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Due to Middle East tension, Pakistan increases retail fuel prices by around 20%
Pakistan raised prices for petrol and diesel by?about 20% on Friday, citing a rise in oil prices due to the conflict in Iran. In a video message broadcast on television, Ali Pervaiz Malik, the Petroleum Minister announced an increase of 55 rupees ($0.20 per liter) for diesel and petrol to 321.17 rupiahs. The minister stated that the sharp rise in global petroleum prices forced them to make this decision. This decision will likely lead to higher inflation in Pakistan and affect the country's poor population. Fuel stations in major cities such as Lahore and Karachi were crowded with people before the announcement. Imran Hussain, a business owner from Lahore, said that he was waiting at the station to be ready in case there were any shortages. "I've been waiting for my turn in the last 70 minute," he said. Shehbaz sharif, the prime minister, warned on Friday against fuel hoarding. We have enough petrol. We are planning to extend them because we do not know when the Middle East crisis will end," said Minister. Through the Strait of Hormuz, Pakistan imports oil primarily from Saudi Arabia and the UAE. The oil minister announced that the government would reassess its prices every week. (Reporting and editing by Cynthia Osterman; Mubasher Bukhari)
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US Senator Kelly proposes suspension of federal gas tax until October 1.
Democratic U.S. Mark Kelly, a senator from the U.S. Senate, proposed to suspend the federal 18.4 cents per gallon gasoline tax until October 1, in an effort to 'help Americans facing rising?prices at the pump because of the U.S. AAA, an American travel agency that tracks fuel costs, reports a 35-cent increase in gas prices per gallon, to $3.32 on average, over the last week. According to political analysts, a persistent rise in gas prices may hurt the fellow Republicans of President Donald Trump in November's midterm elections. Kelly's proposal is a piece of legislation that will be introduced to the Senate in the next few days. If passed, the legislation would direct the U.S. Treasury Department monitor the suspension of the tax in order to ensure that the savings are passed onto consumers through lower gas prices. Kelly stated that the suspension of federal gas tax will help to bring down prices and provide families with much-needed relief. The White House didn't immediately respond to an inquiry for comment. Trump said in an interview with CNN on Thursday that he was not worried about the rising U.S. gas prices related to the conflict. He added, "if they increase, they will rise." This week, it was reported that the Trump administration is considering measures to combat rising energy prices in light of the war. U.S. officials are racing to reduce the economic and political impact of fuel price increases. The price of U.S. crude oil has risen 35% since the conflict with?Iran began on February 28. Middle East supplies have been disrupted by the expanding conflict. Then-President Joe Biden requested in 2022 that the federal gasoline tax be suspended for three months to combat the record-high prices related to COVID, but Congress did not act. In 2022, five states, including Georgia and New York, temporarily suspended their state gas taxes.
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South Africa's central bank will redraft its risk scenarios in response to the Iran war and rising oil prices
The South African central bank is redrafting its risk scenarios in preparation for the upcoming rate setting policy meeting, as the Middle East conflict continues to escalate oil prices. This was announced by the governor of the central bank. The central bank will decide on interest rates on March 26, after keeping its main loan rate at 6.75 percent in a split decision late in January. Lesetja Kganyago, South African Reserve Bank Governor, said: "We had a baseline (in January's meeting), and we had an optimist scenario and an adverse scenario." The adverse scenario assumed that the average oil prices for the year would be $75 per barrel, and the rand's value would fall to 18,50 dollars. He said that the old negative scenario was "gone - it's in the past... We will create a new one." Brent crude futures rose to over $94 per barrel last week as a result of the Middle East crisis triggered by Israel's and Washington’s bombing Iran. The rand fell to 16.82 cents to the dollar. Kganyago stated that a 10% change in the exchange rate?would have a stronger impact on South Africa's inflation than a similar increase in oil prices. Kganyago stated that although the scenario is adverse, it has not played out as expected. He added that policymakers would only become concerned when they see the effect of the exchange rate on prices. "As a policymaker, you have to decide if this is transitory or persistent. You only react to the persistent and not the transitory, which is a difficult call. Kganyago said that the knock-on effect of global tensions, which have kept the markets on edge over the past few months, and the latest 'crisis', would dominate discussions at the meeting. He was speaking in London on the sidelines an investor conference. We will discuss the impact of geopolitics, oil, emerging markets and exchange rates on the markets. The governor was asked if South Africa would still buy dollars, as it has done since the beginning of the year. After the rand fell nearly 4% against the strong dollar this week, he said that the policy hadn't changed. "If we believe that there are low-cost dollars on the market, then we will buy them," he said. He added that the overall reserve levels have been boosted not only by the dollar purchases but also by the rising value of gold held in the war chest of the central bank and by the proceeds from borrowings by the Treasury. Data released by the central bank earlier Friday showed that South Africa’s net foreign reserve rose from $74.88 to $75.84 at the end February. Reporting by Karin Strohecker, Editing by Rodrigo Campos & Edmund Klamann
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Barclays predicts Brent oil could reach $120/bbl in the Middle East if tensions continue
Barclays stated on Friday that Brent crude oil could test $120 per barrel if Middle East conflict continues for another couple of weeks. Barclays said that "these?numbers? might seem 'too 'high, especially in light of widespread pessimism regarding the oil market outlook for this year. But we reiterate that fundamentals and risks are greater than when we witnessed these levels materialize, during the Russia-Ukraine Conflict." The price of oil has risen sharply due to the U.S. and Israel's increasing conflict with Iran, which has effectively shut the Strait of Hormuz. This has impacted Middle East supply. After Iran threatened to fire on passing vessels, shipping through the Strait of Hormuz was disrupted. This is because it carries about one fifth of all oil, oil, and liquefied gas in the world. Brent crude futures was trading at around $93,60 per barrel, and West Texas Intermediate was at $91.62 per barrel as of 1857 GMT. Barclays reported that oil stranded in tankers on the Middle East Gulf has increased by 85 million barrels, since the conflict began. They also said that the risks for oil prices are still skewed upward. Donald Trump, the U.S. president, demanded Iran's unconditional surrender?on Friday. This was a dramatic increase in his demands, just a week after he began the war with Israel. It could make it harder to negotiate an?assailable end to hostilities. Barclays stated that "Production shutdowns are already occurring in Kuwait and Iraq and could spread to the UAE and Saudi Arabia over time." Barclays stated that the 'far-end 10% scenario is now' implies Brent could reach $150 per barrel by the end of this month.
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South Africa's Central Bank will redraft an adverse risk scenario at the next rate setting meeting
The South African central bank's governor said that the rising oil prices are forcing the central bank to re-evaluate its risk scenarios. The central bank will decide on interest rates on March 26, after keeping the main lending rate at 6.75%, in a split decision in late January. Policy makers at that time cited they wanted to see inflation expectations drop further. Kganyago said that "we had a baseline" (in the meeting in January) and that we had both an optimistic and an adverse scenario. The latter assumed the average oil price per barrel for the year would be $75 and the rand's weakness to 18.50 dollars. He said, "The previous negative scenario is gone. It was in the past. We will create a new one." The rand has weakened to 16.82 cents per dollar this week despite the Middle East Crisis triggered by Israel's bombing Iran and Washington's bombing Iran. Kganyago stated that a 10% change in the exchange rate will have a greater impact on inflation in South Africa than an equivalent jump in oil prices. Kganyago stated that although it was a negative scenario, it did not play out as badly as anticipated. He added that policymakers would only become concerned when they saw the effect of the exchange rate on prices. "As a policy maker, you have to decide if this is transitory or persistent. You only react to the persistent and not the transitory, which is not easy to do. (Reporting and editing by Rodrigo Campos; Karin Strohecker)
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White House: US on the right track to controlling Iran's airspace
White House Press Secretary?KarolineLeavitt stated on Friday that the 'United States was well on its way to achieving control of Iranian airspace. Washington expects to achieve 'the achievable U.S. goals in four to six week. Leavitt told reporters in the White House that Washington is looking into potential candidates for the role of Iran's next leader. This comes a day after President Donald Trump said in an interview the United States must be involved in the selection process. Leavitt stated, "I'm aware that the United States Government and our intelligence agencies are looking at a number of individuals. But I won't go any further into?that." In his 'interview with Trump on Thursday, he said he thought the next leader of Iran was unlikely to be Ayatollah Khamenei, the son of the late Supreme Leader Ayatollah, who is considered the frontrunner for the position of successor to his father who died in a military attack at the beginning of the war. Trump had said earlier on Friday that there would be no Iran deal unless Iran "unconditionally surrendered." "What the President means is that, when he, in his capacity as Commander in Chief of US Armed Forces determines that Iran no longer represents a threat to the United States of America and the Operation Epic Fury goals have 'been fully achieved, then Iran will essentially be at a place of unconditional surrender whether they say it or not," Leavitt stated.
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SEC fines NYSE $9 million for glitch disrupting stock market
New York Stock Exchange agreed to pay $9 million to settle U.S. Securities & 'Exchange Commission charges?over a computer glitch that disrupted the opening of the stock exchange in January 2023 and caused wild swings in prices for blue-chip stocks. The settlement reached on Friday stems from an incident that occurred in 2023 when the NYSE accidentally ran its primary and backup trading system Pillar Production, and Pillar DR (short for disaster recovery) at the same time. The SEC stated that the error caused the primary system to treat opening auctions of 2,824 of NYSE's 3,421?"listed securities" at the time, as if they had already occurred. The glitch led to the halting of trading for 84 stocks. This included 81 stocks whose prices dropped more than 10% with no apparent explanation. More than 4,000 trades were undone or "busted". ExxonMobil was affected, as were McDonald's, 3M and Verizon. According to SEC, it took the NYSE 39 minutes to realize that the 'opening auctions' were a mess and 83 to understand the'scope of damage. The lack of policies and procedures in place to support the "auctions" was allegedly the cause. The NYSE compensated member companies for trading losses in excess of $5.77million. Intercontinental Exchange, based in Atlanta, said that it has improved its procedures and systems. It also stated that the "NYSE opening -and-closing auctions remain to be most reliable liquidity events for NYSE listed symbols." (Reporting from Jonathan Stempel, New York; editing by Hugh Lawson.)
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South32 reports that the U.S. Forest Service has approved a draft for Hermosa Mine expansion
South32, an Australian mining company, said that the U.S. Forest Service had issued a draft decision allowing its Hermosa Mine?project to expand from private land into federal land. South32 reported that the agency had released a draft Record of Decision as well as a final Environmental impact Statement for the project located in the Patagonia Mountains. Hermosa is a deposit of silver, manganese and zinc. The authorization, if approved, would allow South32, Inc. to build infrastructure on land within the Coronado National Forest. This includes a primary access road and a secondary tailings dry-stack facility. South32 stated that Hermosa was the only advanced mine development project capable of producing zinc and manganese, both federally classified as critical minerals. The project also falls under the federal?FAST-41/permitting program which streamlines review for projects deemed to be of national interest. The Forest Service will then issue a final decision after a 45 day 'objection period.' A final Record of decision is expected to be issued in July. South32 stated that it was 'committed to almost 140 additional conservation, mitigation, and monitoring measures developed in collaboration with federal agencies, tribes, and community stakeholders. (Reporting by Dharna Bafna in Bengaluru; Editing by Tasim Zahid)
Saudi Arabia declares its strong fiscal position as Iran tensions spread
Saudi Arabia's Finance Ministry said 'on Friday that the kingdom's fiscal situation was strong, and it had multiple export 'routes' including the 'Red Sea'. This is a week after the U.S. - Israeli war against Iran has caused turmoil in the area.
The spokesperson for the Saudi Arabian finance ministry said that "economic activity continues to run normally" in a statement referring to "recent events", but not directly mentioning the conflict.
The statement continued, "We continue to evaluate economic and fiscal indicators on a regular basis. Current data confirms that our fiscal 'position and medium-term prospects remain solid."
Iran has launched attacks across the region in response to the U.S., Israeli and other countries' attacks. Saudi Arabia has suffered fewer strikes than the rest of the Gulf states.
The price of oil has risen by 20% since Friday. Attacks have also slashed hydrocarbon exports through the Strait of Hormuz, as well as halted production at Saudi Aramco’s largest domestic refinery.
The statement read: "Energy prices are currently rising as a result of recent developments in the energy markets."
"Our energy exporting infrastructure remains resilient and the Kingdom has the flexibility to use multiple export routes including through Red Sea."
The top oil exporter in the world registered a deficit of 276 billion Riyals ($73.54 Billion) for the fiscal year 2025, much higher than the initial estimate of 245 Billion.
The oil revenue in 2025 was down by 20% from the previous years to 590 billion Riyals.
(source: Reuters)