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As the Gulf War escalates, Asia's yields are rising.
As the United States and Iran exchanged escalating threat, and Israel planned "weeks" of more fighting, oil prices went on another roller-coaster. Iran announced on Sunday that it would attack the 'energy' and water systems of its Gulf neighbors if U.S. president Donald Trump carried out his threat to strike Iran’s electricity grid within 48 hours. This ended any hope for an early conclusion to the war which is now in its 4th week. Trump said Iran only had 48 hours before it would have to reopen the Strait of Hormuz. The Strait is currently closed to most ships and has little naval protection. Nikkei, the Japanese stock market index, fell 3.9%. This brings March's losses to more than 13%. South Korea's stock market fell?4.5% for a total of 12% in one month. The broadest MSCI index of Asia-Pacific stocks outside Japan dropped 1.2%. The oil prices are again volatile, with gains quickly fading away. Brent is down by 0.2% to $111.90 per barrel but has still risen 55% in the last month. U.S. crude oil was almost flat at $98.35. Shane Oliver is the head of investment strategy for fund manager AMP. He said that "the war could continue for many more weeks?yet" and oil prices would rise to $150 a barrel. "And the constant destruction of energy infrastructure will mean it will take longer to return supply to normal." It's worth noting, too, that previous oil shocks were spread out over a long period of time as the full impact became apparent. In 1973 it took about four months and in 1979 an entire year. Analysts from HSBC reported that Singapore jet fuel prices were up 175% in this year, reaching a record high. Asian liquefied gas was also up 130%. Bunker fuel, which is used to transport goods by ship, has blown out and increased the cost. Fertiliser prices are also on the rise. SEND OFF RATE CUTTINGS EUROSTOXX50 futures and DAX Futures fell 1.2% in Europe. S&P 500 Futures on Wall Street fell 0.1% while Nasdaq Futures dropped 0.2%. Energy inflation has prompted markets to abandon their hopes of further monetary easing and instead price in rate increases across the majority of developed nations. Futures have erased expectations of 50 basis points easing by the Federal Reserve in this year. There is even a slight chance that the next move will be upwards. The hawkish "sea-change" has caused bonds to fall and yields to rise, increasing borrowing costs for governments who are already facing deficits and debt. The prospect of higher costs and softer consumer demand have clouded corporate profit forecasts, while the rise in yields has made equity valuations appear ever more stretched. Last week, bond yields increased by double digits across the globe due to the energy shock and pressure on fiscal budgets caused by higher defense spending. The yield on ten-year U.S. Treasury bonds was at a high of 4.410% for the past eight months, after having risen by 44 basis points. As a result of the increased volatility on the markets, the U.S. Dollar has become a more liquid store. The U.S. also is a net exporter of energy, giving it a comparative advantage over Europe and most of Asia who are net importers. The euro was slightly lower at $1.1555, though still far from the major supports of $1.1409 or $1.1392. Investors were wary of Japan intervening if the dollar broke 160.00. On the commodity markets, gold rose 0.4% to $4,511 per ounce after losing ground last week, as investors bet on rising interest rates worldwide. (Reporting and editing by Lincoln Feast; Reporting by Wayne Cole)
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Russell: The price of crude oil makes Trump TACO less likely to trade:
The crude oil markets still price in a resolution of the Middle East conflict that will result in the full opening of the Strait of Hormuz. In pricing this outcome, the market actually makes it more likely that the narrow waterway which serves as a channel for as much as 20 percent of the world’s oil supply remains closed. The market still expects U.S. president Donald Trump to deliver TACO - the acronym for Trump always?Chickens out. Trump can continue the conflict by maintaining the price of paper crude oil below the level that would allow for a return to normal flow from the Persian Gulf. This is because he believes the global market, which includes crude and refined products, is not yet in a crisis. It's a Catch-22. The paradoxical, no-win situation popularized by Joseph Heller in his 1961 novel with the same title. Brent crude futures, the global benchmark for oil prices, were trading at around $111.81 per barrel during early Asian trade Monday. They had risen by 54% from the $72.48 close on February 27, a day before Israel and the U.S. launched an air campaign against Iran. Brent reached a high of $139.13 per barrel when Russia invaded Ukraine on February 20, 2022. The Russian attack on Ukraine is different from the conflict currently raging in the Middle East because the Russian action did not result in significant losses of crude oil and refined products. China and India stepped in to fill the gap left by European countries' halting of purchases of Russian crude oil and products. The disruption was limited mainly to the rerouting and pricing. The situation today is quite different. Most of the 20,000,000 barrels of crude and refined products, which normally transit the Strait of Hormuz per day, are no longer available. Even with the increased flow of crude oil and refined products from the United Arab Emirate of Fujairah on the Gulf of Oman and Saudi Arabia's Yanbu Port in the Red Sea, the world is likely to lose at least 12,000,000 barrels of product per day. The International Energy Agency's moves to release their stockpiles, and the waiver of U.S. sanctions against Russian oil and Iranian crude in water are only temporary solutions that don't do much to solve the problem. HORMUZ is the only game The Strait of Hormuz is the single key to global supply. The longer it remains closed for most vessel traffic, the more strain will be put on the world's supplies. Singapore jet fuel prices are already showing the strain in Asia. The price of oil has more than doubled from the low of $93.45 per barrel on February 27. The highest price of jet fuel was $173.69 per barrel during the price spike after Moscow's invasion of Ukraine. This shows that physical traders did not perceive the same risk as the current war with Iran. The market must ask itself how high crude oil futures will have to go before Trump is forced to deliver on the TACO deal, instead of the current mixed message word salad. Trump has, in recent weeks, veered from claiming that the conflict would be over soon to threatening "obliteration" of Iran's energy installations if the Strait of Hormuz was not reopened. This move and the likely Iranian attacks on energy infrastructure in the Gulf do not sound like the necessary de-escalation to control crude oil futures. It seems that the de-escalation of tensions and the re-opening strait are getting further apart with every passing day. The history shows that long-running, intractable conflict is usually resolved only when one side achieves a decisive victory in a war. This is unlikely to happen in the current conflict, or when most parties begin to align their interests for peace. Trump wants to end the conflict quickly to increase the chances that his Republican Party will win the November mid-term elections. But his ego also needs a victory even if only his domestic political base believes it. Israel is determined to eliminate Iran from the world as a serious threat. It does not seem to care if a severe recession occurs worldwide if they continue to wage war. Iran's authoritarian regime, which has achieved its first goal of survival, might believe that prolonging the conflict will give it more leverage to negotiate favorable terms for any settlement. Russia is probably laughing to the bank, and wants the war on indefinitely. China believes it has a large oil stockpile that will protect it from the worst effects. However, the longer the conflict continues, the more likely economic consequences for the heavily trade-dependent Chinese economy. Almost every nation in Asia, Africa and Europe wants the war to end quickly, as they fear the economic effects of a prolonged lack of crude oil from the Gulf. Fuel-importing nations are particularly at risk. Lack of alignment increases the likelihood of war continuing or even getting worse. The global economy is likely to be faced with a loss of at least 10% of its crude oil supply and refined products. The question is not about demand, but rather supply. The global economic impact of reducing demand by 10 million bpd is not evenly distributed. Regions like Asia and Africa will likely suffer more. Even in wealthy countries, governments often lack the fiscal power to combat an increase in energy prices and their accompanying economic downturn. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, an author for.
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Oil prices are choppy in Asia as the Gulf War escalates
As the United States and Iran escalated their threats, and Israel prepared for "weeks" of more fighting, oil prices went on a roller coaster ride. Iran warned on Sunday that it would "attack the energy and water networks of its Gulf neighbors" if 'U.S. Donald Trump has followed through on his threat to strike Iran's power grid within 48 hours. This effectively ends any hope for an early conclusion to the war which is now in its fourth year. Trump said on Sunday that Iran has 48 hours to reopen the Strait of Hormuz. The Strait is currently closed to most ships and there are few prospects of naval protection. In early trading, the Australian and New Zealand stock markets were down by 1.7% and 1.1% respectively. Japan's Nikkei Futures were trading at 50,850, a decline from Friday's cash close of 53372. S&P futures on Wall Street fell 0.1% while Nasdaq lost 0.2%. Investors were weighing the?risks of the conflict and their impact on energy prices. Shane Oliver is the head of investment strategy for fund manager AMP. He said that oil prices could rise to $150 a barrel in upcoming weeks. "And because of the destruction to energy infrastructure, it will be longer before supply returns to normal." It's worth noting, too, that previous oil?shocks were spread out over several months as the full impact of rising oil prices became more apparent - about four months in 1973 and one year in 1979." Brent oil prices were choppy again in Asia, with gains made early quickly being lost. Brent is now down 0.3% to $111.82 per barrel but up 55% for the month. U.S. crude fell 0.2% to $98.01. Analysts from HSBC reported that Singapore jet fuel prices were up 175% in this year, reaching a record high. Asian liquefied gas was also up 130%. Bunker fuel, which is used to transport goods by ship, has blown out and increased the cost. Fertiliser prices are also on the rise. SEND OFF RATE CUTTINGS Markets had abandoned hopes of further monetary easing and shifted to pricing rate increases in most developed nations. Futures have erased expectations of 50 basis points easing by the Federal Reserve in this year. There is even a slight chance that the next move will be upwards. The 'hawkish sea-change' has caused bonds to fall and yields to rise, increasing borrowing costs for governments who are already facing deficits and debt. The outlook for corporate profit has been clouded by the prospect of higher costs and weaker consumer demand, while the rise in yields has made equity valuations appear ever more stretched. Last week, bond yields increased by double digits across the globe due to the energy shock and pressures on fiscal budgets caused by higher defense spending. The yield on ten-year U.S. Treasury bonds is now 4.3856%. It has risen 42 basis points since the start of World War II. As a result of the increased volatility on the markets, the U.S. Dollar has become a more liquid store. The U.S. also has a significant energy exporter status, which gives it an advantage relative to Europe and Asia, both of whom are net importers. Investors were wary of Japan intervening if the dollar broke 160.00. The euro was slightly lower at $1.1545 and threatened to breach major supports at $1.1409 or $1.1392. On the commodity markets, gold rose 0.4% to $4,511 per ounce after losing ground last week, as investors bet on rising interest rates worldwide. (Reporting and editing by Lincoln Feast; Reporting by Wayne Cole)
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Starmer, UK's Starmer, calls for an emergency meeting to discuss the economy as Iran war threats mount
The British government announced that Prime Minister Keir starmer will chair an urgent meeting on the economic impact of the war in Iran, on Monday. Finance minister Rachel Reeves, and Bank of England Governor Andrew Bailey are expected to attend. Investors should prepare for another turbulent?week on the financial markets, after Iran warned that it would 'hit the energy and water system?of its Gulf neighbours' if U.S. president Donald Trump followed through on his threat to strike Iran’s electricity grid. The British are watching this situation with particular concern. The high level of inflation, the country's dependence on natural gas imports and its stretched public finances has caused government bonds to fall more than their international counterparts. The British Finance Ministry said that the meeting, dubbed "COBRA", on Monday will cover the following topics: the economic impact of this crisis on businesses and families, energy security and the resilience and supply chain of industries. Starmer, Reeves and Bailey will also attend the event as well as Foreign Secretary Yvette 'Cooper and Energy Minister Ed Miliband. Reeves said that it was too early to predict the impact of war on Britain's economy. He also resisted calls for cost-of-living increases for households and instead suggested more targeted assistance. INFLATION ?SET TO SHOOT HIGHER Energy price shock could push Britain's rate of inflation back up to 5% this year, or even higher. Reeves' efforts to fix the public finances could be derailed if the surge in oil and gas prices continues and major measures of support are needed, which may lead to further tax increases this year. Last week, the Government launched a 53-million-pound package to help homes who use heating oil for warmth. The bond market has become more uneasy as a result of the increased pressure to take wider measures. For the first time in almost two decades, the cost of borrowing 10-year British government bonds surpassed 5% on Friday. The majority of the losses were confined to short term gilts up until last week, which are largely based on interest rate expectations. The bets on what the BoE will do next have changed dramatically. They are now heavily skewed towards interest rate hikes, and away from the expected cuts until the end of World War II. The central bank announced last week that it is ready to take action to maintain inflation at its 2% target. Some policymakers suggested that borrowing costs could be increased, but Bailey said it was still too early to predict that rates will have to rise. The sale of long-term bonds and short-term debt indicates that investors have begun to 'price in Britain's fiscal vulnerabilities due to the energy price shock. Neil Wilson, UK Investor Strategist at Saxo Markets London said: "The developments over the weekend indicate that we are entering a very dangerous phase of financial markets." The move in bond rates last week was significant and added to the stress on financial markets. The markets are pricing in a central-bank response."
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Slovenia restricts fuel purchases after some pumps run out
Slovenia temporarily limited fuel purchases on Sunday to combat shortages caused by stockpiling and cross-border fuelling due to the Iran War. This has raised concerns about the security of fuel supplies as the country prepares to vote. Robert Golob, the Prime Minister, announced on Saturday night that fueling at individual service station will be limited to 50 litres a day for private vehicles. The restrictions will remain in force until further notice. "Let's reassure you there will not be any fuel shortages in Slovenia. The warehouses are filled and?there is no shortage of fuel," said Golob. A liberal, Golob is running against the right-wing populist Janez Jansa at an election this Sunday. GOVERNMENT?ORDERS INQUIRY In an emergency session held on Sunday, the government accused Petrol, the largest Slovenian oil distribution company in which it holds a 32.3% shareholding, of failing to eliminate fuel supply disruptions. It also ordered an investigation into possible violations of fuel trading and critical infrastructure management. The fund also asked the Slovenian sovereign-wealth fund to call a meeting of Petrol shareholders and request an audit of the logistics operations of the company after March 16. The government has ordered the interior ministry to submit a report based on "possible suspicions" that some Petrol employees have committed criminal offenses. Calling in the Army Petrol has rejected the accusations of the government, stating in a statement released by the state news agency STA that the problems at certain sale points are solely the result of the sudden increase in demand over the past few days. It refuted any claims of irregularities at the stations or blame for shortages. "The company has an crisis coordination group that constantly monitors the situation, and adjusts to stabilize supply," said Petrol. Golob stated that the army will be called to assist retailers in moving supplies. Golob said that the army would be called in to help retailers move supplies. On Sunday, many filling stations were closed in Slovenia. The filling stations?belonging?to Hungarian oil group MOL remained open, but had already restricted purchases to 30 litres per person and 200 litres per company. (Reporting and writing by Fatos bytyci and Gaspar Lubej; editing by Kirsten donovan and David Holmes).
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Philippines temporarily allows use of dirtier fuel during Middle East Crisis
MANILA, 22 March - The Philippines allowed the temporary use of a dirtier but cheaper type of fuel to ensure the supply while it searches for ways to "cope" with the Middle East Crisis. Only vehicles with model years 2015 or earlier, traditional jeepneys and power plants, generators and the maritime and shipping sector will be permitted to use Euro-II-compliant petroleum products. The DOE released a statement saying that the measure was designed to "maintain an adequate, continuous and accessible fuel supply" while still allowing some flexibility for those sectors who may be affected. The order ordered that oil companies offering Euro II fuels must keep them separate from Euro IV fuels in their storage, transportation and retail systems. Manila changed to Euro-IV-compliant fuels in 2016 from Euro-II. Euro-IV fuels are still in use and have a sulphur level of 50 parts per millions (ppm), compared to 500 ppm with Euro-II. The U.S. and Israel war against Iran has caused global oil prices to surge. Last week, jeepney drivers protested a more-than-doubling of diesel prices in the Philippines. The Philippines, like many of its Southeast Asian neighbors, has taken measures to counter the impact of rising costs. Congress also gave the president emergency powers that allow him to suspend or reduce fuel taxes. In a video message sent on Sunday, Philippine President Ferdinand Marcos stated that the government was in talks with India, China and Japan about possible arrangements for fuel supplies. The country that relies heavily on Middle Eastern oil to meet its fuel needs is about to import Russian oil in this month, for the first time since 2005. (Reporting and editing by Saad Saeed; Karen Lema)
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Sinopec China posts 36.8% decline in net profit for 2025 due to weak petrochemical margins and new energy substitute
Sinopec (China Petroleum & Chemical Corp), also known as Sinopec reported a 36.8% 'decline' in its 2025 net profit, citing a rise in the substitution of?new energy resources and weak petrochemicals margins. In a filing with the Shanghai Stock Exchange, the world's largest oil refiner by capacity reported a net income of 31.8 billion Yuan ($4.62billion) based on Chinese accounting standards. The refinery's throughput dropped 0.8% to 250.33 millions metric tons last year, which is equivalent to 5,000,000 barrels of oil per day. The company predicted that refinery throughput will remain at around 250 million tons by 2026. Gasoline production and diesel production both fell by 2.4% and 9.1% respectively to 62.61 and 52.64 million tons. Kerosene production, however, rose 7.3% to 33.71 millions tons. The annual refining gross profit margin was 330 Yuan ($47.93), up?27 Yuan per ton. This is primarily due to the sharply improved margins of refining products such as sulfur, petroleum coke and other by-products, which helped offset high import crude premiums, and freight costs. In 2025, the company's sales of gasoline fell 2.5% on an annual basis to 61.1 millions tons. The average price also fell 7.7%. Kerosene was sold in 24.2 million tonnes, an increase of?4% on the previous year, but at a lower average price. The company's domestic crude output in 2025 will reach 255.75 millions barrels, an increase of 0.7% on a year-on-year basis, while its overseas crude output is 26.65million barrels. Sinopec anticipates that domestic crude oil production will reach 255.6 millions barrels by 2026. This is expected to remain largely stable. Outbound output, however, is projected to fall to 25,31 million barrels. The natural gas production is expected to increase by 4% annually in 2025, reaching 1,471.7 billion cubic feet. In 2025, the company's production of ethylene will increase 13.5% on an annual basis to 15,28 million tons. The company's?2025 external sales revenue for chemical products will total 378.0 billion Yuan. This is a 9.6% decrease compared to the previous year, due primarily to lower product prices. Sinopec will spend 147.2 billion Yuan on capital in 2025, with 70.9 billion of that amount going to exploration and development. Sinopec plans to spend capital from 131.6 billion yuan up to 148.6 bn yuan in this year. This includes 72.3 billion for exploration and development. These include projects for natural gas capacity in western and south Sichuan and for oil and gas storage and transport. Sinopec’s Hong Kong listed?shares are up 0.21%, outperforming the Hang Seng Index’s 1.38% drop. However, they are still behind their peers PetroChina, and CNOOC who have seen gains of 17.58%, and 42.63% respectively.
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Minister: Japan may consider minesweeping in Hormuz if ceasefire is reached
Toshimitsu Mottigi, Japan's Foreign Minister, said that if the U.S. and Israeli war on?Iran ends, Japan could consider sending its military to minesweep in the Strait of Hormuz. This is a vital oil supply artery. Motegi stated during a Fuji TV program that "if there was to be a total ceasefire, theoretically speaking, things like minesweeping might come up." "This is just a hypothetical but I would think it's worth considering if there were a complete ceasefire and the naval mines were causing an obstruction." Japan's post-war constitution limits its military actions, but a 2015 security law allows it to use its Self-Defense Forces abroad if an attack threatens Japan's existence and there are no other options. Motegi stated that Tokyo does not have immediate plans to make arrangements to allow passage of stranded Japanese ships through the Strait of Hormuz. He added it was "extremely" important to create conditions to allow all vessels to navigate the narrow waterway. It is the conduit for one fifth of world oil shipments. Abbas Araqchi, the Iranian Foreign Minister, told Japan's Kyodo News Agency on Friday that Motegi had been in contact with him about allowing Japanese vessels to pass through the Strait. Iran has closed the Strait to a large extent during this war which is now in its fourth weeks. The spike in oil prices worldwide has led Japan and other countries to release oil from their reserve. U.S. president Donald?Trump met with Japanese Prime Minister Sanae?Takaichi on a Thursday. He urged her to "step-up" while he presses his allies, so far unsuccessfully, to send warships to help open the Strait. Takaichi said to reporters after the Washington summit she had informed Trump of what Japan's laws allowed it to do and not allow Japan to do in the Strait. (Reporting and editing by William Mallard; Satoshi Sugiyama)
Slovenian parliamentary elections: Liberal and populist parties tied
According to the preliminary results from 'the state election commission', based on?the most votes?counted?, the right-leaning Slovenian Democratic Party and liberal Freedom Movement were tied at Sunday's parliamentary elections in Slovenia.
Even with their existing coalition partners, neither party appeared likely to win the 46 seats required for a majority of the 90-seat Parliament. This makes smaller parties who cross the 4% threshold potentially kingmakers.
SDS won 28 seats. Based on 99.45% counted votes, GS was in a close race with SDS. With the support of the other parties, GS, led by the incumbent Prime Minister Robert Golob, would have 40 MPs, while SDS, headed by populist former prime minister Janez Jansa would have 43.
Golob told his fans that they had all put their trust in GS, regardless of what they believed. "We all deserve to have a better future, and with this mandate I can say that we will do all that we can to improve that future for all of our citizens."
Jansa who was running for his 'fourth term' as premier accused the electoral commission of manipulating the counting. He said that his monitoring team had 'noticed a discrepancy in 50,000 votes for the SDS.
He told local TV that if they organized themselves properly, he would recount all votes from every polling station.
Aljaz Pengov Bitenc, a political analyst, doubts the formation of a stable government but believes that Golob has a stronger position to negotiate with a wider range of parties than Jansa.
He said: "I anticipate a very long negotiation of a coalition because it will be difficult to hammer out the priorities. It will take a lot of political wisdom, patience and experience."
DETERMINING SLOVENIA’S FUTURE PATH
Both camps have stated that the election will determine Slovenia's future. Golob has pursued a liberal pro-European democracy focused on social reforms. Jansa, meanwhile, wants to cut funding for welfare, NGOs and media and introduce tax breaks.
Golob aligned Slovenian Foreign Policy with European countries that support an independent Palestinian State, while Jansa would change the country's foreign alignment. Jansa is an ally of Hungarian Nationalist Prime Minister Viktor Orban, and a supporter of U.S. president Donald Trump.
This month, the election campaign was sparked by covert videos published on an anonymous website that purportedly exposed government corruption.
In a report published this week, it was claimed that Jansa had met with officials from the Israeli spy firm Black Cube. LinkedIn said in 2023 that Black Cube was responsible for a campaign of hidden cameras that targeted journalists and activists in the run-up to Hungary’s 2022 election.
(source: Reuters)