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Brazil's Petrobras increases fertilizer production in order to reduce Middle East dependency
Brazilian oil giant Petrobras has increased its nitrogen fertilizer sales in Brazil to help reduce the supply risks as tensions in Middle East threaten the delivery of a key source for the country's imports. Petrobras said that its Bahia and Sergipe units, which resumed operations recently, had reached 90% capacity. The factories are able to supply 12% of Brazil’s urea needs. Urea is one of the most common fertilizers used around the globe to grow crops such as corn, wheat and rice. It's also commonly used for sugarcane,?coffee, sugarcane, and sugarcane. Brazil is increasing its urea production, but it is still heavily dependent on the Middle East. Brazil imported 7.7 million tonnes of urea last year. About?35% came from the Middle East. Tomas Pernias, StoneX analyst of market intelligence, said that the increase in urea in Brazil could help reduce the uncertainty in the market for nitrogen fertilizer due to our dependence on imports. The U.S.-Israeli air attacks against Iran this weekend have already pushed up prices, which is bad news for Brazilian farmers. According to trade data, Iran accounted for about 2% (or urea) of Brazil's supply in the past year. Oman, Qatar and Saudi Arabia are also major regional suppliers of urea to Brazil. Jeferson Souza, an analyst at Agrinvest Commodities, said that the price of urea had been a problem for corn growers even before the conflict. In a social media post, he stated that the outlook was more difficult than it was when the conflict in Ukraine started in?2022, because corn prices are higher and domestic credit is more abundant. Petrobras has stated that it will supply 20% of Brazil's total urea needs when production resumes at its Parana facility. When the Mato Grosso plant is operational by 2029, this could reach 35% of Brazil's urea demand. (Reporting and additional reporting by Ana Mano, writing by Ana Mano, editing by David Gaffen.)
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US gasoline crosses the $3-per-gallon mark as a test of Trump's Iran War
Analysts say that the average U.S. gasoline price surpassed $3 per gallon on Monday for the first time since November as the conflict in the Middle East intensified. This is a major test of public support for President Donald Trump's decision against?Iran. Tehran's response to U.S.-Israeli strikes on oil production in neighboring nations and ships in Strait of Hormuz has disrupted the global supply of oil. Brent crude has risen by more than 5%, to almost $77 a barrel. Fuel prices are also rising in line with feedstock costs. As Trump and the Republicans prepare for the November midterm elections, higher prices at gas stations are a serious risk. Many Americans struggle to keep up with the rising cost of daily goods. A /Ipsos survey found that nearly half of the respondents said they were less likely to back Trump's Iran campaign if gas and oil prices rose in the U.S. Mark Malek is chief investment officer of Siebert Financial. He said that gasoline prices have a psychological impact. They are the inflation numbers that consumers see daily. Analysts predict that every increase in crude oil price of $10 per barrel will result in a 25-cent increase at the pump. Malek warned that refinery problems could cause fuel prices to rise even more. According to a OPIS database, the average retail gasoline price reached $3 per gallon on Sunday. Tom Kloza said that due to the current crisis they could reach $3.25 a gallon this week. GasBuddy data shows that U.S. gas prices rose for four straight weeks prior to the attack on Iran. Refiners were transitioning to summer-grade motor gasoline, which is required by environmental regulations but costs more to produce. GasBuddy analyst Patrick De Haan said that the conflict would exacerbate?the?increases. De Haan stated that "in the coming week, gasoline prices will likely face increased upward pressure due to seasonal trends continuing and as markets navigate through this changing geopolitical environment."
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REalloys, a rare earths company, receives Pentagon funding
REalloys, a rare earths company, has received a U.S. Department of Defense Contract worth up to $1.7 Million to fund the design of a metal processing facility used to?make magnets and electronic components for weapons. The Ohio-based firm received the contract from Defense Logistics Agency. It aims to process 300 metric tonnes?per annum of heavy rare earths, samarium, and gadolinium to metal form. This would make the company one of the largest U.S. suppliers of these metals. Rare earths are first converted into metals before they can be used in?magnets. China has placed export restrictions on rare earths, critical minerals and other minerals. The DLA, who buys goods for the U.S. Military, has given REalloy a first vote of confidence with the contract. It is divided into two phases and will last 24 months. REalloys will have to create engineering'schematics' for a modular facility. This is after merging with Blackboxstocks last week. The company has also developed a 'rare earths mine' in Saskatchewan, and it has an agreement to process the minerals with the Saskatchewan Research Council. The President Donald Trump has ordered the Department of Defense to change its name to the Department of War. This will require the action of Congress.
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Investors grapple with Middle East curball scenarios
Investors struggled to determine whether the Middle East conflict is a marginal risk centered around a power struggle in Iran or a long-term war that could have ramifications on global trade and inflation. Donald Trump, the U.S. president, stoked confusion by suggesting that the U.S. Israeli and Iranian strikes on Iran that killed Supreme Leader?Ayatollah Ali Khamenei at the weekend could continue for weeks. Oil was the most dramatic market reaction, with prices that spiked then dropped sharply. Bitcoin rose, European stock markets fell, but U.S. indices were flat or higher. Government bond yields also rose. Joerg Kraemer is the chief economist at Commerzbank. He also believes that this scenario is most likely. J.P. Morgan analysts said that they expect a decline of one to two weeks in the prices of riskier investments, but this will create a "buy-the-dip" opportunity once the market has gotten over the initial pullback. Iran has retaliated against Gulf cities. Airlines have halted flights, and tankers transporting oil and other products have suspended transit through the Strait of Hormuz. Due to the complexity of the Islamic Republic’s ruling system, the biggest risk to?markets comes from the uncertainty about what will happen next in Iran. Oil prices, which have been rising for several weeks now, are dependent on what the oil producing countries do and the effects of the tanker passage through the Middle East. This has a huge impact on inflation and bonds around the world. The market scenarios assumed that the impact would be minimal, as it was during the "12-Day War", which took place in Iran in June last year, and not the spike in 2022 oil prices caused by Russia's invasion in Ukraine. Brent crude rose 6% to $77, a gain of?nearly 30% this year. However, it remains below the $100 analysts predict would be reached in an extended conflict. Analysts at TS Lombard stated that they were concerned about a possible repeat of the 2022 market, when both bonds and equities were pushed down as markets pondered long-term implications for energy supply. "The situation is still very fluid, but we remain committed to our original view that this is more of a squall than a full-blown oil crisis which will tip the global economy towards a sustained regime of stagflation." IS HISTORY A REPEATING FORMULA? Investors trimmed their rate-cut bets at major central banks, citing the inflationary implications of higher oil prices. U.S. Treasury rates shot up, with the 2-year yields set to make their largest daily gain in 4 months. This was due to a decline in expectations of a Federal Reserve rate reduction in June. The yields on Germany's 10-year Government Bond, the benchmark for the euro zone, are set to see their biggest jump since December. Barclays analysts wrote in a Saturday note that "history strongly argues in favor of selling the geopolitical premium when hostilities begin." What worries us is that investors may have learned about this pattern and are underpricing scenarios where containment fails. Other factors could also exacerbate the selloff if the conflict escalates, including existing concerns about the artificial intelligence boom or private credit markets. Mohit Kumar of Jefferies, an economist who was already critical last week about the markets' complacency on geopolitical issues, said: "We expect further market downside in the coming days." "At some future point, we would be willing to purchase the dip. But that seems far away for now." Analysts predict that Iran won't be able disrupt the trade in the Gulf and its impact on the oil price will be limited. Ed Yardeni of Yardeni Research in New York said: "We wouldn't... be surprised if any S&P 500 sell-off on Monday morning turned into a rally driven by expectations that oil prices will drop?once this latest Middle East conflict ends." Gold could also double on Monday. He said that bond yields could fall because of both the safe-haven market and future oil price prospects.
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Petrobras monitors Iran conflict and fuel price before making a decision
Petrobras, the state-owned oil company in Brazil, is watching closely?the fallout of conflict in Iran. It will be monitoring oil prices - which soared on Monday -- for the next seven days before making a decision?on fuel pricing. After the weekend attacks by Israel and the U.S., which killed Iran's supreme ruler, Ali Khamenei, global oil prices?soared?. Brent crude rose up to 13% on Sunday and about 8% at noon Brasilia Time, helping Petrobras shares, which export?crude. One source, who spoke on the condition of anonymity, said that this week would be one of observation and could lead to an announcement next week. However, there are still many uncertainties. Petrobras also needs to monitor the exchange rate as it is a part of the equation for fuel pricing, according to the sources. One person said that a prolonged conflict in the United States could lead to capital flight, and Brazil might become a destination for some flows. He explained that a weaker dollar would offset higher oil prices. Petrobras also monitors the impact of the war on oil and fuel production, as well the logistical bottlenecks caused by the conflict. Concern about the STRAIT of HORMUZ Thirdly, the Strait of Hormuz could be closed. This is where 20% of all the oil in the world flows. Although the strait is not fully closed, there have been reports that over the weekend vessels stopped moving or were targeted. The total closure of the Strait would have a significant impact on global oil flows, and could lead to a major change in shipping routes. Petrobras would benefit, but might have to purchase 'potentially expensive' crude and derivatives in other regions. Petrobras imports crude oil daily to mix with its production. This is another issue that needs attention. Claudio Schlosser, Petrobras Executive Director of Logistics, Commercialization and Markets, says the company still has options and flexibility to compete despite the Middle East conflict. Schlosser said that Petrobras had alternative routes outside of the conflict zones, which gave us security and competitive costs for our operation, while preserving 'our margins. He refused to comment on possible changes in Petrobras fuel pricing. He said that most imports are from outside of the crisis area, and that "the few which do exist" can be redirected. Reporting by Rodrigo Viga Gaier, Writing by Oliver Griffin, Editing by Roberto Samora & Andrea Ricci
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Trump's war against Iran is a serious risk to US and European aluminum consumers
The war between the U.S. & Iran is likely to cause a prolonged disruption in Middle East aluminium imports, which will hit European and U.S. consumers the hardest. This is because they are heavily reliant on this region for supply. The U.S.,?Israel and other countries attacked Iran on Saturday in a move which could result in the closure of Strait of Hormuz. This important trade route was disrupted due to Iranian attacks against U.S. military base. The impact of sustained disarray will be significant According to BNP Paribas commodities analyst David Wilson, the Arabian Gulf has around 7 million tons smelting capability, which is around 8% global capacity. He said that the impact of a sustained disruption in shipments to the region would be significant, both for the price and the physical premiums. This is especially true in Europe. One analyst said that 75% of Middle Eastern aluminum production is exported. MIDDLE EAST ALUMINIUM EXPORTS Trade Data Monitor reports that Europe imported around 1.3 millions tons of primary and alloyed aluminum from Egypt and the Middle East last year. TDM reports that U.S. imports from the Middle East of primary and alloyed aluminum accounted for nearly 22 percent of its total of 3.4 million tonnes last year. Impact on prices The London Metal Exchange's prices of metals used in the transport, construction, and packaging industries reached a one-month high on Monday at $3,254 per metric ton. The physical premium that European buyers pay over the LME price to cover freight, taxes and handling costs jumped to $378 per ton last week. This is up $20 since the beginning of the week. U.S. Premiums are around $1.04 per lb, or $2.292 per ton. This is due to Donald Trump’s?50% tariffs on imports that were imposed last June. ALUMINIUM PRODUCTION COSTS If energy costs continue to rise, aluminium production costs will also increase. The war in the Middle East has already pushed up the price of natural gas and oil, which is a factor that accounts for around one-third of aluminum smelting costs. (Reporting and additional reporting by Polina Dewitt; editing by Jan Harvey).
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Miner SQM sees lithium sales jumping 15% in first quarter
SQM, a lithium producer in Chile, expects the first quarter of 2026 to be a record-breaking period for sales, with a 15% increase over the previous year. The company is experiencing a strong demand for increased volume from Asia-Pacific clients, especially in China. KEY GUIDANCE * Lithium price in the first three months is expected to be "substantially" higher than the fourth quarter level of?approximately 10 per kilogram. The full-year 2026 lithium price is expected to be closer to the current levels than 2025's lows, but volatility is anticipated. The total?lithium production is expected to reach approximately 260,000 metric tonnes LCE by 2026. This represents an increase of about 234,000 metric tons from 2025. * In?Australia, the Kwinana Refinery's ramp-up timeframe was extended to 2027 because of intermittent?operational problems, which caused 2026 production to lean towards concentrate sales. Dividend payments due to Codelco joint venture in April or May. Salar?Futuro Project Environmental Application is expected to be submitted by mid-year.
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Gold prices rise amid fears of Middle East conflict
Gold as a safe-haven asset gained on Monday due to escalating fears of a prolonged conflict in the Middle East following?U.S. Israeli and U.S. strikes against Iran have boosted the price of safe-haven gold. Gold spot gained 2%, to $5,384.41 per ounce, by 1406 GMT, after reaching a session-high of $5,418.50. Prices reached a record high of $5,594.82 in January. U.S. Gold Futures increased 2.9% to $5.397.40 per ounce. David Meger is the director of metals trading for High Ridge Futures. "I believe that it is the uncertainty that will more than likely'support prices. The U.S. and Israeli air war against Iran has continued to expand with no end in site. Israel responded to Hezbollah's?attacks, while Tehran fired missiles, drones, and rockets at Israel, Gulf states, and a British airbase in far-away Cyprus. SP Angel analysts noted that the increasing geopolitical fragmentation prompted BRIC Central Banks to reduce their exposure in dollar-denominated asset to gold. They added that they expect that this trend will continue. Gold, which has long been regarded as the safest asset during times of uncertainty, is up nearly?25% this year. The rally is a continuation of its 64% rise in 2025. This was fueled by central bank purchases, inflows to exchange-traded funds and a shift towards looser U.S. financial policy. BNP Paribas, meanwhile, said that it sees the physical gold investment demand as being a major driver for this year. The bank said that physical gold ETFs had already amassed about 2 million ounces of gold this year, and they expect Chinese investors to buy more than in 2025. This week, the market is going to be watching for the ADP Employment Report, the weekly claims of joblessness and the non-farm pay reports. Silver spot?eased by 0.6% to $93.23 per ounce, after reaching its highest level since January 30. Spot palladium fell by 1.1%, to $1,767.00, while spot platinum dropped 1.7%, to $2,324.40. Ashitha Shivprasad reports from Bengaluru. Additional reporting is by Noel John, Kavya Baliaraman and Kavya Balaraman. Editing is by David Goode.
How has the Strategic Petroleum Reserve been used by US presidents during wartime?
Although the U.S. does not plan to sell oil from its Strategic Petroleum?Reserve - the world's largest stockpile of emergency oil - presidents have used it in times of crisis to try to control fuel costs for U.S.?consumers.
A U.S.-based source confirmed on Monday that the administration of Donald 'Trump does not have any plans to sell oil from the SPR.
Analysts said that if the oil prices continue to increase following the U.S. and Israeli attacks against OPEC member Iran, which killed the Supreme Leader Ali Khamenei, as well as other top officials, then the administration may take another look.
SPR holds 415.4 millions barrels of mostly sour oil, with a high sulfur content, that is suited to be processed by many U.S. refining plants. The crude oil is stored underground in salt caverns hollowed out on the coasts of Texas & Louisiana. The capacity is approximately 714 million barrels.
Here's a look at how the SPR was used in wartime:
RUSSIA INVADES UKRAINE
Joe Biden, Trump's former president, ordered in March 2022 that 180 million barrels be released over six months. This was the largest ever sale from the emergency stock. Biden and Trump slowly purchased a small amount of oil to start replenishing that stock, but Congress has not provided enough money for this.
ATTACK ON SAUDI ARABIA
In 2019, the Houthis, a Yemeni group with ties to Iran, attacked Saudi Arabia. This led to the shut-down of over half the country's crude production. Trump, who was then serving his first term, stated that his administration was?ready to tap into the SPR in case of need. This did not occur as the oil production from Saudi Arabia’s Abqaiq and Khurais fields recovered quickly.
LIBYA CIVIL WORRAGE
Former President Barack Obama released 30 million barrels from the reserve in?June 2011 to counteract disruptions on global markets caused by the civil war in Libya, the oil producer. This sale was coordinated by the Paris-based International Energy Agency and resulted in another 30 million barrels being released from other members.
OPERATION DESERT?STORM
After the Iraqi invasion, George H.W. Bush sold approximately 21 million barrels in two phases. Bush sold approximately 21 million barrels over two phases. The U.S. had ordered a test sale of 3.9 million barrels in October 1990. After?U.S. In January 1991, after?U.S.
(source: Reuters)