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China's oil imports cut and US exports increase wrongfoot the market bulls
Analysts and traders alike predicted a market Armageddon if U.S. - Iran war continued and the Strait of Hormuz remained closed. Five weeks after the peace talks stalled and the strait remained largely closed, oil prices did not rise but instead fell to between $100-$110 per barrel. This fall was caused by several factors: Chinese refiners reduced refining and imports, and used crude oil from their tanks instead. The United States' refiners, traders and producers exported more fuel and oil to the global market to fill the supply gap from the Middle East. The Strait of Hormuz was the route of around 20% of the world's energy before the war. Since then, 14 million barrels of oil per day - 14% of the global supply – have been removed from the market by suppliers like Saudi Arabia, Iraq and Kuwait. The war has caused inflation, slowed down the global economy, and led to demand destruction when high oil prices cause consumers to reduce purchases. Ole Hansen, analyst at Saxo Bank, said: "The fact that the prices are still relatively low, despite what's arguably the biggest supply disruption in history, indicates that demand destruction has been stronger and wider than expected." According to General Index data, the premium for Middle Eastern crude grades Oman Dubai and Murban to Dubai benchmark was around $9 per barrel this week. This is down from the record-high premium of over $65.50 per barrel that occurred in March. This gave an outright price of $104 per barrel. It was down from almost $170 per barrel in late March. On May 15, the price of U.S. Permian quality?crude sold at the Magellan East Houston terminal (MEH), fell to a $1.20 per barrel premium over U.S. crude oil futures, in line with levels before World War II. U.S. Mars Sour, the flagship U.S. offshore grade, traded at a $4 per barrel premium to U.S. crude futures on May 15, down from a 6-year high of $17.50 in April. U.S. crude oil exports to Europe also weigh on grades in the Atlantic basin. North Sea Forties crude traded on May 12 at a slight discount to Brent dated, compared with an all-time high $21.50 premium. Before the start of the conflict on February 28, crude oil benchmarks like Dubai and 'Dated Brent' were hovering at around $70 per barrel. CHINA REFINES LESS, USES STOCKSPILES Morgan Stanley analysts said in a recent note that the Chinese oil industry has responded to the crisis with a remarkable response. Chinese refiners cut production by nearly a fifth compared to pre-war levels, to 8.4 million barrels per day. They did this either by bringing up scheduled maintenance dates or by cutting fuel runs. The bank reported that China's net imports of crude oil by sea fell from a year ago to 8.5 millions bpd, or 5.5%. Chinese refiners resold the cargoes that they bought under long-term agreements to refiners outside of China - a rare occurrence - due to low domestic fuel demand and high oil prices, which made resales profitable. Oil imports in Asia, which accounts for 37% of the world's refining production, fell to their lowest level in 10 years last April, as refiners processed stocks that were accumulated before the war at lower prices. Energy Aspects' data shows that Asian crude processing is expected to drop by 5.6% in May to 28,7 million bpd from March. The International Energy Agency reported that global oil inventories dropped at a record rate of 246 millions barrels between March and April as refiners processed more oil to avoid higher prices on an "undersupplied" market. OECD Asia &?Oceania crude stock levels fell 12% in May to 451'million barrels from their pre-war February levels, according to Energy Aspects. No one wants to pay more for the next barrel. Energy Aspects analyst George Dix stated that everyone is waiting with hope but eventually all of these stocks will run out. U.S. Exports Hit Records Producers and traders have increased exports of the United States. The United States is the largest oil producer in the world. U.S. exports have also surpassed records. The U.S. has sold 133,000,000 barrels of its Strategic Petroleum Reserve. According to the Energy Information Administration, U.S. crude and fuel exports rose from 11.2 to 13 million barrels per day in the first two week of May. Kpler data shows that crude oil exports from the SPR were around 308,000 bpd last April, and 281,000 bpd this month. Analysts warn that the lower prices are not sustainable and stocks will drop to minimal levels if Hormuz doesn't reopen within a couple of months. Aldo spanjer, BNP Paribas' analyst, says that refiners will have to resume purchasing to supply fuel markets, and this would cause prices to rise again. The market is resilient, but it's running on its inventories as it waits for a breakthrough in Hormuz, said Adi Imsirovic. He is a senior associate non-resident at the Center for Strategic and International Studies and an experienced oil trader.
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French PM rejects large-scale tax cuts on fuels in the face of tight budget constraints
Sebastien Lecornu, the Prime Minister of France, said that France would 'continue to only offer limited relief to consumers who are impacted by high fuel prices. Paris, unlike other European countries, has refused to cut fuel taxes despite the fact that the Strait of Hormuz closure has driven oil prices over $100 per barrel. The reason given was the high budget deficit in the eurozone. Lecornu said at a press briefing that "we're not changing our strategy." "We reject any reduction in fuel taxes that is indiscriminate and general." He said that the government instead?extended targeted measures and scaled up incentives to buffer the impact on certain groups. Lecornu said that France should also bet on its competitive advantage - a fleet nuclear reactors which produce more than two-thirds (?2/3 of) its electricity and speed up the electrification in the heating and transport sectors. "The switch to electrification is happening whether we like or not. Were we too late to start? It's not too late, thank goodness. Do we have to move more quickly? He said, "We already are." Taxi drivers will benefit from a new bonus that will help them finance the purchase of electric vehicles. The maximum tax-free bonus that can be given to employees who drive to work will now reach EUR600. Lecornu stated that the'most optimistic scenario' envisaged a return to normal conditions by autumn. However, he also stressed that a number of more pessimistic scenarios were being considered due to the high level uncertainty. Budget Minister David Amizel said that the new package will bring total expenditure to help households cope higher fuel costs up to EUR1.2 billion. He said that the government would offset the costs by making savings in other areas and update their budget targets before the end of the month. $1 = 0.8630 Euros (Reporting and writing by Dominique Vidalon and Michel Rose; Editing by Inti and Alex Richardson).
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Sources: Russian NORSI refinery partially closed after drone attack
Two 'industry sources' with direct knowledge of the situation confirmed on Thursday that NORSI, Russia’s fourth largest oil refinery, had?shut down its primary CDU-6?unit following a Ukrainian drone strike on Wednesday. Has reported that virtually all major refineries across central Russia were forced to stop or reduce production following a recent?Ukrainian 'drone attack. NORSI, Russia's second-largest gasoline producer, can process 16,000,000 metric tons of oil each year, which is equivalent to 320,000 barrels per day. The shutdown of CDU-6 at NORSI will lead to a sharp drop in the refinery’s output. This will add further uncertainty to Russia’s energy sector and fuel supplies. The unit can process 25,700 metric tons of oil per day. This is equivalent to 190,000 gallons. It accounts for 53% of the refinery’s total capacity. Gleb Nikitin said that a fire broke out at the industrial site in?Russia's Nizhny Novgorod Region on Wednesday. Ukraine's General Staff said that it struck an oil refinery owned by Lukoil near Kstovo, located in Nizhny Novgorod (about 450 km east of Moscow). Lukoil didn't immediately respond to a comment request. (Editing by Alexander Smith).
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Scientists predict a below-normal Atlantic hurricane season in 2026
Scientists from the U.S. Government said on Thursday that they anticipate a tropical storm season below normal in 2026. This will likely produce one to three hurricanes, with winds sustained at least 111 mph (179 kph). The National Oceanic and Atmospheric Administration has released its outlook for the coming season. It begins on June 1 and ends November 30. The forecasters predicted that eight to fourteen named tropical storms will form with winds at least 39mph. Three to six hurricanes, with winds at least 74mph, are likely to follow. Ken Graham, a director of the U.S. National Weather Service, said: "Don't allow words like below-normal to change your preparation." It only takes one." Graham urged residents along the 'Atlantic and Gulf coasts of the United States to stockpile non-perishable foods, medicines, and emergency supplies like radios and flashlights. NOAA's forecast is in line with other agencies NOAA's outlook is consistent with private and academic forecasts made earlier this year. These forecasts predicted limited storm formation between August and October during the peak tropical season, due to the formation of an El Nino system that sends strong wind across the south of the U.S., which rips apart potential storms. The National Weather Service predicts that El Nino is likely to form during this year's tropical seasons. Between 1991 and 2020, the average hurricane season produced three major storms out of seven named storms. Matthew Rosencrans is the lead hurricane season forecaster for NOAA. "The last forecast we made was in 2015," he said. He predicted that there was a 55% chance of the season producing fewer storms and hurricanes than average. The names of the first storms in this season are Arthur, Berta Cesar Dolly Edouard Fay. Reporting by Anjana Anil from Bengaluru, and Erwin Seba from Houston. Editing by Nathan Crooks. Franklin Paul. Rod Nickel.
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US is moving closer to imposing prohibitive tariffs for Russian palladium
After the Department of Commerce reached a final decision on a countervailing duty of 110.1%, the United States is moving closer to imposing prohibitive 'tariffs' on imports of Russian Palladium. It also issued a final ruling in April 2026 setting a 132.83% anti-dumping duty for Russian palladium. If an independent investigation by the International Trade Commission finds that the U.S. manufacturing industry has been harmed, the duties will be imposed. These decisions "support" a petition from Johannesburg-based Sibanye-Stillwater which, last summer, along with the United Steelworkers'?union asked Washington to consider imposing tariffs on imports Russian palladium in order to "ensure the sustainability of U.S. supplies for the long-term". Nornickel of Russia, the largest palladium producer in the world with a market share of about 40%, declined to make a comment on Thursday. The U.S. Anti-dumping Investigation into Russian Palladium has 'increased the market volatility, but it is not expected that fundamental market conditions will be affected in the long run, the company stated previously. Nornickel stated in a recent market report that "as long as palladium and the platinum market remain balanced and palladium remains a key metal for automotive catalyst manufacturing, we don't expect to see a significant increase in price on a long-term basis, since the global market can quickly reallocate materials flows." Nornickel's palladium production is expected to fall to between 2.415 and 2.465 million ounces (75.1-76.7 tonnes) in 2026, from 2.725 millions ounces (84.8 tonnes) in 2020. This could be the lowest level in over 20 years. Imports of Russian palladium in the United States grew to 27.6 tons by 2024, from 23.8 tons in 2023 and 20.4 tonnes?in 2022. The amount of Russian palladium imported into the United States increased to 27,6 tons by 2024 from 23.8 tonnes in 2023 and 200.4 tons in 2022. Palladium used in gasoline vehicles to reduce emissions has avoided U.S. sanctions. Since the beginning of the year, the spot palladium price has fallen by about 16 percent to $1,370 an ounce. (Reporting and editing by Alison Williams; Anastasia Lyrchikova)
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Rubio: chances of an agreement being negotiated with Cuba are "not high".
Marco Rubio, U.S. Secretary of State, said that the 'likelihood' of a peaceful, negotiated agreement between the United States, and Cuba, is not very high right now. Washington has been stepping up its pressure against Cuba's communist regime. Rubio stated that the United States prefer a negotiated solution. He told reporters, "That is still our preference." I'm being frank with you. The likelihood that this will happen, given who we are dealing with at the moment, is low. If they change their mind, we are here. In the meantime, we will continue to do what we have to." Donald Trump wants to "regime-change" in Cuba. Castro's communists are in power in Cuba since 1959, when his brother Fidel Castro started a revolution. Rubio said that Cuba had accepted the U.S. humanitarian aid offer of $100 Million. On Wednesday, the United States announced that?former Cuban president?Raul?Castro was charged with murder. This marked a significant escalation and a new low for?relations? between these Cold War rivals. Rubio denied that the U.S. is nation-building. He told reporters that it was not nation-building before he left for a NATO Ministers' Meeting in Sweden. "We're addressing a matter that is directly related to national security in the United States." Reporting by Katharine Jackson, Doina chiacu and Michelle Nichols. Editing by David Ljunggren
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SpaceX IPO filing boosts European space stocks
European space stocks rose?on Thursday?after Elon Musk filed for a listing on the stock market. This raised hopes that a historic debut could boost valuations throughout the sector. Eutelsat, the French satellite operator, rose by 20% and reached its highest level in over a year. German satellite manufacturer OHB rose 15%, while Luxembourg-based SES gained 3.7%. SpaceX would become the first U.S. company to list at its reported valuation if the listing is completed. Market debut initial public offerings worth more than $1 trillion. "I do not think that there will be a capital flight. IPOs of large size are generally good for the market. OHB CEO Marco Fuchs said that there is interest and opportunities. SpaceX predicts a substantial increase in the market for space-enabled products and services over the next few years. This is in line with OHB’s assessment: We are at a real space explosion! Analysts said that investors wanted to see a re-rating or higher market valuation for European satellite companies. Stephane Beyazian, an analyst at ODDO BHF, said that SpaceX's IPO is expected to have valuation multiples far above those of SES and Eutelsat. He said that some investors are interested in gaining exposure to this sector and hope for a possible upsizing of European valuations. ING analyst Jan Frederik Slijkerman stated that sentiment towards European?satellite operator? had improved following a weaker 2025 when investors feared low-Earth orbit constellations could disrupt the market and cause overcapacity. This was especially true for geostationary assets. He declined to comment specifically on SpaceX, but said that the narrative has shifted in recent years. SpaceX stated in its filing that it has a total market addressable of $28.5 trillion, which includes $1.6 trillion for Starlink.
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Ukraine repairs massive Trypilska Power Plant before Centrenergo Sale
The head of the State 'Fund' said on Thursday that Ukraine plans to repair the large thermal power plant owned by the state near Kyiv, after Russian airstrikes, and prepare the?parent company Centrenergo for privatisation in the next year. Since Russia's full-scale invasion in Ukraine 2022, it has repeatedly attacked Ukraine's power system with drone and missile strikes, striking both power plants that deliver electricity to customers and substations. Officials in Ukraine have confirmed that up to 80% thermal generation capacity has been lost. Dmytro Natalukha is the chairman of the State Property Fund which manages the state assets of Ukraine. He said that the State Property Fund intends to proceed in the privatisation of Centrenergo but first the Trypilska Plant would have to be restored. He said that three parallel processes are underway and should be completed by 2027. These include preparing the facility for the next heating seasons, restoring it, and drafting the documents for future tenders. Natalukha said, "We are dealing with a number of issues at once and none is easy." The main obstacle to implementing this ambitious project is the war. Russia intensifies its attacks on energy infrastructure in winter and often destroys what was repaired in the summer. PRIVATISATION Mykhailo Honchar, an independent energy analyst, said that the war context would make it unlikely for any privatisation to be successful. He said that "no one would invest in building or restoring new capacity if they knew it could be destroyed any minute." Trypilska, a power plant that supplies electricity to Kyiv, the region and beyond, was severely damaged by Russian air strikes during spring 2024. Since then, it has been virtually shut down. The plant has a capacity of 1.8 Gigawatts - roughly two nuclear reactors - and Natalukha says it's a?high risk?target. The roof of this vast facility has been removed, and inside, dozens of workers are trying to restore the blackened boilers, turbines and pipelines. Centrenergo owns three power plants, including Trypilska. The other two are located in eastern Ukraine, at?Vuhlehirska & Zmiivska. Vuhlehirska, which was taken over early in the conflict, was severely damaged by attacks in 2024. Natalukha stated that "I believe next year, we will try and reach an understanding (on the timeline for privatisation) - it will depend on how well we manage to get through the winter." He said he couldn't estimate the cost to restore the plant, or provide a timeline for its resumption of operations. And he didn't give any further details about the privatisation process. He said that major European and U.S. companies in the energy sector could be interested to buy Centrenergo.
Trump Administration pivots towards buying stakes of critical sectors
The Trump Administration is increasing efforts to secure U.S. Supply Chains for Critical Minerals and Semiconductors by converting federal grant?for companies in equity stakes. This will reduce reliance on China.
The U.S. Department of Commerce announced on Thursday that it would be taking $2 billion as equity stakes in nine quantum computing companies.
As part of the shift from traditional subsidies to direct ownership, the administration has acquired or discussed stakes with several companies.
The following are the companies that have been linked to strategic investment:
QUANTUM COMPUTING COMPANIES
The 'Trump' administration will invest $1 billion in order to launch Anderon, America's very first dedicated quantum chip production facility. IBM will invest $1 billion into Anderon. The government did not reveal the stake that it holds in Anderon.
- GlobalFoundries
The U.S. is investing $375 million to help accelerate the development of quantum technologies solutions. The government has agreed to invest an equity stake in the company of approximately 1%.
- D-Wave, Rigetti Computing, Infleqtion , Atom Computing, PsiQuantum, Quantinuum
The Trump administration is investing $100 million in each company to solve the key technical obstacles that have slowed down the development of more powerful quantum computers. They will also take minority equity stakes, but not control.
Diraq
The government will take a?equity interest in the company in exchange for funding of up to 38 million dollars to scale and develop quantum computing technology.
USA RARE EARTH
Project: rare earth mine to magnet supply chain
Sources familiar with the issue said that the Trump administration would take a 10% stake as part of a debt-and equity investment package.
Details: USA Rare Earth plans to build an integrated U.S. rare-earth and magnet production system supported by $1.6 Billion in proposed CHIPS Act financing.
Strategic Value: This effort aims to increase U.S. rare-earth processing capacity and strengthen the domestic supply chains in critical minerals.
KOREA ZINC
Stake purchased: around 10%
Project: $7.4 billion smelter in Tennessee
Details: A joint venture between U.S. and Korean partners will build a $7.4 billion smelter for Korea Zinc in Tennessee.
The?U.S. The Department of Defense holds a 40% stake in the JV while the Commerce Department provides $210 million in subsidies through the CHIPS Act.
Korea Zinc will distribute $1.9 billion in new shares to the JV and strategic investors from the United States, giving them about 10% of the company. The JV and strategic investors in the U.S. will receive new shares worth $1.9?
The remainder $5.5 billion will be derived from $4.7 The remaining $5.5 billion will come from $4.7? Construction will begin in 2026 with phased operation starting in 2029.
Strategic Value: This project will strengthen U.S. supply chain and reduce reliance on China. China dominates the global supply of critical minerals and has recently restricted antimony and Germanium exports to the United States.
TRILOGY METALS
Investment includes warrants for an additional 7.5%
Project: Upper Kobuk Mineral Projects in Alaska. A JV between Australian miner South32 and?Trilogy Metals.
Details: The White House is investing approximately $35.6 million to develop critical mineral resources in the UKMP located in Alaska Ambler Mining District.
Trump signed an executive directive directing his administration that it would allow an access road into the mining district of Ambler.
Ambler Mining District is rich in minerals, including copper, zinc, and lead.
CRITICAL METALS
The stake under discussion is approximately 8%
Project: Tanbreez rare earths deposit, ?Greenland
Four people with knowledge of the discussions said that Trump administration officials have discussed acquiring a stake in Critical Metals.
Washington would gain a direct stake in the Greenland rare earths project, which is the Arctic territory Trump suggested buying.
LITHIUM AMERICAS
Acquired stakes: 5% of the parent company, and 5% of the joint venture with General Motors in Thacker Pass.
Project: The lithium mine at Thacker Pass, Nevada
Strategic Value: This project is seen as an important part of Washington’s efforts to increase the production of lithium, a metal that's used in batteries for electric cars and other electronic devices.
MP MATERIALS
Stake purchased: about 15%
Project: Mountain Pass?rare earth mine in California
MP operates the only U.S. MP operates the only?U.S. rare earths mine.
The Department of Defense will become the largest shareholder in Las Vegas-based MP. This is Washington's most high-profile investment to date in the critical minerals sector. The Department of Defense is set to become the largest shareholder of Las Vegas-based Minerals Partners, a company that specializes in critical minerals. This will be Washington's biggest investment in this sector.
INTEL CORP
Stake purchased: 9.9%
Strategic Value: Intel will use the investment to expand its advanced manufacturing capabilities in the U.S. and strengthen supply chain security. Reporting by Arunima K., Vallari Srivastava. Sumit Saha. Pranav Mathur. Pooja M. Menon. Editing by Maju Samuel, Shilpa Majumdar, Maju S., and Shilpa Kalluvila.
(source: Reuters)