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Russell: China's rebound in crude oil imports has more of a bearish tone than a bullish one.
China's crude oil imports have been positive for the first few months of this year. However, rather than being a sign that fuel demand is improving, the improvement has more to do with rising inventories. Customs data released Friday show that the world's largest crude importer, Saudi Arabia, recorded an average of 11,69 million barrels a day in April. This is down from the 12.1 million bpd it had in March, but up 7.5% from the 10,88 million bpd for the same period last year. The imports in March were the highest since August 2023, and April's relatively strong performance brought the arrivals of the first four month to 11,83 million bpd. This is up 0.5% compared to the same period last year. The strength of imports in April and March was largely due to the availability discounted cargoes coming from Iran and Russia. Both countries are now under new US sanctions. According to commodity analysts Kpler, China's seaborne exports from Russia reached 1.38 million barrels per day (bpd) in April, and 1.22 millions bpd during March. These were the two strongest months since 1.51 million bpd was recorded in October of last year. Kpler estimated that imports from Iran fell to 743,000 barrels per day (bpd) in April. This was down from 1,39 million barrels per day in March which was the highest monthly figure since October. Imports from Iran were likely under pressure in April as the U.S. administration of President Donald Trump increased pressure on Tehran to curtail its nuclear program. Last week, it was reported that sanctions imposed on two Chinese refiners in March andApril for purchasing Iranian crude had led to problems in sourcing oil. This is because the companies Shandong Shouguang Luqing Petrochemical (SSH) and Shandong Shengxing Chemical were unable to source oil. The sanctions against the smaller operators have also deterred the larger independent refiners to buy Iranian barrels. This has led to the fall in imports for April. How long will Chinese buyers be wary about buying Iranian oil? Or, to put it another way, will they find ways to get around the latest sanctions to resume importing from Tehran? China's imports of Russian crude dropped sharply in January after new sanctions were imposed by the departing administration of former U.S. president Joe Biden against vessels transporting Russian crude. Kpler estimated that China's seaborne exports to Russia fell to their lowest level in 26 months during February. Since then, they have recovered as refiners worked around U.S. restrictions. STORAGE FLOWS Understanding why refiners buy more oil from Russia or Iran is important. As Chinese refiners try to take advantage of the discounted prices, they are storing the increased quantities in strategic or commercial storage. At the same time, they are worried that the United States will increase sanctions on the Russian and Iranian oil flows. China does not reveal the volume of crude oil flowing in or out of its strategic and commercial stockspiles. However, an estimate of surplus crude can be calculated by subtracting the amount processed from the total crude oil available from both imports and domestic production. According to calculations based upon official data, China's crude surplus in March was 1.74 million barrels a day (bpd), the highest since June 2023. In the first two month of the year oil imports were low due to the high prices at the time of cargo arrangements. This led to the swing in March from a shortage of crude oil available. Analysts Vortexa say that the average increase in inventories in the five-week period ending May 4 was over 1.1 million bpd. China's continued purchases of crude oil to build up its inventory is a question that arises as global crude prices are under pressure due to increased OPEC+ production and global demand concerns sparked by Trump’s trade war. The deteriorating economy may make refiners more cautious, given that periods of low oil prices tend to lead to higher imports. These are the views of the columnist, an author for.
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Prices of oil rise after US-China trade talks calm market fears
The oil prices increased on Monday, after both sides of the U.S. and China trade talks announced their progress over the weekend. This lifted the market's sentiment that they may be moving towards a resolution to their trade dispute. Brent crude futures rose 27 cents or 0.4% to $64.18 per barrel at 0001 GMT. U.S. West Texas Intermediate crude futures traded at $61,30 per barrel, up by 28 cents or 0.5% from Friday's closing price. The benchmarks gained more than $1 last Friday, and over 4% in the past week. This was their first weekly gain since mid-April. A U.S. deal with Britain made investors hopeful that tariffs imposed by the United States on its trading partners would not cause economic disruptions. On Sunday, the U.S.-China trade talks ended on a positive, as U.S. officials hailed a "deal" that would reduce the U.S. deficit in trade, while Chinese officials claimed the two sides had reached an "important consensus". He Lifeng, the Chinese Vice Premier, said that a joint press release would be issued on Monday. Positive talks between two of the largest economies in the world could boost crude oil demand, as trade between both countries is restored after being disrupted for years by huge tariffs. Toshitaka Takawa, an analyst with Fujitomi Securities, said: "Optimism about constructive U.S. China talks supported sentiment. However, limited details and OPEC’s plan to increase output capped gains." Tazawa was referring plans by the Organization of the Petroleum Exporting Countries (OPEC+) and its allies to increase output in May and Juni, which will add crude oil to the market. A survey revealed that OPEC's oil production was slightly lower in April. Officials said that talks between Iranians and Americans to resolve disputes about Tehran's nuclear program ended on Sunday in Oman, with more negotiations planned. Tehran, however, publicly insisted that it would continue its uranium-enrichment. The U.S. and Iran nuclear deal may alleviate fears about a lower global oil supply that could pressure oil prices. Baker Hughes, an energy services company, said that the U.S. oil and gas companies cut their number of rigs last week to its lowest level since January. (Reporting and editing by Christian Schmollinger; Yuka Obayashi)
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China's CATL will raise at least $4 Billion in Hong Kong listing
According to the prospectus it filed on Monday, Chinese battery manufacturer CATL aims at raising at least HK$31.01bn ($3.99bn) through its Hong Kong listing. This is the largest new share sales in the city for this year. According to documents filed with the Hong Kong Stock Exchange, the maker of batteries used in electric vehicles will sell 117.9 millions shares at a maximum price of HK$263 each. If the offer size adjustment and greenshoe options are used, then the size of this deal could reach $5.3 billion. The prospectus revealed that more than 20 cornerstone shareholders, including Sinopec, Kuwait Investment Authority and Kuwait Investment Authority have subscribed for CATL shares worth $2.62 billion. With the offer size adjustment, up to 17,7 million additional shares can be sold to raise an extra HK$4.65billion ($598,00 million). The greenshoe option allows for the sale of up to 17,7 million additional shares. The filings indicated that the price of the shares is expected to be determined between Tuesday and Friday. A final price will be announced no later than May 19. CATL will sell its Hong Kong shares at a slight discount to Shenzen's Friday closing price if they are priced at HK$263 per share. If the Hong Kong shares are below this level, the discount is larger. CATL stated in its prospectus that it had been granted a Hong Kong Stock Exchange exemption to not publish the minimum price at which shares can be sold, as this could have an impact on the trading of the Shenzhen listed stock. The prospectus stated that 109,1 million shares will be sold to institutional investors. Hong Kong retail investors can bid on 8,8 million shares. This will be the biggest share sale in Hong Kong since Midea Group raised $4,6 billion last year. CATL shares will begin trading at the Hong Kong Stock Exchange from May 20. CLOSING EYE ON US - CHINA TRADE WAR The filings revealed that U.S. investors onshore will not be allowed to purchase CATL shares as part of the Hong Kong deal. However, many of these funds have overseas operations and would be eligible to participate. In January, the company was listed on a list of Chinese companies that U.S. Defense Department claimed worked with China's Military. CATL stated in its prospectus that it was working closely with the U.S. Department to correct the 'false label'. It said: "It doesn't restrict us from doing business with entities, other than a few U.S. government authorities. Therefore is expected to not have a substantial adverse impact on business." CATL's book-building comes at a time when the U.S., China and other countries held constructive talks on de-escalating the trade war in Geneva. However, the 145% tariffs on Chinese goods by Washington and the 125% tariffs on U.S. products by Beijing remain in effect. Tariff policies are rapidly changing. We cannot assess with accuracy the impact that such policies will have on our business. However, we will monitor the situation closely. CATL previously stated that the impact of U.S. Tariffs would be minimal, as this market only accounts for a small portion of the company's business. The Biden administration's policies have severely restricted its North American business. These policies excluded Chinese batteries under an EV subvention scheme. CATL licenses its battery technology in order to assist its U.S. customers, including Ford and Tesla, to build their own battery plants rather than building its. Such partnerships are often criticized by U.S. lawmakers.
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Norway Wealth Fund divests Israel's Paz Retail and Energy Due to West Bank Activities
Norway's sovereign fund, which is the largest in the world, sold all its shares to Israel's Paz Retail and Energy, because the company owns and runs infrastructure that supplies fuel to Israeli settlements on the West Bank. The Council on Ethics of the fund, which is responsible for overseeing the fund's ethical standards, had adopted a stricter interpretation in August, aimed at businesses that support Israel's activities in the occupied Palestinian Territories. In December, the first divestment took place from Israeli telecoms company Bezeq. The fund operates according to guidelines set forth by the Norwegian parliament. It is regarded as a leader on environmental, social, and governance issues. This is the latest move by a European financial institution to reduce links with Israeli companies and those who have ties to Israel since the beginning of the Gaza War in October 2023. Paz, Israel's largest gas station operator, has nine stations located in the West Bank. In its recommendation for divestment, the Council on Ethics stated that Paz was contributing to the perpetuation of the settlements by operating the infrastructure to supply fuel to them on the West Bank. The settlements were established in violation international law and their continuance constitutes a continuing violation thereof. Paz is not available to comment immediately outside of normal business hours. The U.N.'s highest court Last year, it was said Tel Aviv has rejected the ruling as being "fundamentally incorrect" and biased. DIVESTMENTS The Norwegian central bank's board has final say in divestments. The fund has sold off all of its shares in the company. It wasn't immediately clear whether there would be more divestments. The fund's watchdog announced that it had cleared the majority of companies it had examined over their activities within the occupied Palestinian Territories after it conducted a new review following the outbreak the Gaza War. The watchdog stated at the time it had made two divestment recommendations - Bezeq, in December, and Paz now - but didn't say if it had made any more. The watchdog evaluated around 65 companies from the fund's investment portfolio, including those in energy, infrastructure, travel, tourism, banking and other sectors. (Reporting and editing by Leslie Adler, Andrea Ricci and Gwladys Fauch)
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Norway Wealth Fund divests Israel's Paz Retail and Energy Due to West Bank Activities
The world's largest sovereign wealth fund has sold its entire stake in Israel's Paz Retail and Energy, because the company owns and runs infrastructure to supply fuel to Israeli settlements on the West Bank occupied by Israel, the fund said. The Council on Ethics of the fund, which is responsible for overseeing the fund's ethical standards, had adopted a stricter interpretation in August, aimed at businesses that support Israel's activities in the occupied Palestinian Territories. In December, the first divestment took place from Israeli telecoms company Bezeq. The fund operates according to guidelines set forth by the Norwegian parliament. It is a leader on environmental, social, and governance issues. This is the latest move by a European financial institution to reduce links with Israeli companies and those who have ties to Israel since the beginning of the Gaza War in October 2023.
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Official: More than 100 deaths after floods in eastern Congo
A local official reported that more than 100 people died in flooding near the shores of Lake Tanganyika, in eastern Democratic Republic of Congo. The flooding that hit the village of Kasaba comes at a time when Central Africa is most vulnerable. Since the beginning of this year, M23 rebels supported by Rwanda have intensified their offensive in eastern region. Thousands of people were killed in the fighting during the first two month of this year. Samy Kalodji said on Saturday night that the reports coming from the Fizi territory, which is in South Kivu Province, where the village lies, "indicated over 100 deaths." The area affected is still administered by Kinshasa, and not one of the areas taken over by M23. Didier Luganywa said that the South Kivu Government spokesperson, Didier Luganywa stated in a press release the flooding incident took place between Thursday night to Friday, when torrential rainfall and strong winds caused Kasaba River to overflow. The statement stated that 62 deaths were confirmed and 30 people were injured. Officials said that the Kasaba region was only accessible by Lake Tanganyika, and the mobile network was not available. This could cause delays in humanitarian aid efforts. (Reporting and editing by MacDonald Dzirutwe, David Holmes, and Ange Kasongo; Additional reporting in Kinshasa by Ange Kalongo)
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Trump's quest for $1 trillion is unlikely to bring about Saudi-Israeli ties
Donald Trump, the U.S. president, will land in Riyadh, Saudi Arabia, on Tuesday. He will be welcomed with lavish ceremonies, palaces gilded in gold, and the prospect that $1 trillion worth of investments are in store. The raging Gaza war has prevented him from achieving a goal that he had long desired: Saudi-Israeli normalisation. Two Gulf sources and an official from the United States said that behind closed doors, U.S. officials were quietly pressuring Israel to agree to a ceasefire immediately in Gaza. This was one of Saudi Arabia’s conditions for resuming normalization talks. Steve Witkoff, Trump's Middle East envoy, told an Israeli embassy audience in Washington, this week, that he expected to see progress in expanding the Abraham Accords. The Abraham Accords were a series of agreements brokered by Trump during his first term, under which Arab countries including the UAE and Bahrain recognized Israel. Witkoff stated in a video recording of his speech that "we think we will be making some or many announcements very soon, and we hope they will result in progress by next years." He will be expected to accompany Trump to the Middle East. Two sources stated that the Israeli prime minister Benjamin Netanyahu's opposition to a permanent end to the war and the creation of a Palestinian State makes progress in similar talks with Riyadh very unlikely. Saudi Arabia doesn't recognize Israel as legitimate. This means that the Middle East’s two most powerful economies and militaries do not have any formal diplomatic relations. Normalising relations would, say supporters of the move, bring stability and prosperity in the region while countering Iran’s influence. Since the beginning of Israel's Gaza war, establishing ties is especially toxic for Saudi Arabia. It was the birthplace Islam. According to six sources, including two Saudis and two U.S. government officials, this issue, which was central to bilateral discussions in Trump's term, is now effectively decoupled from other issues of economic and security between Washington and Saudi Arabia. All the people asked to remain anonymous in order to discuss sensitive diplomatic discussions. Dennis Ross, an ex-U.S. negotiator, said that Saudi Arabia's defacto ruler, Crown Princess Mohammed bin Salman needs to see the Gaza War end, and have a path to a Palestinian State "before he engages in the normalization issue." According to six sources, Washington and Riyadh are focusing Trump's visit primarily on the economic relationship and other regional issues. Both sides are looking at lucrative investments, such as mega-projects, arms deals, and artificial intelligence. They said that the approach was cemented during diplomatic discussions between Saudi and U.S. officials before the trip. This is the first official state visit of Trump’s second term. Trump has stated that he wants to invest a trillion dollars in U.S. firms, building upon the $600 billion commitment made by the crown prince. The rich kingdom, which is the top oil exporter in the world, knows how to impress guests and secure favors. Sources said the goal is to avoid diplomatic landmines, and possibly, win concessions from Trump regarding the Gaza War and its aftermath. The Trump administration wants to make this trip a big deal. This means lots of big announcements about deals and collaborations, which can be sold to Americans as good for America", said Robert Mogielnicki. He is a senior resident scholar with the Arab Gulf States Institute in Washington. He said that "normalizing relations with Israel" was a more difficult task than rolling out a red carpet for Trump and announcing investments deals. A State Department spokesperson refused to comment on an agreement reached before the trip. Trump, however, "will seek to strengthen the ties between our Arab Gulf partners and the United States during the visits." The Saudi Government Communications Office did not respond to a comment request. COURTING the Kingdom Before Hamas' Oct.7 attack on Israel, which killed 1,200 people, and sparked the devastating Israeli offensive in Gaza - the Crown Prince was finalising a historic diplomatic agreement: A U.S. Defense pact as a trade for Riyadh recognizing Israel. The scale of Israel’s campaign in Gaza - killing 52,000 and forcing 1.9 million people to flee - forced a pause on the talks. Bin Salman accused Israel's of genocide. Two Gulf sources claimed that Trump, frustrated by the long-term crisis in Gaza, could use his trip to announce a U.S. plan to end the 18 month war. They said that the plan could lead to a new transitional government in Gaza and new security arrangements - potentially reshaping region diplomacy, and opening up future normalization discussions. Axios reports that Trump, in a sign of the importance of the diplomacy, met with Israeli Strategic Affairs Minister Ron Dermer privately on Thursday. They discussed the nuclear and war talks with Iran. The U.S. State Department didn't immediately answer questions about Trump’s Gaza discussions. Trump has conspicuously not announced that he will be visiting Israel during his tour of the area. Two diplomats have noted that the U.S. President has not spoken about his "Gaza Riviera plan" which angered the Arab World with its suggestion to resettle the entire Gazan community and U.S. possession of the strip. Washington took a number positive actions in the lead up to the visit. A Saudi ceasefire in Yemen coincides with an agreement by the United States to stop bombing Houthis. Washington has also separated civil nuclear talks and the normalisation issue. To bypass the opposition of Congress, the stalled Saudi U.S. Defense Pact was revived as a scaled-down version of security guarantees. Three sources confirmed that the Trump administration is now taking up these talks along with discussions on a civil nuclear agreement. They cautioned, however, that it would take some time to define the terms. CHINA INFLUENCE Trump's Saudi Arabia trip is his second foreign trip after his reelection and first official state visit since his inauguration. He attended the funeral of the pope in Rome. He will also travel to Qatar and the United Arab Emirates. Diplomats claim that beneath the showmanship and the hype of Trump's visit, lies a calculated U.S. attempt to reassert its influence and reshape the economic alignments of a region in which Beijing, Washington's main economic rival, has steadily increased its foothold within the petrodollar-based system. Trump's first overseas trip in his first term began in Riyadh where he announced $350 billion of Saudi investments. Trump has the deepest trust of the Saudi leadership. This is rooted in his close relationship with them during his first term, which was marked by massive arms deals and the steadfast U.S. support for Bin Salman. Five industry sources confirmed that Saudi Arabia and its Gulf Allies plan to ask Trump to relax U.S. Regulations, which have been deterring foreign investment in the U.S. for years. This is especially true of sectors considered to be part of America's critical national infrastructure. Saudi ministers are expected to advocate for a business-friendly environment in meetings with U.S. officials. This is especially true at a moment when China is actively courting Gulf capital. Saudi Arabia will not find it easy to counter China's economic growth, even though this may be the top priority of Trump's foreign policies. China's influence in Saudi Arabia has grown since the launch of Vision 2030. It now dominates sectors such as energy, infrastructure, and renewables. Samia and Humeyra Pakuk reported from Washington, with additional reporting by Alexander Cornwell and Pesha Mahed in Riyadh. Samia and Humeyra also wrote the article. Frank Jack Daniel edited it.
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Aramco's first-quarter profits drop by nearly 5%
Aramco, the Saudi oil giant, reported on Sunday a drop of 4.6% in its first-quarter profits due to lower sales. The top oil exporter in the world reported a net profit of 97.54 riyals (about $26,01 billion) for the three-month period ended March 31. This was higher than the median estimate of 16 analysts, which was $25.36 billion. Aramco has confirmed the previously announced $21.36 billion total dividends for first quarter. Of this, $219 millions were performance-linked dividends. This mechanism was introduced in 2022 after Russia invaded Ukraine and oil prices soared. Aramco said in March that it would declare a total dividend of $85.4 billion by 2025. This is a sharp drop from the $124 billion payout last year, which was based upon 2023 and 2024 earnings. Performance-linked dividends, which totalled $43.1bn last year, were slashed by 98% due to a lack of free cash flow. In the first quarter of 2018, free cash flow decreased by 15.8% compared to a year earlier. Amin Nasser, the Chief Executive of Aramco, said that "global trade dynamics affected the energy markets in the 1st quarter of 2025 with economic uncertainty affecting oil prices." He added that Aramco’s results demonstrated the value of low-cost operations. "Such periods highlight the importance disciplined capital planning, execution and our long-term perspective. Aramco’s resilience is what drives both its financial performance as well as our progressive and sustainable base dividend in volatile times. The capital expenditure in the first quarter was $12.5 billion, an increase of 15.9% over a year ago. (1 dollar = 3.7507 Riyals) (Reporting and editing by Edmund Klamann, Elaine Hardcastle and Yousef SABA)
Australia's South32 to quit coal in $1.65 bln sale
Australia's South32 Ltd on Thursday stated it had actually accepted sell its Illawarra metallurgical coal organization to a consortium led by an Indonesianowned business for $1.65 billion, exiting coal to concentrate on broadening in copper and zinc.
The coal organization is being sold to an entity owned by Golden Energy and Resources (GEAR) and M Resources, developing on GEAR's. metallurgical coal holdings in Australia.
The offer consists of an in advance money payment of $1.05 billion. at conclusion, and a deferred cash consideration of $250 million. payable in 2030.
Analysts stated the incoming cash would reduce issues around. South32's balance sheet as it prepares to bring its $2.16. billion Taylor zinc task online in the United States.
From our point of view, the list price for fulfilled coal seeks to. be fair and this is an ageing asset that requires ongoing. reinvestment to support the associated facilities, Citi. experts said in a note.
Shares of the diversified miner were trading 1.4% higher at. 0031 GMT, outshining the more comprehensive market, after having. leapt as much as 5.3% earlier in the session.
The Illawarra job generated $1.64 billion underlying. profits in financial 2023 for South32, about 18% of its total. underlying revenue.
South32 CEO Graham Kerr stated the offer will improve the. company's portfolio and unlock capital to purchase advancement. projects in copper and zinc.
The deal will likewise streamline our service and lower. our capital intensity, Kerr added.
The deal is anticipated to finish in the first half of fiscal. 2025, based on certain conditions including an approval from. the Foreign Financial Investment Review Board.
It is likewise based on a waiver of pre-emptive purchase. rights held by BlueScope Steel which purchases Illawarra. coal, under the exact same commercial terms.
BlueScope, in a different declaration, said it will consider. its position on the task sale.
Singapore-registered GEAR, owned by Indonesia's Widjaja. household, would hold 70% of the Illawarra service, while. Australia's independently held M Resources would own the rest, post. completion of the deal.
(source: Reuters)