replace its hardline islamist government. Gas prices in the United States have increased by around 10%, from under $3 per gallon to $3.32. Gas prices are expected to be short-lived. This is in contrast to the successive oil disruptions that occurred during the 1970s, which never allowed for prices recover. "This is...more of a one-off,"?Waller stated about the current rise in crude oil prices. Oil prices and other commodities - like food - fluctuate, which is why the Fed looks at "core" inflation, which excludes these volatile items, to try to reach the 2% target. Trump has not given a timeline for the conflict. Shipping through the Strait of Hormuz, which is critical to the flow of oil and gas across the world's oceans, has almost stopped. Some regional officials warn of future price increases depending on how long the conflict continues or the success of Iranian counterattacks. The markets have become more sceptical about further Fed rate cuts. Waller said that the Fed's outlook would be at risk if the oil price shock "became more permanent...then it will start leaking through to other areas of the economy."
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Asia refineries and petchem firms reduce runs as Mideast conflict disrupts feedstock supply
The U.S./Israel war on Iran caused a disruption in crude and feedstock imports from the Middle East, forcing several Asian refineries and companies to declare force majeure and cut back production. Asian steam crackers have declared force majeure on petrochemical deliveries to customers, despite sourcing more than 60% of their feedstock for naphtha from the Middle East. Three operators said they were reducing run rates in order to carry over some of the feedstock they have into next month. This will allow them to keep their plants operating and avoid shutting down even if they don't get enough imports. Two operators reported that it can take up to two weeks for a steam cracker to be restarted. Plants typically keep no more than a month's worth of feedstock in stock. Here are the latest developments in technology: Shell's joint venture in south China with China's CNOOC is planning to close a steam-cracker and inform domestic customers that it will not be able to supply certain products. CNOOC, Shell Petrochemicals Co Ltd (CSPC), plans to close a 1.2-million-metric-ton-per-year-capacity (tpy),?cracker, in Huizhou. This is one of two crackers that have 2.2-million-tpy total capacity, according to the sources. The disruptions in feedstock supply are to blame, they said. Zhejiang Petrochemical Corp, a major Chinese refiner backed by ?Saudi Aramco, shut a 200,000-barrel-per-day unit, bringing forward maintenance in response to the Middle East conflict's impact on crude supply. Two industry sources said that another Chinese?refiner backed Aramco, Fujian Refining &?Petrochemical Co., or FREP shut down its 80,000 bpd unit - the smallest of its kind - for a period not specified. People familiar with the situation said that China also asked refiners not to sign new contracts for fuel exports and to cancel any shipments already made. India's Mangalore Refinery and Petrochemicals has shut a crude unit and some secondary units at its 300,000-barrel-per-day refinery due to oil shortage, sources said. SOUTH KOREAN According to a source familiar with the situation and an internal letter of the company, the South Korean petrochemical firm Yeochun NCC has cut its production and declared force majeure over its supply because it cannot receive naphtha due to the Strait of Hormuz Blockade. SINGAPORE According to three people familiar with the situation, Singapore's petrochemical company PCS declared force majore on its shipments due to the Middle East conflict disrupting maritime transportation and supply chains. Aster Chemicals and Energy, a major Singaporean refiner and petrochemical company, declared force majeure on Friday regarding the?supplies', according to a spokesperson for the company. The force majeure covers ethylene and propylene. Sources said that Aster's steam?cracker, which was restarted in February, ran at 50% capacity on Friday. INDONESIA In a press release reviewed by the, Indonesian petrochemical manufacturer Chandra Asri declared force majeure for all contracts because 'the Middle East conflict disrupted their raw material supply. VIETNAM In a recent statement, Binh Son Refining & Petrochemical Company in Vietnam asked the government to limit crude oil exports to the Dung Quat Refinery until the end of this year's third quarter to ensure national safety. (Reporting and editing by Ruth Chai, Tony Munroe, Diti Pujara).
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Stocks fall as Gulf oil supply concerns rattle markets
European stocks and U.S. Futures fell on Friday, as renewed concerns over oil supplies arose from the U.S.Iran War. This led traders to re-evaluate their interest rate bets and rethink the global impact. Benchmark global and U.S. Oil prices reached their highest level in nearly two years, as U.S. Treasuries dropped for the fifth consecutive day. Global stock markets are heading for their largest weekly decline in a year. Futures on the U.S. S&P500 fell by 0.62%, while Nasdaq's futures declined by 0.75%. The STOXX 600 Index in Europe fell 1.04% during choppy trading. This reversed a rise of nearly 0.5% that had occurred earlier as oil prices seemed to have stabilized. QATAR WARNS ABOUT DRAMATIC IMPACT OF ENERGY MARKETS Qatar's Energy Minister told Financial Times that all Gulf producers will halt exports in a few weeks, pushing oil prices up to $150 per barrel and causing extensive economic damage. The warning by Qatar's Energy Minister that a prolonged war could bring economies down around the globe has once again rattled financial market, said Susannah Streeter. Chief investment strategist at Wealth Club. The U.S. crude prices rose more than 5%, to $86.22 per barrel. This is the highest price since April 2024. Brent crude rose to $89.48 per barrel, its highest level in almost two years. It was on course for a 23% increase in a week, the biggest since the COVID-19 Crisis rocked global economies in 2020. TRADERS?SLASH RATE CUTS BETS Money market traders that?bet interest rates now predict around 30 to 35 basis point (bps) reductions by the U.S. Federal Reserve in this year. This is down from approximately 55 bps one week ago. The 10-year Treasury yields in the United States rose by 3 basis points on Friday, to 4.173%. They are on course for a 21-basis point weekly rise. This is the biggest move since April 2025. However, the biggest impact was felt by Europe which relies more on imports of oil and gas. After erasing previous bets that the European Central Bank would cut interest rates, traders now believe the bank will increase rates by the end of this year. After betting on two rate cuts in February, they now expect one this year. This has caused the British bond markets to crash on Friday. Matt Britzman is senior equity analyst at Hargreaves Lansdown. He said that oil was in a dominant position, and its movements directly affected inflation expectations and?rate forecasts. We'd expect volatility levels to remain high as long as this uncertainty persists. STOCKS Slack as Dollar Gains Investors woke up this week to the possibility that the Middle East conflict could last longer than originally anticipated. They sought the "safety" of cash. The dollar index (which tracks the currency against 6 peers) rose 0.33% Friday, and was on course for a weekly gain of 1.8%, the largest since September 2024. The MSCI world stock index was expected to fall 2.9%, the largest weekly drop since March 2025. MSCI's broadest Asia-Pacific share index outside Japan dropped 0.3%, and was on track to drop 6.6% in the coming week. This is its steepest weekly decline since March 2020. At 8:30 am ET, 1330 GMT, the U.S. government will release potentially market-moving data. This includes non-farm payrolls. ET). Gold spot was unchanged at $5,086 per ounce. However, it was heading for a weekly decline of 3%. Harry Robertson, Jamie Freed and Kate Mayberry edited the story.
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Kyodo reports that Japan could use a portion of its national oil reserves amid the Iran war supply crisis.
Kyodo News Agency reported on Friday that the Japanese government may use a part of its oil reserves to help with the current Iran crisis, which has disrupted global energy supplies. This could be done in conjunction with other countries, or on its own. Around 95% of Japan's oil comes from the Middle East, with 70% of that coming through the Strait of Hormuz. This is now effectively closed because of the Iran war. Tokyo has emergency reserves that are equivalent to 146 days' worth of consumption. It also maintains private stockpiles, and it shares joint stockpiles in oil-producing nations. Japan has some of the world's largest oil reserves, which are equivalent to 254 days worth of imports. Officials in Japan earlier this week stated that they have no plans to release their stockpiles. The Japanese industry ministry did not respond to a request for comment immediately on Friday. Kyodo stated that the government will monitor the situation, and decide whether to release a part of its national reserves located throughout the country to local companies in order to ensure stable supplies. Kyodo's report said that the government would study whether it should do this in coordination with other nations or "on its own" and how much of the existing stockpile to offer to offset any shortages due to the?Strait of Hormuz Blockage. Japan, in coordination with other countries and the International Energy Agency, released some of its oil reserves after Russia invaded Ukraine in 2022.
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As the Middle East war intensifies, aluminium resumes its ascent and is expected to have its best week in over 18 months.
Aluminum prices rose 'again' on Friday, after breaking a three-day winning streak in the previous session. They were on their way to their biggest weekly increase in more than 18-months as a result of?supply -concerns resulting from the U.S.-Israeli war against Iran. As of 1050 GMT, the benchmark three-month aluminum on the London Metal Exchange had increased by 1.5% to $3,346.50 a metric tonne. Aluminium, a metal used for packaging and transportation, reached a four-year high of $3.418 per metric ton on Wednesday. The Mideast crisis was threatening to stop shipments. LME aluminum was expected to rise 6.6% in the coming week. This would be its biggest weekly gain since August 2024. The Qatari smelter Qatalum & Aluminium Bahrain has already declared force majeure for shipments. Bank of America stated in a report that "given the Middle East represents around 9% of global production and is under threat, we have increased our shortfall prediction to 1.5 million from 1 million" for 2026. Israel has retaliated against Iran by pounding the Lebanese city of Beirut in an expansion of its war. LME aluminium inventories The Shanghai Futures Exchange aluminium stock fell by 2,250 tons to 456,875 tonnes, the lowest level since July 2025. The highest level since April 2020, 394 498 tons rose 10.8% in a week. LME copper, meanwhile,?fell 0.3%, to $12,858 per ton. This was due to high inventories. Copper stock in LME warehouses The total?total?of 284,325 metric tons has risen by 2,450 tons. This is the highest since October 2024. Copper used in construction, manufacturing, and power was heading for a weekly drop of 3.6%. Zinc rose?1.3%, lead 0.2%, nickel 0.5%, and tin 0.2%. (Reporting and editing by Rashmi, Harikrishnan Nair, and Jan Harvey; Additional reporting in London by Tom Daly)
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Stocks drop as Gulf oil supply concerns rattle markets
European stocks fell along with U.S. Futures?on friday as the U.S. -Iran War prompted fresh concerns about oil supply, prompting traders rethinking their expectations 'for central bank rate reductions. Benchmark global and U.S. Oil prices have reached their highest level since mid-2024. ?U.S. The dollar has risen, but Treasuries have fallen for a fifth consecutive day. Futures for U.S. S&P 500 index and Nasdaq fell by 0.29% a 0.38%, respectively. The STOXX 600 index in Europe fell 0.15% during choppy trading. This reversed a rise of nearly 0.5% that had occurred earlier as oil prices seemed to stabilize. QATAR WARNS ABOUT DRAMATIC IMPACT OF ENERGY MARKETS Qatar's Energy Minister told Financial Times that all Gulf producers will shut down their exports in a few weeks, driving oil prices up to $150 per barrel and causing extensive economic damage. The warning by Qatar's energy ministry that a prolonged war could bring the economies of other countries to a halt has once again shaken financial markets, said Susannah Streeter. Chief investment strategist at Wealth Club. U.S. crude prices have risen to $84.90 - the highest level since April 2024. Brent crude futures reached their highest level since July 2024, at $87.66 per barrel. The price of Brent crude futures rose to its highest level since July 2024 at $87.66 a barrel. TRADERS Slash RATE Cut Bets Money market traders who bet on interest rate reductions predict a drop of 35 basis points from the U.S. Federal Reserve in this year. This is down from 55 basis points about a week earlier. The 10-year Treasury yields in the United States rose by 2 basis points on Friday, to 4.17%. They are on track for a 20-bps weekly rise. This is the biggest move since April 2025. However, the biggest impact was felt by Europe which relies more on imports of oil and gas. After dumping previous bets that the European Central Bank would cut interest rates, traders now believe the bank will increase rates by the end of the year. After betting on two rate cuts in February, they now only see a 60% probability of a Bank of England cut this year. Matt Britzman is senior equity analyst at Hargreaves Lansdown. We'd expect volatility to remain high as long as uncertainty persists. STOCKS Slack as Dollar Gains Investors sought safety in cash this week as the conflict in the Middle East wracked the global markets. They realised that the war might last longer than originally anticipated. The dollar index (which tracks the currency's performance against six other currencies) rose by 0.18% Friday, and is on course for a weekly gain of 1.6%, which would be the largest in more than a year. The MSCI world stock index is on track to drop 2.7%, the largest weekly fall since March 2025. MSCI's broadest Asia-Pacific share index outside Japan dropped?0.2%, and was on track to drop 6% in a week. This would be its biggest weekly decline since March 2020. At 8:30 am ET, 1330 GMT, the U.S. government will release potentially market-moving data. This includes non-farm payrolls. ET). Gold spot was unchanged at $5,086 per ounce but was heading for a weekly decline of 3%. Harry Robertson, Jamie Freed and Kate Mayberry edited the story.
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Andy Home: The fragility of the Western aluminum market is exposed by the war between Iran and ROI
The Iran War has exposed a growing vulnerability of the West in its supply of aluminum, a metal that is classified by the United States as a crucial manufacturing input. The London Metal Exchange's (LME) aluminum price reached a four-year peak of $3,418 a metric ton Wednesday, after a Gulf producer, Qatalum, a joint venture between Norsk Hydro, Qatar Aluminum Manufacturing and Qatar Aluminum Manufacturing started powering down its smelter, and another, Aluminum Bahrain, declared force majeure. The Strait of Hormuz is still closed, and this could cause further disruptions to the'regional production hub' that provides 23% of non Chinese supply. High inventories and excess capacity in China have historically protected the aluminium market from such unanticipated supply shocks. Producers would increase run-rates when they saw prices rising. China has no spare capacity and the inventory cover is much lower. This makes the market more vulnerable to disruptions like those currently occurring in the Middle East. DWINDLING STOCKS Daily stock reports from the LME show that aluminium is leaving LME warehouses at Port Klang in Malaysia, at a rate of 2,000 tonnes per day since January. No one has really paid attention. LME Aluminium stocks have lost much of their power as a signal over the last 10 years, as traders and bankers fought for metal in order to lock up lucrative warehouse deals. The resultant churn of metal moving in and out the LME warrant system obscured any reading-through to what happened in?the actual supply chain. The daily stock noise is masked by a gradual depletion of a mountain of aluminium that was 3 million tons at the beginning of the decade. The combined registered and off warrant stocks at the end of February totaled 583,000 tonnes, the lowest since the?LME began publishing off-warrant inventories figures in 2020. A significant portion of the remaining stocks is Russian aluminum, which made up 58% of the warranted stock at the end January. This is not very useful to most Western buyers. The U.S., Britain and EU banned the importation of Russian metal in 2024 in order to stop Moscow funding its war against Ukraine. The amount of metal that can be used in the LME is much smaller than what the headline figures suggest. CHINA HITS BRAKES The change in stock dynamics reflects the profound structural changes that have occurred within aluminium's industry. The Chinese government has mandated a maximum annual production capacity of 45 million tonnes. According to the International Aluminium Institute, Chinese production growth has slowed down from 4% to 2% in 2018. Smelters produced 44,5 million tons of aluminium annually in December. China's trade relationship with the rest is changing due to the production slowdown. Chinese manufacturers are importing more metals, especially from Russia. According to World Bureau of Metal Statistics which uses official customs data, the world's biggest producer imported a total of 2.5 million tons of primary metal last year, including just over one million tons of unwrought aluminum. China is exporting fewer semi-manufactured goods, such as tube, sheet or foil. In 2025, outbound shipments dropped by almost 10% on an annual basis, which is equivalent to a loss of nearly 600,000 tonnes in the Western market. Other words, China imports more aluminum metal and exports fewer finished goods, tightening Western supplies at both ends. FLAT-LINING Western smelters are even less flexible than their Chinese counterparts. According to IAI, production outside of China was flat last year. The price of energy is the main problem, as it is a key cost component for the electrolytic smelting process. The U.S., Europe, and Asia have a large amount of idle smelter capacities, but they must compete for limited long-term energy supplies with other sectors. High power prices are continuing to put a strain on existing plants. South32 has placed its Mozambique Smelter under care and maintenance after failing to secure an economically viable electricity contract. The West's ability? to build long-term supply resilience is further undermined by the energy shock that the Iran war has brought. NEW VOLATILITY Aluminium is an essential part of our modern lives. It's used everywhere from cars to homes and food packaging. The energy transition is also a key issue. In 2020, the World Bank declared aluminium a metal with "high impact" and "cross cutting" in all green energy technologies. It is a metal that faces ever greater price volatility, as the global markets emerge from a period of "surplus" to one in which supply appears more problematic and stock levels are lower. The war in Iran is a warning for an important metal. Andy Home is a journalist. This column is a favorite of yours? Open Interest (ROI), a data-driven, thought-provoking commentary on the markets and finance is available at Open Interest. Follow ROI on LinkedIn, X 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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Asia refineries reduce oil spills in the Middle East
The U.S. and Israel war against?Iran disrupted oil imports from the Middle East into?Asia. Some Asian refineries had to reduce their runs, while petrochemical firms declared force majeure. The newest developments are listed below: Zhejiang Petrochemical Corp, a major ?Chinese ?refiner backed by Saudi Aramco, has shut a 200,000-barrel-per-day unit, bringing forward maintenance in response to the Middle East conflict's impact on crude supply. Two industry sources said that FREP (Fujian Refining and Petrochemical Co.), a Chinese refiner backed up by Aramco and operating its 80,000 bpd unit – its smallest – had shut down its 80,000 bpd unit for an unknown period of time. The independent Chinese refiners have sufficient supply to weather any disruptions caused by the conflict in Iran. This is boosted by recent record purchases from Iran and Russia crude oil and robust government stocks, according to traders. People familiar with the situation?said that China also urged companies to stop signing new contracts for exporting refined fuel and to try to cancel any shipments already committed. India's Mangalore Refinery and Petrochemicals has shut a crude unit and some secondary units at ?its 300,000-barrel-per-day refinery due to oil ?shortage, sources said. SOUTH KOREAN According to a source familiar with the situation and a letter from the company, the South Korean petrochemical firm Yeochun NCC cut its production and declared force majeure over its supply because it was unable to get naphtha due to the Strait of Hormuz Blockade. SINGAPORE The Singapore petrochemical company PCS declared force majeure for shipments because the Middle East war had disrupted maritime transport and supply chains. This was according to three people who have knowledge of this matter. Aster Chemicals and Energy, a major Singaporean petrochemical and refiner, has declared force majeure in regards to supplies, according to a spokesperson for the company. Products that are covered by force majeure include propylene and ethylene. Sources said that Aster's Steam Cracker, which restarted in February, was operating at 50% capacity on Friday. INDONESIA In a press release reviewed by?, Chandra Asri, an Indonesian petrochemical manufacturer declared "force majeure" on all its contracts due to the Middle East conflict disrupting its raw materials supply. VIETNAM In a recent statement, Binh Son Refining & Petrochemicals?asked the government to limit crude exports to the end of this year's third quarter to ensure national safety. (Reporting and editing by Nivedita Battacharjee; Ruth Chai)
Libya's oil production plunges 63% due to oilfield closures, NOC says
Libya's National Oil Corporation stated on Friday that recent oilfield closures have caused the loss of approximately 63% of the nation's total oil production, as a conflict in between rival eastern and western factions continues.
The North African nation's oil blockade has widened, with eastern leaders demanding western authorities pull back over the replacement of the central bank governor, a key position in a. state where control over oil income is the biggest reward for. all factions.
The crisis over control of the Central Bank of Libya. threatens a brand-new bout of instability in a major oil manufacturer. split between eastern and western factions that have actually drawn. backing from Turkey and Russia.
Highlighting that the oil sector represents the foundation of. the Libyan economy, NOC stated rebooting the halted oilfields. will need substantial expenses and double technical efforts.
It stated the factors for the oil closure have absolutely nothing to do. with the business, adding that its teams are examining losses. resulting from the closures.
The duplicated shutdowns have resulted in the loss of a big. part of the nation's oil production, caused a degeneration. of the sector's infrastructure, and dissipated efforts to. increase production, the NOC added in its declaration.
Eastern factions have promised to keep Libya's oil output. shuttered up until the globally identified Presidency. Council and Federal Government of National Unity in Tripoli in the west. return veteran reserve bank governor Sadiq al-Kabir to his post.
Presidency Council chief Mohammed al-Menfi stated he was. dismissing Kabir earlier this month, a relocation declined by the. eastern-based House of Representatives parliament and eastern. commander Khalifa Haftar's Libyan National Army.
(source: Reuters)