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Citi warns that oil could reach $150/bbl if the risks of Hormuz are not mitigated.
Citi said on Tuesday that it expects Brent crude prices to rise to $120 per barrel in the short-term. It stated that oil markets undervalue the risks of a "prolonged supply disruption" and other "tail risks". The bank stated that its 'bull-case scenario' is that Brent prices will reach $150/bbl if the Strait of Hormuz gradually reopens during the third quarter. The oil prices fell on Tuesday, after Vice President JDVance stated that the U.S. had made progress with Iran in their talks. Neither side wanted to see military action resumed. Brent futures for the month of July?settled at $111.28 per barrel on Tuesday. The report said that its outlook for 2027 oil prices was 'extremely hard to predict. But its central case assumes Iran will maintain a 'control of the Strait of Hormuz flow and balance oil exports against demand growth expectations. Citi predicts that oil demand will contract by 0.6m barrels a day in 2026. The apparent weakness in demand is likely to overstate real consumption declines, as refinery reductions and inventory drawdowns mask relatively small end-use demand destruction. According to the bank, global oil inventories are expected to drop by approximately 1 billion barrels in 2018. Citi stated that "we?estimate" that the majority of these draws would occur outside China and that ex China inventories were on track to fall to 2011-2014 levels. Citi was optimistic about the short-term but said that the current market conditions must continue for six to nine more months before the inventory levels outside of China will drop to the levels seen in the second oil crisis. It maintained U.S. Henry hub?prices due to strong production, but also cited downside risks in Europe and Asia. TTF prices are expected to average around $17.8 for every million British thermal units, if disruptions continue. Anmol Choubey, Pooja Menon and Anushree mukherjee in Bengaluru contributed to the report; David Gregorio edited it.
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Bessent will examine US sanctions list and urge more disruption of Iran's financial system
Treasury Secretary Scott Bessent called on allies on Tuesday to disrupt Iran's.financing network and said that the Treasury would clear its outdated sanctions list to.make it easier for the financial institutions to.root out the most sophisticated terrorist funding schemes. Bessent said that after the G7 finance leaders met at Paris, participants in an anti-terrorism funding conference should "stand in full measure with us" against Iran. Bessent stated that "this will require our European partners, for example to join the United States by taking action against Iran, including by designating its financiers and unmasking their shell and front company, closing its bank branches and dismantling its proxy companies." It will be up to those in the Middle East, Asia and Africa to bring down Iran's shadow banks. Bessent said in an interview that Iranian banks branches in Europe did not accept deposits, but "that branch manager was doing something." "Just close it." The Treasury announced new sanctions against Iran's shadow fleet of tankers, an Iranian exchange house for foreign currencies and other front companies. Iran announced its latest peace proposal after the U.S. and Israel led war began on February 28, which included ending hostilities "on all fronts, including Lebanon" as well as the withdrawal of U.S. forces from areas near Iran. The move came after Iran said?its latest peace proposal to the United States over the U.S.-Israeli led war that started February 28 involves ending hostilities?on all fronts including Lebanon, and the exit of?U.S. The U.S. Treasury, as the Trump administration attempts to press Tehran to reopen Strait of Hormuz in order to restore vital oil flow disrupted by U.S. and Israeli attacks against Iran, has increased its sanctions through a "Economic Fury" program. The program aims to disrupt Iran’s shadow banking network and has frozen almost half a billion dollar worth of cryptocurrency tied to Iran’s regime. Treasury will update its sanctions system to make it more effective because "our enemies adapt and innovate by creating new shell corporations." The majority of U.S. Treasury sanction are placed on individuals, businesses, and other entities who are added to the Specially Designated Nationals List. This list contains tens and thousands of designated nationals that have their assets frozen and are cut off from the dollar-based financial systems. Transacting with designated entities can lead to sanctions for the person or company involved. Treasury has adapted its sanctions program to the 21st Century in order to achieve better national security results. Bessent stated that we are reviewing "outdated and outdated designations" to help financial institutions concentrate on the most sophisticated terrorist funding and sanctions evasion schemes. He said that the most effective sanctions were aggressive and targeted and that those left in place for too long could have unintended effects. Bessent stated that sanctions are not meant to punish people, but to change their behavior. Bessent said that sanctions left in place for many years without any visible or tangible changes to behavior could have generational effects that were nearly impossible predict. He stated that Treasury would maintain "agility to maximize effectiveness", and gave examples such as easing sanctions against Venezuela and Syria after regime changes. (Reporting and editing by Chizu Nomiyama, Nick Zieminski, and David Lawder)
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Gold drops more than 1% amid inflation fears as Treasury yields and the dollar weigh.
On Tuesday, gold prices fell by over 1% on the back of a stronger U.S. dollar and persistent inflation fears. By 1:45 pm, spot gold had fallen 1.4% to $4,503.98 an ounce. ET (1745 GMT). Earlier in the session, prices fell to their lowest levels since March 30. U.S. Gold Futures for June Delivery settled 1% lower, at $4,511.20. "We're?seeing an increase in real rates across the globe, and this is really weighing on gold." Edward Meir is an analyst with Marex. Benchmark 10-year ?U.S. Treasury yields reached a new high of more than a year, and the U.S. Dollar strengthened. Both rose amid speculation that the Federal Reserve might take a more hawkish stance to combat energy-driven inflation. A stronger dollar increases the cost of commodities priced in greenbacks. Brent crude oil prices are rising due to supply concerns. This is causing concern about global inflation. Inflation is on the rise, forcing central banks to maintain high rates to reduce price pressures. Gold is a good inflation hedge but it can be a problem in high interest rate environments. The markets now expect no rate changes or tightening in late 2018 and into 2026. Ole Hansen is the head of commodity strategy for Saxo Bank. He wrote: "While gold's structural investment case remains largely intact, short-term macro developments have created an increasingly challenging backdrop for its prices." As the immediate energy-related pressures start to ease, it is possible that central bank demand will reappear as a?more dominant driver." The market is awaiting the minutes of Wednesday's Fed policy meeting. Silver spot fell 4.1%, to $74.53 per ounce. This is after it touched a two-week low earlier in the session. Platinum fell?2.2% at $1,936.10, while palladium fell 4.2% at $1,359.26. J.P. Morgan forecasted $2,400/oz for platinum in the fourth quarter 2026, while palladium is expected to be $1,600/oz during the same time period. (Reporting and editing by Alexander Smith in Bengaluru, Anjana Anil from Bengaluru)
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Nigerian officials claim that joint US strikes have killed 175 Islamic State militants and senior leaders
Defence Headquarters announced on Tuesday that Nigerian forces working with the United States have killed 175 militants of the Islamic State in a recent series of air and ground strikes. The military stated that operations conducted in conjunction with U.S. Africa Command have destroyed checkpoints and weapons caches as well as logistics hubs and financing networks of the?Islamic State West Africa Province?, which has been leading a long-running insurgency?in this region. According to the crisis monitoring group Armed Conflict Location & Event Data, Islamic State, after suffering major setbacks throughout the Middle East, has shifted its focus towards Africa. This continent accounted for 86% the group's global activity? in the first quarter of 2026. In a press release, Nigerian Defence spokesperson Major General Samaila Uba stated that as of 19 May assessments indicated that 175 ISIS terrorists had been eliminated from battlefield. The strike that killed Abu-Bilal al-Minuki, described by both governments to be Islamic State's "global number one" on May 16 was followed up with more raids last weekend. The statement stated that the raids on May 2 killed Abd al-Wahhab an ISWAP leader who oversees attacks and propaganda. Abu Musa?al-Mangawi and Abu al-Muthanna al-Muhajir was also killed. The Defence Headquarters said that the operations were part of a broader campaign to "hunt down" and "destroy" militants who pose a threat to Nigeria and the region.
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Chairman of India's BPCL says that the company reviews its oil imports every day and buys more on the spot amid Iran War.
Bharat Petroleum Corporation, India's state refiner. Sanjay Khanna, the chairman of Bharat Petroleum?Corp. said on Tuesday that it is recalibrating their crude import strategy nearly daily and ramping up its spot purchases following the U.S./Israeli conflict against Iran which disrupted Middle East supplies. India, which is the third-largest oil importer and consumer in the world, has been affected by the rising prices of crude and the disruption of supply following the closing of the Strait of Hormuz. South Asian nation raised retail petrol and diesel prices twice in one week. BPCL planned to procure about 55% its crude requirements?for 2026/27 via annual contracts mainly from Middle Eastern suppliers, and the remainder through spot markets. Khanna stated that BPCL has been forced to increase its spot purchases by Gulf suppliers to maintain refineries at a?115% level of capacity. Our spot volume has increased significantly in recent years because of the uncertainty. BPCL has three?refineries that can process up to 706,000 barrels of oil per day. Khanna stated that the'state-run refiner' meets 40-45 percent of its crude oil needs by buying Russian oil primarily on the spot market, after Washington lifted sanctions. Discounts have also narrowed dramatically. Finance director Vetsa RAMAKRISHNA GUPTA said that discounts on Russian crude are now $5 to $6 per barrelle compared to Brent dated on a delivery basis, down from $10 to 12 earlier. Gupta stated that despite recent fuel price increases, BPCL still suffers a loss in revenue of between 25 and 30 rupees (26-31 U.S. Cents) per litre for diesel, and between 10 to 14 rupees a litre for petrol. BPCL anticipates that spot purchases will ease if Saudi Arabian contracted'supplies' improve following the restoration of the Kingdom’s east-west pipe capacity. Gupta stated that Saudi Arabia currently gives only "a small amount of commitment" to supply through the pipeline. BPCL is also evaluating new annual supply agreements with producers for the next?year if these offer flexible delivery terms, competitive pricing and the company prefers to source from local regions rather than distant suppliers - such as Venezuela and Canada. The refiner has an annual option crude purchase agreement with Brazil. BPCL announced earlier on Tuesday that its fourth-quarter profit, before special items and taxes, rose 42.6% to 86.07 trillion rupees ($892 millions), thanks to steady fuel demand.
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Barrick increases Ebola screening after Congo outbreak kills at least 131
A spokesperson said that Barrick Mining has increased Ebola preventions at its gold mine in the eastern Democratic Republic of Congo. This includes worker screenings and tracking after an outbreak occurred in a neighboring province. Ebola is a deadly virus that spreads through bodily fluids. It was first detected in Congo's Ituri Province in early May, but the outbreak can be traced back to late April. Officials confirm that 131 people have died, but say the death toll could be much higher. A Barrick spokesperson confirmed that preventive measures are being taken at the Kibali mine in Haut-Uele, a neighbouring province. Experts say that the mobility of eastern?Congo mining and trading hubs with their frequent border crossings makes it difficult to contain. Barrick employee who asked not to be identified said that some?Kibali employees are from the province. Barrick's response, according to the person, included daily temperature checks and awareness campaigns. In an emailed response, Toronto-headquartered Barrick said it requires its employees and contractors, around 7,600 in total, to declare where they are travelling from to help screen for potential ?cases. The weekend saw the launch of a campaign to explain the symptoms and risks of Ebola. It also announced that the temperature screening program, which had already been implemented, would be completed by the 20th. Kibali is Africa's biggest gold mine. It is jointly owned by Barrick and AngloGold Ashanti, with 45% of each, as well as 10% by Congo State Miner SOKIMO. Previous?Ebola outbreaks had significant economic implications. The outbreaks that occurred in the Congo between 2018 and 2020 and in West Africa from 2014 to 2016 killed thousands of people and disrupted business, investment, and mining operations in the region. According to annual reports, Kibali is expected to produce between 600,000 - 688,000 ounces of Gold in 2026. Maxwell Akalaare Adombila and Portia Crowe reported the story. Editing was done by Veronica Brown and David Goodman.
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Oil eases after Trump's Iran remarks, stocks fall as US bond rates rise
U.S. bond rates?rose on Tuesday as major U.S. indexes declined. Oil prices also eased following the announcement by U.S. president Donald Trump that he had paused an attack against Iran and referred to "a good chance" for a nuclear agreement. Trump said on Monday that he halted the planned resumption of attacks against Iran in order to give time to negotiate a peace deal after Tehran sent Washington a new proposal. Trump said that there was a'very good chance' the U.S. would reach an agreement with Iran in order to prevent Tehran obtaining a nuke weapon. The yields on U.S. Treasuries have moved up. On Monday, the 10-year yield reached a high of 4.659%. This was its highest level for 15 months. Peter Cardillo is the chief market economist of Spartan Capital Securities, a New York-based brokerage. He said that the long-term market was continuing to rise. Cardillo said that the stock market is on the defensive because of Trump's remarks about a possible halt in planned Iran attacks. Nasdaq was the leading decliner on Wall Street. Earnings from Nvidia, the world's largest chipmaker, are expected on Wednesday. The trade in artificial intelligence will be put to the test. The Dow Jones Industrial Average dropped 170.38 points or 0.34% to 49,515.42, while the S&P 500 declined 47.16 points or 0.63% to 7,356.14, and the Nasdaq Composite fell 255.26 or 0.98% to 25,835.47. MSCI's index of stocks around the world fell 6.07 points or 0.55% to 1,092.16. The European stock market was higher on Monday, however. They recovered ground that they lost last Friday, when they fell 1.5%, as bond market worries spread to equity markets. Stocks in Europe are still below their pre-war level and far behind those of the U.S. The STOXX 600 pan-European index increased by 0.3%. U.S. crude dropped 0.52%, to $108.09 per barrel. Brent was down to $110.26 a barrel on the same day. U.S. U.S. U.S. Treasury Yields have risen as concerns remain over a long-lasting inflationary shock caused by the Iran War. The yield on the benchmark 10-year U.S. notes increased 4.6 basis points, to 4.669% from 4.623% at late Monday. Prices and yields are inversely related. British bond yields dropped after reports that the most likely successor to Keir starmer, the Prime Minister of the United Kingdom, would not change the country's borrowing regulations. The U.S. Dollar was up partly?because higher U.S. Yields were driven by inflation fears, and uncertainty about how the new Federal Reserve Chairman Kevin Warsh would respond if prices continue to increase. The markets are pricing in major central bank rate increases this year based on the expectation that policymakers will tighten their policy to combat an inflation resurgence driven by high energy prices for longer. The dollar index (which?measures greenback against a currency basket including the yen, the euro and others) rose by 0.4%, to 99.39. However, the euro fell by 0.51%, at $1.1595. The dollar gained 0.14% against the Japanese yen to 159.06. Data released on Tuesday revealed that Japan's first-quarter economy grew at a rate of 2.1% annually, which supports expectations for an increase in Bank of Japan rates in June. Investors also await details of the government’s supplementary budget, which could further stress Japan's public finances already in decline and weigh down the yen. Spot gold dropped 1.45% to $4.500.36 per ounce.
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Chairman of Bharat Petroleum India says that Bharat Petroleum reviews oil imports every day and buys more on the spot amid Iran War.
Sanjay Khanna, the chairman of India's Bharat Oil Corp. said that it is recalibrating its crude import strategy nearly daily and increasing?spot purchase after the U.S./Israeli conflict in Middle East disrupted Middle East supply. India, which is the third largest?oil?importer and?consumer in the world, has been affected by the rising crude prices as well as supply disruptions after the Strait of Hormuz was closed. South Asian nation raised retail petrol and diesel prices twice in one week. The refiner planned to purchase about 55% of its crude requirements for 2026/27 via annual contracts, mostly from Middle Eastern producers. Khanna stated that Bharat has been forced to increase spot purchases to maintain refineries at 115% capacity due to force majeure declarations from some Gulf suppliers. Our spot volume has increased significantly in recent years because of the uncertainty. Bharat runs three refineries with a processing capacity of?706,000 barrels of oil per day in?India. Khanna stated that the state-run refiner purchases 40% to 45% of its crude oil needs from Russia, mainly on the spot market, after Washington lifted sanctions. Discounts have also narrowed dramatically. Finance director Vetsa RAMAKRISHNA GUPTA said that discounts on Russian crude are now $5 to $6 a barrel compared to Brent dated on a delivered basis, down from $10 to 12 earlier. Gupta stated that despite recent fuel price increases, BPCL still suffers a loss in revenue of between 25? and 30 rupees (26 - 31 U.S. Cents) per litre for diesel, and between 10? to 14? rupees ($26 to $31 cents) per litre for petrol. BPCL anticipates that spot purchases will ease if Saudi Arabian contracts improve?after the restoration the Kingdom's east west pipeline capacity. Gupta stated that Saudi Arabia is currently only giving "a small commitment" to supply through the pipeline. BPCL also evaluates annual supply 'deals' with new producers if they offer flexible?terms of delivery and competitive pricing. However, the company prefers to source from local regions rather than distant suppliers like Venezuela and Canada. The refiner has also an optional annual crude purchasing arrangement with Brazil.
Oil eases following the latest Iran war headlines, as stocks fall due to rising US bond yields
Oil prices fell on Tuesday as investors digested headlines about U.S.-Iran talks to end the war.
Donald Trump, the U.S. president, said on Tuesday that the United States might need to strike Iran again and that he was an hour from ordering an assault before postponing. Trump said on Monday that he had put off a planned resumption after a new Iranian proposal to end the U.S. - Israel war.
U.S. Vice-President JD Vance stated that the United States has made significant progress in its talks with Iran and that neither side would like to see the military campaign resumed.
Brent futures fell 82 cents to $111.28 per barrel, and the U.S. West Texas intermediate crude contract, which expired Tuesday, was down 89 cents to $107.77.
The yield on 30-year Treasury bonds rose to its highest level in 19 years, 5.197%. Last time, it was at 5.18%.
Peter Cardillo is the chief market economist of Spartan Capital Securities, a New York-based brokerage.
He said, "We are seeing the long-term end of the market continue to rise." "That's why (stocks are) on the defensive."
A rise in yields will increase borrowing costs, and a discount on future earnings for the company. This can affect stock values.
Earnings from Nvidia, the world's largest chipmaker, are due to be released on Wednesday. Expectations for this company are sky-high.
The Dow Jones Industrial Average fell 241.19 points or 0.49% to 49,444.97. The S&P 500 dropped 40.96 points or 0.56% to 7,361.67. And the Nasdaq Composite was down 192.83 or 0.74% to 25,897.90.
MSCI's global index of stocks fell by 5.43 points (0.49%) to 1,092.80. The European stock market was higher on Monday, regaining ground that they lost last Friday, when they fell 1.5%, as the bond market woes spread to the equity markets. Stocks in Europe are still below their pre-war level and lag behind their U.S. counterparts. This is because Europe imports energy and has less major tech companies. The pan-European STOXX 600 rose by 0.19%.
U.S. U.S.
U.S. Treasury Yields rose, as concerns remain about a long-lasting inflationary shock caused by the Iran War.
The yield on the benchmark 10-year U.S. notes increased 4.4 basis points from late Monday to 4,667%. Prices and yields are inversely related. British bond yields dropped after reports that the most likely candidate to succeed Prime Minister Keir Starmer would not change the country's borrowing regulations.
The U.S. Dollar was up partly because of higher U.S. Yields, which were fueled by inflation fears.
The global rate hike expectation has changed, and traders are now pricing in higher probability of rate increases from the Fed. The expectation has grown that policymakers must tighten their policies to combat an inflation resurgence driven by energy prices rising for longer.
The dollar index measures the greenback in relation to a basket including the yen, the euro and other currencies.
The dollar fell 0.45% to $1.1602, while the euro rose 0.34%.
The dollar gained 0.14% against the Japanese yen to 159.05
Data released on Tuesday revealed that Japan's first-quarter economy grew by an annualised 2.1%, which supports expectations of a Bank of Japan rate hike in June.
Investors also await details of the government’s supplementary budget, which could put further pressure on Japan's public finances that are already in a deteriorating state and affect the yen.
Spot gold dropped 1.74% to $4486.37 per ounce.
(source: Reuters)