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Sources say that ADNOC, the UAE's oil company, buys millions barrels of Iraqi crude.
Three people with knowledge of the matter said that Abu Dhabi National Oil Co (ADNOC), a trading firm in the face of supply disruptions caused by the Iran War, has purchased millions of barrels of discounted crude oil from Iraq's State Oil Firm. Two Iraqi energy sources reported that the state company through its trading arm was the largest lifter of Iraqi oil in August and September, helping to boost Iraqi exports, which had been severely cut in the early months of the war. One of the Iraqi sources said that ADNOC had agreed to purchase 32 million Iraqi barrels for $24.90-$27 per barrel in August, and another 40 million barrels for $27 in September. This included 10 million barrels with a $18 discount, and 30 million barrels with a $25 discount. According to the second Iraqi source, despite Iraq's state oil marketing organization SOMO having allocated ADNOC a total of 32 million barrels for August, ADNOC lifted 20 millions barrels because of export restrictions and Basra Oil Company not being able to secure enough?crude. ADNOC has so far lifted 14 millions Iraqi barrels in September, a person told me. Third source claimed that ADNOC had purchased about 20 million barrels from Iraqi?state owned SOMO? in tenders for a discount between $25 and $27 per barrel. Other companies are also buying Iraqi crude. SOMO offered August loading cargoes?at steep discount, attracting other buyers, including Chinese state-majors PetroChina and Zhenhua Oil as well as TotalEnergies and?Vitol. Trafigura Mercuria, and Cathay?Petroleum.
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Kremlin accepts Trump's idea for energy truce in Ukraine and calls for sanctions to be removed
The Kremlin welcomed on Tuesday a U.S. suggestion for a 'Russia-Ukraine moratorium against attacking each other’s energy infrastructure. Donald Trump, the U.S. president, said on Monday that Ukraine had agreed with Russia not to meet each other's targets in terms of energy production. However, neither side confirmed this agreement. On Tuesday, Russia struck petrol stations in Kyiv and Ukraine claimed it had hit a Russian oil refinery. Dmitry Peskov, Kremlin spokesperson, told reporters Trump's idea was "very good", but that it would take more to lower global fuel prices. "It's important to guarantee safe navigation and commercial shipping here, including for oil tankers." Peskov stated that the Kyiv regime had not shown any interest in ensuring such security. "The second thing to do is, of course lift the sanctions (against Russia), and these illegal restrictions on energy supply. Only then will the world be adequately supplied with petroleum products. Global markets will stabilize and prices will fall. Peskov stated that Russia will stay in contact with the Americans regarding Trump's proposal. Volodymyr Zelenskiy, the Ukrainian president, said that Kyiv would only support a ceasefire in the energy sector if Washington could guarantee that Moscow was truly ready to end its conflict with Ukraine. The Ukrainian strikes on energy plants have led to fuel shortages this summer in Russia. This has caused the country to restrict its exports. This has led to a shortage of jet fuel, gasoline and diesel on the energy markets. Ukraine, which is regularly attacked by Russia on its own energy infrastructure, claims that refineries are legitimate military targets. Trump asked Zelenskiy to stop attacking Russian diesel infrastructure on Sunday, saying that the attacks are causing a shortage of diesel which is "hurting?the world". The Kremlin stated on Monday that global market turmoil was primarily?due to conflict in the Gulf. Trump launched military attacks on Iran in Febrary and Tehran responded by closing the 'Strait of Hormuz', which had been used to transport about a fifth of global oil and gas supplies. Russia and Ukraine also hit each other's ships in the Black Sea and Azov Sea. This escalation in violence has pushed up the price for grain, which both countries are major exporters.
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Traders say that Orlen, a Polish oil company, is rushing to find alternatives to Saudi Arabia's oil supply.
Five industry sources have confirmed that the Polish integrated oil company Orlen is rushing to replace Saudi imports with crude oil shipments?from North Sea and further afield. Orlen, one of Europe's largest oil companies, is a major customer of Saudi crude. However, the conflict in the Middle East has escalated in recent weeks. Houthi attacks on Saudi installations by the Yemeni Houthi have led the Polish company to seek alternative sources of supply. Orlen bought'several cargoes' of crude oil at spot tenders between Friday and Monday. Two traders reported that Orlen purchased North Sea grades, including Grane, Johan Sverdrup, and Johan Castberg. Two sources said that the company also bid for grades from further afield, including U.S. WTI Midland as well as Kazakh CPC blend. The tender results could not be confirmed directly with the counterparties. Orlen declined comment on specific commercial transactions but stated that it manages its supply portfolio to ensure uninterrupted operation of the refining assets. Orlen's spokesperson said that "adjusting and optimizing purchase volumes is a part of the Orlen Group operations. It's driven by current production requirements and changing market conditions." The spokesperson confirmed that feedstock deliveries are currently proceeding as usual to the?Orlen refineries.
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Imports of palm and soyoil from India in August rose on the back of stocking
As refiners stockpiled ahead of the festival season in India, soyoil imports to India reached a record high in August. The world's largest importer of vegetable oil, Indonesia, Malaysia, and Argentina, could move more palm oil and soybean oil, supporting benchmark palm and soyoil prices. In a recent statement, the SEA (Solvent Extractors' Association of India) reported that India's imports of palm oil in August grew by 7% over the previous month, to reach 782,761 metric tonnes, the highest level since February. The industry group reported that imports of sunflower oil decreased by 36%, to 160 639 tons. Imports for soyoil increased 26%, to a record high of 628 736 tons. The total edible oil imports increased by 1.5%, reaching a record high of 1,57 million?tons after a surge in palm and soyoil shipments. Mumbai-based dealer of a global trading house said that refiners have increased their purchases in order to build up stocks before the festival season. India celebrates several festivals between August to November when the demand for edible oil is at its peak. A New Delhi-based dealer from a global trade house said that soyoil was available at competitive prices, compared to palm oil. This should help keep September shipments above 600,000 tonnes. The 'war' has?disrupted the sunflower oil shipments in the Black Sea Region. He said that this is also causing refiners' to increase their purchases of soyoil. Industry officials said last week that India's aggressive buying of vegetable oil has caused congestion in major ports. Ships are delayed by up to 10 days while shore tanks fill and refiners struggle with clearing incoming cargo. India imports a majority of its palm oil from Indonesia and Malaysia. Soyoil, sunflower oil, and other oils are mainly imported from Argentina, Brazil and Russia.
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The House is visited by MORNING BID AMERICAS
Treasury yields on 10-year U.S. Treasury notes have risen to their highest level in 19 years. This is just as Treasury Sec. Scott Bessent is preparing to speak to Congress, and the Federal Reserve begins its two-day critical meeting. Government bonds sold across the globe overnight as the prospect of rising interest rates and energy prices remained a primary aggravating factor. Japanese 10-year yields rose back to above 3%. Brent crude prices rose above $107 a barrel again on Tuesday after a brief drop on Monday, following President Trump’s suggestion that Russia and Ukraine could reach an agreement to spare their energy infrastructure during the war. Bessent will appear before the House Financial Services Committee today to discuss a number of thorny topics: his apparent failure to cap Treasury yields, Japan's joint intervention to lift the yen and the war on Iran, as well as the president's promise to provide Americans with $5,000 checks for a $1.3 trillion total cash injection. Bessent's opinion on what the markets expect to be a quarter point Fed rate increase on Wednesday will also make headlines. U.S. Bond markets are now trying to price in up to four rate increases over the next 12 months. The doomsday AI narratives, and calls for a halt in AI development, spilled over into chip stocks, and the SOX semiconductors index fell more than 5% on Monday for the first time since July. This dragged the S&P 500 and Nasdaq down into the red. Trump refused to accept calls for additional restrictions on AI, saying that the existing guardrails were sufficient. A sweep of Chinese economic data was mixed, with retail sales falling short and house prices continuing to decline. The world stock market and Wall Street Futures are both in the red as we approach Tuesday's opening. Chart of the Day This week, the 10-year Treasury yield in the United States, which is the benchmark for long-term borrowing rates by the government and the wider economy, reached its highest level since the eve before the global financial crisis of 2007. The recent efforts of Treasury Secretary Scott Bessent to 'calm the markets via a number of small buybacks' have failed. Bessent will be speaking to the House Financial Services Committee of Congress on Tuesday. Watch today's events The Fed's two day policy meeting starts * U.S. Treasury Sec. Scott Bessent Appearance Before Congress (10 am EDT) * U.S. bond auction for 20 years (1 p.m. ET), New York Fed Manufacturing?survey in September (8:30 am EDT). Check out my most recent column to see why AI could be too big and slow. Listen to the Morning Bid Daily Podcast, in which we discuss all that Scott Bessent has to do as he prepares to head to the Hill later today. Subscribe to the podcast and hear journalists discussing the latest news in finance, markets, and markets. Want to receive Morning 'Bids in your email every morning? Subscribe to the newsletter by clicking here. You can find ROI's website and follow us on LinkedIn or X. The opinions expressed are solely those of the authors. These opinions do not represent the views of News. News is a non-partisan organization that adheres to the Trust Principles and values integrity, independence, freedom from bias, and impartiality.
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South Korea and Kazakhstan sign MoU to explore mineral trade, explore atomic energy
Seoul reported that South Korea and Kazakhstan signed an 'understanding' on Tuesday regarding cooperation in the peaceful use of nuclear energy. Their leaders also pledged to work together on a range of issues, including trade, energy, critical minerals, and AI. The South Korean Presidential Office said that President Lee Jae Myung of South Korea and President Kassym Jomart Tokayev of Kazakhstan discussed the potential for future cooperation in a period of economic turmoil. According to the president's office, Lee told Tokayev that Kazakhstan has a great deal of potential for future high-tech industry. On Tuesday, 13 documents were signed. These included the MoU on Atomic Energy as well as agreements on crude oil, science and technology. Details were not immediately available. Lee will host Tokayev, as well as the leaders of other Central Asian nations on Wednesday to discuss expanding their cooperation. Seoul pursued its so-called New Northern Policy, launched in 2017, to deepen economic ties with Central Asia as well as other Eurasian countries. The energy-poor nation is seeking to diversify the supply of energy and minerals and increase industrial exports. Han Seong-sook, the South Korean Prime Minister, told business leaders in a forum that it was time to expand trade beyond crude oil and uranium. He also said they should include lithium and other critical minerals. Newsis reported that she invited companies to use?South Korea?s advanced technology to explore and produce?Kazakhstan?s rich mineral resources in order to address the growing uncertainty of global supply chains.
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China's aluminium production reaches record levels in August, with a capacity cap in sight
Data showed that China's aluminum production reached a record high in August. Strong margins encouraged smelters, despite the?long-standing national capacity cap, to maximize?output. Data from the National Bureau of Statistics revealed that production?rose by 4.7% compared to a year ago, reaching 3.98 million metric tonnes. The output of the world's largest aluminium producer increased to just under 3.9 million tonnes in July, and was near to the previous monthly record of 3.979 millions tons that was recorded in June. China produced 31,12 million tons in the first eight months of this year, an increase of?3.9% over the same period the previous year. The country's 45 million-ton maximum capacity would be exceeded if production?were to increase at that rate. Since 2017, China has tightened its controls on the aluminium smelting capacities. In 2025, China will produce 45.02 millions tons of primary aluminum. This is a 2.4% increase from the previous year. Strong margins have supported higher output despite the increase in prices due to the disruption of supply caused by the Middle East?war. Benchmark three-month aluminum has gained 8% this year and was up by?1.82% during August. In August, the production of ten?nonferrous?metals, such as copper, aluminum, lead, zinc, and nickel, increased 1.6% compared to a year ago. The production of 10 metals from January to August increased by 2.9%, reaching 55.58 millions tons.
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Syngenta files Hong Kong IPO with the aim of raising at least $5 billion.
Two people who have direct knowledge of this matter say that the Swiss company Syngenta Group, which produces seeds and agrichemicals, has filed confidentially for a Hong Kong IPO, with a goal to raise at least five billion dollars. One of the sources said that the Basel-based firm, controlled by the Chinese state-owned Sinochem hopes to launch its offering as early as this year or, if not, as early as 2027. Sources said that depending on the response of the market, the size of the offering could reach $10 billion. According to LSEG, if the offering size is that large, it will be Hong Kong's largest IPO since 2010. Hong Kong's IPO industry is booming. Initial public offerings and secondary listing have raised $45,8 billion this year compared to $24 billion during the same period in last year. Sources who refused to be identified because the information wasn't public said that the timing, size of the offer and valuation of the company had not been finalised. Syngenta responded to the question by saying "We don't comment on market speculation." Sinochem didn't immediately respond to an inquiry for comment. Bloomberg News reported the filing for the first time on Tuesday. The company was said to be considering raising $5 billion. Sinochem would be able to revive its efforts to bring?Syngenta?public after the company canceled a Shanghai listing planned for 2024. GLOBAL GIANT FARMING Syngenta is a company that sells seeds, crop protection products such as insecticides, fungicides and herbicides. It also provides digital and biological farming products. According to its website, it has over 50,000 employees spread across?90 different countries. Syngenta has reported a decrease in sales and profits for the second quarter following its exit from low-margin business in China. Sales fell 7% in the third quarter to $5.7 billion. Earnings before interest, taxes, depreciation and amortisation, or EBITDA, dropped 2%, to $1 billion. EBITDA increased by 4% when currency was adjusted. Syngenta appointed?Hengde qin, its chief operating officer, as its new CEO in July. He will take over from Jeff Rowe who is due to return home to the United States at the end of August.
Traders and trackers say Sinopec increases Russian oil imports in order to offset Mideast supply reductions
According to multiple trade sources and ship tracking information, China's state owned?Sinopec Corp., the world's largest refiner, increased purchases of Far East Russian Oil to compensate for Middle East oil supplies that were reduced by the Iran War.
Sinopec has been able to maintain a relatively stable output and export fuel surpluses on a strong margin due to its purchases of Russian oil, which is cheaper than competing grades from Brazil and West Africa. This was despite China's decision in March of limiting the overseas sale of fuel products, as a way of protecting domestic supply during trade disruptions caused by war.
According to sources who spoke under condition of anonymity, Sinopec purchased 30 to 40 shipments or 241,000 to 322,000 barrels per day of Eastern Siberia - Pacific Ocean (ESPO), for deliveries from July to September. This is 5%-6% of the refiner’s 5.2 million barrels per day processing capacity.
Sinopec's representative stated that the company doesn't discuss operational issues publicly.
"Sinopec’s crude demand appears to be at its lowest point following the relaxation of fuel export regulations, but recovery is still selective," said Emma Li. She's the lead China analyst for ship tracker Vortexa Analytics.
China, the world's largest crude buyer, has drastically reduced its total crude imports since the beginning of the Iran War. In June, purchases were down 41% compared to the previous year. It has however, lowered its fuel export limits for July and August.
Li said that rather than a broad-based increase in imports, the demand has shifted to barrels with better delivery certainty and lower shipping costs. These are primarily short-haul Russian Far East shipments as well as onshore inventories.
According to Li, Sinopec?saved 7.4 million barrels ESPO during July. The majority of these barrels were delivered into Rizhao Port, the main refining hub in Shandong Province.
According to Li and four traders that closely monitor ESPO trading, the refiner bought at least 10 ESPO cargoes in each of August and September. ESPO is usually shipped on Aframax vessels that can carry 740,000 barrels.
SAUDI CUTTING CUTS ARE STEEP
China and India are the largest Russian oil purchasers since the start of the Ukraine War, but China's state refiners including Sinopec suspended their purchases in October, after Washington imposed sanctions on top Russian producers Rosneft & Lukoil.
Beijing has not recognised what it calls unilateral sanctions and independent Chinese refiners continue to buy Russian oil.
Sinopec reported that it resumed Russian oil purchase in March and early April following a temporary U.S. exemption. The company purchased roughly 10 cargoes, and increased volumes as soon as the waiver ended, due to the Iran War reducing supply.
Four people with knowledge of the matter, who declined to provide further details, said that recent ESPO purchases were made through intermediaries. Sinopec began buying Russian oil with Chinese yuan in the early days during the Ukraine War.
Before the Iran War, nearly half of?Sinopec's crude oil was sourced from the Middle East. It was also one of Saudi Arabia's largest customers.
According to trade sources, Sinopec didn't buy any Saudi crude in June or July and only took 2 million barrels of oil in August. This is far less than the 20 millions Saudi barrels that it imported both in March and April, and less than one fifth of the average 11 million barrels per month it bought in the year before the Iran War began.
Traders said that September-loading ESPO would be discounted by $1 to $2 per barrel compared to Brent benchmark, and about $10 less than other grades like Middle Eastern Oman or Brazil's Tupi.
Before the Iran War, Russian ESPO crude was traded at a discounted price of around $10 per barrel. (Reporting Chen Aizhu; Siyi Liu; Trixie Yap, Additional reporting by Florence Tan. Editing by Tony Munroe & Tom Hogue.
(source: Reuters)