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As the Hormuz Crisis worsens, physical oil prices have reached record highs of near $150 per barrel.
Analysts say that the closure of Hormuz creates a very tight market for oil deliveries in the near future. LSEG data: North Sea Forties crude reaches a?record-high outright price Expert: * Fear of shortages is driving physical prices up By Alex Lawler LONDON, 7 April - European and Asian refiners pay record high prices of nearly $150 per barrel for a few crude oil grades. This is far higher than the paper futures price, which highlights the worsening crisis in supply caused by the U.S./Israel war against Iran. Iran's closure of the Strait of Hormuz has caused the Middle East to shut down at least 12,000,000 barrels of oil per day, or about 12% of global supply. Brent oil futures hit $119.50 per barrel in December, the highest level since 2022, but still below the record high of 147.50 set in 2008. Brent oil futures for June delivery are the contract that is closest. The competition between Asian and European refiners for Middle East oil to replace the disrupted Middle Eastern oil flow has helped to push up prices of replacement crudes, especially those that are available in Europe and Africa. Some?crudes have already broken records. The outright price for North Sea Forties crude According to LSEG, the price of a barrel reached $146.09 on Tuesday. This is above 2008 levels and a record high. Adi Imsirovic is a veteran oil dealer who believes that "panic" about supplies is the main reason for high prices like those of Forties. "When there's a real physical shortage, people don't think about June loading, and therefore June futures price, but oil NOW." Dated Brent is the benchmark physical crude oil that determines the price of Forties, and other cargoes all over the world. According to LSEG, the price is almost $20 higher for June delivery than for Brent futures. This is because the price reflects cargoes that are ready for immediate delivery. Morgan Stanley analysts stated in a recent report that the market was scrambling for barrels that could be used in refineries immediately. The benchmark closest to the physical problem is the first one to experience stress. On Tuesday, prices of refined products in Europe reached near-record highs. The price of jet fuel in Europe hovered at $226.40 per barrel, near the record high set in mid-March. Diesel prices, which were $203.59 per barrel on Tuesday, are still below their 2022 record highs. (Additional reporting by Seher Daeen; editing by Dmitry Zhdannikov, Alistair Bell).
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Key quotes from Vance's and Orban’s press conference
JD Vance, the U.S. vice president, slammed the European Union on Tuesday for its "disgraceful interference" in an election held in?Hungary. He also praised Prime Minister Viktor Orban in his role as an ally to Donald?Trump when it comes to the defence of Western civilization. Here are some key quotes from the joint press conference in Budapest. VANCE ON HUNGARIAN ELSECTION "What happened in this country and what happened during this election campaign is one of worst examples of foreign interference in elections that I have ever read or seen ..." "The bureaucrats at Brussels have tried to destroy Hungary's economy." They tried to reduce Hungary's energy independence. They've tried to raise costs for Hungarians, and all because they dislike this guy. "We're here because we believe the interference from the bureaucracy of Brussels has been disgraceful." RUSSIA-UKRAINE WOAR: VANCEMENT "Viktor Orban has done a better job than anyone else in helping us to understand what the Ukrainians and the Russians require for peace. We will continue to work on this process. "We are aware of the fact that certain elements in the Ukrainian intelligence services have tried to influence the outcome of American and Hungarian elections. This is what they do... "The seeds of this conflict were planted long before the fighting began. They were also planted when European leaders decided to invest so deeply in a certain energy economy, that they would cut themselves off to oil and gas from the east. It's obvious now that this was a big mistake back then. IRAN WAR: VANCER THE WAR There are two ways that this will end. The United States has achieved its military objectives ..." in large part. "Pathway One is when the Iranians decide to become a normal nation. They won't fund terrorism any longer. They will be a part of the global system of trade and exchange ..." "Option B" is that if Iran does not come to the table, and if they continue to terrorize their neighbours - not just Israel but also their Arab neighbours - then the Iranian economic situation will remain very, very poor. ORDER ON THE RUSSIA-UKRAINE WORTHY Budapest would be happy to host a meeting between the United States and Russia if they felt it was necessary ..." "The strategy that Europeans used to support the Ukrainians during this war is over. It has failed. The Russians' assets have suddenly gained value. "Suddenly, they are in a better position than before and the pro-war, pro Ukraine strategy of Europe has failed. This is over, but we're concentrating on the Hungarian election right now rather than Brussels. "I believe that we will face a new situation following the Hungarian election." (Reporting and editing by Kevin Liffey; Gergely Szakacs)
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Gold prices steady as Trump's Iran deadline approaches
The gold price was essentially unchanged on Tuesday as caution prevailed on the'market in anticipation of the expiration of the U.S. ultimatum threatening Iran with devastating attacks against its infrastructure if it did not reopen the Strait of Hormuz. By 9:25 am, spot gold had risen 0.2% to $4,659.35 an ounce. ET (1325 GMT), following a 1% rise earlier in the day. U.S. gold futures remained steady at $4,684.50. The gold market is teetering on the edge of a cliff ahead of tonight's 8 p.m. Eastern Time deadline imposed by the United States. The gold market is halted as traders await the outcome of an 'event that could have a significant impact,' said Jim Wyckoff senior analyst at Kitco Metals. IRAN DOES NOT SHOW ANY SIGN OF CONCEDING Strikes against?Iran continued throughout the day but Iran did not show any sign of accepting Trump’s ultimatum to open the Strait by Tuesday's end. The U.S. President said that "a whole civilization will die tonight" without a deal with Tehran. Gold traders are more concerned about what central banks will do with interest rates, than geopolitics. Wyckoff explained that if major economies delay lowering their interest rates, "that could be extrapolated as less demand for gold." Since the Iran conflict, oil prices have risen since supply concerns increased. The higher?energy prices feed inflation and limit the ability of central banks to reduce?interest rates. Gold is an inflation hedge, but it's less appealing in high-rate environments because it doesn't offer any yield. The market will also be focusing on the minutes of the Federal Reserve's meeting in March which are due to be released Wednesday. Additionally, U.S. The Personal Consumption Spending data will be released on Thursday and the Consumer Price Index?on Friday. Data showed that China's central banks continued to buy gold for the 17th consecutive months. (Reporting by Ashitha Shivaprasad in Bengaluru; editing by Barbara Lewis) (Reporting from Ashitha Shivaprasad, Bengaluru. Editing by Barbara Lewis.)
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Sources say that Russia's NORSI refinery has halted its operations following a drone attack on Sunday.
Two industry sources said that NORSI, Russia’s fourth largest oil refinery, suspended operations on April 5, following an attack by a Ukrainian drone. The temporary 'closure' of the refinery will increase the uncertainty in Russia's energy industry, which has already been hit by a series of Ukrainian attacks including those that have targeted its major oil-exporting terminals on the Black Sea or the Baltic Sea. Russian authorities announced on Sunday that a drone had attacked the NORSI oil refinery, causing it to catch fire. Gleb Nikitin said that two facilities at the plant had been hit, and a power station, as well as several houses, were also damaged. According to the Saint-Petersburg International Mercantile Exchange (SPIMEX), Lukoil does not offer to sell gasoline or diesel from its refinery located 450 km east of Moscow. On Tuesday, industry sources said that the suspension of supplies may be extended until the end?of the month. Lukoil didn't immediately respond to a comment request. NORSI is Russia's second-largest gasoline producer. It can process 16 million metric tons of crude oil per year or 320,000 barrels of fuel per day. Hugh Lawson, Editor and Reporter.
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Russian officials claim that Ukrainian drone strikes killed five people, including a child and a parent at home.
Russian officials confirmed that a drone strike in Ukraine killed five civilians including a '12-year-old boy and his parents. They also struck a school located in an area of southeast Ukraine under the control of Russian forces. Alexander Avdeev and other local officials confirmed that the 12-year-old boy, his parents, and their apartment were all killed by a 'overnight Ukrainian drone attack on Russia's Vladimir Region. Yevgeny Balitsky, the Moscow-backed governor of Zaporizhzhia, in southeast Ukraine, claimed that Ukrainian drones struck a village school in Velikaya Znamenka and seriously injured six people. Five of those were children. Balitsky stated that a local official was killed when he helped the children to evacuate the school. Vladimir Saldo said that a?woman? in her fifties was also 'killed? at home by a Ukrainian drone attack on the part of a?Russian controlled Kherson. The Ukrainian officials claimed that they could not independently verify the statements of the officials, and that Russia itself had launched a series deadly attacks. Reporting and Editing by Andrew Osborn, Guy Faulconbridge
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Vance: No change in strategy after US strikes military targets on Iran Kharg Island
U.S. Vice President JD 'Vance' said on Tuesday that the U.S. strike on Iran's Kharg Island does not represent a rethinking of American policy. Separately, a U.S. Official stated that additional strikes against military targets would not affect oil infrastructure. An anonymous official said that at least some of the strikes targeted sites which had already been struck previously. The attack took place in the early morning hours of Tuesday. Vance, in Budapest, spoke separately and said that the strikes did not represent a change in U.S. policy, as the Trump administration is confident of obtaining a response from Iran in the negotiations to end this conflict by 8 pm (0001 GMT Wednesday). U.S. president Donald Trump demands that Iran give up nuclear weapons and open the Strait of Hormuz - a vital oil transit waterway. "We were going to strike some targets on Kharg Island and I think we've done that," said?Vance. He added, "We won't strike energy and infrastructure targets until the Iranians make a proposal we can support or don't even make one." "I do not believe that the news from Kharg Island represents a shift in the strategy of the United States."
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Truckers in the west protest as nearly a fifth (25%) of French gas stations face supply problems
The government reported that around 18% of French petrol pumps are currently facing fuel shortages. Meanwhile, rising prices at the pump have prompted some drivers in the west of France to block the road in an expression of their growing discontent. The U.S. and Israel-led war against Iran is now in its sixth week. A supply crunch has caused a spike in fuel and crude oil prices around the globe. Maud Bregeon, a junior energy minister in France, said that the shortages were not due to the fallout of the war but rather to internal logistical issues. She claimed that a decision made by French oil major TotalEnergies in order to keep fuel prices below their competitors', led to drivers rushing to fill up at Total stations and straining the supply. Total announced on Tuesday that it would maintain a maximum of 1,99 euros/litre in April for unleaded fuel, but increase the cap on Diesel to 2,25 euros/litre. This will bring its diesel prices closer to other retailers. It said that its diesel price cap will be lower for retail electricity and natural gas customers. France has chosen to support the most vulnerable sectors with measures that will help ease the impact of the rising oil prices. These include 80.91 million euros in fuel subsidies for the agriculture, fishing and transport industries, as well as additional benefits for low-income households that will help them pay their energy bills. The 2018-19 Yellow Vests movement was a national protest that turned into a public revolt against President Macron's leadership. Some truckers and motorists set up a traffic block in Nantes, west France, on February 2 to express their concerns. "If the situation doesn't change, I am afraid -- we are all afraid -- I worry about a wave?of layoffs in the next few months. Charlotte Lucas, a construction project entrepreneur, said that it's getting very hard for some businesses. "We've already had terrible weather to start the year. We now have to deal with the problem of rising diesel and nonroad diesel prices. This is affecting our cash flow which, at the moment, isn't very abundant.
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IRGC claims that Iran has attacked Saudi Arabia’s Jubail petrochemical compound
Iran attacked Saudi Arabia’s Jubail petrochemical complex on Tuesday, the heartland of the downstream sector in the kingdom, according to a statement from the Islamic Revolutionary Guard Corps. However, it wasn't immediately clear exactly what was struck. Jubail is a sprawling city that houses multi-billion dollar joint ventures between Saudi Aramco, the state-backed oil company, and SABIC, its petrochemicals subsidiary. The IRGC stated that the attacks were "in retaliation to enemy crimes?in the attack against (Iran's Asaluyeh petrochemical factories." The exact location of the incident was not immediately known. Video footage confirmed by showed smoke and fires rising in the direction of Jubail. The IRGC claimed that it had "effectively" targeted the Sadara Complex, a $20 Billion joint venture between Aramco, Dow, and ExxonMobil, which was closed last week. It also said it had "targeted other facilities in Jubail, including one belonging ExxonMobil." The IRGC said that it also hit a petrochemical plant in nearby Juaymah. The IRGC said the facility was owned and operated by Chevron Phillips, although it did not mention that Chevron Phillips had any facilities in Jubail. Saudi Arabia's Defence Ministry said earlier that air defences had intercepted and destroyed "seven" ballistic missiles that were launched at the eastern region of the kingdom. It added that debris from these intercepted missiles was found near energy facilities. Aramco refused to comment on the reported attacks in Jubail and Juaymah. SABIC and the Saudi government's communications office did not respond immediately to requests for comment.
Aluminium gains after a UAE smelter is forced to face lengthy repairs
The price of aluminium rose on Tuesday, and the key spread for the metal on the London Metal Exchange also increased. This is due to the prolonged repairs that a smelter located in the United Arab Emirates has been facing since an Iranian attack late last month.
In official open-outcry trade, the three-month contract for aluminium on London Metal Exchange (LME), gained 1.1% and reached $3,507 per metric ton.
Emirates Global Aluminium announced on Friday that it could take up to one year to fully restore production at its Al Taweelah Smelter. The smelter produced 1.6 millions tons of cast iron?in the year 2025. It entered an emergency shut down after?the attacks of March 28.
In a recent note, Marex analyst Ed Meir stated that it is "a considerable amount of time" to be down. He also added that an outage in Gulf will likely cause the market to fall into a large deficit this year.
The LME Cash Aluminium?contract premium over the three-month Contract
Investors were waiting and watching on the markets as President Donald Trump's deadline for a deal between the U.S. and Iran threatened to escalate the conflict.
LME copper fell 0.1% to $12,344 per ton during official activity due in part to the pressure of rising LME stocks.
Goldman Sachs raised its forecast for a surplus on the global copper market this year from 380,000 to 490,000 tons. Its economists had estimated that higher energy costs could reduce global GDP growth by 0.4 percentage points.
Daily LME data showed that copper stocks in LME-registered?warehouses increased to 378.775 tons on April 2 after 16,125 tonnes of inflows from Asia, Europe, and the U.S.
Zinc, meanwhile, remained unchanged at $1,933 while it gained 1.8% on the LME. Both reached their highest levels since March 11, earlier in the session. Nickel was down 0.5% to $17,000 and tin fell 0.6% to $46,000. (Reporting and editing by Tasimzahid; Polina Devtt)
(source: Reuters)