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As the Middle East war escalates, oil prices rise as Iraqi tankers are attacked.
The price of oil rose on Thursday, after 'Iraqi officials reported that Iranian explosive-laden ships had 'hit two fuel-oil tankers. Brent futures were up $5.69 or?6.19%?to $97.67 per barrel at 0118 GMT. U.S. West Texas Intermediate crude (WTI) was up $5.11 or 5.66%?to $92.36. Farhan al Fartousi, director general of?General Company for Ports', said on Wednesday that two foreign tankers carrying Iraqi oil fuel were struck by unknown attackers and caught fire. Initial investigation by Iraqi security officials revealed that explosive-laden boats from Iran struck the two tankers. Tony Sycamore is an IG analyst. He said: "This seems to be a 'direct and forceful Iranian reaction to the IEA overnight announcement of a mass strategic reserve release aimed to cool?runaway price increases. The International Energy Agency 'agreed? to release a 400?million barrels record of oil in order to control prices, which have risen due to the supply shocks caused by the U.S. and Israeli war against Iran. The U.S. contributes the majority of this release, 172 million barrels, from its Strategic Petroleum Reserve. Tina Teng is a market'strategist with Moomoo ANZ. She said that the IEA's decision to release oil reserves could only be a temporary fix, because disruptions in oil shipments across the Strait of Hormuz, and a production halt of major proportions in certain?Middle Eastern nations, may cause a supply crisis on a longer-term basis. Donald Trump, the U.S. president, said that Washington is in "very good condition" when it comes to its war against?Iran. He also stated that the U.S. would "look very closely at the Straits." U.S. intelligence, however, indicates that Iran's leaders are still intact and not at risk of collapse anytime soon, according to sources who have knowledge of the matter. Teng said that oil prices were continuing to rise as there was no sign of a de-escalation of the war in the Middle East. (Reporting and editing by Tom Hogue, Lewis Jackson and Sam Li)
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Liontown, Australia's lithium producer, reports a larger interim loss and is looking to recover its lithium.
Liontown, an Australian company, reported a wider?first-half?loss on Thursday following a non-cash?charge. It also said that it was reviewing the potential expansion of its Kathleen Valley mine due to likely?higher lithium prices. The price of the 'raw material' used in electric vehicles batteries is recovering after a two-year slump due to a slower than expected EV adoption that led to oversupply. In its December quarter report, Liontown reported that prices had improved. They achieved pricing of $900 per metric ton - up 28% from the previous quarter. It sold 190 000 tons of spodumene, a lithium raw material in the first half. The company said that it expects to see cash flow improve in the second half of the year, with FY2026 guidance remaining unchanged and spodumene pricing strengthening into CY2026. Tony Ottaviano, CEO of the'miner', said that its energy is generated 80% by renewable sources. This means it will be insulated from an increase in oil prices caused by the conflict in the Middle East. He said Liontown was also considering a brownfield extension at Kathleen Valley, and that the board would decide whether or not to approve it during the first quarter of the next financial year. He said that a decision would likely depend on the direction of lithium prices. As of 1234 GMT, shares were down up to 3%. They stood at A$1.58. Liontown reported a net loss after taxes of A$184 (131 million) on a statutory basis for the six-month period ended December 31 compared to a loss A$15 in the previous corresponding 'period. Liontown reported that the latest loss was due to a non-cash A$104m?accounting?charge related to a derivative convertible note, which was primarily influenced by the share price increase of Liontown from $0.70?to $1.575?over the period. Last month, LG Energy Solution of South Korea sold its 7.5% stake in the company worth at least A$419m. $1 = 1.4019 Australian Dollars (Reporting and editing by Alan Barona, Christopher Cushing and Melanie Burton from Melbourne and Bengaluru)
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How did US presidents tap strategic petroleum reserves in wartime?
The U.S. will release '172 million barrels' of oil from the Strategic Petroleum Reserve. This is more than 40% of an overall release that has been coordinated with other allies to help lower soaring prices caused by disruptions in supply due to the U.S. and Israeli war against Iran. The sale of?U.S. The?U.S. The U.S. Department of Energy announced that the U.S. withdrawal would start next week and last for about four months. SPR holds approximately 415 million barrels of crude oil, the majority of which are high sulfur or sour, which U.S. refineries can process. The crude oil is stored underground in salt caverns that are hollowed out on the coasts of Texas and Louisiana. They can hold 714 million barrels. Here's how U.S. Presidents have used the SPR in times of war. RUSSIA INVADES UKRAINE Former President Joe Biden, in March 2022, a month after Russia invaded Ukraine ordered 180?million barils to be released over a six-month period - this was the largest ever sale from the emergency stock. Biden and later President Donald Trump slowly purchased oil to replenish reserves. However, little was added as Congress needed to provide additional money. 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, in his first term, stated that his administration was "ready to tap into the SPR" if necessary. This did not occur, however, as Saudi Arabia's Abqaiq Plant and Khurais Field quickly recovered their oil production. LIBYA?CIVIL WAR Former President Barack Obama released 30 million barrels of oil from the reserve in June 2011 to counter the disruptions on global markets caused by the civil war in Libya, the oil producer. This sale was coordinated by the IEA in Paris, resulting an additional 30 million barrels of oil from other members. OPERATION DESERT SSTORM After the Iraqi invasion, George H. W. Bush, then President, sold 21 million barrels of oil in two phases between 1990-1991. In October 1990, the U.S. demanded a test sale of 3.9 million barrels. After?U.S. In January 1991, after?U.S. (Reporting and editing by Tom Hogue; Timothy Gardner)
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Australian shares fall as fears of inflation fuelled by oil prices increase
Australian shares dropped on Thursday after a two-session recovery. The oil price surge, linked to the Middle East conflict, heightened inflation fears, dampening appetite for risk and increasing expectations of a rate increase next week. As of 2337 GMT, the S&P/ASX 200 index was down 1.3% to 8,633.10. The price of oil soared sharply after the Gulf was still constrained by ship attacks on the Strait of Hormuz. This is a major chokepoint in global crude trading. The markets are now expecting a rate hike by the Reserve Bank of Australia in the next week. This is because the central bank will likely address the rising cost of living pressures caused by increased fuel prices. The markets quickly increased the probability of an increase next week from less than 30% earlier this week. A further move is fully priced in by August. Australian financials fell by 1.2%. The top lender Commonwealth Bank was responsible for 0.7% of the Australian fall. ANZ dropped nearly 2%. Macquarie Group, a leading investment bank, saw its shares fall as much as 2,3%. BHP's and Fortescue’s respective 1,4% and 1.8% declines in share prices weighed on the miners, causing them to lose 1.7%. The sub-index fell further due to the Australian gold sector. It was down by 2.2%. Pantoro?Gold and Evolution Mining were down 4.5% and 2.0%, respectively. The U.S. Dollar strengthened during the Middle East conflict, erasing a large part of the gains made by gold stocks. Goodman Group, the data centre owner, dropped by 3.6%. Healthcare ?stocks slipped 1.3%. The technology stocks fell 3.6% in line with overnight losses on Wall Street. Software firm WiseTech Global tumbled 4.6%. Oil prices increased, and energy stocks rose by 1.4%. The sector has gained 22,8% this year, after falling behind the benchmark over the last three years. The benchmark S&P/NZX50 index in New Zealand was down by 0.4% to 13,236.46.
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Rodriguez, Venezuela's oil minister, promotes his deputy to the position of head
Delcy Rodriguez, Venezuela's acting president, announced on Wednesday that she had appointed Paula Henao as oil minister. Henao will play a key role in the country's overhaul of its oil production under U.S.-imposed pressure. After the capture of Nicolas Maduro by the United States in January, Rodriguez rose from his position as vice-president to become president. Henao will be the new 'president of the United States. The U.S. is pushing to open Venezuela up to American investment in the oil, gas and mining industries. Rodriguez has been publicly praised by President Donald Trump for his cooperation in efforts to?move the oil to the United States. Venezuela has the largest known oil reserves in the world. "I'm confident that with her 'professionalism', extensive experience, and many years in this ministry, we can advanc?e in the recovery and development of the energy sector. This is a fundamental pillar of?economic growth? and the?well-being?of Venezuelans?people?" Rodriguez wrote in a post on social media. (Reporting and Writing by Brendan O'Boyle; Editing by Daina-Beth Solomon)
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US releases 172 Million Barrels of Oil from Strategic Petroleum Reserve
U.S. Secretary of Energy Chris Wright announced on Wednesday that the U.S. would release 172,000,000?barrels?of oil?from its strategic 'petroleum -reserve? in an effort to lower oil prices, which have soared because of supply shocks caused by the U.S. and Israeli war against Iran. Wright said that the'release' is part of the 400 million barrels of oil released by the International Energy Agency earlier in the day. Wright stated that the release of the film will start next week, and it will take?about 120 days for delivery. On February 28, the U.S., Israel and other countries began to attack Iran. Iran responded by launching its own attacks on Israel and Gulf states with U.S. base. The Iranian Islamic Revolutionary Guard Corps has raised the stakes in the global economy by threatening to 'block oil shipments out of the Gulf until the U.S. or Israeli attacks stop. The war has shook markets all over the world. Donald Trump said that Washington would "reduce" the threshold of the Strategic Petroleum Reserve when asked on Wednesday. The U.S. Energy Secretary said that the United States had arranged to replace these strategic reserve barrels with approximately 200 million within the next year.
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Liontown, Australia's largest energy company, posts a larger interim loss due to LG Energy stake sales charge
Liontown, Australia's largest food and beverage company, reported a wider first-half loss on Thursday. The reason for the widened loss was a?non-cash accounting expense after South Korea's LG Energy Solution sold its stake in the firm last month. By 2324 GMT, shares of the company were down by as much as 2,5% to A$1.59 Lithium producer reported a net loss after tax of A$184m ($131.25m) on a legal basis for the six-month period ended December 31 compared to a loss of A$15m in the previous corresponding period. Liontown reported a?reported?loss? that included a?non cash accounting charge? of A$104million after the South Korean firm sold its 7.5% share in the company worth at least A$419million in a block deal. LG Energy is no longer a Liontown shareholder as a result of the sale. However, it expects to realise a gain of A$58m upon conversion into equity. This will be reflected in its results for the full year. A brownfield expansion?is also underway at the company's flagship Kathleen?Valley Project, and is expected to lower unit costs due to increased scale. In its statement, it said: "We are advancing critical procurement right now."
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McGeever: Higher oil prices cloud Wall Street's optimistic earnings outlook
Even if the Iran War ends soon, U.S. oil prices will be structurally higher this year. Investors may have to reconsider their optimistic 2026 earnings estimates. The consensus oil outlook for 2026 was quite bearish while Wall Street's earnings forecasts were very optimistic. This has not changed. According to LSEG 'data, the full-year earnings growth estimate for 2026 was nearly 16% as of?Friday. This is up from 14% a year ago and 12% a year before. These 'rosy forecasts' assume that oil prices will average $60 per barrel this year, but those expectations have disappeared with the U.S. and Israeli strikes against Iran on February 28, as well as the subsequent disruption of supply. The oil market has seen wild volatility. Crude oil recorded its largest weekly increase on record last weekend, and continued to rise to almost $100 a barrel in this week's trading before falling on hopes of a quick end to the war. The damage has been done. The global energy system, which was finely tuned, has been thrown off balance. Infrastructure has also been damaged and the anticipated supply glut has disappeared. The average oil price this year is likely to be much higher than what businesses budgeted for at the beginning of the year. The companies will absorb a portion of the increase and consumers will feel it. In either case, corporate profits will be squeezed. RUPTURE THE FORECASTS In a December poll, the average consensus forecast for Brent crude in 2026 was $61.27 a barrel, with the oversupply expected offset any possible disruption of supply from the brewing U.S.Iran tensions. This would have been a 7% drop from the average price of $68.20 in 2025. Since then, these forecasts have been thrown out. Analysts at HSBC raised their forecasts for Brent crude to $80 per barrel in 2026 from $65 per barrel and U.S. West Texas intermediate crude to $76 per barrel from $61 per barrel on Tuesday. This represents an increase of 23% for Brent and 25% for U.S. West Texas Intermediate crude. The U.S. Energy Information Administration also raised its forecast for 2026 Brent crude to $79, up from $58 a month ago. This is a 36% rise. Energy price increases will have a significant impact on the economy. Fuel, fertilizer and petrochemicals will be more costly. This impact will also be felt by industries such as manufacturing, metals and retail. Joe Brusuelas is the chief economist of RSM US LLP. He says that as prices increase, consumers are affected and corporate earnings are eroded. It's a GAS! Goldman Sachs equity strategists believe that the impact of "modestly higher" oil prices on S&P500 earnings will be relatively muted. However, an extended period of disruption in supply or uncertainty is much more dangerous to economic activity. They say that for every percentage point of decline in the real U.S. growth rate, S&P 500 earnings could drop by 3-4%. According to other estimates, a 30% increase in oil prices can knock 4% off the earnings of S&P 500, with the most severe impact felt in transportation, consumer discretionary, and industrial sectors. Around 70% of the U.S. Economic activity in the United States is dominated by consumer spending. Energy costs will rise sharply, causing household budgets to be squeezed and other spending to suffer. Alarm bells have already started to ring. According to data from the American Automobile Association, average gasoline prices in the United States are now above $3.50 per gallon. This is up 17% since the start of the war. Of course, there's also a negative side. Energy sector profits are expected to grow by double digits if oil prices continue to rise. Energy only makes up 4-5% of the total S&P500 earnings, so it is unlikely that it will offset any margin losses elsewhere. AI?ARMS RACES ARE EVEN EXPENSIVER NOW There is an incredibly large dispersion between the 11 sectors in current earnings growth forecasts for 2026. The energy sector EPS was minus 1,2% as of Friday. This is the bleakest forecast, and the only one that indicates a decline in profits. On the other end of scale, the tech sector's 2026 estimated EPS growth was 35.9%. This is the highest estimate among all sectors, and it was up from 30.8% in January 1. Tech has contributed to the S&P 500 earnings growth for the past few years. Higher energy prices will hurt the mega-cap companies leading the race for artificial intelligence. UBS analysts predict that capex expenditures by "hyperscalers", this year, will reach $770 billion. Construction and operation of data centers may now become more costly. Investors are already worried about future returns. The prospect of a significantly more expensive energy source will only increase their concerns at a time where risks in many other sectors have also increased. You like this column? Check out Open Interest, your new essential source for 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.
Sources say that Barrick Mining is considering splitting into two separate entities.
Barrick is considering splitting into Africa and North America focused entities
Discussion on the sale of African assets, including Reko Diq Mine
Barrick's performance in the record gold rally is undervalued by investors.
By Divya Rajagopal
Four sources familiar with Barrick Mining's thinking said that the board has discussed the possibility of splitting Barrick Mining into two separate companies, one focusing on North America, and the other focusing on Africa and Asia.
Sources say that a split could include the sale of Barrick Africa's assets, as well as the Reko diq mine in Pakistan once financing is secured.
Sources said that Barrick wants to settle a dispute in Mali with the African nation’s military administration prior to selling the asset.
Barrick's spokesperson did not respond immediately to comments. Interim CEO Mark Hill responded on Monday to a question about a possible division by saying that the company doesn't comment on speculation.
Sources said that talks are still ongoing and nothing is finalized. If the plans are implemented, they would reverse Barrick's merger in 2019 with Randgold and eliminate assets acquired by former CEO Mark Bristow. One source said that the company's focus in North America would help to ensure Barrick is not undervalued if a takeover bid were made. This includes Fourmile, an undeveloped major gold mine in Nevada. The Fourmile mine is not expected to begin production until 2029. Hill announced earlier this week the company's shift to North America. Analysts at Jefferies, among others, upgraded its ratings on its shares. Following the report, Barrick's shares rose on the Toronto Stock Exchange. They closed up 3%. Investors say Barrick's stock is undervalued, and they have asked the company how it can take advantage of gold prices that are experiencing a historic rise. Barrick's shares are up 130% in this year but its returns over the past five years have been less than those of its peers. Agnico Eagle, for example, has gained 142%. Investors proposed to divide the company into two divisions, with one with more stable assets, such as Nevada, Fourmile and Reko Diq. The other would have riskier assets, like those in Africa, Papua New Guinea and Reko Diq. Investors say that Barrick, as one of few gold mining companies to have assets on multiple continents and in volatile political regions, is at risk. Barrick's most profitable mine in Mali was taken over by another company earlier this year. This led to a $1 Billion write-off. Three metric tons (three metric tons) of gold were seized and a temporary administrator was appointed to run the mine after a dispute over the new mining tax code in the country. The Malian government has still imprisoned four Barrick employees. One Barrick investor said, "There was a perception that Nevada had a great deal of value." The investor, who asked not to be named because they weren't authorized to speak with the media, added that if the Nevada mine was a publicly-listed company, it would be among the largest gold mining companies in the world. Investor said that the company had resisted splitting up in the past, because its other mines would be worthless without Nevada. Barrick operates the Nevada gold mine with Newmont Corp.
The company also has mines in the Democratic Republic of Congo and Papua New Guinea. It also operates gold mines in Tanzania, Dominican Republic and Tanzania. (Divyarajagopal reported from Toronto; Veronica Brown, Lisa Shumaker, and Edmund Klamann edited the story)
(source: Reuters)