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Will US sanctions against Russian oil work? Russell
The crude oil market has a common belief that sanctions by the West against Russia's exports have little effect, as the market finds ways to keep the cargoes flowing. It means that new measures will only have a temporary impact on prices. This is due to the fact that the flow of goods and services has been virtually unaffected. It is possible that the same dynamics are at work with President Donald Trump’s latest sanctions announced last week against Russia’s two biggest oil companies, Lukoil, and Rosneft. The two largest producers produce about 5% of all crude oil produced worldwide, or about 5.3 millions barrels per day. They export about 3.5million barrels a day. After the new measures were announced on October 24, Brent futures rose as high as 8.9%, hitting a three-week trading high of $66.78 per barrel. In early Asian trading on Monday, it was unchanged at $66.37. This may seem like a big price increase, but it is still well below the level that would have been reached if the crude oil market had believed that there was a real risk of losing as much as 3 million bpd to the seaborne markets. Oil reached just below $140 per barrel when Russia invaded Ukraine, in February 2022. This was due to the fear of losing Russian exports. It is expected that Russia's oil producers will be able circumvent new sanctions using a dark fleet of tanks and a variety of middlemen, and banking arrangements which avoid U.S. dollar. This is the most likely scenario, as any disruption in Russia's crude oil exports would be limited and short-lived. Does this mean the sanctions were a waste of time? What you want to achieve is what matters most. These latest measures will be ineffective if the goal is to stop Russian oil being exported by cutting of its remaining buyers, China and India. Sanctions may be more effective if the goal is to reduce the revenues Moscow receives from selling its oil but keep Russian barrels on the global market. New sanctions will make it more difficult for China and India to buy Russian oil. They are the two largest buyers of Russian oil. It is likely that they will demand even steeper discounts to continue importing Russian barrels. The cost of shipping Russian crude is also increased by using dark fleets and middlemen trading firms. The cost of shutting out Russian oil companies from the U.S. banking system is also passed on to oil revenues, since money must be routed through shell companies and offshore jurisdictions. DO SANCTIONS REALLY WORK? Western sanctions against Russia have not had much of an impact in convincing President Vladimir Putin to stop his war in Ukraine. They are also unlikely result in a substantial reduction in export volume. They make it difficult for Russia to export crude and the amount of money per barrel received may decrease. This also means that the flow of Russian barrels is likely to change again as some buyers pull out. Reliance Industries in India is a good example. The company runs a 1,24 million bpd complex at Jamnagar on India's West Coast, which produces fuel for the domestic as well as export markets. Reliance said that it would abide by Western Sanctions, meaning it could end its contract of 500,000 bpd with Rosneft. According to commodity analysts Kpler, Reliance is also likely to buy some Russian crude at spot prices. Total imports of Russian crude oil through the Sikka port - which supplies Jamnagar - are expected to reach 591,000 barrels per day in October. The average bpd was 766,000 in the second quarter. However, this is in line with 563,000 in the first. Other buyers will have access to around 500,000 barrels per day of crude if Reliance stops its imports. It is unclear whether India's government-controlled refiners are willing to accept the risk or if Chinese refiners can take on more Russian crude. It will be important to see if Trump can reach trade agreements with India and China and if Russian oil is included in these deals. Both New Delhi and Beijing are likely to want Washington to make significant concessions if they wish for their Russian oil imports be stopped or reduced significantly. The Russian oil will likely continue to flow for now. However, the biggest risk to the market is if it is used as a tool to reshape global trade in the Trump era. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, who is also an author. (Editing by Himani Sakar)
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McGeever: Be wary of the US-China trade "deal"
Before Donald Trump and Xi Jinping meet this week, the United States and China seem to have hammered the framework for a trade agreement. This removes the threat of a collapse in trade between two of the largest economies in the world. The world markets welcomed the news but it is not a game changer. Recall this: Trump posted on Truth Social, on the 11th of June: "Our Deal with China is Done. Final approval will be given by President XI and me." He added that "the Relationship is Excellent!" The deal wasn't done and the relationship wasn't excellent. Beijing, emboldened by this, imposed extra controls on rare-earth exports earlier this month. Washington, in response, threatened to impose 100% tariffs on shipments from China bound for the United States. U.S. Treasury secretary Scott Bessent publicly criticized Li Chenggang, the top Chinese trade negotiator. The two men appeared to have set aside their differences following discussions in Malaysia at the weekend. They agreed to the basics of a preliminary agreement in which China would delay its expanded licensing system for rare earths, and the U.S. would drastically lower its threatened duties on Chinese products. The White House is upbeat while the Chinese are more cautious. How should investors interpret the latest news? 'PERILOUS NEW CHAPTER' A deal that eliminates the worst case scenario of a collapse in U.S. China trade is a good thing. All the evidence, since the 'Liberation Day,' turmoil of April, suggests that if the doomsday scenario is removed, the world will continue to struggle and the markets will melt up on policy stimuli, AI optimism, and solid corporate earnings. Cassandras claim that this is a dangerously complacent viewpoint. Whatever face-saving agreement Trump and Xi reach will only push the problem down the road. Grace Fan, a senior analyst at TS Lombard, warned on Friday that a dangerous new chapter had been opened in geopolitics as well as global trade regardless of the outcome of the Trump-Xi summit. Both sides will be feeling confident, as the stakes are high. Trump is the leader of the world's largest economic, financial, and military superpower. Every single trade agreement he signed this year was in favor of the United States. Xi, meanwhile, has a lot of leverage when it comes to rare earths - the element used in many things, including lithium-ion battery and semiconductors as well as cell phones, LED TVs and electric vehicles. Small but Mighty Rare earths is a complex issue. China produces 90% of all rare earth magnets. According to management consultancy firm IMARC, the value of the rare earths global market is only $12 billion. This figure is at the upper end of estimates and is only a fraction of the $670 billion in bilateral trade between China and the United States last year. These elements are linked to trillions in global economic output. This makes the relatively small market an important part of U.S. China relations. It would be foolish to believe that the temporary lifting of China’s export controls will solve the problem, if this is included in any agreement. Both sides will use the "deal", as an opportunity, to strengthen their weaknesses, to be in a stronger position when tensions rise again. SOMETHING MORE "MONUMENTAL" The International Monetary Fund's and World Bank's annual meetings held in Washington, DC this month were a great opportunity to learn that China is using its rare earths as leverage against the U.S. This signals a more dangerous phase in the geopolitical conflict. Daniel Yergin said, in a panel discussion, that the trust between China and the U.S. has "gone". Goldman Sachs' John Waldron said in a panel discussion that "something more significant" is taking place between the U.S. and China. Many delegates expressed even greater pessimism in private. In the past six months, pessimism has not been a common theme on the financial markets. Stocks in Japan, Australia and South Korea, Britain, France and the U.S. reached all-time records last week. Investors figured that a placeholder' deal was better than nothing at all. You like this column? Open Interest (ROI) is your indispensable source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X.
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Athletes demand climate adaptation fighting back ahead of COP30
The climate change is the biggest enemy facing athletes, says Brazilian soccer player TamiresDias. She's one of 40 elite athletes involved in a global campaign to be launched at the COP30 summit next month in her country. Dias has played in two Women's World Cups. She is joined by tennis players Beatriz Haddad-Maia and Maya Gabeira from Brazil, Romanian Olympic swimmer David Popovici, and Raheem sterling, a former England soccer player, to support Adapt2Win. The Gates Foundation, Wellcome Trust and the global multi-media campaign launched on January 1st urges governments to prioritize investment in climate adaptation before the COP30. Dias, 38 years old, describes the difficulties of playing soccer in Brazil where extreme heat and damaging rainfalls are a challenge. He says that adapting to climate changes is no longer an option. "In sports, we have to learn to adapt to different teams, tactics and opponents every day. Climate change is an entirely different opponent. "It's more powerful, unpredictable and no one is able to face it alone", she said. Forty athletes signed an Open Letter, while a film highlighting the devastating impact of fires and floods on sporting venues will be shown at COP30 next month in Belem. The film begins with the caption: 'This can either be history's worst defeat or its greatest comeback.' According to the campaign organizers, climate related disasters will cause $417 billion worth of economic losses by 2024. Yet, less than 10% global climate finance goes towards adaptation. Sterling, a Jamaican-born player who has represented England 82 times, said: "This is personal to me." "I've witnessed how climate change has reshaped life in the Caribbean. Through the work of my foundation on mosquito-borne diseases prevention, I have seen how simple solutions, led by communities, can make a big difference. The COP30 presents an opportunity for leaders to support these solutions." The campaign highlights the grassroots efforts that are already underway in Kenya, for example, SMS drought alerts and heat-resistant maternal healthcare in Sierra Leone. "Adapt2Win reminds me that all sectors, from government to business, to sports have a part to play in creating a change", Ana Toni said, CEO of COP30's Presidency. The list of signatories also includes South Africa rugby player Bongi Mobambi, Nigerian soccer player Kenneth Omeruo, and American sailor Mike Buckley. Growing up in Nigeria you could always rely on the seasons - when it would rain, when the crops would turn green. In recent years, however, things have changed," Omeruo said. He has 69 caps for Nigeria and was a member of the African Cup of Nations-winning squad in 2013. The weather is unpredictable. Communities are in trouble. Even the football fields we used to train on have been flooded or dried up. "We live with climate change every day." Martyn Herrman reports.
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Albemarle divests Ketjen control and Eurecat stakes in deals worth $660 Million
Albemarle announced on Monday that it would sell a 51 percent stake in its Ketjen refining catalyst solution business to KPS Capital Partners and its 50 percent interest in Eurecat to France's Axens SA in deals valued at approximately $660 million. Albemarle said that proceeds from the sale of lithium would be used to reduce debt and for general corporate purposes. This is part of Albemarle's efforts to increase financial flexibility and focus on its lithium and bromine core units. Albemarle has been attempting to reduce its portfolio in response to the recent drop in lithium prices, which has impacted earnings and cash flows. Albemarle has said that once the transaction is closed in the first half 2026, it will retain a 49 percent minority stake in Ketjen, and the full ownership of the Performance Catalyst Solutions division, which includes the PCS plant located in Pasadena. KPS, which has more than 19 billion dollars in assets under management, will use its manufacturing expertise to expand Ketjen’s global refining catalyst operations and increase profitability.
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Gold prices fall as a potential US-China trade agreement dents demand for safe-haven assets
The gold price fell by 2% Monday as investors looked forward to the major central bank meetings scheduled this week. As of 1122 GMT, spot gold was down by 2% to $4,029.69 an ounce. Prices reached a record-high of $4,381.21 in October, boosted by bets on U.S. interest rate cuts and geopolitical, economic and financial uncertainties. Since then, prices have fallen over 5%. U.S. Gold Futures for December Delivery fell 2.3% to $4 042.80. Asian stocks rose as signs of a truce in the China-U.S. Trade tensions boosted risk appetite. This was a good start to a busy week, which will include central bank meetings and earnings from megacap companies. The UBS analyst Giovanni Staunovo stated that a possible trade agreement between the U.S. U.S. president Donald Trump announced that the U.S. will "come away" with a deal between China and the U.S., a day following a meeting of top officials from both countries to discuss a framework on which Trump and Chinese president Xi Jinping would decide during their upcoming summit in South Korea. The Fed is expected Wednesday to reduce rates by a quarter of a percentage point, as a result of September's lower than expected inflation. Markets are waiting for any remarks that Jerome Powell, Fed chair, may make at the meeting. Lower real interest rates should still be able to support the demand for gold. Staunovo said that the market consensus was for the Fed's rate to be cut by 25 basis points. "I don't anticipate much movement at the FOMC meeting." In a low interest rate environment, gold that does not yield tends to be more profitable. Silver fell 2.3% per ounce to $47.48, while platinum fell 0.8% at $1,593.43, and palladium dropped 0.8% at $1,417.58. (Reporting by Ishaan Arora in Bengaluru; Editing by Sumana Nandy and Subhranshu Sahu)
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Biya is declared the winner of the election in Cameroon, but opposition members report gunfire
Cameroon President Paul Biya Official results from Monday showed that the candidate for the main opposition party, who claimed victory, was reelected to an eight-term term. Issa Bakary, the opposition candidate who was a challenger to the incumbent in the election, wrote on Facebook after the announcement of the results by the Constitutional Council that civilians were being fired upon outside his Garoua home. The government did not immediately comment on the statement, nor could it independently verify its content. Protesters against the government The clashes with security forces have escalated in the last week, after local media reported partial results that showed Biya on track to win. The vote on October 12 . The government has rejected the opposition's accusations of irregularities. Biya is 92 years old and was elected in 1982. He has been in power since then, abolishing the term limit for presidents in 2008, and winning re-election with large margins. A new seven-year term could keep him at the helm until he is almost 100. Clement Atangana said, "Hereby declared as President of the Republic having received the majority of votes cast, Biya Paul", the president of the Constitutional Council. Tchiroma, a former minister of employment and government spokesperson in his 70s, broke ranks with Biya this year. He ran a campaign which attracted large crowds, and received endorsements from an alliance of opposition parties and civil groups. He said last week that he won the election, and he would not accept a different result. (Reporting and writing by Bate Felix, Amindeh Atabong and Anait Miridzhanian. Editing and proofreading by Ayen deng Bior and Andrew Heavens.
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Mazda and Changan jointly form EU Carbon Emissions Pool
A document from the EU revealed that Mazda, a Japanese automaker, has formed a joint venture with China’s Changan in order to pool carbon credits. This will help Mazda avoid fines for carbon emissions. As the shift from gasoline to electric cars (EVs), has taken longer than expected, several legacy carmakers could face fines by the European Union. But those with a lower share of EV sales are able to "pool" their emission with segment leaders by purchasing credits and lowering their average. The EU fines that carmakers say could reach up to $17.5 billion for the industry were originally intended to be applied to carbon emissions levels in 2025. In March, however, the European Commission gave in to pressure from auto manufacturers and allowed compliance on average emissions between 2025-2027. The pool created by Mazda and its joint venture with Changan, a 50/50 joint-venture, is valid until 2025. Other manufacturers can join the pool up to the end of November. The pool joins four others that were formed earlier in the year and are all valid for 2025. These include ones built around Tesla, Mercedes-Benz, and other manufacturers.
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Nord Stream suspects fight German transfer at Italy's highest court
The case of a Ukrainian suspected of coordinating a 2022 sabotage on the Nord Stream pipelines is being re-filed in Italy's highest court by his lawyer. A Bologna Italian appeals court ordered on Monday that the suspect, who was identified as Serhii k. under German privacy law, be transferred to Germany. This decision confirmed a previous one that had been issued by this court last month. Nicola Canestrini, the defence lawyer, said that the man would stay in Italy pending a hearing before the Court of Cassation (the top court), which is expected to be held within a month. DEFENCE SAYS THE ACT WAS POLICICAL AND REQUESTS INNOCENT Canestrini, the lawyer for the client, said that the defence would not stop until the court had fully examined international law and the human rights implications in the case. He argued his client should receive immunity because of what he called a "political act". German prosecutors refused to comment on the Italian court process. The new appeal will cite also a recent decision in Poland where a Polish court refused to hand over a Ukrainian suspect sought by Germany for connection with the blasts, and ordered his immediate freedom from detention. The mysterious explosions of September 2022, described by both Moscow as well as the West, severely impacted the Russian gas supply to Europe. Ukraine has also denied playing any part in the explosions. Serhii, described by defence as a former officer, was detained in August near Rimini, Italy, on an European warrant. In an early decision, the Court of Cassation of Rome sent the case to the Bologna appeals court after a first challenge. German prosecutors claim he is part of a group that planted devices near the Danish Island of Bornholm, in the Baltic Sea. He is accused of conspiring to cause an explosive, anti-constitutional acts of sabotage, and the destruction of important buildings. (Written by Keith Weir, edited by Crispian balmer and Conor Humphries).
Angola bids to buy majority stake in De Beers according to source
Angola bid for the majority of Anglo American's De Beers unit, according to a source with knowledge of the matter. This could lead to a standoff between Angola and Botswana, which are both seeking control over the diamond producer.
De Beers is one of the leading diamond companies in the world. It operates in Botswana Namibia South Africa and Canada.
Bloomberg News reported that the source confirmed that Angola’s state-owned Diamond Company Endiama made the offer.
De Beers and Endiama are jointly exploring diamonds in Angola. In August, the company announced that it had discovered Angola's first kimberlite fields in 30 years. Kimberlite, an igneous stone that contains precious stones, is a type of kimberlite.
DE BEERS UP for SALE AS DIAMOND PRICES DROP According to a June report, Anglo, which put De Beers up for sale amid falling diamond prices attracted at least six consortiums.
Anglo Values De Beers at $4.9 Billion after recording $3.5 Billion in impairments for the last two years.
Anglo American, as well as the Angola Mines Ministry, declined to comment. Endiama was not available for immediate comment.
Botswana, which owns 15% of De Beers, and which contributes 70% to its annual rough production, considers it a strategic asset, despite a slump in diamond prices that has severely hurt the country's economy. In July, its mining minister stated that the Southern African nation wanted to fully control De Beers. The mines ministry of Botswana could not be reached immediately for comment. Angola stated in September that they were seeking a stake in De Beers, and believed it should be run by a private sector firm. Clara Denina is the reporter; additional reporting by Miguel Gomes, Brian Benza and Wendell Roelf in Cape Town; Writing by Silvia Aloisi and Nelson Banya. Editing by Olivia Kumwenda Mtambo and Kirby Donovan.
(source: Reuters)