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Russell: China added crude oil to its massive stocks in March. But the outlook has changed.
China built the largest crude oil stockpile in the world during March, even as the rest of the world began to use up its inventories to make up for the millions of barrels lost due to the closure of the Strait of Hormuz. According to calculations based off official data, China, the largest crude importer in the world, had a surplus of 1,74 million barrels a day (bpd). China's excess crude for the first quarter was 1,41 million bpd. This is down from the?record-high of 2.67 millions bpd set in December, but it is up from the 2025 average of 1.13million bpd. China does not reveal the volume of crude oil flowing in or out of strategic and commercial stocks, but it can be estimated by subtracting the amount processed from total crude produced domestically and imported. Not all of the excess crude is likely to have gone into storage. Some was processed in plants that are not included in the official data. Even if you ignore these gaps, the fact remains that China imported crude oil at a rate far greater than was necessary to meet its domestic fuel needs. In March, China imported 11.77 million barrels per day of crude oil while its domestic production was 4.49 million barrels per day. Refinery processing reached 14.52 million barrels per day, leaving an excess of 1.74 millions barrels per day for storage. China's crude oil stockpiles continued to grow in March, despite the fact that imports were not affected by the conflict?in the Middle East. The conflict began on February 28, when Israel and the United States launched an aerial attack against Iran. Oil delivered to China before the start of the conflict would have left the Strait of Hormuz, but imports from April will likely be affected. It is important to ask how China will respond to the lower crude imports that are expected to begin in April. These may be further restricted if the U.S. The military will be able to carry out President Donald Trump's order to blockade Iranian ports. Kpler, a commodity analyst, estimates that China's seaborne oil imports for April were 8.7 million barrels per day. While this number is likely to rise as more cargoes arrive before the month's end, arrivals are likely to be at their lowest level since August 2022, when 7.97 million barrels per day arrived. Options If it wants to maintain domestic refinery rates at current levels, China can use some of its vast crude oil stockpile. Beijing has not revealed the exact number of commercial and strategic stocks, but analysts estimate that at least 1.2 million barrels are in these inventories. It would take two years to exhaust the stockpile if China released up to 2,000,000 bpd from reserves to maintain refinery output. It is clear that this is an extreme situation, but the truth is that crude oil flow from the Middle East is likely to return at some point to levels similar to those prior to the start of the conflict. China can easily continue to refine fuels and increase the amount of processing that is done, allowing for the export of fuels. Beijing has imposed informal restrictions on this since the beginning of the conflict. Kpler tracked shipments of 524,000 bpd in April. Jet fuel and diesel prices in Asia reached record highs during March due to the loss of refined fuel exports from China. Beijing probably expects the Iran conflict will end within the next few weeks, and the flow of crude oil and other products from the Middle East to resume. If the Strait of Hormuz is closed for a long time, China faces increased risks. China can keep its domestic fuel supplies for a long time because it has a large amount of crude oil reserves. However, if Asian neighbours experience shortages or their economies begin to shut down, it won't be long before this will affect China's export industries. You like this column? Check out Open Interest, 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, an author for.
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The Financial Times reports that Repsol, a Spanish oil company, has regained control over Venezuelan oil operations.
The Financial Times reported that the Spanish energy group Repsol was poised to regain operational control of its Venezuelan oil assets and?boost their production after a deal had been signed with the South American Government. FT reported that Repsol could announce the deal as soon as Thursday. According to the report, the agreement will include plans to triple the production of its Venezuelan oil operations within three years. It will also establish a "guaranteed payment" system to avoid the pitfalls that led to previous failures by the capital city 'Caracas to pay up. Could not verify the report immediately. Repsol didn't immediately respond to the request for comment. Venezuela has one of the world's largest oil reserves, but a dilapidated infrastructure. Repsol and Venezuela reached an agreement in 2023 to continue operating their facilities there. Later, the deal expired after the?U.S. The deal lapsed after a revocation of the licences by President Donald Trump. Washington eased sanctions on Venezuela's energy industry after capturing President Nicolas Maduro, in January. It issued general?licences allowing?global companies to operate oil & gas projects in Venezuela.
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Morning Bid Europe-Truce Trades Increase as Trump Touts Israel-Lebanon Talks
Gregor Stuart Hunter gives a look at what the European and global market will be like today. Global equities are setting new records, and the dollar has been falling for a ninth day in a row to its lowest levels since the Iran War began. Traders have increased their bets that the conflict in the Middle East may end soon. In a post posted on Truth Social, U.S. president Donald Trump added to the optimism by saying that direct talks between Israel & Lebanon "will take place tomorrow". The MSCI All-Country World Index rose 0.3%, reaching a new record. Meanwhile, the Nikkei225, the broadest measure of Asia-Pacific stocks outside Japan, grew 1.2%. S&P 500 futures rose 0.2%. Early European trades saw pan-regional futures?up 0.3%. German DAX Futures grew by 0.2%, and FTSE Futures were up by 0.1%. Chinese shares rose 0.9%, and the yuan remained steady in Hong Kong offshore trading after data revealed that Asia's biggest economy grew by 5.0% in the 1st quarter of this year compared to a year ago. This was a surprise for analysts as policymakers prepared themselves for the aftermath of the Iran 'war'. In Taiwan, the AI sector's linchpin, TSMC, will report quarterly earnings on Thursday. A 50% increase in net profit is expected due to the booming demand for advanced chips. The U.S. Dollar Index fell 0.1% on the currency markets as traders lowered their expectations for a Federal Reserve easing of monetary policies. On Wednesday, President Trump 'threatened' to remove Fed Chair Jerome Powell if he did not resign from his separate position on the Board of Governors of the U.S. Central Bank when Powell's term as Fed Chief ends on May 15th. The intensifying'standoff' has disrupted the Fed's normally smooth transfer of power, and raised concerns about its independence. Mark Mobius, 89 years old, died on Wednesday. This marked the end of a era in emerging markets. Even as late as January, the veteran investor was still touting new investment opportunities. He speculated that Nicolas Maduro’s ouster would lead to Venezuela opening to investors. On Thursday, key developments that may influence the markets include: Earnings of corporations TSMC, Netflix, PepsiCo, Tesco, Schroders Economic Events UK:?GDP estimates, services, industrial production, manufacturing output, and goods trade balance for Feb. Euro zone: final HICP for the month of March Debt auctions: France: Government debts of 3, 5, 6, 7, 12, 13, 17, and 27 years. UK: 23-year government debt
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Oil prices remain unchanged despite scepticism about US-Iran peace negotiations to ease Hormuz disruption
On Thursday, oil?prices remained unchanged, reversing previous declines. This was due to skepticism about the peace talks between?the U.S. Brent crude futures rose 9 cents at 0427 GMT to $95.02 per barrel. U.S. West Texas Intermediate Crude Futures rose 44 cents to $91.73 per barrel. Both benchmarks traded with a wide range on Wednesday, but settled little-changed. U.S. and Israeli war with Iran resulted in the biggest ever disruption of oil and gas supply due to Iran's blocking of traffic through the 'Strait of Hormuz', which typically carries around 20% of world oil and liquefied gas flows. Toshitaka Takawa, an analyst with Fujitomi Securities, said that while there is hope for de-escalation many investors remain sceptical. This is because U.S.Iran talks have failed repeatedly, even when they appeared to be making progress. He added that WTI prices will continue to fluctuate between $80 and $100 until a peace deal is reached, allowing free navigation across the Strait. In a note published on Thursday, analysts from ING estimated that the closure of the strait has disrupted oil flow by roughly 13 million barrels a day, taking into account pipeline diverts and the trickle tankers which have passed through. The disruption may increase with the U.S. blocking Iranian ports after the failure of the peace talks at the weekend. The ING analysts stated that "the physical market is tightening every day without a restart of oil flow through the Strait of Hormuz". Iran's source told a source that if an agreement was reached in order to avoid a renewed conflict after a two-week truce began on April 8, Iran would consider allowing ships free passage through the Omani side of Strait of Hormuz. U.S. officials and Iranian officials are considering a trip to Pakistan this weekend for more talks. The Pakistani army chief was in Tehran as a mediator on Wednesday to try and prevent a resurgence of the conflict. Treasury Secretary Scott Bessent announced on Wednesday that Washington would not renew waivers that allowed some Iranian and Russian oil to be purchased without facing U.S. sanction. The Energy Information Administration reported on Wednesday that U.S. inventories for oil, gasoline and distillate fuels dropped last week. This was due to a decline in imports and a rise in exports as countries searched for barrels to replenish the interrupted flows. (Reporting from Yuka Obayashi, in Tokyo and Siyi Lu in Singapore; editing by Lincoln Feast & Christian Schmollinger).
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China's aluminium production increased 2.7% in March due to the Iran war driving prices higher
Official data released on Thursday showed that China's primary aluminum production rose 2.7% from the previous year, as fears of supply due to the Iran conflict boosted prices. According to the National Bureau of Statistics, aluminium?production increased?to 3,85 million metric tonnes in March. The data shows that in the first quarter of this year, China produced 11.41 million metric tonnes of primary aluminum, an increase of 3.1% compared to the previous period. Around 9% of the global supply of aluminium comes from the?Gulf Region. Aluminium prices rose after the 'Iran's move to disrupt traffic in the Strait of Hormuz, and a number of major regional producers including Aluminium Bahrain, and Emirates Global Aluminium faced increased risks. In March, the benchmark three-month aluminum price rose 10.41%. This was its best month since 2024. The most active aluminium contract at the Shanghai Futures Exchange gained just over 4 percent in March. Due to price volatility in March, domestic demand for this light metal was low. This led to the stock of aluminium monitored by SHFE reaching a six-year high early in April. Analysts however said that China's export of aluminium is now poised for growth as the Iran War tightened up availability and boosted margins through higher prices. The production of 10 non-ferrous metals, including copper, aluminum, lead, zinc, and nickel, rose by 2.2 % from the previous year to 7.07 metric tons. The year-to-date production was up by?3.6% to 20.53 millions metric tons. Other non-ferrous materials include tin and antimony. Mercury, magnesium, titanium, and mercury are also available.
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China's crude steel production drops in March due to lower margins and falling exports
China's crude output of steel in March fell 6.3% compared to the previous year, the lowest for the month since the middle of 2020. Margins were thinned out and exports dropped amid the Middle East conflict. National Bureau of Statistics reported on Thursday that the world's biggest steel producer produced 87.04 metric tons of crude "steel" last month. According to data-based calculations, the March volume represents an average daily output of 2,81 million tonnes, down from 2,99 million tons in March 2020. Steel margins were hit by rising feedstock prices in the first quarter, which was partly due to higher fuel?prices because the Iran War choked shipping via the Strait Of Hormuz. Xin Ge is a deputy director of Lange Steel. He said that the Middle East conflict has caused freight costs to rise, which in turn helped support prices for raw materials, including iron ore. Steel gains, however, were curbed due to high stock levels. Ge said that the squeezed margins had discouraged some steelmakers from increasing production. According to data compiled by Mysteel, an average of 41% of steelmakers will be able to make a profit this March. This compares with 53% in the same time period in 2025. Iron ore prices rose?8.7% last month while steel reinforcing bars, which are typically used in construction, only grew by 2.3%. Steel production was also affected by the weak?demand of the?embattled?property market as China's new-home prices continued to decline in last month. China's steel exports in March fell?by 12.6% on an annual basis, impacted by the Middle East conflict and a?export license regime it implemented as a response to escalating global protectionist sentiment. The World Steel Association cut its forecast on global crude steel demand this year. This is partly because the war in Iran has reduced consumption across the Middle East. The data shows that in the first quarter 2026, Chinese crude-steel output dropped by 4.6% on an annual basis to 247.55 millions tons.
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Iron ore prices rise on positive China economic data
Iron ore futures rose on Thursday, boosted by?positive economic data from China. Meanwhile, falling domestic 'crude steel production' fueled hopes that global steel prices would rise and Chinese steel mill margins would improve. As of 0243 GMT, the most-traded contract for?September?iron ore on China's Dalian Commodity Exchange was trading 2.04% higher. It was valued at 774.5 Yuan ($113.60). The benchmark iron ore for May on the Singapore Exchange rose 1.09% to $105.35 per ton. The Trump administration expressed optimism on Wednesday regarding a possible deal to end the conflict with Iran, but warned of increased economic pressure if Tehran continues to be defiant. Positive sentiment on the metals market was fueled by hopes of an end to Iran's war. China's economy grew by 5.0% from a year ago in the first three months of this year, according to official data released on Thursday. This was better than analysts expected, as policymakers prepare for the aftermath of the Iran War. China's crude-steel output also fell 6.3% year-on-year in March, to its lowest monthly level since 2020. Margins were thinned out and exports decreased amid the Middle East conflict. National Bureau of Statistics (NBS), which released its statistics on Thursday, revealed that the world's biggest steel producer produced 87.04 millions metric tons crude steel in January. The lower Chinese steel production will 'lift steel prices globally', because China has historically slashed steel prices due to its large export volumes, making it difficult for steel mills to make a profit. In March, the country pledged to curb its overcapacity of steel. Coking coal and coke, which are used to make steel, also gained on the DCE. They rose by 0.93%?and?1.16% respectively. The benchmarks for steel on the Shanghai Futures Exchange have largely advanced. Rebar rose 0.52%; hot-rolled coil rose 0.67%; wire rod rose 0.09%, while stainless steel dropped 0.34%. ($1 = 6.8177 Yuan) (Reporting and editing by Ronojojo Mazumdar).
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Gold rises on the back of a weaker dollar as US-Iran hopes for peace deal rise
Gold prices increased on 'Thursday', supported by a falling?dollar. Investors also weighed a?growing optimism over a possible U.S.Iran agreement to end the conflict that has pushed energy prices up and fueled fears of inflation. By 0301 GMT, spot gold had risen 0.7% to $4821.44 an ounce. U.S. Gold Futures for June Delivery gained 0.4%, to $4844.40. The U.S. dollar hovered ?near its lowest level in six weeks, making greenback-denominated commodities including bullion more affordable for ?holders of other currencies, while benchmark 10-year U.S. Treasury yields eased 0.1%. Kelvin Wong is a senior analyst at OANDA. He said that the primary reason for gains in 'gold' was optimism over a U.S.Iran ceasefire. "If we begin to see a breakout above $4,900, potential further upside can't be ruled out towards the next?intermediate resistance?zone which is at a psychological level of $5,000." On Wednesday, the Trump administration expressed optimism about a possible deal to end war with Iran. However, it warned that if Tehran continues to be defiant there would be increased economic pressure. Donald Trump believes that the war with Israel he started in late February is almost over. This, despite the fact that a shipping ban he had announced was now in effect and the traffic through the Strait of Hormuz remains well below the normal level. The spot gold price has fallen by more than 8% since the 'Iran war' began late in February, amid fears that high energy prices will feed inflation and raise global interest rates. Gold is considered to be a hedge against inflation. However, rising interest rates are affecting the demand for this non-yielding material. The traders in the U.S. now expect a '29%' chance that interest rates will be cut by 25 basis points this year. There were two expected reductions in interest rates for this year before the?war. Silver spot rose 1.7%, to $80.41 an ounce. Platinum gained 1.2%, to $2,135.58, while palladium increased 0.9%, to $1,587.39. (Reporting by Noel John in Bengaluru; Editing by Subhranshu Sahu)
Russia oil fleet shifts far from Liberia, Marshall Island flags amidst United States sanctions crackdown
Lots of oil tankers used by Russia have stopped cruising under the Liberian and Marshall Islands flags in current weeks after the United States ramped up sanctions enforcement on ships linked to those computer system registries, according to shipping information and interviews with industry and government authorities.
The shift reflects the close relationship between the U.S. and the flag administration companies of Liberia and the Marshall Islands, which are headquartered not in their home nations, however in Virginia, just miles from Washington D.C. and within the jurisdiction of U.S. sanctions enforcement.
The heavy past use of those flags also represents a. potentially lasting vulnerability for Russia's oil fleet, whose. tankers will remain accountable for sanctions offenses even after. they have changed to a new flag beyond U.S. reach,. according to energy and sanctions professionals.
They've created an enduring liability and long-lasting danger,. said Craig Kennedy, a center partner at Harvard University's. Davis Center for Russian and Eurasian Research Studies.
Commercial ships should be registered, or flagged, with a. particular country to ensure they are abiding by. worldwide acknowledged safety and ecological rules.
analyzed LSEG and Lloyd's List Intelligence shipping. data, and interviewed federal government officials, flag computer system registry. agents and shipping analysts to offer formerly. unpublished details on the role of flag windows registries in the recent. wave of U.S. sanctions statements targeting Russia's oil. fleet, and the vulnerabilities they position to Russian oil. shipping.
The G7, the EU and Australia imposed a $60 a barrel cost. cap on Russian oil exports in December 2022 as part of wider. economic sanctions targeted at cutting Moscow's incomes without. interfering with worldwide energy supplies, following Russia's intrusion. of Ukraine.
When, the cap bans the use of Western maritime services. tankers carry Russian oil priced at or above the cap. A U.S. official, who requested privacy when discussing the. sanctions, verified that the Liberian and Marshall Islands flag. computer system registries certify as Western services.
Considering that October, the U.S. Treasury Department has enforced. sanctions on some 41 oil tankers for Russian cost cap. offenses, 24 of which were flying the Liberian flag and among. which was utilizing the Marshall Islands flag.
Practically all of the other tankers were flagged in Gabon,. including 12 of the 14 targeted by the Treasury Department in. its newest bundle of sanctions on Feb. 23. Of those. Gabon-flagged tankers, in which Russia's top shipping business. Sovcomflot (SCF) has an interest, at least three had recently. flown the Liberian flag, according to ' analysis of. delivering information.
Those tankers were among a multitude of ships in the SCF fleet. transferring to Gabon, according to the information: since early February,. SCF had 42 tankers in its 147 tanker fleet that had recently. shifted to the Gabon flag, mainly from Liberia and Panama.
SCF decreased to comment and Russia's transportation ministry did. not react to an ask for remark.
The Liberian flag computer registry told that all the. Liberian-flagged vessels which were approved remained in the. procedure of having their Liberian flags eliminated. We are all. residing in a various world right now and the windows registries require to. adjust to what the global situation is at this point, the. Liberian registry said.
The computer registry decreased to comment on its previous. company with SCF.
A U.S. authorities told that Liberia had actually been actively. engaged with the Treasury Department, which sanctioned. tankers have about a three-month wind down duration to change to. another flag.
Marshall Islands registry officials are likewise in contact with. U.S. agencies on the issue, a Marshall Islands computer registry. representative stated.
Gabon Transport Minister Loic Moudouma validated to. that numerous tankers had left the Liberia registry for. Gabon recently, and said Gabon would de-list them if they are. discovered to be participated in illegal activity.
We are not a flag registry for the world's rogue navigators. or transporters, he said.
If any ally, any partner worldwide, recognizes that. there is a Gabonese ship flying the Gabonese flag and bring. out prohibited activities, all they need to do is send us the file. completely and we will take steps to remove the flag from this ship. ourselves. Whether Russian or any other citizenship.
Panama officials did not react to a request for. comment.
WELCOMING DIFFICULTY
The sanctions imposed so far have sent out a chill through the. market involved in Russian trade.
A lot of the still to be de-listed Liberian-flagged vessels,. Are stuck, sitting at anchor outside of ports. across the world consisting of in the Black Sea, according to. delivering information, marking a pricey liability for their owners and. those economically linked to their freights.
U.S. Treasury Department sanctions can have a contagion. impact on tankers by detering market gamers from handling. them, according to Harvard's Kennedy.
In the dollar denominated world of oil trading, why put a. deal worth 10s of countless dollars at risk by using a. obstructed tanker? You're just welcoming difficulty for everybody. involved, he stated.
Changing to the Gabon flag might also invite extra. danger at ports for tankers bring Russian oil.
A U.S. official said tankers that brought Russian oil above. $ 60 that change to the Gabon flag might likewise have a more. hard time with port authorities concerned about the safety. of ageing tankers.
The United States, European Union and UK issued a letter. late last year pressing Liberia, the Marshall Islands and. Panama to increase oversight of ships bring their flags to. guarantee they do not transport Russian oil offered above the cost. cap, a source told at the time.
While the U.S. has been the main enforcer of the cost. cap, other countries in the mechanism are working with. Washington to tighten the screws.
We're making it harder for Russia to use its shadow fleet,. which in turn would force more volume back into the G7 fleet,. where provider are compliant with the cap, Olga. Dimitrescu, an authorities at the UK Treasury's sanctions. enforcement arm OFSI informed a Feb. 1 podcast with ship insurer. NorthStandard.
U.S. officials state shipping practices associated with the. export of Russian oil above the West's cost cap remain in their. crosshairs. We are really concerned about evasion, I think that's. clear from the actions we have actually taken, Claire McCleskey, an. official with the U.S. Treasury's sanctions enforcement arm. OFAC, told a New York shipping conference last month.
You can anticipate our continuing to do something about it..
(source: Reuters)