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Australian shares drop as concerns persist over US-Iran agreement; banks and miners drag
Australian shares fell on Friday. Miners and banks were the main culprits. Domestic?fuel supply worries and doubts about whether upcoming U.S. - Iran?peace negotiations would ease disruptions in Strait of Hormuz? weighed on risk sentiment. As of 0021 GMT the S&P/ASX 200 index was down by 0.5% at?8,914.30 after a 0.3% decline in the previous session. The benchmark is set to have its worst week since four years, with a 0.5% decline. Oil prices rose overnight as doubts grew about whether upcoming peace talks will ease supply disruptions. Energy supply 'concerns' have been brought to the forefront in Australia. A fire at the largest refinery of?Viva Energy has reduced petrol production by 60%, despite ongoing efforts to ensure fuel supplies. The "Big Four" bank losses ranged from 0.4% to?1%. The sub-index looks set to have its worst week ever since the Middle East conflict began on February 28. The decline in the mining sector was 0.2%, which is a continuation of the previous day's losses despite higher iron ore and Copper prices. BHP and Rio Tinto each fell by about 0.2%. If the current momentum continues, this sector is on track to achieve a fourth consecutive weekly gain. Gold miners declined 1.2%, and Consumer Discretionary stocks retreated by 1.5%. Brent crude futures rose $4.46 overnight, causing energy stocks to rise 0.2%. Santos and Woodside both advanced by more than 0.4%. Insurance Australia, a stock, fell as much as 1,6% among individual?stocks after the competition regulator of the country extended its investigation into the proposed takeover by the company of RAC Insurance. The probe was based on competition concerns. Paladin Energy, a uranium-producer, upgraded its full year production forecast at its Langer Heinrich Mine, and was one of the top gainers. The shares of 'Amplitude Energy' jumped up to 6.7% after a binding agreement was reached with AGL Energy for the supply of gas from their East Coast Supply Project. New Zealand's benchmark S&P/NZX 50 Index reversed early gains and traded 0.2% lower, at 13,039.86.
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Vale records best-ever first quarter iron ore sales for eight years
Brazilian miner Vale announced on Thursday that it had sold the most iron ore in a first quarter since 2018. It also announced the suspension of pellet production in Oman due to the conflict in the Middle East. Iron ore sales for the company, including fines, pellets, and run-of mine, increased 3.9% from a year ago to 68.7 millions metric tons in the quarter January-March. Vale, a world-leading iron ore producer, reported that sales increased in tandem with production. A 5.5 million ton inventory drawdown was mainly due to in-transit stocks after increased production in the second halves of 2025. It said that the?average realized iron ore price rose by 5.5%, to $95.80 per tonne. Analysts at Itau BBA wrote: "Vale’s first-quarter sales and production figures were relatively in line with our expectations. This led to a slight upward adjustment of our proforma EBITDA first-quarter estimate." Vale announced that it had halted the production of its pellet plant in Oman for annual scheduled maintenance in mid-March and suspended construction on a?concentration plant at Sohar in the country. Due to recent developments in the Middle East, the company expects its Oman operations to resume by the end of third quarter. In the interim, the pellet feed that was originally allocated for Oman will now be diverted to the Tubarao plant in Brazil and sold as fines. Vale's pellet production forecast for the full year remained unchanged at 30 to 34 million tonnes. PRODUCTION BOOSTED BY SOUTHWEST BRAZIL Vale produced 69.68 millions tons of iron ore during the third quarter. This was a tick higher than Visible Alpha's consensus estimate of 69.43million tons, and represents a 3% increase?year-on year. The report revealed that a higher production in the southeastern Brazil region offset a decline of iron ore production in northern Brazil. The company, which will report its first-quarter earnings to the public on April 28, has also set its iron ore production forecast for 2026 at between 335 and 345 million tons. COPER AND NICKEL PRODUCTS RISE MORE THAN 12% Vale's base metals division reported an increase of 12.5% in its copper production, to 102,300 tonnes, thanks to its Brazilian operations Salobo and Sossego, despite lower output at its Canadian mines. The second furnace at Onca Puma mine in Brazil boosted nickel production by 12.3%, to 49,300 tonnes. Vale reported stable operations at Voisey's Bay Underground Mine in Canada, which also contributed to a record-breaking first quarter production at Long Harbour refinery. Reporting by Andre Romani from Sao Paulo, and Marta Nogueira from Rio de Janeiro. Editing by Kylie Madry and Inigo Alexander.
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Oil prices fall on prospects of talks to end Iran War and revive supply
Early Friday morning, oil prices dropped on the optimism that the Middle East conflict could be coming to an end. A 10-day ceasefire between Israel and Lebanon went into effect after the inauguration of the ceasefire. Moreover, 'President Donald Trump' said the U.S. may hold talks with Iran over the weekend. Brent crude futures fell $1.34 or 1.35% to $98.05 per barrel at 0021 GMT. U.S. West Texas Intermediate Crude Futures declined $1.65 or 1.74% to $93.40 per barrel, reducing gains from the previous day. Trump addressed a major sticking point in talks to end the Iran War, which has shut the Strait of Hormuz?for seven weeks, and cut off approximately one-fifth the world's supply of oil. He said that Tehran had offered to not possess nuclear weapons for more than 20 years. We're going to see what happens. Trump said to reporters on Thursday outside the White House, "I think we are very close to a deal." Oil prices rose 50% in March, a record. They have fallen below $100 per barrel only recently but have remained within $90 for the entire week. Israel's campaign against Lebanon has been a major obstacle in securing the peace deal that?Trump is seeking to end his war with Iran, which he started in late February. Two Iranian sources have told?that U.S. negotiators and Iranian negotiators are now seeking a temporary agreement to avoid a return to conflict. Two Iranian sources told? on Thursday that U.S. and Iranian?negotiators have scaled back their expectations for a?comprehensive peace deal, instead seeking a temporary memorandum to prevent a return?to conflict. According to analysts from?ING, the Strait closure has disrupted oil flow by approximately 13 million barrels a day. Helen Clark, Sonali Paul and Helen Clark contributed to this report.
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IMF and World Bank announce they will resume dealings with Venezuela
The International Monetary Fund (IMF) and the World Bank each announced on Thursday that they have resumed their dealings with Venezuela. These had been paused since 2019. This was due to issues regarding 'government recognition. This move could lead to the release of billions in funding through frozen special drawing rights. Kristalina Georgieva, IMF's Managing Director, said in a press release that the Fund was guided by the views of the majority of its members and now dealt with Venezuela's Government under the administration of the South American nation’s interim president Delcy Rodriguez. The World Bank Group released a statement also announcing that it would resume dealings with the Venezuelan government under Rodriguez. The statement stated that its last loan was made in 2005. The Venezuelan?information ministry and its central bank did not immediately respond to comments. After the U.S. administration of Donald Trump ousted Nicolas Maduro from power in Caracas in January, Washington has resumed a formal relationship. Washington has worked with Rodriguez since then and wants to expand its presence in Venezuela's mining and oil sectors. DEBT RESTRUCTURING and SHORT TERM FUNDING HOPES JPMorgan estimated that Venezuelan special drawing rights are worth $5 billion. Investors bet heavily on Venezuelan bonds, hoping that a change of government will allow for a restructuring. Analysts estimate that Venezuela has defaulted bonds worth?about 60 billion dollars, but the total external debt stands at approximately $150 billion to 170 billion. Last month, the IMF?said that it would begin to engage with Venezuela again. It began by collecting basic data and assessing its economy after many years of gaps. A full sovereign restructuring, however, is usually underpinned by the?new IMF lending program and data about what level of debt a country can sustain. Reporting by Libby George, Washington. Mrinmay dey and Daina-Beth Solomon contributed additional reporting from Mexico City. Editing was done by Chris Reese and Inigo Alexander.
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G7 Finance chiefs call for "lasting peace" in the Middle East and warn of war's damaging economic effects
The finance?chiefs of Group of Seven nations agreed on Thursday that it was urgent to reduce the cost of the Middle East 'war' to the global economy and "reaffirmed the pressing need to move towards a lasting peace," said a?statement?from France, which is holding the G7 Presidency this year. The war was one of three major topics that the finance ministers and governors of central banks of the richest democracies in the world discussed on the fringes of the spring meeting of the International Monetary Fund (IMF) and World Bank (WB), which took place in Washington. The two also discussed the continued support of Ukraine as well as developing alternative supply routes to China for rare Earths and critical minerals. "The conclusion was unanimous - it's urgent to limit the costs to the global economic system of a conflict that continues." The statement said that G7 members reiterated the urgent need to work toward a lasting peaceful solution. "More so than ever before, coordination between G7 members is key in addressing the impact of the energy and economic crisis on the world economy. The G7 is particularly concerned about the indirect and direct effects of the crisis on the "most vulnerable" states. Roland Lescure, the French Finance Minister, told reporters on Thursday morning that the G7 nations must be prepared to take action to reduce the risks of inflation and economic instability caused by war-related energy and supply shocks. Last month, with the support of the G7, the International Energy Agency released a record-breaking amount of oil to counter the cutoff of supplies from Gulf nations through the Strait of Hormuz. Lescure stated that "we need to ensure that we know?where the risk balance is tilting over the next few week" after the G7 Finance Ministers and Central Bank Governors' meetings on Wednesday and Thursday. Lescure said, "We will be meeting again in Paris in one month and we want make sure we monitor the situation and evaluate the impact. If we need to take action, like we did when we released inventories a couple of weeks ago, we'll do so." Lescure said that it was also important to guarantee free transit of ships through the Strait of Hormuz. He added that G7 Ministers had agreed that vessels shouldn't have to pay "one dollar" to Iran for passing through the international waterway. This year, France is the host of the G7 summit, which includes the U.S.A., Canada and Japan as well as Britain, Germany, Italy, and France. Francois Villeroy de Galhau, Governor of the Bank of France, said that the G7 central banks had also committed to?take steps necessary to ensure that Iran's energy and commodities shock does not become embedded in core inflation second and third round price impacts. We will act without hesitation if necessary but are not in a hurry. We need more data about the impact of the price shocks. Aid for Ukraine Lescure stated that the G7 finance leaders met for the first time this year in person and also pledged to continue?to help Ukraine. This includes helping it?prepare?for next winter, after a difficult year this year due to constant Russian attacks against Ukrainian energy infrastructure. Lescure stated that "Ukraine must never be collateral damage in the war currently being fought in Iran." "Russia cannot benefit from the events in Iran." Scott Bessent of the U.S. Treasury Department, who missed Thursday's G7 meeting about critical minerals, announced on Wednesday that he will not renew the?30-day waiver of sanctions for Russian oil at sea. The waiver expired on April 11 and was intended to reduce price pressures through the release of more oil onto global markets. According to the French statement, the focus of the meeting was on Ukraine's economic reforms, under the $8 billion IMF programme, as well as the need to maintain economic pressure on Russia. It also mentioned the importance of Ukraine's energy requirements and the active contribution to the repair work at Chernobyl's confinement arches. The G7 finance chiefs also discussed how to develop alternative supply chains of rare earths, critical minerals and other essential materials to reduce the countries' dependence on China. Lescure stated that the group will continue to work on "very tangible steps" which could be presented at a G7 meeting in Evian-les-Bains, a French Alpine spa city. (Reporting and editing by Andrea Ricci, Paul Simao and David Lawder)
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The US has a large supply of cargoes to cushion it from the price shock in Europe and Asia
Analysts and traders say that U.S. crude cargo prices have fallen from recent price spikes, while in Europe and Asia prices continue to reach record highs, seven weeks after the Iran 'war. The war in Iran disrupted the global oil flow with the closure of the Strait of Hormuz - a vital trade route - and caused damage to oil facilities in the entire region. This pushed the price of crude oil in Europe, the Middle East and Asia up to record highs. As the world's largest oil producer, the U.S. has been able, through its refineries, to access the medium-sour crude that they prefer, as well as recent product from Venezuela to cushion some of the shock. According to Argus Media data, physical cargoes of Mars Crude, a medium sour crude produced in the U.S. Gulf of Mexico traded at an outright rate of $97 a bar on Wednesday. This is down from $128.70 a bar on April 2. The price of Dubai benchmark crude oil in the Middle East became the most expensive benchmark at $170 per barrel. "European buyers and Asian buyers require immediate physical barrels. U.S. refiners are "on the supply-side of the equation" and not "price-takers", according to David Jorbenaze. As part of an international effort to address shortages caused by the war, the U.S. is releasing 172 million barrels from its Strategic Petroleum Reserve. Gus Vasquez is Argus Media's crude editor. He said that the SPR release will feed into markets in which Mars will directly compete. "So an increase in supply of its product is likely to have a negative impact on prices, as we have historically seen when there has been an SPR released." VENEZUELAN CRUDE Imports Rise The crude oil released by the SPR has a medium-sour taste, just like the Venezuelan crude that more U.S. refining companies have access to since the capture of Nicolas Maduro, the former Venezuelan president, in January. In the first quarter of 2019, the U.S. imported 295,000 barrels of Venezuelan crude per day, an increase of 14% over the previous year and the highest quarterly amount since the fourth quarter 2018. The combination of SPR releases, Venezuelan barrels and high freight risks for?Europeans or Asians are keeping a lid the U.S. Physical Market," said Neil Crosby. Analyst at Sparta Commodities. He added that, from a sour perspective, the region is well supplied. However, not all U.S. crude oil prices have dropped. WTI Midland, a lighter, lower-sulfur oil, delivered to Europe by refiners'scrambling' for alternatives to Middle Eastern imports, reached a record high on Tuesday of $22.80 per barrel over Brent. Janiv Shah, Rystad Energy vice president for oil markets analysis and Rystad Energy, stated that Mars is rarely exported because it's consumed in the United States. The export-oriented WTI, however, would have the most upside due to the increased competition. Reporting by Robert Harvey, London; editing by Liz Hampton and Bill Berkrot.
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The US Energy Secretary is criticized by lawmakers for forcing coal-fired plants to continue operating
U.S. legislators criticized Energy secretary Chris Wright for ordering that aging coal plant remain open in hearings held on Wednesday and Thursday, saying: 'the action will raise the already high power bills for steelmakers and consumers. Wright's department ordered in December that two Indiana coal plants, which had planned to?close permanently?, remain open. They said this would reduce the risk of power outages and provide affordable electricity. CenterPoint Energy's and Northern Indiana Public Service Company's coal plants were to be replaced with natural gas or other sources of power. NIPSCO estimates that it will cost them $100 million to maintain their plant. Representative Frank Mrvan of Indiana said that keeping the plants open could lead to higher power rates, as the Federal Energy Regulatory Commission has authorized the regional grid operators to recover costs for compliance. Mrvan said to Wright on Wednesday that Northwest Indiana was the largest steel-producing region in the United States. Utility rates affect the price of steel and therefore the price of all the products we produce. Please explain how the forced emergency order benefits those who are being crushed by these policies. Wright stated that the ultimate goal was to drive down prices and protect the grid against blackouts, in a region populated by data centers which are power hungry. Wright has agreed to review his orders for the plants to remain open in Indiana and Washington State. CenterPoint sent Wright a letter on February 17 asking him to withdraw the order to keep its?F.B. Culley 2, stating that it would be costly to maintain the "inefficient, and increasingly unreliable" asset. Citizens Action Coalition, a public interest group, obtained the letter published on Thursday. Wright's department instead issued another order to CenterPoint in March, directing them to "run the plant" until at least June 21, Ben Inskeep said that the orders were an "outrageous misuse of power" and would cause the energy bills of Americans to continue to rise. Wright also ordered TransAlta 'to keep a coal-fired unit open in its Centralia facility, Washington State that was planning to retire by the end of 2025. Kim Schrier said that consumers are paying for the cost of keeping this unit in standby, even though it's not producing power. Hydropower and natural gases are replacing it. She said the order was a result of the administration's "obsession" with coal. (Reporting and editing by Nick Zieminski; Additional reporting by Valerie Volcovici, with additional reporting by Timothy Gardner)
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California gasoline stock drops to record lows due to disruptions caused by Hormuz
Fuel prices are soaring across the country due to 'the war against Iran.' Analysts warn that California has not yet felt the full impact of supply disruptions caused by the closing of the Strait of Hormuz. According to the American Automobile Association, California motorists paid an average of $5.86 per gallon on Thursday, the highest price in the U.S. This is far higher than the national average of $4.09 per gallon. Analysts say that because California relies heavily on Asian refined products, the supply crunch will worsen. This means California is among the first states in the U.S. who are likely to feel the effects of the Strait of Hormuz closure, which affects a fifth of world oil and gas. The Energy Commission's Niki Woodard, spokesperson for the agency, said that the commission is in constant communication with the state refineries to ensure an adequate supply of transportation fuels during this volatile time of reduced supply due to the closure of the Strait of Hormuz. The average state gasoline stock for the four-week period ended April 10 was 9.44 million barrels, the lowest since 2005. These inventories consist of California blend gasoline, blending ingredients and non-California gas. Because it is not connected to the country's fuel pipelines it is more vulnerable to price shocks. This forces it to import from Asia where refiners refine Middle Eastern crude oil into gasoline and other products that are used on the U.S. West Coast. According to AAA, the $5.86 average statewide represents a 26 percent increase since the start of the Iran War. California's gas prices are higher due to taxes and extra costs to produce the unique gasoline blend developed to reduce the smog which was once a common sight over Los Angeles. DECLINE IN Inventory Michael Mische, a professor at the University of Southern California wrote this week in an analysis that the full impact of decreasing gasoline and crude imports have not yet been seen in California's fuel systems. It takes about a month to ship refined products from Asia to California. The analysis predicts that gasoline imports will drop sharply in the next two to three weeks. The analysis said that this will be the moment when the impact of the import shock is fully felt in the terminal supply, and ultimately at the pump. Susan Bell, of Rystad energy, said that California's gasoline inventories may worsen over the next few weeks. California was once a major oil producer. However, in recent years the state has become more reliant on fuel and crude imports due to two refineries that accounted for 20% of California’s refining capability closing. According to the CEC, its crude oil inventory was 10.09 million barrels, a decrease of more than 23% compared to a year ago. Woodard, a California refinery official, said that the refineries are using alternative sources of crude oil and gasoline to compensate for the loss in Middle East cargoes. "We do not predict a supply problem in the near future." The agency has enough stock to last until mid-May. Californians consume about 36 million gallons per day.
Competition regulator extends probe into Insurance Australia’s proposed RAC Insurance merger
A 'watchdog' in Australia said that Insurance Australia’s proposed takeover RAC Insurance would?require a further review.? Citing?concerns about a deal which could reduce competition in motor vehicle, home and contents and insurance in Western Australia.
The Australian Competition and Consumer Commission (ACCC) made its decision nearly a full year after Insurance Australia announced that it would invest A$1.35billion ($967.01m) to purchase the underwriting business and 'the Royal Automobile Club of Western Australia.
The review is a follow-up to an initial investigation that ended in December when the regulator was against the deal.
ACCC Chair Gina Cass Gottlieb stated that the acquisition would bring together two of?the biggest insurance companies in WA.
IAG is waiting in line while the competition watchdog scrutinizes major deals that may hinder competition in Australia.
Ampol, a fuel retailer, has sweetened its proposal to the competition regulator in response to concerns about its A$1.1billion takeover of EG Australia. This is the local arm owned by Britain's EG Group.
Insurance Australia, in a separate statement released?on Friday', said that it would 'continue to work constructively' with the ACCC during this process. The deal, once finalised would add approximately A$1.5 billion to gross written premiums and support regional expansion for the insurer.
The 'watchdog' said that the Phase 2 assessment could take up to 90 - days, unless it is extended. It will also look at if the takeover would affect the?smash repairs, which are services for repairing cars damaged in accidents.
(source: Reuters)