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Japan will release part of its oil reserves before IEA decision, says PM
Sanae Takaichi, Japan's Prime Minister, said that Japan will release 15 days of private sector oil reserves as well as one month of state oil reserves. This is in preparation for the International Energy Agency's action. She said that to avoid a disruption in gasoline and other petroleum products supplies, Japan would tap its reserves with the G7 and IEA. However, they will start releasing them 'from 16 March. Takaichi, in a broadcast, said that Japan would act before waiting for formal IEA?approval?of a coordinated release of international reserves to ease the global energy'market supply and?demand. It will release reserves as soon as?the 16th of this month. Around 95% of Japan's oil is sourced from the Middle East. The government and industry released data on Wednesday showing that the retail price of gasoline in Japan?rose? to its highest level since December, and refineries reduced their production last week. This was the first 'week?of the U.S./Israeli war against Iran. We will deliver as soon as possible '15 days' of private sector reserves and one month's worth of national reserves to domestic refiners. Takaichi stated that we will also quickly use joint reserves with oil producing nations. Japan has a total of 254 days worth of emergency oil reserves, which includes national stocks (146 days), private sector reserves (101 days), and joint stockpiles held with other producing countries (7days). (Reporting and editing by Louise Heavens, Kantaro Kommiya, Katya Glubkova)
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Meloni, an Italian critic, says that the US war against Iran is part of a dangerous trend
Giorgia meloni, the Italian Prime Minister, delivered her strongest criticism to date of the U.S. and Israeli war against Iran on Wednesday. She described it as a dangerous trend of "interventions outside the scope of international laws". Her comments to the parliament followed repeated accusations by the opposition that her government's right-wing had been "too soft" toward its allies. Spain is the only notable exception. Most European nations have not criticised the U.S. or Israeli attacks directly, instead calling for restraint. Meloni, who is close to U.S. president Donald Trump, also stated that Iran should not be allowed develop nuclear weapons as this would end the non-proliferation regime with "dramatic consequences for global security", exposing?Italy & Europe to a potential nuclear threat by Tehran. As the Middle East war entered its 12th day the U.S., Israel and Iran traded airstrikes with Iran. The conflict has stopped the flow of a fifth of the world's gas and oil supplies. Meloni, who addressed the parliament about the crisis, drew parallels with the conflict in the Middle East and Russia's invasion of Ukraine 2022, which, she said, triggered a wider global destabilisation. She told the Senate that "it is within this context of structural crisis in the international system where threats are increasing and 'unilateral interventions' outside the scope of international laws are multiplying" that we should also place the American-Israeli intervention against the Iranian regime. Meloni stated that Rome is providing air-defense assets to Gulf nations hit by attacks from Tehran. "This is because they are strategic allies of Italy and friendly nations, but there are also tens of thousand of Italians in that region who we need to protect. Not to mention that there are around 2,000 Italian troops stationed there." (Reporting and editing by Angelo Amante, Giuseppe Fonte)
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Aluminium rallies bring Middle East turmoil to the forefront
After a brief selloff caused by comments made by U.S. President Donald Trump about the Iran war, the focus shifted to 'pricing global supply losses due to the Middle East conflict. At 1018 GMT, benchmark aluminium at the London Metal Exchange had risen 1% to $3,439 per metric tonne. It reached $3,544 per ton earlier this week, its highest level since April 2022. Around seven?million tons of aluminum smelting is located in the Middle East, which represents 9% of global capacity. Trump predicted on Monday that the conflict would be over well before the four-week timeline he had set out. The war has frozen global supplies of aluminum used for transport, construction, and packaging. Last week, Aluminum Bahrain, or 'Alba', which operates one of the largest smelters in the world, declared force majeure, warning customers of delays. Meanwhile, Qatari smelter Qatalum began to shut down. Aluminium stocks in LME approved warehouses are a source of concern about supply. . On Tuesday, the number of cancelled warrants and metals destined for delivery was 177,325, which is 40%, up from 9% the previous day, before the Middle East turmoil began. Concerns about tight?aluminum?supplies has created a premium for the cash contract?over the three month?forward?on the LME. The soaring dollar and oil prices are causing concern about the global economy. The dollar's value is inflated by a rising U.S. currency, making metals priced in dollars more expensive to holders of other currencies. This could reduce demand. The inflation data due on Wednesday could provide clues about U.S.?monetary policy, and the dollar?s prospects. Copper fell 1.1% to $12,997 per ton. Zinc was down 0.6% at $3,326, while lead dropped 0.2% to 1,940. Tin declined 1.3% to $48,800, and nickel was down 0.4% at $17,425.
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Russian oil prices used to tax state revenues exceed budget targets
Calculations showed that the price of Russian crude oil, used to tax the country, has exceeded the budget target?for the first time since Jan 2025?because?of?the rise in global prices due to the Iran War. Since the beginning of the war in Ukraine, in 2022, Russia has increased its military spending, increasing its deficit. In January-February, it was 3.45 trillion Russian roubles (43.70 billion dollars), or 1.5%. The Iran War, which involved U.S., Israeli and Iranian strikes on Iran, and Iranian strikes against Israel and U.S. military bases, as well as Gulf states has fueled a significant increase in demand for Russian gas and oil,?boosting the exports that had been affected by sanctions related to the war in Ukraine. To highlight the boost in Russian revenue, traders said on Friday that Russian flagship Urals delivered to Indian ports for the?first time sold?at a higher price than Brent crude, which is the international benchmark. Based on industry data, calculations show that the Russian oil used to calculate taxation on Monday reached 6,105 Russian roubles a barrel, an 82% increase from the 27th of February, just a day prior to the United States' and Israel's military campaign against Iran. This is more than the assumed price of $5,440 per barrel (or $59 per barrel) at a rouble exchange rate of $92, per U.S. dollars, in the federal budget for 2026. The Russian oil trade above budget targets may be short-lived due to a drop in the price of oil globally and the strong rouble. The price of Russian oil on Wednesday was around $62 per barrel, after reports of possible oil stockpile releases to reduce the oil deficit due to a blockage of Strait of Hormuz. This is an important route used for oil flow globally. According to data from the Finance Ministry, the state's?oil-and-gas revenues in February fell by 44% to 432.3 billion Russian roubles compared to the same month last year. This was due to lower oil prices and the stronger rouble.
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Minister says oil producers should invest in Nigeria in order to diversify their supply during times of crisis.
Yusuf Tuggar, the Foreign Minister, told?that the Middle -East conflict shows that Gulf oil and gas companies should view Nigeria as a 'partner, not a rival' to help diversify their supply in times of crisis. The remarks coincide with the war in Iran, which has disrupted shipments through Strait of Hormuz. This corridor accounts for about a quarter of global supplies, forcing exporters and price spikes. Tuggar stated that Nigeria's untapped oil and gas reserves provide Gulf States with an alternative source at a moment when global flows of crude are vulnerable. The demand for hydrocarbons will?remain high for many years to come, he added. He said, "It is in line with our advocacy - that other countries who might consider us competitors?should partner with and invest with us so they can increase their market share by working with us." NIGERIA'S TOTAL OUTPUT HAS BEEN RAISED TO ABOUT 1.7 MILLION BPDS Nigeria's long-hampered economy has been impacted by theft, pipeline vandalism and underinvestment. The total production is now 1.7 million barrels a day, up from 1.4 million in 2023, when Bola Tinubu assumed office. Tuggar said that the country could increase its output further with more capital for pipelines and fields. Tuggar says the opposite may also be true. Some analysts believe that U.S., Israeli and Iranian strikes against Iran and Tehran's attacks against Gulf states could cause the region to delay African bets. It could cause them to want to work with oil-rich countries like Nigeria to diversify the market for both countries' benefit, or it could cause them to hold back. Nigeria and the United Arab Emirates (UAE) signed the Comprehensive Economic Partnership Agreement in January. Abuja claims that the agreement will unlock trade and investments. Qatari investors also have plans to invest in gas in Nigeria, but timelines are unclear. Analysts Flag Long Approval Cycles, Execution Risks Analysts warn that headline investment promises often face long approval cycles and execution risk in Nigeria. Tuggar stated that Nigeria felt the impact of higher oil prices because it imports large quantities of refined products. This has led to a rise in transport and food costs, particularly during Ramadan when muslims fast. He said Nigeria would be better able to handle longer-term shocks, as the domestic refining industry expands. Dangote, a privately-owned refinery, says that it operates at a nameplate capacity of 650,000 barrels per day. This is enough to meet the domestic demand. Tuggar said that oil will "remain relevant for many years." At the moment, the world consumes between 105 and 106 million barrels of oil per day. I don't think that will change anytime soon. We need to work together in order to have enough hydrocarbons. (Reporting and editing by Clarence Fernandez; David Lewis is the reporter)
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UK gilts suffer new decline as investors focus on oil reserves
The price of British government bonds?fell dramatically in early trade on Tuesday, as the markets questioned if the plans for a record releasing?of oil reserve could offset any potential supply shocks resulting from the U.S. and Israeli war against Iran. As of 0906 GMT the short-dated gilt yields were up around 12 basis points, completely erasing Tuesday's large drops. Investors have also reduced their bets for a Bank of England rate cut in this year. The probability is now?roughly 20 percent, down from 50 percent a day ago. The British public is more vulnerable to a shock in energy prices than many other European countries, due to the 'weakness of its finances and its heavy dependence on gas. The yield on two-year bonds is 46 basis points higher than the equivalent French, German, and U.S. debts. Investors have been watching developments in the Strait of Hormuz. This is a major artery that accounts for about 20% of global oil and natural gas supplies. It has fallen 'rapidly' since the Iran conflict started on February 28. Emma Wall, chief investment strategist of Hargreaves Lansdown, said that the Strait of Hormuz is a major factor in determining long-term impact on equity markets, bond markets, inflation, and economic growth. The Treasury Committee of Parliament will be asking questions to the Finance Minister Rachel Reeves at 945 GMT. Andy Bruce is reporting; Suban Abdulla is editing.
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Sources: Rio Tinto increases Q2 Japan Aluminium Premium Offer
Rio Tinto increased its offer of a?aluminum premium to?Japanese customers to $350 per ton for April-June primary shipments. This is up 79% compared to the current quarter. The revised offer, which is 40% more than Rio's prior proposal of $250, would, if accepted by the client, be the highest premium since the April-June 2015 quarter, when it reached $380 per ton. Japan is the largest?Asian metal importer and the premiums it agrees to pay each quarter for primary metal shipments over the London Metal Exchange cash price are the benchmarks for the region. Global?producers in late February offered Japanese buyers premiums ranging from $220 to $250 per ton of metal for the April-June period, up 13%-28% on the current quarter. They pulled the offer or let it expire as they assessed the risks of the Middle East conflict on cargoes that transit the Strait of Hormuz. One source involved directly in the quarterly talks stated that the reason for the higher offer was the stronger European and U.S. Premiums, as well as the rising freight and insurance cost. Due to the sensitive nature of the issue, the sources refused to give their names. Rio Tinto refused to comment. The Middle East war, which is responsible for 9% of the global aluminum?supply has shook the light metal market, effectively freezing shipments through the Strait. The Qatari smelter Qatalum has begun shutting down its production, and Aluminium -Bahrain which operates one of the largest smelters in the world, declared force majeure. In 2025, Japan will import about 20% of its primary aluminium ingots. Since the end of February, premiums for aluminium have increased dramatically in South Korea. Japan's quarterly price negotiations began last March and are expected continue until late March. (Reporting from Yuka Obayashi, in Tokyo; Additional reporting from Melanie Burton in Melbourne. Editing by Christian Schmollinger, Saad Sayeed and Saad Schmollinger)
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Stocks fall as Middle East conflict and volatile oil prices weigh on trading
Investors were worried about inflationary pressures, and the risks of economic growth. Investors were reminded about the vulnerability of 'private credit' after Financial Times reported, citing a source familiar with the issue, that JPMorgan Chase JPM.N marked down the?value? of some loans held in private-credit groups, and tightened its lending policies to the sector. The price of oil was volatile again, but the price movements were relatively mild compared with Monday's record-breaking price swings. The Wall Street Journal reported that the International Energy Agency had proposed the largest release in history of reserves to bring down crude oil prices. Energy ministers from G7 countries said they supported using stockpiles as a way to address the situation. Brent crude futures rose around 2% to $89.47 per barrel after trading as low as $86.24 over night. The MSCI All-World Index eased slightly on the day, as losses in European stocks mounted. This left the STOXX 600 at a loss of 0.7%. It also shrugged off gains in Asia where the Nikkei gained 1.7% and South Korea’s Kospi gained 1.75%. U.S. Stock futures were almost flat on the day. The markets will continue to be influenced by the volatile news flow surrounding Iran and the outlook of oil flows until we move on to the next big event. The narrative is now cautiously optimistic, despite the fact that there are few signs of an imminent resolution to the conflict," said Jim Reid, a strategist at Deutsche Bank. Investors are on edge, as the Middle East conflict could freeze global energy trading and cause a price spike. This is a threat that world leaders are scrambling to deal with. It is important to know when the Strait of Hormuz will be open again for traffic. This critical chokepoint for oil supplies worldwide, which Iran controls, is an immediate concern. Christine Lagarde, President of the European Central Bank, said that the central bank will do all it can to control inflation to prevent a repeat in 2022 of the energy price shock. Several ECB officials are urging a wait and see approach before taking any action. SAFE-HAVEN DOLLAR As the war enters its second week, the dollar remains the preferred safe-haven asset for investors. Since the beginning of the conflict, the dollar has gained over 1% compared to a basket other major currencies. This compares with the Swiss Franc, which fell by 1%, and gold, which lost 1.5%. Frank Benzimra is the head of Asia equity and multi-asset strategy at?Societe Generale. "Even gold and Treasuries didn't play this huge role of safe-haven. Treasuries are a good choice because they're inflation-proof, while gold is a great option if you want to offset losses on the stock market. The euro and pound were almost unchanged, at $1.1615 each, and $1.3432 respectively. The yen fell, which led to the dollar rising 0.15%. The rise in bond yields that began the week, due to the possibility of a sustained increase in energy prices, has increased concerns over other areas of the market, which many believe are at risk of overheating. These include private credit, and in particular the huge sums associated with the 'rollout of artificial intelligent. Investors have been withdrawing money from private credit funds, such as BlackRock's HPS Corporate Lending Fund, due to concerns over deteriorating credit. The FT reported that PMorgan is concentrating on lending to the software companies they consider most vulnerable to disruption. U.S. Treasuries dropped again on Wednesday. The yield on the benchmark 10 year note increased 3 basis points, to 4.165%. This was ahead of the February monthly inflation report later that day. (Additional reporting from Rae Wee, Singapore; Editing done by Shri Navaratnam & Pooja Deai)
How much gold is enough to diversify China’s reserves?
The aggressive gold buying by China's Central Bank since 2023 raises the question of just how much Beijing will increase its reserves in order to reduce its dependence on the US dollar and match its holdings to its position as the second largest economy in the world.
China's purchases coincided with a rally between 2023 and 2025, which has driven gold to a new record high of $3.508.5 per troy-ounce on Tuesday.
The rise also highlights a wider trend among developing economies to diversify away from the dollar, after Western sanctions frozen $300 billion in Russia's official reserve, or about half of Moscow total, by 2022.
The central bank of Russia was only able to access gold and assets denominated in yuan.
In the first half of this year, the People's Bank of China purchased 21 metric tonnes of gold. In 2016, it bought 44 tonnes and by 2023, it will have purchased 225 tons. It was then the largest central bank buyer in the world.
State secrets include future plans to purchase gold for China's official reserves of 2,300.4 tonnes. This story relies on analyst's estimates and does not attempt to get any official targets.
Hou Huimin was the vice-general secretary of the China Gold Association in 2009. He suggested a target of 5,000 tonnes, citing China's growing international standing and the global financial crisis of 2008.
BNP Paribas analyst David Wilson stated that if China had set a target of 5,000 tons for 2009, it is likely to be higher now, as the economy has grown rapidly since then.
Wilson stated that "we will continue to see demand from the PBOC, as China continues with its diversification and dedollarisation of reserves."
If China's gold reserves reach or exceed 5,000 tons, it would be the second-largest official holder in the world, after the United States which has 8,133.5 tonnes, and before France, Germany, and Italy.
Gold is a low-risk investment that central banks keep in their portfolio of foreign currency reserves. It's often seen as an insurance against inflation, geopolitical and economic instability. Normal circumstances are when they reduce their purchases of gold.
The United Nations agency for Trade and Development said that the uncertainty has now become systemic in its Global Trade Update, published on Monday. It added that it is a problem that is most acute among developing countries.
In this year, the uncertainties include U.S. president Donald Trump's reversal of Western security policies, his trade wars against China and others and his criticisms of Fed chair Jerome Powell which have raised doubts regarding the independence of the U.S. Federal Reserve. All of these risks have not been eliminated.
One Chinese policy expert involved in discussions within the country, who refused to be identified due to the sensitive nature of the subject, said that China's reserves of gold were well below the level required to reflect the nation's status as the second largest economy of the world.
He said that the U.S. has gold reserves of over 8,000 tonnes, and ours should be at least 5 000 tons.
China's GDP, measured in nominal terms, is 64% that of the U.S. If we apply this percentage to the U.S. gold reserve of 8,133.5, then China's gold reserves would be 5,205 tonnes.
This is almost double the amount of gold China has. Official data shows that the PBOC had 2,300.4 tonnes of gold in its reserves, worth $244 billion. Western analysts believe that other state-controlled and state-owned entities may store additional amounts of gold in China's vaults.
China and Poland are the two central banks that have bought the most gold since 2023. Poland has also already met its own goals.
The National Bank of Poland holds 515 tonnes of gold in reserves. In 2024, it announced that its gold-purchasing program was designed to increase its reserves due to the possibility that the frontline of Russia-Ukraine could move closer to Poland's borders and destabilize the economy.
Poland's gold purchase totaled 287 tons combined in 2023, 2020, and 2025 so far, and helped the gold share to reach the central bank's 20% target in April.
Gold reserves in the United States, which have remained largely unchanged over the past 25 years, account for 78% of foreign currency reserves. This is normal, as advanced economies tend to have more gold and less currency than developing countries.
Analysts say that the amount of reserves held by the central bank will depend on the economic growth in China over the next few years.
Robin Bhar, an independent consultant, believes that if China is to become the largest economy on the planet in the coming decades, it will have gold reserves of more than 8,000 tonnes.
China's gold reserves are 7% of total reserves. This is the standard way many countries calculate gold holdings. This is also a low percentage compared to global average gold holdings of 22%.
It is difficult to increase the percentage because of China's huge reserves, which total $3.6 trillion including gold.
According to industry sources however, China's position as the world's leading gold producer, with 8% of 4,974.5 tonnes of total supply in 2024, will also help. This will be aided by the holdings of other Chinese entities that have not yet been declared.
Ross Norman, an independent analyst, said: "My impression is that there is a desire for gold without chasing up the market." "China's reserves of gold are a riddle inside a mystery," said independent analyst Ross Norman.
(source: Reuters)