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Russell: It's not about altruism, but economics that's driving China's crude imports to slump.
China's seaborne crude oil imports fell to their lowest level in nearly 10 years in May as a result of the Iran War, which led to a dramatic restructuring of operations at the world's largest?oil exporter. According to Kpler, the data collected by commodity analysts shows that seaborne crude arrivals were down from 8,10 million barrels per days (bpd), in April. This is the lowest level since October 2016. Kpler recorded imports at just over half of the 11,39 million bpd for February, the last month before the U.S.-Israeli attack on Iran. Media and market commentary frame the collapse in China's imported crude as helping Asia adapt to the loss of 10 million barrels per day of crude due to the closure of the Strait of Hormuz. Beijing is not being altruistic, but it's a side effect of the changing dynamics in price and supply. The conflict in Iran is clearly the main cause of the decline in China's oil supplies. But the real challenge is to understand what China does to adapt to this loss of up to 10% of global crude supply. First, China's imports are being cut back as usual when prices increase sharply. In the aftermath of Russia's invasion in Ukraine in February 20,2022, Brent crude futures rose to a peak of $139.13 per barrel in March. China's seaborne exports fell from 10,84 million bpd a month in January 2022 down to 8,07 million bpd a month in June 2022. China is not unusual in seeing a swing in imports of up to 2,000,000 bpd per month in response to price changes. However, the drop in arrivals between February and May this year was 5.5,000,000 bpd. The drop in prices is not the only factor. The closure of the Strait of Hormuz has also made it difficult for Chinese refiners to obtain crude oil from their usual sources, particularly those who were cut off. Kpler reports that imports from Iraq dropped from 790,000.00 bpd a month earlier to only 60,000.00 bpd a month later in May. Imports from Kuwait also fell from 522,000.00 bpd bpd bpd bpd bpd bpd bpd bpd ppd bpd bpd bpd bpd bpd bpd RUSSIAN CRUDE The drop in seaborne arrivals of Russian products in May was the lowest since August, and down from 1,96 million bpd. Prior to the Iran War, China was the sole major buyer of Russian crude oil which had been under Western sanctions ever since the invasion and occupation of Ukraine. The administration of U.S. president Donald Trump has eased the sanctions against Russian oil to address the shortage of crude created by their war with Iran. India, Asia's largest buyer, has returned to purchasing Russian crude. Arrivals of 2,17 million bpd were a record and more than double the 1,07 million bpd that was in February. China's crude imports in May fell by a staggering amount, largely due to higher prices and issues with supply. However, it is not clear how the country will adjust to this massive drop. Refiners are likely to have changed their product mix in order to maximize the production of middle distillates, such as jet fuel and diesel. Light distillates, which are used in petrochemicals and plastics production, is likely to be affected by the shortage. China's Strategic Petroleum Reserve (SPR) is unlikely to be tapped yet, as the refineries are using commercial stocks of crude and refined products. This sharp decline in refined products exports from 777,000 to 463,000 bpd is keeping fuels more available on the domestic market. The problem is, commercial inventories are unlikely to last for an extended period of time. This means that China will have to eventually do one of the following three things or a combination. It must either increase crude imports, reduce refinery processing rates or tap into SPR. 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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As Israel intensifies its incursion in Lebanon, oil prices are up more than 2%.
Early trading on Monday saw oil prices rise by more than 2 percent after Israel ordered troops to advance further into Lebanon, in the midst of a battle against Hezbollah, an Iranian-backed militant group. This was despite a ceasefire that had been announced more than six weeks earlier. U.S. crude?futures?rose by $2.37, or 2.71%, to $89.73 per barrel as of 0028 GMT. Brent futures increased $2.16, or 2.37%, to $93.28 per barrel. This increased fighting came just days after the U.S. held Israeli-Lebanon talks in Washington, and dimmed expectations of a U.S.-Iran ceasefire agreement extension. Brent and WTI had both risen by 1.8% and 1.7% respectively on Friday. The Israel-Lebanon war is the most significant spillover from the Iran War. Hezbollah started firing drones and rockets into Israel on?March 2, to support its Iranian ally. Both sides reached a truce in mid-April, but continue to fire. Donald Trump, the U.S. president, said Friday that he will soon make a decision?on the proposed deal to extend the ceasefire announced by Iran in early April. This would give negotiators time to find a lasting solution to the dispute over Iran’s nuclear program. Israel is a key player in any deal of this kind, and Iran has said that Hezbollah should be included. Tony Sycamore, IG's analyst, said that concerns about mines are growing in the Strait of Hormuz - a key shipping lane for oil and gas - according to a IG?note. This could delay the process of reopening strait, and cause the oil market to receive relief more slowly even after the strait is reopened. Sycamore stated that even if an agreement is reached it will not result in a flood supply. On Friday, an Axios reporter said that Iran dropped more mines into the strait in the previous week. This was shortly after U.S. defense secretary Pete Hegseth had stated that the attempt to place more mines would constitute a breach of the ceasefire. Hormuz, a conduit that carries about a fifth global oil and natural gas flows, has been effectively closed by Iran since the conflict began in February with U.S.-Israeli airstrikes. The concerns over the supply of oil and gas outweighed China's mediocre economic data over the weekend. This showed stagnant factory activity. The stalling factory activity and a decline in exports have added to the concerns that China's economy is losing its momentum. (Reporting and editing by Edmund Klamann, Stephen Coates and Colleen Waye)
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Tesla retracts notice of termination on graphite deal with Australia's Syrah
Syrah Resource, an Australian company, said that Tesla had withdrawn its notice of intent to terminate the?graphite deal. This ended a long process of negotiation in which both companies extended a deadline for resolution four times. Syrah planned to provide 8,000 metric tonnes of graphite-anode materials over a period of four years from its Vidalia facility in the United States. The 2021 contract covers the state of Louisiana. The Vidalia plant is the only large-scale vertically integrated producer of anode material outside China. This helps reduce U.S. dependence on Chinese supplies that dominate the market. The market is dominated by Chinese suppliers. Graphite can be found in the lithium-ion battery that powers electric vehicles. Tesla, led by Elon Musk, issued a default notification in July 2025 citing issues of conformity with samples of active anode materials (AAMs) delivered from Vidalia. Syrah, in a Monday statement to the ASX, said that Tesla has now accepted the miner's?demonstration of?it producing AAM samples conforming and?made a sufficient?progress. Tesla, according to Miner Syrah, has the right to cancel the'supply agreement' if the final qualification of Vidalia AAM is not achieved. Tesla and Syrah agreed in March to extend the deadline for resolving the alleged breach of their graphite agreement by a fourth time to June 1.
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As Israel intensifies its incursion in Lebanon, oil prices are up more than 2%.
Early trading on Monday saw oil prices rise by more than 2% after Israel ordered troops into Lebanon to continue the fight against the Iranian-backed Hezbollah militants, despite the ceasefire that was announced a little over six weeks ago. As of 1112 GMT, U.S. crude futures rose $2.17 (2.48%) to $89.53 per barrel. Brent futures rose by $1.93, or 2.12%, to $93.05 per barrel. Brent and WTI settled down 1.8% and 1.7% respectively on Friday as a result of the increased fighting. This was just a few days after the U.S. hosted Israeli and Lebanon peace talks at Washington. Israel-Lebanon war is the largest spillover from the Iran conflict. Hezbollah started firing rockets into Israel on March 2, to support its Iranian ally. Both sides agreed to a ceasefire mid-April, but they have continued to exchange fire. Donald Trump, the U.S. president, said Friday he will soon "decide" on a proposal to extend the ceasefire announced with Iran in early April. This would give negotiators time to "seek an end to the conflict permanently and find a resolution to the dispute over Iran’s nuclear program." Israel is a key player in any deal. Iran has said that Hezbollah should be included. Tony Sycamore, IG's analyst, said that concerns about mines are growing in the Strait of Hormuz - a key shipping lane for oil and gas - in a?note. This could delay the reopening of the strait, and cause the oil market to receive relief more slowly even after the reopening. "Even if an agreement is reached, there won't be a flood in supply," Sycamore stated. Axios?reporter stated on X on Friday, that Iran dropped more mines earlier in the week. This was shortly after U.S. Defence Secretary Pete Hegseth?said that laying more mines would violate?the ceasefire. Hormuz is the conduit for a fifth or more of global oil and natural gas flows. Iran has closed it effectively?since U.S. The weekend's?weak economic data from China, which showed stagnant factory activity, was overshadowed by concerns over supply. The stalling of factory activity and a decline in exports have added to the concerns that China's economy is losing its momentum.
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Brazil's Petrobras lowers the price of diesel for distributors with cashback system
In a Sunday statement, Brazil's state oil company,?Petrobras?, announced that it would lower the diesel price to distributors starting June 1 by 0.3515 Reais per liter. This follows an announcement from the Brazilian government regarding a cashback program for producers and importers. Petrobras said that the average price it charges distributors for a liter of gasoline will drop to $3.30 ($0.6552) from $3.65 previously. The Brazilian 'government' announced on Saturday a new cashback scheme for diesel producers and importers of 0.35 Reais per liter. This system is also scheduled to begin in June?1. It will compensate for the ending of a tax exemption program. Petrobras said that the lowering of diesel prices would "neutralize" any effect the higher taxes will have on consumers. The government has also established a diesel subsidy in Brazil and renewed tax exemptions on cooking gas, jet fuel, and jet fuel. This is to keep prices down in the year when President Luiz Inacio Lula Da Silva will be seeking reelection. Petrobras announced that it is analyzing the announcement on Saturday of a new diesel subsidy of 1,12 reais/liter. The firm said that "any decision made by the 'company' on this issue?will be immediately disclosed to the domestic market."
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A blast in a village in Myanmar has reportedly killed 55 people and injured dozens of others
A rebel army claimed that at least 55 people died in an explosion in Kaung Tat, Myanmar. The blast was caused by a?accidental explosive of material to be used in mining. The Ta'ang National Liberation Army (Ta'ang NLA), which controls the village close to the Chinese border and is currently in a truce with the Myanmar military, has confirmed that there have been fatalities without specifying how many. BBC and Shwe?Phee Myay News Agency, a local news outlet, reported that at least 55 people, including 30 women and 25 men, had been killed, and dozens of others were injured. The group expressed its condolences in a telegram post to the families of those killed, injured and damaged by the explosion. The explosion, which occurred at 12 noon local time (0530 GMT), is being investigated. Anyone found responsible will be held accountable. The statement said that the affected families would receive immediate relief, rehabilitation and healthcare. Reporting by Chandni Ghoshal and Devjyot Abraham Writing by Rhea Rosa Abraham Editing and Barbara Lewis by David Goodman
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All bodies found in Washington State chemical accident: 11 confirmed dead
The death toll in the United States from a ruptured?chemical tank has risen to 11. The death toll from a?chemical tank rupture in the United States has risen to 11 as crews have recovered all nine bodies, according authorities. The tank that contained "white liquor", a chemical mixture of sodium hydroxide and sulfide, used to make 'paper pulp, imploded on Tuesday at the Nippon Dynawave Packaging plant. Kurt Stitch, Cowlitz 2 Fire & Rescue deputy chief, stated that the search for missing persons continued throughout the week as crews cleared debris from indoor?areas, and drones were flown over the perimeter. Officials have confirmed that the ruptured tank held about 900,000.000 gallons of white liquor. Tests also showed contamination of the nearby Columbia River. However, no negative health effects were detected in the air or drinking water of the city of Longview. Nippon Dynawave Packaging, Japan's wholly-owned subsidiary, was established in 2016 by Nippon Paper Industries, Japan's second largest paper manufacturer. The company acquired the Longview plant from Seattle-based Weyerhaeuser Timber for $225m. (Reporting and editing by William Mallard in Bengaluru)
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PSG wins the Champions League with a shoot-out victory over Arsenal
Paris St Germain reclaimed their Champions League 'title' with a penalty-shootout victory? over Arsenal, after a 1-1 stalemate in a tense final at the Puskas arena on Saturday. Gabriel, of Arsenal, blasted his penalty over the?crossbar to give PSG a?4-3 victory? on spot-kicks. The French champions had the worst start possible after Kai Havertz scored an Arsenal goal?in just the sixth minute. He whipped a?rising shot?past PSG's goalkeeper Matvey Safonov. The PSG defence looked to be the most formidable in Europe, but Ousmane dembele equalized from the spot after a foul was committed by Cristhian Moquera against Khvicha Kvaratskhelia in the 65th minutes. PSG won the Champions League trophy for the second consecutive year after a scrappy extra-time period that could not separate both sides. (Reporting and editing by Christian Radnedge.)
Asia stocks rely on AI boom to offset Gulf risk
The Asian share market rose on Monday, as the 'boom in AI and all things AI' continued to drive demand. This offset a lack of progress made in Gulf peace talks that shook optimism about a reopening of the Strait of Hormuz. Oil prices also rose. Although negotiators from Washington and Tehran appear to be working on a deal, Donald Trump has remained silent about their progress. Pete Hegseth, the Defense Secretary, said on Saturday that the U.S. is ready to resume attacks against Iran if no deal can be reached. Israeli advances into Lebanon to fight the Iranian-backed Hezbollah militants did not help ease tensions in the area.
Michael Feroli is the head of U.S. Economics at JPMorgan. He said that while there are still uncertainties, the acute risks for the global economic should be over once tankers start moving again.
Oil prices are likely to stay high for a while as inventories are rebuilt and supply infrastructure is repaired in the Middle East.
Brent crude rose 1.9% to $92.89 per barrel due to the lack of new information, while U.S. Crude added 2.4% to $89.46.
Asian share markets continue to be supported by semiconductors and AI related gear. Japan's Nikkei has risen 0.5% after rising almost 5% last week, reaching all-time highs.
South Korea gained 1.3% after a surge of 8% the previous week. Taiwan also grew by almost 6%. MSCI's broadest Asia-Pacific share index outside Japan rose 0.2%.
Nvidia's Jensen Huang will kick off the Computex show in Taiwan with a speech on AI on Monday. He is expected to elaborate on the latest product initiatives of his company as well as Taiwan's role as a leader in the industry.
PAYROLLS ARE COMING SOON!
In Europe, EUROSTOXX Futures declined by 0.3%. DAX Futures fell 0.2%, and FTSE Futures dropped 0.5%.
S&P futures rose 0.2% while Nasdaq Futures firmed up 0.4% following last week's record-breaking performance.
The gains are narrowly based, with only 21 of the 500 stocks reaching record highs. Tech stocks rose almost 16% during May. Consumer discretionary, healthcare, and consumer staples all managed less than 2%.
Oil's inflationary?pulse continues to stifle bond markets, as U.S. 10 year yields have risen 3 basis points to 4,470%. The markets indicate that the Federal Reserve will need to raise rates by year's end to avoid rising prices being baked into inflationary expectations.
This week, a number of Fed members will be speaking. Also of note are the ISM manufacturing survey and the May payrolls data on Friday.
The market forecasts a steady increase of 85,000?in employment. This will keep the unemployment rate at 4,3%. Any further increase in employment would reduce the chances of an increase.
The market's hawkish view has kept the dollar largely steady. However, the reliance of the Japanese yen and euro on energy imports is a hindrance to these currencies.
The dollar was slightly firmer?on the Japanese yen, at 159.42. However, bulls were hesitant to risk Japanese intervention if the 160.00 barrier was breached.
The euro was $1.1645 after spending the last week in a tight range between $1.1585 to $1.1661.
Gold was unchanged at $4,535 per ounce on commodity markets. It has not been a popular safe-haven asset or hedge against inflation. (Reporting and editing by Lincoln Feast; Reporting by Wayne Cole)
(source: Reuters)