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Aramco reports a 44% increase in net profits as the Iran war increases oil prices
Aramco, the Saudi oil giant, reported a 44% rise in its second-quarter net profit on Tuesday. It reaped higher prices for crude 'oil', refined products and chemicals, while being forced to reroute shipment to avoid war-torn Strait of Hormuz. The top oil exporter in the world posted a net profit of 32,69 billion dollars for the three-month period ending June 30 compared to $22,67 billion dollars a year ago. Amin Nasser, CEO of Aramco, said that despite the disruption in supply through the Strait of Hormuz we were able to continue our business by leveraging our diverse asset base, multi-decade plans, and Aramco’s export terminals. Aramco said it maintained a rate of supply reliability of 98.4% in the third quarter, despite the continued geopolitical uncertainties in the region. Since the U.S.-Israeli War with Iran, the company has increased exports via the East-West Pipeline into the Red Sea Port?of Yanbu. Nasser described the route as a 'critical lifeline'. The alternative route to the Red Sea and Saudi export terminals are also now under threat. In July, Iran's Houthi forces announced that they would blockade Saudi Arabian oil in the Red Sea. This extended the disruption to a second major waterway, and pushed oil prices up. (Reporting and writing by Maha El-Dahan; editing by Tom Hogue, Sonali Paul, and Tala Ramadan)
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Mike Dolan: The bond market is afraid of the US economy because it has been overstimulated.
The U.S. economic engine is gaining steam despite erratic politics, global conflict and booming business investment. It could overheat. Step back from the daily noise, and it's clear that fiscal generosity, loose financial conditions and booming business investments, as well as near-zero real interest rates, are all fueling the economic engine. It would be remarkable if inflation returned to target without tightening fiscal or monetary policies. It also explains the stock market's refusal to retreat despite wild swings in single stocks, recent hedge fund stress and gnawing doubts over whether this is the peak of the AI wave. Investors who are pursuing "buy-the-dip" strategies or simply rotating their portfolios between sectors seem reluctant to raise cash. Stock markets are close to new records after major U.S. equity indices gained 50% in the last two years and another 10% during the first half of the year. This is boosting asset wealth of the wealthy cohorts who account for most of the consumer spending that drives the economy. It encourages greater spending from disposable income, and allows companies to pad margins in an upward spiral. Rising bond yields are the only red flag. The past week, two big numbers were released: the estimated annual profit growth for S&P firms accelerated to almost 50% through the last quarter. And, despite a headline inflation-adjusted number that was not impressive, the nominal U.S. Gross Domestic Product grew at an annualised rate of nearly 8% in the second quarter. Demand components were strong, despite the 6.3% increase in GDP deflator that was mostly energy related. The nominal GDP growth rate is nearly twice as high as the average over the last 25 years. Consumer spending soared by 3.2% while business equipment investment accelerated at a rate of 15%. LSEG data show that the annual U.S. profits are growing at a staggering 47%. This is fueled by a frenzy of AI, which has prompted "hyperscalers", who build infrastructure, to spend more than $1 trillion on capital expenditures this year. This is three times higher than the estimate for January and twice what was expected a month earlier. This is due to both the 'blowout quarters of major oil companies and banks as well as stellar technology earnings. The margin expansion is evident, even with revenue growth at only 14%. Barclays' readout on the current earnings season revealed that "margins have been driving forces as they reach new heights." The report also highlighted the strength of the energy and technology sectors, along with consumer staples and materials. TRILLIONS AFTER TRILLIONS Many factors are at play. Stephen Jen and Fatih Yalmaz of Eurizon SLJ believe that high energy prices and inflation are not causing the "demand destruction" they would usually cause to lower prices. The consumer is less price sensitive than they were in the past. The scale of fiscal expenditure that is still in place, which does not appear to be reversing, is blamed. They propose a "fiscal stimuli-price-spiral" instead of the "wage-price-spiral" of previous cycles. The note states that the federal budget is in deficit of over $2 trillion per year, despite AI-related capital expenditures topping $1 trillion. These deficits were further exacerbated by the fiscal bill last year, which included tax cuts and increased spending. Similar deficits are forecast for the next decade. "Huge and constant transfers by the government have sustained the aggregate demand in the U.S. This has prevented the demand curve from remaining flat, and given corporations and producers greater pricing power. They concluded that these variables were 'all linked. The causality is from fiscal stimulus, to greater pricing, to inflation. There is also another loop. The top 25% earners can spend more because of rising equity and real estate values. Their asset wealth allows them to continue buying regardless of inflation rates between 3% and 4% or fluctuations in gas prices. Their collective purchasing power allows companies to keep increasing margins. The resulting earnings increase and stock price?windfall also boosts equity wealth for richer households. Where does it end? The Federal Reserve can do a lot to curb inflationary corporate pricing power. It is not powerless when faced with supply or capex shocks. Two interest rate hikes in the remaining months of the year could cool equity prices, margin expansion, and spending. They also increase the odds of inflation being tamed for asset-poor families. The bond market may do it if the Fed does not. The opinions here are those expressed by Mike Dolan, who is a columnist at. This column is great! Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn 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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Authorities say that Ukraine drones have killed six people and damaged warehouses in Russia.
Governors reported that Ukraine's attacks overnight on?Russia killed 6 people and injured 9 as they damaged warehouses in the vicinity of?Moscow & St.Petersburg. Meanwhile, Russian strikes have injured and killed people in Ukraine. Governor Andrei Vorobyov announced on Telegram that five people were killed and six others injured in the Moscow area after Ukrainian drones struck. He said that a warehouse caught fire, which was then doused. The drones that hit the warehouse near St. Petersburg, Russia's second largest city, were not identified by regional governor Alexander Drozdenko on Telegram, but one person was hurt. Wildberries, Russia's largest online retailer and a frequent target for Ukraine's recent attacks, reported that its warehouse in St Petersburg had caught fire, but no one was injured. Finland, which is a NATO and EU member, has lifted the temporary aviation restriction zone that was briefly set up on the eastern Gulf of Finland. Authorities in the region of Belgorod, near Ukraine, have reported that a drone struck a car and killed a woman, while two others were injured. Oleh Hryhorov, the regional governor, said that four people sought medical help after two children and an elderly woman died in a Russian-guided bomb attack on Sumy, a city located in northern Ukraine. Could not independently verify the?reports. Both Russia and Ukraine deny that civilians were targeted in the 'war' sparked by Russia’s full-scale invasion in Ukraine in February 2022. (Reporting from Tokyo by Jekaterina Glubkova; Editing by Tom Hogue Christopher Cushing, and Clarence Fernandez).
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Russell: Imports of crude oil and fuel from Asia are recovering, but still below pre-Iran War levels.
Asia's crude imports rose to their highest level since the start of the Iran war in July, but they were still 15% lower than pre-conflict. According to Kpler, the commodity analysts who compiled these data, imports from the continent that consumes most energy were?22.82 millions barrels per day. The average bpd for the three months prior to the U.S.-Israeli attack on Iran in February 28 was 26.89 millions bpd. Kpler data shows that imports of refined fuels showed a slight recovery in July. Arrivals of light and medium distillates were 5.76 million barrels per day, which is 18.5% less than the average 7.07 million barrels per day in the three-month period ending in February. The July crude imports are up significantly from the April levels. This is because the Strait of Hormuz was closed in April. It was this narrow waterway that carried about 20% of all oil and petroleum products before the war. Kpler data shows that Asia's crude imports in April were at 18.77 million bpd, the lowest level since November 2015. In June, imports of light distillates and middle distillates were at their lowest ever levels, with arrivals of just 5,21 million bpd. The market must decide whether the increase in crude and product imports during July is an indication that flows are beginning to normalise or if it is a temporary blip, and Asian markets continue to be stressed. It is a problem that a part of the increase in imports was due to a brief ceasefire in mid-June, which allowed tankers stranded in the Strait of Hormuz by the "effective closure" to leave the waterway. The strait was the main route for Asia to import light and middle distillates. In July, the number of bpds increased from the low of 144,000 in May but remained below the 1.51m bpds in the last three months. The average crude oil arrivals through the Strait of Malacca were 4,05 million barrels per day (bpd) in July. This is up from 1,59 million barrels per day in April, but 70% less than the average 13.60 million barrels per day in the three-month period prior to the beginning of the war. HORMUZ FLOWS Imports could drop after August as some of the crude oil and products that left the Strait of Hormuz in the three-week ceasefire agreement between the United States, Iran and other countries are likely to be delivered. After August, it is likely that Asia will import goods at levels?well below those before the beginning of the conflict. The Asian countries must continue to draw down their inventories, and hope that China - the world's largest crude importer - continues to drastically reduce its purchases. According to Kpler's data, China's crude oil imports by sea were 6.94 million barrels per day (bpd) in July. This is up from a decade-low 5.99 million bpd recorded in June, but 39% lower than the average of 11.43 millions bpd for the three months ending in February. China's reduction in seaborne crude oil imports of over 4 million bpd has helped to offset losses caused by the Iran War. But how long will this continue? China's crude stocks are estimated to be at least 1.2 million barrels. It is possible to limit imports for several months. However, it would be logical to assume Beijing will not be eager to reduce inventories significantly. China, like a majority on the crude market, could anticipate that U.S. president Donald Trump would be forced to accept a deal that reopens strait of Hormuz?on Tehran’s terms. The flow of crude oil and refined products to Asia suggests that the window for a deal before economic hardships are felt is closing. 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 a columnist who writes for.
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MORNING BID EUROPE - Yen holds gains, but bond pressure increases
Gregor Stuart Hunter gives us a look at what the future holds for European and global markets. Scott Bessent, the U.S. Treasury Secretary, may have hoped for some relief from his to-do lists. The 'Japanese currency' fell for the first time in five days on a tuesday as the dust settled after a rare coordinated intervention by officials from Washington and Tokyo in the foreign exchange market. The yen fell 0.3% against the U.S. Dollar at 157.715 and by the same amount against the euro at 181.45. The yen is still 4% higher against the dollar and euro than it was a week ago, which prompted support from officials. This marks the first U.S. entry into Japan's forex market in 15 years. The auction of 10-year Japanese Government Bonds on Tuesday also attracted weaker demand than previous sales of sovereign debt. This prompted a new bout of anxiety and a rise in yields. Stocks drifted in other markets, as there were few catalysts. MSCI's broadest Asia-Pacific share index outside Japan fell?0.5% while the Nikkei 225 dropped?0.3%. Investors focused on corporate earnings that were better than expected. S&P 500 futures rose 0.2%, a small step towards reclaiming records. LSEG data shows that 84% of S&P companies have beaten their earnings expectations. Brent crude rose 1.4% to $84.93 per barrel during the Asian session after oil prices plummeted on Monday. This was due to traders examining Donald Trump's promise to refrain from attacking Iran in order to aid peace talks, which Tehran claims are not happening. The Strait of Hormuz, and the?Bab el-Mandeb are not seeing much traffic. Early European trades saw pan-regional futures up 0.3%, German DAX up 0.2%, both on course to hit'record highs.' Meanwhile, FTSE futures grew 0.3%. Three sources said that after security breaches caused by AI agents who have gone rogue developers Meta, Anthropic and OpenAI, as well as Google, were invited to the White House on Tuesday to discuss voluntary government safety testing of their most advanced models. The following are key developments that may influence the markets on Tuesday. Earnings of SpaceX, AMD Caterpillar, McDonald's, Pfizer BP Lufthansa Economic Events France: Budget balance in June Debt auctions: Germany: 2-year government debt UK: 6-year Government Debt (Reporting and Editing by Jamie Freed; Gregor Stuart Hunter)
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South Korean stocks continue to lose, and the market is betting on another rate increase
South Korean shares fell marginally Tuesday, extending losses into a 2nd session amid persistent concerns over the durability of the 'AI trade' and the possibility of a 2nd consecutive rate hike in this month. As of 0354 GMT, the benchmark KOSPI Index was trading 1.1% lower. The index jumped 2.1% at the start of trading, but then reversed direction within minutes and fell as much as 3%. Samsung Electronics, a memory chip maker, fell 2.30% while rival SK Hynix dropped 2%. These two'stocks' account for over half of the KOSPI index and are the main drivers of the recent sharp volatility on the Korean market. The data released earlier that day showed cheaper crude oil had helped lower inflation to 2.8%, which was the lowest level for three months. The figure is still above the central bank's 2% medium-term goal, so the odds of a rate hike in August are still very much on the table. Markets have priced in a 70 percent chance of an increase later this month. The Bank of Korea stated that it would monitor closely the price situation, since core inflation is expected to remain high because of the spillover effect of high oil prices, and the growing demand in Korea, spurred on by record profits made by the chip industry. Kim Jin-wook is an economist with Citi Korea. He said that the core CPI inflation rate will likely stay around 2.8%-3.0% for a long time due to?the time lag between core CPI goods and strong demand side inflationary pressure. "We maintain our view that a 25 basis point?hike will be made at the MPB (monetary board) meeting on August 27." In July, the Bank of Korea raised its benchmark interest rate to 2.75 percent for the first time in three and a half years. Koo Yun Cheol, the Finance Minister, said in a cabinet session that he will work to reduce volatility?in stock markets and implement measures recently announced to curb the 'use of single-stock ETFs. On the KOSPI, Hyundai Motor, and its sister company Kia Corp, were both down by 2.29% and 0.69% respectively. POSCO Holdings, a steelmaker, rose by 1.48%. Samsung BioLogics, a drugmaker grew by 2.67%. The foreigners sold shares worth?50.0 Billion won ($34.98 Million) at a net profit. As of 0354 GMT the won had been quoted as 1,428.1 per US dollar on the offshore settlement platform. This was a marginal increase from its previous closing price of 1,429.5.
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Oil prices remain stable as inventories at the LME and Shanghai fall
The copper price rose on Tuesday due to falling inventories. Oil prices remained stable despite conflicting statements from the U.S. The benchmark three-month contract for copper on the London Metal Exchange rose?0.60% to $13,953 per metric ton by?0331 GMT. Meanwhile, the most traded copper contract on Shanghai Futures Exchange rose 0.91% to $15,792.90 per ton. Copper stocks at LME registered warehouses As of Friday, inventories had fallen to 244,025 tonnes from around 400,000 in April. The SHFE tracks inventories The number of tons has dropped from 430,000 to 69,300. The decreases have resulted in a tightening of the supply available outside of the United States. COMEX inventories rose to 717 314 short tons in August, continuing a steady increase from around 340,000 short tonnes late last year. In a recent note, Chinese broker Jinrui Futures stated that weekly copper imports into the U.S. were at an all-time high. The broker said that downstream consumption is also slipping in 'China due to higher prices. The oil prices stabilized following a steep drop in the previous session. This was despite President Donald Trump's claim that talks with Iran are underway. Brent crude futures increased by more than 1% Tuesday. This is after the crude oil price dropped 7% to a 3-week low on Monday. Trump stated on Monday that negotiations are taking place, and called them Iran's "last opportunity" to reach a deal. Iran's Foreign Ministry denied that meetings or talks were taking place. Copper is vulnerable to transport and energy costs due to the disruption of shipping through the Strait of Hormuz. Nickel recovered elsewhere after leading Monday's losses. The benchmark nickel contract traded on the 'LME rose by 1.61% while the most active nickel contract traded on the Shanghai Exchange climbed by 1.55%. The market is waiting on the Indonesian government for a more clear direction in?issuing new nickel mining quotas. Aluminium rose by 0.68% on the?LME, while zinc gained?0.37% and lead grew by 0.83%. Tin also increased 0.62%. On the SHFE, other metals rose by 1%: aluminium, zinc, lead, and tin.
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After a selloff, oil prices rise as the talks to end the US-Iran War remain in doubt
The oil price rebounded 1% from a drop in the previous'session. This was due to concerns that Middle East supplies remained 'at risk, as a diplomatic solution to the U.S. - Iran war which has disrupted shipments seems unlikely. Brent futures for the front-month rose $1.12 or 1.3% to $84.89 per barrel at 0355 GMT, after falling 7% to a 3-week low in the previous session. U.S. West Texas Intermediate crude (WTI), which had fallen more than 5% the previous day, was now up 77 cents or 1% at $81.11, after having dropped to its lowest level in almost a week. Prices fell after U.S. president Donald Trump announced on Sunday that he would hold off on any new attacks against Iran until ongoing talks were concluded to end their war and resolve claims regarding control of the Strait of Hormuz. Before the conflict, this strategic waterway connected Gulf oil producers with global markets. It was responsible for about one fifth of all crude oil and gas shipments. Esmail Baghaei, the spokesman for Iran's Foreign Ministry, rejected Trump's claim on Monday. He said that no meetings or negotiations were planned with the U.S. The scale of the sale seems to be a bit overdone given that there is still a lot of uncertainty. "We've been here before many times, but things always unravelled," ING analysts wrote in a report. "And with Iran denial that any talks are taking place and Trump issuing threats if no deal comes about, the background clearly leaves plenty of room for a new escalation." The Hormuz issue is the main sticking point in negotiations. Washington claims that the June memorandum required Iran to open up the waterway. Tehran, however, says the text preserved Iran's?authority. Analysts from Barclays say crude oil and refined products net exports through this strait averaged at 4.2 million barrels a day for the week ending July 31 compared to 3.2 million in the previous week. Shipping data revealed on Monday that six Saudi-flagged Supertankers recently changed their course from the Gulf of Aden to southern Africa. Two tankers?ladened with Saudi oil - crossed the Bab el-Mandeb Strait. The shipping traffic along the Gulf's main waterways of Bab el-Mandeb, the Strait of Hormuz and the Strait of Hormuz remained largely the same at the start of this week. Hormuz remains dangerous for vessels. The United Kingdom Maritime Trade Operations Agency?flagged a incident on Tuesday 20 nautical miles (37km) northeast of Oman’s Al Khasab after a cargo ship broadcasted over VHF channel 16, that it was hit by an 'unknown projectile. Tim Waterer is the chief market analyst for KCM Trade. He said that the fighting between Saudi Arabia and the Houthis did not stop energy flow, but it has caused longer journey times, higher insurance rates, and sometimes diversions. The Strait of Hormuz is a double-chokepoint in the market, which prevents the oil price from achieving its full geopolitical premium. (Reporting from Ishaan Yap and Trixie in Singapore, with editing by Christian Schmollinger.)
Europe's wildfires season exposes the gap in climate insurance
The domestic insurers will likely absorb the majority of losses from Europe's most devastating wildfire season. But the fires also raise a larger question: Who will pay when climate-driven disasters continue to increase in frequency and destruction? About 220,000 people have been evacuated from France due to unprecedented wildfires that are raging across the nation. The fires that have raged in Spain and Greece are also fueling concerns about insurance costs and the widening gap between protection and climate-related risks. According to Morningstar DBRS, France's total loss could be between EUR10 billion and EUR15 billion (between $11.5 billion and $17.3 billion), while insured losses are likely to reach several billion euros.
Analysts say that while the fires are manageable, they could be a preview of what lies ahead in the event that blazes threaten more densely populated regions.
Marcos Alvarez is the managing director of Morningstar DBRS. He said: "This could be a real danger to the industry if a wildfire gets out of hand and reaches a city as large as Bordeaux." "This is a different scale of loss." The French fires, while far below the $40 billion insured losses caused by California's Palisades fire in 2025 could still be the most expensive wildfire in the history of the United States.
Insurance companies expect to receive claims for damage to homes, businesses and supply chains, and even utility interruptions.
Private insurers will be expected to pay the majority of the bill for recovery. Wildfires are excluded from the state-backed compensation scheme for natural disasters in France, unlike floods and droughts.
Fitch Ratings stated in a recent research note that the impact of fires on 2026 earnings for insurers should be limited as long as they do not spread into major residential, commercial, or industrial areas.
The Insurer reported last week that France's insurance companies had agreed to emergency measures, allowing policyholders who were evacuated due to wildfires in Bordeaux to stay at hotels for up to three weeks on their insurer's expenses.
These measures helped Nicolas Mulac, an pharmacist from Marcheprime, near Bordeaux, flee his home with his partner as a fire approached on 24 July.
Mulac, whose house was not damaged, filed a claim for reimbursement of food and accommodation costs. He described the process as being "very straight-forward".
CLIMATE PROTECTION GAP
The fires have brought to light Europe's "protection gaps" - that is, the difference between the total loss from a disaster and the amount of insurance coverage. Spain's wildfires in 2025 caused damage of close to EUR5billion, but only "well below" EUR1billion was insured. Tyson Vickery is the global placement leader for insurance broker Marsh, in Zurich.
The European Central Bank (ECB) and the European Union Insurance Regulator have warned that less than a quarter of losses from climate-related disasters between 1980-2024 are insured. In Europe, wildfire insurance is less developed than it is in the United States.
Ana Matarranz is the CEO of Gallagher Spain, an insurance broker. She said, "Spain experienced wildfires in the past, and insurance companies have considerable experience responding to such events."
Climate-related risks are increasing in frequency and severity.
Climate experts and analysts have said that the lack of historical wildfire data in Europe, on which insurers depend to model and price risks, could complicate underwriting decisions. Rodolphe Man, the head of France for insurance broker Miller told The Insurer that household premiums will likely rise in high-risk areas in January when policies are up for renewal.
In France, property insurance is common because mortgage lenders typically require homeowners to have coverage, and tenants to purchase home insurance.
Munich Re data show that Europe was responsible for 5% of the EUR173 Billion in global wildfire losses between 2016 and 2025.
A report from AXA’s climate unit in July found that by 2050, the areas surrounding French cities may see an average of 70% more days with high fire risk per year.
Sarah Goddard said that the growing catastrophe risks made it more important to close Europe's gap in protection, but that efforts at EU level were still at a "exploratory stage".
Wynne Laurence, a partner with the London-based law firm Clyde & Co, said that it is too early to determine the final cost, but Europe has been experiencing more conditions similar to those in California and other wildfire-prone areas, such as parts of Australia.
(source: Reuters)