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Administration sources claim that the US will allow the waiver on Iranian oil to expire
Two administration officials said on Tuesday that the Trump administration would allow a 30-day waiver on sanctions against Iranian oil at sea to expire later this week. The U.S. has imposed a blockade of shipments from Iranian port. Treasury Secretary Scott Bessent said last month that the waiver issued by the Treasury Department on March 20 allowed 140 million barrels to reach the global market and relieved pressure on energy supply during the Iran war. The waiver will expire on April 19. After lawmakers of both parties criticised the administration's decision to temporarily relax sanctions on Moscow and Tehran, while Israel and the U.S. are at war with Iran, and Moscow is continuing its war against Ukraine, the move was made. One of the?U.S. officials stated that Washington has a range of?authorities?it can use against institutions who buy Iranian oil. This includes secondary?sanctions. "In addition to the snapback of U.N. "In addition, with the snapback of?U.N. sanctions on Iran and its history trying to 'hide behind seemingly legal activity?to carry out its?illicit behavior, any activity that Tehran engages in could trigger additional sanctions," said the source. Reporting by Timothy Gardner, Editing by Chris Reese
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Bessent, US Treasury's Bessent, says China is an unreliable partner for hoarding oil in wartime.
U.S. Treasury secretary Scott Bessent said on Tuesday that China was an unreliable?partner in the Middle East War?by hoarding supplies of oil and limiting the exports of?some goods. This is similar to its actions during the COVID-19 Pandemic. Bessent said he spoke with Chinese officials on the matter. He avoided a question on whether the dispute will derail U.S. president Donald Trump's plans to visit Beijing mid-May. However, he said that Trump and Chinese President Xi Jinping have a good working relationship. "I believe the message of this visit is one of stability. "We've enjoyed great stability in our relationship since last summer. That comes from the top down," said he. "I think communication is key." Bessent criticized China for its actions in the U.S. - Israel war on Iran. This caused oil prices to rise by 50% and caused supply chain disruptions. Bessent stated that China has proven to be an unreliable partner in the last five years. "China was unreliable three times during COVID when they hoarded health products and secondly on rare earth," Bessent referred to Beijing's threats to restrict?rare Earth exports. He said that the United States was now stockpiling oil instead of helping to ease the global shortage of oil caused by Iran's closing of the Strait of Hormuz which transports 20% of all the world's crude. China had a strategic oil reserve roughly equal to the size of all the reserves held by the International Energy Agency's 32 members, yet it continued to buy oil. Bessent stated that China continued to buy oil and hoarded it, as well as cutting off exports. The Chinese Embassy in Washington did not immediately comment. On Monday, the International Monetary Fund (IMF), World Bank and International Energy Agency (IEA) urged all countries to?avoid hoarding of energy supplies and imposing import controls that would worsen the shock they call the 'global energy markets biggest ever shock. The IMF, World Bank and International Energy Agency did not name specific countries. After weekend talks on ending the conflict in Islamabad broke down, the U.S. military began blocking ships from leaving Iran's port on Monday. Tehran also threatened to retaliate by?blocking ports of its Gulf neighbors. Oil prices have risen back to $100 per barrel with no signs of a quick reopening. Bessent had earlier told reporters that the blockade would ensure that Chinese ships and?others wouldn't be allowed to cross the strait. "So, they won't be able get their oil. They can still get oil. Bessent added that China was buying Iranian oil at a rate of about 8% per year, and more than 90%. Reporting by Andrea Shalal, Editing by Katharine Jackoll and Andrea Ricci
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French Finance Ministry raises inflation estimate, trims growth forecast
The French Finance Ministry has lowered its 2026 growth forecast and raised its inflation estimate to reflect the impact of the Middle East conflict. According to the ministry, the euro zone's 2nd largest economy will now grow by 0.9% in 2014 instead of the 1.0% previously expected. Inflation is expected to average 1.9%, instead of 1.3%, due to the higher energy import prices. The Finance Minister Roland Lescure stated that the current crisis will have "a modest impact" on the growth, citing momentum carried over from last years, and inflationary effects will be "limited" due to France's heavy dependence on nuclear energy. According to the ministry, its projections assume that oil prices will stay?at $100 per barrel until May's end before gradually decreasing. The government has reiterated that despite a less favourable economic outlook it is "committed" to cutting the budget deficit of the public sector down to 3% by 2029 from 5.1% as recently as '2025. The ministry stated that a rise in global bond rates since the conflict began 'has increased borrowing costs. This has added an estimated 4 billion euros this year to government financing expenses. (Reporting and editing by William Maclean)
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UN agency: Fertiliser shortages caused by the war in Iran are a major concern for developing countries.
The?head of United Nations'?trade agency, said Tuesday that the shortages of fertilisers caused by the Iran war is a?priority for developing countries. Gains from higher oil and gas prices are unlikely to last long for producers in the developing world. The'more immediate issue' is fertiliser because it affects food safety and food is the foundation of stability, said Pamela Coke Hamilton, executive director at the International Trade Centre. She added that oil and natural gas can be obtained from other sources so that the situation is "not as dire", even if the price increases are a problem. Coke-Hamilton's agency, which focuses on promoting international trade, has noted that about a third of global urea passes through the Strait of Hormuz. Iran and the United States have blocked the Strait. In an interview, she said: "There are significant issues in regards to the availability of fertilisers. There's also a deadline for agriculture as far as ensuring that you have enough for your next harvest. This is something we miss now." In an interview, she said: On Monday, the U.N. announced that it was launching a diplomatic campaign to support a U.N. proposal aimed at ensuring safe passage of fertilisers through the Strait of Hormuz. ITC stated that the dependence on Gulf-produced nitrogen fertilisers is highest in several Asian developing countries such as Kenya and Uganda, South Africa and Sri Lanka, and Kenya. ITC stated that shortages typically lead to lower yields and reduced fertiliser usage, not changes in harvesting times. This effect is more pronounced in areas such as Sub-Saharan Africa?and South Asia?where production is more dependent upon rains?, planting windows?are narrower?and farmers?are more sensitive to input costs?. ITC stated that alternative suppliers, especially in North Africa, can help fill the gaps.?Egypt holds a potential of $1.6 billion in untapped exports, and Algeria another $1.3 billion. ITC stated that countries like Nigeria, Kazakhstan and Brazil may benefit from increased revenues. However, these gains would be limited, as all but Kazakhstan were net importers. The ITC stated that while higher natural gas prices could benefit countries like Algeria, Malaysia and Turkmenistan, short-term supply expansion is unlikely to occur. Reporting by Philip Blenkinsop, Editing by Alexandra Hudson
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No rate cuts if oil prices rise? No problem for US stocks
Investors say that the U.S. Stock Market is back where it was six weeks ago when the Iran War began. This is because they bet on a short-term conflict. What if this thinking is incorrect? The S&P 500 benchmark's round-trip comes despite a dramatically different investing environment compared to February?27. This was just before U.S. and Israeli military strikes started the Middle East?"conflict". Oil prices have risen by about 40%. The fear of inflation has driven up the benchmark yields on?Treasuries. These same concerns have led the markets to rule out interest rate cuts in this year. If they continue, all of these factors can affect the performance of stocks. There's a lot complacency about this. Brad Conger is the chief investment officer of Hirtle Callaghan. The company manages endowments and other foundation assets. "I don't think we are as well off as we were on February 27th. And we're paying the same price." Investors seize on what they perceive as a solid economy, and in particular a positive outlook for corporate profit that has improved since the start of the war. Investors are aware of the stock market’s resilience in this three-year bull market, and they don't want to miss out on any rallies. WAR RISKS VIEWED A FLEETING S&P 500 has recovered after initially dropping after the crisis started. In late March, the index had fallen over 9% since its all-time January high. This was close to a 10% drop that would indicate a correction. S&P 500 closed Monday up 0.1% from the start of the war, and only a little over 1% off its record high. The S&P 500 was up 1% for the day on Tuesday. The optimism about a possible resolution increased after a ceasefire agreement was reached last week. Investors were bracing themselves for the possibility of war-related developments that could cause asset volatility. Peter Tuz of Chase Investment Counsel Corp. said that the market is looking at "temporary risk" which will be resolved in a short time, as opposed to a new regime of higher energy prices, interest rates, and inflation. OIL HIGHER NOW OR LESS LATER? Oil prices are a major factor in the performance of the stock market. Oil prices that continue to rise will increase costs for both businesses and consumers. Angelo Kourkafas is a senior global investment analyst at Edward Jones. He said that the markets are showing that oil prices will be moderated by the end of the year. According to LSEG, the front-month contract of U.S. Crude is hovering around $95 a bar, and the December contract at $77. Kourkafas stated that the markets now see energy disruptions as being near-term. "There's this idea that there are a lot near-term disruptions, but they're temporary," Kourkafas said. Once we get past this, we will return to the economic resilience we enjoyed before. Oil prices have already affected U.S. inflation. The Consumer Price Index rose in March at the highest rate in almost four years. Investors have lowered expectations of Federal Reserve rate reductions due to inflationary concerns. This was a major source of optimism for U.S. stocks heading into the new year. According to LSEG data, as of Tuesday, Fed funds futures had priced in only 6 basis points of easing for December. This is less than a standard 25-basis point cut. Prior to the war, roughly two such quarter-percentage-point cuts had been expected by December. The rise in Treasury yields is also due to oil-driven inflation. The benchmark 10-year Treasury rate was around 4.3% last, up from 3.96% in February. The higher benchmark yields can have a negative impact on equity performance. This could be due to the fact that they translate into higher borrowing costs, both for consumers and companies. BUY STOCKS FOR OUTLOOKED EARNINGS Since the start of the war, estimates for U.S. company profits have increased. According to LSEG IBES, S&P 500 companies will increase their earnings by 19% between 2026 and 2015, compared to an estimated 15% increase before the war. Stocks have become more attractive due to the increased earnings forecast. According to LSEG Datastream, the price-to earnings ratio for S&P '500 was?20.4, down from a high of over 23 at the end of October. Chris Fasciano is the chief market strategist of Commonwealth Financial Network. He said that estimates are continuing to rise despite the increase in oil prices. "More appealing valuations and higher earning estimates make me feel okay about the background." In the weeks to come, companies will report their first quarter results. Tuz stated that people are expecting a huge increase in earnings from all companies this year. It's too early to tell if the number is accurate or not.
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Russia is ready to justify the price of a new Hungarian Nuclear Plant to Magyar
The?Russian state nuclear corporation, whose?boss spoke on 'Tuesday' after the Hungarian 'Prime Minister elect Peter Magyar claimed that the price was too high, is prepared to defend its 'price tag' for a project to expand Hungary’s only?nuclear facility. The project, worth 12.5 billion euros ($14.75billion), was awarded without competition to Rosatom of Russia. It has been seen as a symbol for the close relationship between President Vladimir Putin and Viktor Orban who is leaving office after losing a weekend election to Magyar. Magyar stated on Monday that Hungary will review the situation and may even cancel the expansion if it is necessary. He suggested that if contacted, he could ask Putin to improve?financial conditions. Alexei Likhachev, the Rosatom chief, told reporters that "we will have to pass an examination." In the best sense. Examining the cost-effectiveness of a project and its effectiveness. We are ready to take this exam. Rosatom has signed an agreement in 2014 to build two new nuclear reactors at Paks, a nuclear power plant located south of Budapest. The Russian VVER units are still expected to be finished by 2030-2031, despite repeated delays. Each unit has a?capacity? of 1.2?gigawatts. Orban's defeat, which comes after he maintained close ties with Putin in spite of waves of European Union sanctions against Russia for the war in Ukraine is a major blow to the Kremlin. On?Tuesday?, Kremlin spokesperson?Dmitry Peskov said that Moscow was happy?with what it perceived as Magyars' willingness to engage in a "pragmatic dialog".
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OMV denies violating Austrian rules on lowering fuel prices
Austria ordered an official review to determine if the 'partially-state-owned oil and natural gas company OMV' is complying with new rules on lowering fuel prices. The company, however, denied that it had broken them on Tuesday. The 'U.S. and Israeli?war on Iran has caused the biggest oil supply disruptions in history, sending oil prices soaring. European governments are scrambling to protect their consumers. Austrian government introduced the so-called "petrol-price brake", under which the value-added tax increase?from increased petrol prices are passed on to the consumers in the form a reduction?in tax, initially set at 6 U.S.-cents per litre. The national broadcaster ORF reported that OMV had told wholesale customers it would only be reducing the diesel price by 2.8 cents per litre. Austria's Economy Ministry said that it and E-Control, the national energy regulator responsible for enforcing rules, were informed "at short notice" of OMV’s planned price adjustments. The burden of proof is now with OMV. In any event, we will assign E-Control to carry out a?special verification," the statement added. E-Control responded to a query by saying that it would request relevant?information soon from OMV. OMV, when asked for comment, did not deny the reported price change, but said that it was following the rules. It argued that the calculation differed if you took into consideration 'fuel imported from abroad rather than refined here in Austria. It said that OMV?was fully transferring the 5 cent discount on Schwechat products, its main refinery?Austria?, to all of its customers. The company explained that the price of OMV's wholesale products is determined by a combination calculation, based on the production and import volume in Schwechat. Reporting by Alexandra Schwarz Goerlich, Writing and Editing by Francois Murphy.
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Gold prices rise on the back of a weaker dollar and hopes for US-Iran talks to resume
Prices of gold rose more than 1% Tuesday as the U.S. Dollar weakened. Meanwhile, hopes for a resumption of U.S.-Iran negotiations also helped to support prices by easing inflation fears. By 11:31 am, spot gold had risen 1.5% to $4,808.69 an ounce. ET (1531 GMT). U.S. Gold futures increased 1.4% to $4833.10. Sources say that the U.S., Iran and their respective negotiating teams could return to Islamabad to resume the talks this week in order to end the 'war.' After the weekend negotiations collapsed, Washington imposed a?blockade? on Iranian ports. The direction of the gold price will be determined by the outcome of the Pakistani talks and the progress made in the lead-up to the weekend. Bob Haberkorn is a senior market analyst at RJO Futures. He said that if we get positive news metals are likely to?continue rising'. He added that "lower dollar and lower oil prices are helping gold out right now, because when the war began, there was an influx of cash, as well as a concern over being able assemble energy supplies." Oil prices also fell as the dollar weakened. The weaker U.S. dollar makes the greenback-priced gold more affordable to holders of other currencies. The data showed that U.S. producer prices increased less than anticipated in March, as services costs were unchanged. However, the rising energy prices due to the war against?Iran exacerbated inflation pressures. Gold, despite its role as a hedge against inflation, is less appealing in an environment with higher rates because it has no yield. The traders now expect a U.S. interest rate cut of 28% this year. This is compared to expectations for two reductions before the war. Analysts at Commerzbank stated that the gold price was unlikely to drop much more as long as the market did not seriously consider an increase in interest rates by the U.S. Federal Reserve. Silver spot rose 4.7%, to $79.12 an ounce. Platinum gained 0.9%, to $2,088.13, and palladium fell 0.2%, to $1,571.02. (Reporting and editing by Keith Weir in Bengaluru)
Bloomberg News reports that Shell is in talks with UAE-based ADNOC to sell fuel outlets in South Africa.
Bloomberg News, citing sources familiar with the situation, reported that Shell has advanced talks with Abu Dhabi state oil company ADNOC about a possible deal to sell its retail fuel stations in South Africa. The transaction is likely to be worth around $1 billion.
ADNOC was named as the preferred bidder, after Shell's failed negotiations with commodity traders Gunvor Group. A deal could be reached as soon as this quarter.
The British oil giant has lowered its expectations for first-quarter production of gas due to the "volatility" in the energy markets following the Middle East conflict.
Bloomberg reported that Shell would sell 600 of its retail fuel outlets to ADNOC, giving it about 10% of the South African market.
Shell, which has operated in South Africa for over a century now, announced plans to 'exit' its downstream business in the region by 2024.
ADNOC had previously announced plans to invest 150 billion dollars between 2026 and 3030?to boost growth and'meet the global energy demand.
Shell and ADNOC Distribution didn't immediately respond to comments. (Reporting and editing by Sahal Muhammad in Bengaluru, Raechel Thankam Job from Bengaluru)
(source: Reuters)