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China builds up a crude-oil war chest amid Middle East tensions, says Russell
China continues to accumulate crude oil stocks, despite the fact that it refines less crude oil than it can produce or import. The world's largest oil importer can now buy less in the coming months, as prices rise due to Middle East tensions. Calculations based on data from the Chinese government show that the surplus crude in China reached 1.4 million barrels a day (bpd), the third consecutive month where it was above the 1,000,000 bpd mark. Since June 13, when Israel launched airstrikes against Iran, Tehran has responded with missiles and drones. Brent futures have risen almost 6% in the last week since the end of June, to around $73.58 per barrel on Tuesday. Refineries in China have reacted to rapid increases in crude oil prices by reducing their imports or using stored oil. Due to the two-month lag between cargoes being arranged and their delivery, any reduction in China's imports is likely to be noticeable only from August. China's ability to reduce imports and lower prices is not dependent on the crude oil price. China does not reveal the volume of crude oil flowing in or out of its strategic and commercial stockspiles. However, an estimate can still be made if you subtract the amount of crude oil that is available through imports and domestic production from the total crude. According to data released by the government on Monday, refiners processed 13.92 millions bpd during May. This is down from 14.12million bpd recorded in April, and 1.8% less than one year ago. In May, crude imports fell to 10.97 million barrels per day (bpd) from 11.69 in April. Domestic production rose slightly to 4.35 in May from 4.31 in April. After subtracting the refinery output of 13.92 millions bpd, the total crude oil available for refiners is 15.32 million barrels per day. This leaves a surplus of about 1.4 million barrels per day. The surplus crude was 990,000 barrels per day (bpd) in the first five of the year. This is up from 880,000 barrels per day for the first four. China's refiners used up their inventories for the first time since 18 months in the first two-month period of 2025. They processed around 30,000 bpd per day more than they could get from crude imports or domestic production. The massive surpluses of March, April and may have reversed this earlier draw. Not all this excess crude has likely been stored, as some is processed in plants that are not included in the official data. Even if you ignore the gaps in official data, there is no doubt that since March China has imported crude oil at a rate far greater than what it requires to meet its own domestic fuel needs. Imports, Prices The strong crude imports that LSEG Oil Research expects to arrive in June of 11,72 million bpd is a good indication of the price-sensitive nature of China's refiners. The increase is due to the decline in crude oil prices since the cargoes for June would have been purchased. Brent futures fell from a six week high of $75.47 per barrel on April 2, to a low of $58.50 per barrel, a four year low on May 5. This prompted Chinese refiners sucking up cargoes. The majority of these shipments are expected to arrive in June and early July, giving the impression that China's demand for crude oil is improving. The weak numbers for refinery processing show that China may be storing crude. Due to the high prices due to Middle East tensions it is likely that refiners would also cut their purchases and seek discounted oil from sanctioned suppliers such as Russia and Iran. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, an author for.
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Oil prices rise as Iran-Israel conflict creates uncertainty
On Tuesday, oil prices rose on fears that the conflict between Israel and Iran could intensify. This would increase the risk of unrest in the Middle East region as well as the disruption of the oil supply. Brent crude futures were up 34 cents or 0.5% to $73.57 per barrel at 0340 GMT. U.S. West Texas Intermediate Crude was up 29 cents or 0.4% at $72.06. Both contracts had risen more than 2% in the previous trading session. The oil prices fell more than 1% on Monday, as media reported that Iran wanted to end hostilities. Concerns have increased after U.S. president Donald Trump, in a post on social media, urged " Everyone can benefit from this Tehran, the capital of Iran, should be evacuated. The fighting in Iran has entered its fifth day, with Iranian media reporting heavy air defence and explosions. Tel Aviv air raid sirens were sounded by Israel in response to Iranian rockets. In an email, Priyanka Sackdeva, Senior Market Analyst at Phillip Nova said that the conflict between Iran & Israel was still fresh. Investors are still holding onto 'war risk'. "Additional volatility and caution before the Fed policy decisions are further ensuring a higher-paced reaction in price for oil," Sachdeva said, referring the U.S. Federal Open Market Committee, which makes interest rate decisions. The meeting begins on Tuesday. The market remains largely focused on the uncertain situation surrounding the Iran-Israel conflict. Iran is the third largest producer of oil among the members of the Organization of Petroleum Exporting Countries. It is feared that the fighting may disrupt Iran's oil supply, which could lead to higher prices. On Monday night, U.S. media reported that Trump proposed renewed talks with Iran over a nuclear agreement. Meanwhile, other reports of a shipping incident in the Gulf of Oman highlighted the risks for companies transporting oil and fuel in the region.
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London metals drop as the dollar strengthens and Middle East tensions increase
The prices of metals fell in London on Tuesday due to a stronger U.S. Dollar and the escalating tensions with Israel and Iran. As of 0246 GMT, the London Metal Exchange reported that three-month copper was down by 0.3%, at $9,677 a metric ton. LME aluminium fell by 0.2%, to $2 508 per ton. Zinc dropped 0.4%, to $2 646, while lead dropped 0.5%, to $1 996.50, and nickel fell 0.4%, to $15 005. Tin fell 0.3% to $32,505. Metals prices fell this morning as a result of the conflict between Israel and Iran, according to a Singapore-based metals dealer. Israel and Iran both attacked each other on Tuesday for the fifth day in a row. U.S. president Donald Trump also urged Iranians, citing their rejection of an agreement to reduce nuclear weapons development, to leave Tehran. U.S. Stock Futures fell and Oil Prices climbed. The dollar index increased by 0.3% against its competitors. The dollar's strength makes commodities priced in greenbacks more expensive for buyers of other currencies. Better-than-expected retail data from China released on Monday offered some relief and raised hopes for a rise in metals demand. As part of an agreement announced by the United States and the United Kingdom on Monday during the G7 Summit, the U.S. will impose a tariff-free quota for steel and aluminum imported from the United Kingdom. The SHFE's most-traded contract for copper gained 0.2%, to 78470 yuan per metric tonne ($10,926.84). SHFE aluminium was unchanged at 20,405 Yuan per ton. Lead was also flat at 16,910 Yuan. Nickel fell by 0.9%, to 118640 Yuan. Zinc gained 0.1%, at 21,820, and tin dropped 0.4%, to 263,400. Click or to see the top news stories on metals, and other topics. ($1 = 7.1814 Chinese Yuan Renminbi). (Reporting and editing by Harikrishnan Nair in Bengaluru and Sherry Jacobi-Phillips.
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ADNOC-Led Consortium Makes $18.7B Bid to Buy Australia’s Santos
Australia's second-largest gas producer Santos said on Monday it intended to support an all-cash $18.7 billion takeover bid from an international consortium led by Abu Dhabi's National Oil Company (ADNOC), which wants to grow a global gas business.Santos shares jumped 11% by the close on Monday, but that was well short of the 28% premium offered against their previous close, which analysts said reflected risks that the deal may not win regulatory approval in Australia.ADNOC's investment arm XRG with Abu Dhabi Development Holding Company (ADQ) and private equity firm Carlyle proposed to offer $5.76 (A$8.89) per Santos share. The stock last traded at A$7.72.Taking into account net debt, the deal gives Santos an enterprise value of A$36.4 billion, which would make it the largest all-cash corporate buyout in Australian history, according to FactSet data."For ADNOC, this is in line with their aggressive growth plans," said Kaushal Ramesh, vice president, gas and LNG research, at Rystad Energy.The takeover bid emerged as oil prices reached multi-week highs as Israel and Iran traded air strikes, sparking concerns oil exports from the Middle East could be widely disrupted.With Santos in its fold, the XRG-led consortium would gain control of two Australian liquefied natural gas operations - Gladstone LNG and Darwin LNG, as well as stakes in PNG LNG and the undeveloped Papua LNG. Santos' interests in Papua New Guinea are considered its most prized assets.The company is also developing an oil project in Alaska, Pikka, due to start producing in mid-2026.XRG said in June it aims to build a gas and LNG business with capacity of between 20 million and 25 million metric tons a year by 2035. Santos last year sold 5.08 million tons of LNG, with more than 60% of that from Papua New Guinea."What ADNOC really wants is the LNG assets, since they are inside the Asia Pacific basin. Since their plan is to expand in LNG, they will want assets close to where the future of demand lies," Rystad's Ramesh said.Australian Treasurer Jim Chalmers, who makes the ultimate decision on major takeovers based on advice from the Foreign Investment Review Board, declined to comment on whether he had any concerns about an ADNOC-led takeover of Santos."It would be a big decision," he said in an interview with Australian Broadcasting Corp TV.Santos said the latest offer came after it had rejected two previous proposals made by the consortium in March at $5.04 and $5.42 per share that were not made public.Its board said if a binding offer is made it "intends to unanimously recommend that Santos shareholders vote in favour of the potential transaction, in the absence of a superior proposal."The XRG consortium said it was negotiating to carry out due diligence with Santos on an exclusive basis before formalising the offer which would need at least 75% support from Santos investors."The proposed transaction is aligned with XRG's strategy and ambition to build a leading integrated global gas and LNG business," it said in a statement.XRG, which was set up in November, last month acquired a stake in an offshore gas block in Turkmenistan. ADNOC has also struck several international deals for assets to sit under XRG, including gas and LNG interests in Mozambique.Regulatory Hurdles Could Be SteepSantos said the deal required approval from Australia's Foreign Investment Review Board (FIRB), Australian Securities and Investments Commission, National Offshore Petroleum Titles Administrator, PNG Securities Commission, PNG Independent Consumer and Competition Commission and Committee on Foreign Investment in the United States (CIFIUS).XRG said it would maintain Santos' headquarters in South Australia, in a move to try and appease some regulators.MST Marquee senior energy analyst Saul Kavonic said FIRB approval "may be a major risk to the deal" as Santos controls significant critical energy infrastructure in Australia.Any spin-off of domestic infrastructure assets to potentially satisfy regulators would be difficult, as the facilities are saddled with decommissioning costs, he said.Santos rejected a $10.8 billion offer from private equity-backed Harbour Energy in 2018 and walked away from talks with its bigger Australian rival Woodside Energy WDS.AX last year to create a possible A$80 billion oil and gas giant, saying it would look for other ways to bolster its value.In February it reported a nearly 16% fall in underlying annual profit in 2024 and cut its dividend by 41%.While Santos has long been a takeover target, Kavonic said a competing bid "is very unlikely as only ADNOC may be willing to pay such a premium to realise their global LNG ambitions."($1 = 1.5425 Australian dollars)(Reuters - Reporting by Scott Murdoch in Sydney and Emily Chow in Singapore, additional Shivangi Lahiri in Bengaluru; Editing by Kim Coghill and Sonali Paul)
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EnBW, DHL Group Ink PPA for He Dreiht Offshore Wind Farm
EnBW Energie Baden-Württemberg (EnBW) and Bonn-based DHL Group have signed a power purchase agreement (PPA) for the electricity that will come from the 960MW He Dreiht offshore wind farm, currently under construction off Germany.The long-term PAA will cover approximately 16% of DHL Group’s current annual electricity needs in Germany, supplying 80 GWh of green electricity per year for the term of 10 years.The agreement between the two companies will take effect in step with the phased commissioning of the wind farm through to spring 2026.“Well thought-out energy management is crucial for us to achieve our goals. The agreement with EnBW for the He Dreiht wind farm is another important step on our path to net-zero emissions in logistics by 2050.“The long-term agreement with our energy partner ensures a credible supply of electricity from renewable sources for our operations and contributes to supporting the energy transition. This is an example of how fostering proactive supplier relationships can contribute to a more sustainable and positive ecosystem,” said Anna Spinelli, Chief Procurement Officer at DHL Group.“We are delighted to support DHL Group on its journey towards zero-emission logistics. This partnership underscores our position as a major provider of sustainable energy across Europe.“PPAs are a targeted and highly flexible instrument for advancing the decarbonization of industrials. They support the companies we partner with in meeting their sustainability goals while underpinning the financing of our projects: a win-win situation for industry and the climate,” added Matthias Obert, Executive Director Trading at EnBW.:He Dreiht is being developed by energy utility EnBW in partnership with the consortium made up of Allianz Capital Partners, AIP and Norges Bank Investment.More than half of the electricity that will be available from He Dreiht is already under contract.
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Petronas estimates that the proposed ENI joint venture will take between one and two years to set up.
Petronas anticipates that it will take between one and two years to establish a joint venture proposal with Italian energy group Eni for some upstream assets located in Indonesia and Malaysia. This was revealed by a senior executive at the state-run company on Tuesday. In February, the companies signed an agreement on a joint venture to combine approximately 3 billion barrels equivalent of oil (boe) with an additional 10 million boe in exploration potential. The idea behind the combination was to create an independent entity that could be self-financed, Mohd. Jukris Abdul wahab, executive vice president of Petronas and chief executive officer of upstream, told the Energy Asia Conference in Malaysia's capital. Eni's Chief Operating Officer, Guido Brusco said: "This is a major game changer in the region." We are combining assets in Malaysia and Indonesia, especially the Kutai Basin." Eni's Kutai Basin investments include the Northern Hub and Gendalo Gandang Hubs, which contain massive gas reserves. Petronas said that it would like to include oil projects in Indonesia’s Kutai Basin as part of the joint venture. It proposed to swap its assets and blocks in Malaysia and Indonesia for Eni’s blocks in Indonesia. Petronas has said that it will exclude Indonesian assets awarded to the company recently, including the Binaiya block and the Serpang block. (Reporting and writing by Florence Tan and Ashley Tang, Emily Chow and Clarence Fernandez; editing by Tom Hogue and Clarence Fernandez).
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Dalian iron ore falls as traders evaluate mixed Chinese macro-data
Iron ore prices fell on Tuesday, as traders assessed mixed macroeconomic reports from China's top consumer. However, resilient steel mill profit lent some support. As of 0255 GMT, the most traded September iron ore contract at China's Dalian Commodity Exchange was trading 0.43% lower. It was priced at 696.5 Yuan ($97.00) per metric ton. The benchmark July Iron Ore price on the Singapore Exchange dropped 1.03%, to $93.1 per ton. The National Bureau of Statistics reported on Monday that China's crude-steel output fell 6.9% in May from a similar period a year ago to 86.55 millions tons. Official data released on Monday showed that new home prices dropped in May, continuing a two-year stagnation. This highlights the challenges facing the housing sector, despite multiple rounds of support policies. Retail sales, which are a measure of consumption, have picked up, providing temporary relief in the midst of a fragile truce between China and the United States. Galaxy Futures, a broker, stated that while blast furnace production is at its peak, profits are high and steel mills do not feel the need to reduce production. According to Mysteel, as of June 12th, 60% of China's blast furnace steel mills reported positive margins. Mysteel data revealed that the volume of iron ore arriving at ports fell by 8.62% on a weekly basis to 23,85 million tonnes as of 13 June. Coking coal and coke both increased by 0.77% and 0.74 %, respectively. The benchmarks for steel on the Shanghai Futures Exchange have lost ground. The price of rebar fell by 0.03%. Hot-rolled coils dropped 0.13%. Wire rods lost 0.67%. Stainless steel was down 0.6%. $1 = 7.1805 Chinese Yuan (Reporting and editing by RashmiAich; Michele Pek)
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GRAINS - Chicago soybeans fall on favorable weather and weaker soyoil
Chicago soybean futures declined on Tuesday after a two-day rally, due to favorable weather conditions for U.S. crops and lower soyoil price. As of 0222 GMT the most active soybean contract fell 0.23%, to $10.67 a bushel. This halted gains fueled by surging crude prices and stricter U.S. biofuel blend mandates. On Monday, soybeans reached a new high of one month and soyoil an all-time high of 20 months. Analysts say that tensions between Iran and Israel could cause energy prices to rise, causing a spike in grain prices. Andrew Whitelaw is an agricultural consultant with Episode 3. The region has a major impact on the grain markets. The Soyoil Contract dropped by 0.85% to 54.64 cents a pound as traders made profits and removed some support for soybeans. Oilseeds continue to be affected by a weakening demand, uncertainty over tariffs and global competition. The price of corn fell 0.06%, to $4.35 per bushel. This was due to the weekend rains that were beneficial for key growing areas, such as the Plains, the Northwest and Southeast Midwest, and parts of the Plains. However, strong export data helped curb losses. The latest U.S. corn harvest inspections reached 1.67 million tons, which is higher than expected. According to U.S. Government data, the weekly condition ratings of the corn crop in the United States also improved. They were the highest they had been for several years at this time. Soybean ratings declined. The price of a bushel rose by 0.84%, to $5.41. However, harvest pressures limited gains. After a slow start, the U.S. harvest of winter wheat is now expanding. The USDA reported that the winter wheat harvest was 10%, up from just 4% one week earlier but still behind the average for the past five years of 16%. Analysts had on average estimated harvest progress as 11%. Traders said that commodity funds bought soyoil contracts at the Chicago Board of Trade on Monday, but sold corn, soybeans, soymeal and wheat futures.
Oil prices fall on weak China demand and geopolitical uncertainties
The oil prices dropped on Tuesday as a result of uncertainty surrounding the U.S.-Iran nuclear negotiations and Russia-Ukraine talks. Meanwhile, new government data revealed a cautious outlook for China's economy, which is the world's largest crude importer. Brent futures fell 42 cents or 0.6% to $65.12 per barrel at 11:02 am EDT (1502 GMT), whereas U.S. West Texas Intermediate crude (WTI) dropped 26 cents or 0.4% to $62.43.
Iran's
Ayatollah Khamenei, the Supreme Leader of Iran, said that U.S. demands for Tehran to stop enriching its uranium were "excessive" and "outrageous," and expressed doubts about whether negotiations on a new deal in nuclear energy will be successful.
According to U.S. Federal Energy data, Iran will be the third largest crude oil producer in the Organization of the Petroleum Exporting Countries group (OPEC) in 2024 after Saudi Arabia and Iraq.
Alex Hodes, StoneX analyst, said that a deal between Iran, the U.S., and other countries would allow Iran's oil exports to increase by 300,000-400,000 barrels a day if sanctions are eased. StoneX analyst Alex Hodes said that the European Union and Britain did not wait for the U.S. before announcing new sanctions against Russia. This was a day after U.S. president Donald Trump met with Russian President Vladimir Putin, but without a ceasefire promise in Ukraine.
Ukraine wants to know more
Group of Seven
The (G7) advanced economies will reduce their price caps on Russian oil shipped by sea to $30 per barrel. The current G7 price cap is imposed over
Russia's war on Ukraine
The price of a? is $60.
It does not appear likely that the Russia/Ukraine conflict will be resolved immediately. While it may lead to more Russian oil on the market in the future, this is uncertain and out of time as Russia still has its obligations to OPEC+, said Bjarne Shieldrop.
A peace agreement between the two countries to end their war
Russia
The Ukraine and Russia could enable Moscow to export even more oil. Russia is a part of the OPEC+ countries.
Other producers.
The second largest crude oil producer in the world was Russia.
According to U.S. Federal Energy Data, in 2024.
CHINESE DATA On Tuesday, at least seven Federal Reserve officials will speak.
Traders expect that the U.S. Central Bank will deliver at least two 25 basis-point rate cuts in 2025. The first is expected to be in September.
Interest rates are used by central banks such as the Fed to control price inflation. By lowering consumer borrowing costs, lower interest rates can boost economic growth and oil demand.
Analysts expect a decline in fuel demand in the world's largest oil importer. Data showing a deceleration in industrial output and retail sales has put more pressure on oil. Goldman Sachs, however, pointed to an increase in China trade late Monday. The analysis did not take into account a 90 day pause between the U.S. In Germany, Europe's largest economy, Finance Minister Lars Klingbeil has promised to take swift measures in order to boost investment in the face of global trade uncertainty.
OIL INVENTORIES On Tuesday and Wednesday respectively, the American Petroleum Institute (API), a trade group, and the U.S. Energy Information Administration will release data about U.S. crude oil inventories.
Analysts predict that energy companies will have removed about 1.4 millions barrels of crude oil from U.S. stocks during the week ending May 16.
This would be the third decrease in four weeks. The same week last season, there was an increase in barrels of 1.8 millions barrels. Over the past five-year period (2020-2024), the average decline has been 3.5 million barrels. (Reporting and editing by Scott DiSavino and Trixie Yap; Louise Heavens, Clarence Fernandez and Paul Simao).
(source: Reuters)