Latest News
-
Sources: Sinopec purchases Russian oil to replace Mideast supplies after US waiver
Sinopec, the Chinese state oil company, has purchased Russian crude to replace Middle Eastern crude after the U.S. temporarily lifted sanctions in order to ease supply shortages?globally. Several trade sources confirmed this. Sinopec purchased between 8 and 10 cargos of ESPO blend oil exported from Kozmino in the east, according to one source. Another estimated that it was about 10 cargos. Each ESPO shipment is 740,000 barrels. Sinopec purchased the cargoes for a premium of $8 - $10 per barrel over ICE Brent. Before the Iran conflict, Russian crude was traded at a discount ranging from?about $10 a barrel. Sources spoke under condition of anonymity. The U.S. Treasury Department' allowed the purchase of Russian oil at sea starting in mid-March, with a waiver of 30 days that expired on 11 April. This was part of an effort to control energy prices globally during the U.S. and Israeli?war against Iran. This waiver led Sinopec and PetroChina's trading arms to inquire about possible purchases with suppliers. It was reported that they had stopped seaborne purchases of Russian oil since October because of Western sanctions. Since then, it was not clear if PetroChina had purchased seaborne cargoes. Sinopec didn't immediately respond to an inquiry for comment. Big Middle East?EXPOSURE Sinopec is the world's biggest refiner and sources about half of its crude oil from the Middle East. This leaves it especially exposed to a possible closure of the Strait of Hormuz due to the U.S./Israeli war against Iran. Sinopec announced in a March results briefing that it would reduce its production by 5% due to the disruption. It also assessed the possibility of buying Russian oil under waiver. Kpler data revealed that China's imports of Russian crude oil by sea in March were?at 1,82 million bpd. This was down from February's record 1.92 million Bpd. As of April, imports have reached 1.92 million bpd. The waiver from the U.S. boosted 'demand for Indian refiners, who bought?millions barrels of Russian crude oil on sea. The market expects Washington to extend its waiver, despite the fact that it has not made an announcement. Reporting by Siyi Liu, Chen Aizhu and Florence Tan in Singapore. Editing by Clarence Fernandez and Florence Tan.
-
South Korea claims to have secured 273 million barrels of crude oil via routes outside Strait of Hormuz
South Korea has purchased 273 million barrels of crude oil from the Middle East and Kazakhstan by the end of this year. Supplies are being routed outside of the Strait of Hormuz. Kang, who was visiting as a presidential special envoy in Kazakhstan, Oman and Saudi Arabia over the last week, said that Asia's fourth largest economy had also acquired 2.1 million tons of naphtha during the same time period. Kang stated that "in particular, the crude and naphtha obtained this time would be sourced via alternative supply routes, unrelated to the closure of the Strait?Hormuz. This will make a direct, tangible contribution to stabilising the domestic supply." Kang stated that Saudi Arabia agreed to ship 50 million barrels of crude oil to South Korean firms, which were already allocated, via alternative ports near Red Sea in April or May. Riyadh also promised to give priority to 'South Korean companies when allocating and shipping 200 millions barrels of crude between June and the year-end. He said that Riyadh would supply as much Naphtha through the year as possible, including the 500,000 tons requested from the South Korean government. Kang stated that Kazakhstan will supply 18 million barrels, whereas Oman has committed to 5 million barrels and 1.6 millions tons of naphtha. According to him, the crude oil secured would have been enough to fuel the economy under normal conditions for over three months based on the usage of last year. The naphtha volume was equivalent to one month's worth of imports. Kang stated that the oil and naphtha will be supplied via alternative routes, which are not affected by the potential closure of Strait of Hormuz. He said that his trip was driven by an 'urgent need to secure vital energy supplies in the face of what he described as an economic emergency caused by the conflict?in the Middle East. South Korea relied on Strait of Hormuz to import 61% of crude oil and 54% of naphtha last year. Kang added that the government couldn't afford to sit back passively while the regional situation improved. Kang stated that President Lee Jae Myung expressed deep concern over the Middle East conflict by sending letters to the leaders of countries visited. He also expressed solidarity and called for joint efforts to tackle the energy security crisis. South Korea held discussions with oil producers, including Saudi Arabia and Oman, on "cooperation" in areas like constructing bypass pipelines or building oil storage outside the Strait of Hormuz. This is to reduce risks of a possible blockade. Kang stated that with additional funding allocated for domestic storage facilities, joint stockpiling could be expanded to help secure stable supply. (Reporting and editing by Ed Davies. Editing by Kyu Seok Shim)
-
Foreign Minister says that Russia is ready to assist China with energy before Putin's visit.
Russian news agencies reported that Sergei Lavrov, the Foreign Minister of Russia, said on Wednesday in Beijing at a press conference that Russia was'ready to increase its energy supply to China before an expected visit by President Vladimir 'Putin. Vedomosti cited sources who said that it would be during the week of May 18th. President Xi Jinping and Lavrov met on 'Wednesday', assuring Moscow that China is a friend of Russia and saying that China and 'Russia' must work together, trust each other and protect each other's interest. Lavrov said at the press conference that Russia is ready to provide energy supplies to China and other countries that are affected by "the Middle East Crisis". Lavrov told a news conference in China that "Russia could, of course make up the'resource shortage' facing China and other countries who are interested in collaborating with us on a mutually beneficial and equal basis." Lavrov also said that Russia, China and other countries had the means to avoid being dependent on what he called 'the United States. Lavrov?also said that Russia and China had all the necessary means?to avoid reliance on?what he described as 'U.S. Reporting by. (Editing by Gleb Brynski and Mark Potter).
-
Asian stocks reach a six-week high on the hope of US-Iran Peace Talks
As oil prices remained below $100 a barrel, Asian stocks followed Wall Street's lead on Wednesday. The dollar also stabilized after seven consecutive days of declines. The European markets are bracing themselves for a muted opening, with the pan-regional futures down by 0.2% and FTSE Futures barely changing. Wall Street futures were unchanged after a strong rally Tuesday. Donald Trump has said that talks with Iran may resume in Pakistan within the next two day after Washington imposed a blockade against Iranian ports following the failure of the weekend negotiations. Both Pakistani and Iranian officials said that negotiations could resume. The markets were calmed by signs that the diplomatic?engagement will continue. Brent crude futures rose 1% to $95.77 per barrel after falling almost 5% overnight. MSCI's broadest Asia-Pacific index outside Japan gained 1.5%, reaching its highest level in six-weeks. Japan's Nikkei climbed 0.9%% ?while South Korea's KOSPI rallied 3%. Hong Kong's Hang Seng index rose 0.7% and the blue-chip index in China gained 0.2%. It is becoming increasingly evident that the U.S. Blockade of the Strait of Hormuz was a negotiation gambit, said Michael Brown. The 'direction' of travel remains largely towards a US-Iran Peace Deal. Wall Street saw the Nasdaq climb 2% overnight to reach its 10th consecutive day of gains, while the S&P 500 flirted close to a new record. U.S. producer price inflation data was also encouraging, as prices increased?by less that economists had expected in March. This helped to temper fears about war-driven inflation. Investor optimism about the 'Iran War' coming to an end soon helped Treasuries recover from recent inflation concerns. After falling 3 basis points overnight, the yield on two-year U.S. Treasury bonds fell 1 basis point to 3.746%. The 10-year yield also fell 1 basis point (bp) to 4.2439% after falling 4 bps overnight. The U.S. Dollar, a safe haven currency, has stabilised overnight after falling for the seventh consecutive session. The euro remained at $1.1791, after hitting a six-week high of $1.1811 over night. Gold prices fell?0.3%, to $4.824 per ounce. The International Monetary Fund lowered its outlook for growth on Tuesday, warning that the global economy could be on the verge of recession if conflict intensifies. Stella Qiu, Kevin Buckland, and Kim Coghill edited the article.
-
Kenya increases retail fuel prices in response to the Middle East conflict driving up crude costs
Kenya's energy regulator announced late Tuesday that retail fuel prices had risen by up to 24.2% due to a spike in crude oil prices and a squeeze on?petroleum supply caused primarily by the Middle East conflict. The Energy and Petroleum Regulatory Authority, which sets maximum retail prices monthly for different products, released a statement that showed a litre of petrol had been increased by 16.1%. It now costs 206.97 Kenyan shillings (about $1.60). Diesel was raised by 24.2%, to 206.84 Kenyan Shillings. Kerosene remained at 152.78 Kenyan Shillings. The regulator justified the increase in retail prices by citing the rising cost of imported goods, which they claimed had increased up to 68.7%. In March, EPRA kept prices the same, saying that the impact of war hadn't yet been reflected in retail price. Kenya imports nearly all of its fuel products from the Middle East ?via government-to-government deals with Persian Gulf suppliers, including Saudi Aramco Trading Fujairah, Abu Dhabi's ADNOC Global Trading ?Ltd, and Emirates National Oil Company Singapore Ltd. The new prices were set to take effect on late Tuesday night, but motorists in Nairobi's capital rushed to fill their tanks up, creating long queues. EPRA said that it has reduced the value-added (VAT) tax on petrol, diesel and kerosene, from 16% down to 13%, "to cushion consumers from the high...cost?of petroleum products due to the escalating prices on the international market."
-
MORNING BID EUROPE-Stocks rise, blockade holds, talks may resume
Gregor Stuart Hunter gives a look at what the day will bring for the European and global markets. Global equities are edging higher, with new record highs in 'view. Investor confidence remains intact, despite the fact that Iran has not confirmed when it will announce its decision. The MSCI All-Country World Index gained 0.2% on Wednesday to extend its winning streak for a ninth day in a row. Meanwhile, S&P 500 futures were stable just above the 7,00 mark. This is the level that the cash benchmark briefly reached at the end of January. Brent crude rose 0.6% to $95.33 a barrel after the U.S. Military said that its blockade had completely stopped economic trade into and out Iran by sea. Investors also weigh warnings from the International Monetary Fund (IMF), which reduced its global growth forecast on Tuesday. Meanwhile, some traders have warned that complacency could be setting in. The U.S. earnings report season 'painted a picture? of a financial sector that was able to profit from the volatility in the first quarter. Banks reported booming trading revenue, even though they warned about the impact of higher oil costs on their clients. ASIA LEADER IN GAINS The MSCI Asia-Pacific Index outside Japan, the broadest measure of Asian shares, rose 1.5%. Korea's Kospi index led the gains with a 3% increase to surpass its previous record. Taiwanese stocks rose by 1.9%, setting new all-time records. EUROPE MORE GARDED Early European trade was more skeptical. Pan-regional futures fell 0.1%. German DAX Futures slipped?0.1%. FTSE?futures rose 0.1%. Kevin Warsh is also on course to break a record, as he has disclosed assets of more than $100 million. If confirmed, he would become the richest Fed chair ever. The following are key developments that could impact the markets on Wednesday. Earnings of the company ASML Holding NV Bank of America Corporation Morgan Stanley Economic Events France: CPI for the month of March Euro Zone: industrial output for February and reserve assets for march Debt auctions: Germany: 26 and 30 year government debt
-
Report: LKAB's plan to mine rare earths in Sweden could violate Sami rights
LKAB plans to open an iron ore mine and rare earths project near the Kiruna mine in Sweden's far 'north' could be a violation of rights for the Sami reindeer herders, according to a Stockholm Environment Institute report published on Wednesday. Per Geijer is located near LKAB’s?existing Kiruna Mine and is one of the?European Union’s flagship projects as part of its strategy to reduce reliance upon China for rare Earths needed for clean energy, defense, and electric vehicle production. The Sami reindeer herders, however, say that it will end their traditional lifestyle and have promised to take the mine to court. Rasmus Klocker Larsen is a senior research fellow with the non-profit SEI. He said that LKAB's.project carries a risk of violating indigenous rights for the Sami members. SEI stated that LKAB plans for Per Geijer violated Sweden's obligations?under the United Nations International Covenant on Civil and Political Rights and the U.N. Declaration on the Rights of Indigenous Peoples. The mine would?prevent herders from moving reindeer between winter and summer pastures. LKAB claimed it hadn't reviewed the report. The company stated that "we understand our plans for a new deposit will have an impact, and we want dialogue with the Sami villages to develop appropriate and extensive measures for compensation as well as to identify different solutions moving forward." The conflict shows the tensions between Europe's economic goals and commitments to human right. Geijer is Europe's largest rare earth find, with its 1.2 billion tonnes total mineral resources. Of these, 2.2 millions tonnes are rare Earth Oxides. The EU has designated it a strategic project, which means that permits should be accelerated. Sweden wants to be a leader in a "green" industrial era and has cut red tape for new mines. LKAB said Per 'Geijer was crucial to the long-term viability and sustainability of the Kiruna Mine -?the largest underground iron ore mining in the world. Last year, it applied for a mining license. It would still require an environmental permit to begin operations if granted. Both could be appealed. The Sami claim they are not against mines as long as they do not threaten their culture. Lars-Marcus Kuhmunen is the chairman of the Gabna Sami. (Reporting and editing by Paul Simao; Simon Johnson)
-
Iron ore prices rise on the optimism that Iran's resolution will revive steel demand
Iron ore futures rose on Wednesday, as renewed interest in the Iran War?lifted metals market sentiment. A ceasefire is expected to restore Middle Eastern demand for Chinese steel. As of 0246 GMT, the most-traded contract for September iron ore on China's Dalian Commodity Exchange was trading 0.53% higher. It stood at 760.5 Yuan ($111.51). On the Singapore Exchange, the benchmark May ore was up 0.24% to $103.75 per ton. Metals have rallied due to renewed interest in ending the conflict in the Middle East. Zhuo Guqiu, a Jinrui Futures analyst, stated that the war had disrupted trade flows through the 'Strait of Hormuz. This led to lower steel shipments into the Gulf and, consequently, the annual 'lower steel shipment in March. As other countries erected trade barriers, the Gulf became China's second largest steel export destination in 2013. Donald Trump, the U.S. president, said that talks to end the Iran War could resume in Pakistan within the next two weeks, following the failure of the weekend negotiations, which led Washington to stop shipping to and from Iran. A note from Shanghai Metals Market stated that iron ore consumption in China is currently?near peak levels', which provides strong support to iron ore price. The World Steel Association announced on Tuesday that global crude steel demand is expected to increase by 0.3% to 1.72 billion metric tons this year. Coking coal and coke, which are used to make steel, also grew by 1.6% and 2.56% respectively. A separate note by 'Shanghai Metals Market' stated that due to the rising production of hot metals, demand for coking coal and coke was high. Steel mills had relatively low levels of coke in stock, which led to an urgent purchase?of cargoes. The Shanghai Futures Exchange steel benchmarks mostly rose: Rebar was up by 0.23%; hot-rolled coils were up 0.3%; and stainless steel gained 1.89%. Wire rod, on the other hand, lost 0.12%.
Gold falls on increased risk appetite, US-Iran talks are in focus
Gold prices fell slightly after reaching a one-month high earlier in the session, as the prospect of a second round of talks between Iran and the U.S. boosted risk appetite. Meanwhile, rising oil prices contributed to inflation problems.
As of 0501 GMT spot gold was down by 0.3%, at $4,826.13 an ounce. It had previously reached its highest level since March 18. U.S. Gold Futures for June delivery remained unchanged at $4,850.40. Donald Trump, the U.S. president, said that talks to end the Iran War could resume in Pakistan within the next two days after weekend negotiations failed.
Marex analyst Edward Meir said that gold prices are reacting to headlines from the Middle East in the short-term with the hope that both countries will engage in dialogue.
If things go wrong again, we could revert back to the pre-ceasefire pattern, which was characterized by lower gold prices, a stronger US dollar, and lower stock prices.
Bullion has gained 1.6% this week. Investor optimism about the Iran War boosted Asian stocks to a six-week high. Oil prices rose amid uncertainty about crude supply coming from Middle East, the region that produces the most oil. The Strait of Hormuz is still largely closed.
Inflation is fueled by higher crude oil prices because they increase transportation and production costs. Gold is a hedge to inflation but higher interest rates are affecting the demand for this non-yielding material. The U.S. Military announced late Tuesday that American forces have 'completely halted the economic trade going into and leaving Iran by sea via a blockade on Iranian ports.
In the U.S. traders now see a 29% chance that a rate cut of 25 basis points will occur this year. This is up from 13% last week. Prior to the war, two rate cuts were expected for 2026.
In a recent note, analysts at OCBC stated that "while gold and silver rallied overnight, the overall signal was a 'risk-on' rather than defensive position."
(Reporting by Noel John in Bengaluru; Editing by Rashmi Aich, Subhranshu Sahu and Harikrishnan Nair) (Reporting by Noel John in Bengaluru; Editing by Rashmi Aich, Subhranshu Sahu and Harikrishnan Nair)
(source: Reuters)