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PetroChina's operations are 'overall' normal, and the Strait of Hormuz is responsible for 10% of its supply.
PetroChina's chairman stated that the company is essentially operating as usual, and about 10% of its crude oil and natural gas supplies are delivered via the Strait of Hormuz. The Strait is responsible for 20% of the world's oil and gas supply. A raging Iran War and an expanding conflict in the Middle East has effectively choked this route, driving oil prices up and forcing refiners, petrochemical manufacturers, and most importantly, petrochemical producers in Asia to reduce their output. Dai Houliang, chairman of PetroChina, told reporters that the company's sales of natural gas and crude oil are largely based on its own production in China. Imports via pipelines, equity stakes in projects outside of the Middle East, and non-Middle Eastern supply secured under long-term contracts account for 90% of PetroChina’s crude processing. Dai Houliang, Chairman of PetroChina's earnings briefing, said that the company can operate its oil and natural gas supply chains with relatively high rates and stable operating costs for a long time. Dai didn't elaborate on how China's second largest refiner, after Sinopec has "scaled back" production due to disruptions in Middle Eastern crude supply. Dai stated that although PetroChina's investments have been affected, they had contingency plans in place to ensure supplies through trading activities. He didn't elaborate. PetroChina is a major investor in the Middle East, including Iraq, the United Arab Emirates, and Oman.
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MORNING BID AMERICAS-Crude escalation
By Mike Dolan March 30th - Mike Dolan, Editor at Large, Finance and Markets, explains what matters today in U.S. markets. The markets are still not convinced that an end to the Middle East conflict is imminent. Oil prices surged again on Monday, and global stock indexes started off with a rough start. Over the weekend, any hopes for a near-term deescalation of the conflict were dashed as Iran-affiliated Houthi?forces?in Yemen joined in the conflict. President Trump also suggested that U.S. soldiers 'could?take Kharg Island - Iran's main oil-export hub. Washington's signals remain mixed with Trump still praising the prospects of a peace agreement with Tehran. Below, I'll go into more detail. Listen to the Morning Bid Podcast, where I discuss crude's recent upswing, and look ahead to a major release that is due today, which could provide an early indication of how energy shocks are affecting prices. Subscribe to the podcast and hear journalists discussing the latest news in finance and markets seven days a weeks. Brent crude was on track to reach its highest monthly increase ever as it crossed $116 a barrel on Monday, while U.S. Crude rose above $102 a barrel. Both have since dropped slightly but are still high. The benchmarks have been moving sharply higher since last Friday. Energy consumers and central banks are more concerned about the fact that the 3-month Brent futures have also risen above $100 per barrel. This indicates a growing pessimism regarding a near-term end of the war, and the risk of persistent inflation. Asian stocks fell on Monday, taking their cues from the renewed increase in crude prices. Japan's Nikkei index dropped by 2.8% in March, which is nearly 13% more than it was at the beginning of the month. South Korea's KOSPI fell by almost 3% this month, nearly 9% less. European shares were slightly higher in the early morning trading, and Wall Street futures rose before the bell. This was perhaps due to Trump's comments about apparent talks with Tehran. The dollar, meanwhile, held steady as it continued to make its largest monthly gain since July last year. The strength of the greenback helped push the yen beyond the 160-per dollar level, which is usually a redline for intervention. Atsushi Mmura, a Japanese currency official, said that "decisive actions" could be needed to stop the yen from falling. G7 Finance Ministers, Foreign Ministers and Central Bankers will meet virtually today in order to determine what can be done to mitigate the impact of this energy shock. Today, both New York Fed President John Williams and Fed Chair Jerome Powell will be speaking. We'll also be able to see how the initial energy shock has impacted on inflation in Europe, when the German CPI numbers for March are released. Pakistan, the country that has become a key mediator in the Middle East conflict has announced it will host "meaningful discussions" between Washington and Tehran. However, it's not clear if either side has accepted to attend. The crisis appears to be reaching a critical point, with more U.S. soldiers deploying in the region. It remains to be determined whether all the noise will lead to an escalation of violence or a de-escalation. Chart of the Day The U.S. gasoline pump prices increased by a third during the month of March, as the Iran attacks and energy shock that followed unfolded. This is one of the biggest monthly increases ever recorded. The average regular unleaded price is now just below $4 per gallon. Watch today's events * U.S. Dallas Fed Business Survey (10:30?AM EDT). Both U.S. Fed Chairman Jerome Powell and the New York Fed President John Williams speak * G7 energy, finance and central bankers meet virtually Want to receive Morning Bid every morning in your email? Subscribe to the newsletter by clicking here. Follow us on LinkedIn, X and ROI. The opinions expressed here are the author's. These opinions do not represent the views of News. News is committed to the Trust Principles and to integrity, independence, freedom from bias, and impartiality.
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Zelenskiy claims that allies have sent'signals to Ukraine' about reducing the strikes on Russian oil
Volodymyr Zelenskiy, the president of Ukraine, said that some of Ukraine's closest allies have sent "signals" to Kyiv about the possibility?of?reducing its long-range attacks on Russia's energy sector due to a rise in global oil prices. In a WhatsApp conversation with reporters, he said that Ukraine is ready to reciprocate, provided that Russia stops attacking Ukraine's energy system. He also added that Kyiv would be open to a ceasefire at Easter. Zelenskiy told journalists in a WhatsApp briefing that "recently, after such a severe?energy crisis in the world, we've received signals about how to reduce the?responses of our oil sector, and energy sector in the Russian Federation." Prices have risen due to the U.S. and Israeli war against Iran. The Russian attacks on Ukraine's infrastructure for energy have already made it scramble to find supplies. Zelenskiy, who just returned from a four day trip to the Middle East said that he reached an agreement with certain countries in the area to provide energy assistance to Ukraine. Zelenskiy announced at the weekend, during his Middle East tour, that he'd reached an agreement on diesel deliveries to Ukraine for a full year. He did not provide any further details. Diesel is vital for the Ukrainian military and the agricultural sector. It's the bedrock of their economy. During his trip, Ukraine signed cooperation framework deals with Saudi Arabia, Qatar and the United Arab Emirates. Zelenskiy said that he raised the issue of air defence missiles in his discussions with Middle Eastern leaders. He did not indicate if an agreement was reached. He said that because of the Iran 'war,' Ukraine's international allies were currently "primarily" sending anti-ballistic systems to the Middle East, and Ukraine is sometimes forgotten. (Reporting and writing by Yuliia Dyesa; editing by Daniel Flynn).
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China's neighbors get the cold shoulder when it comes to energy.
Energy stress is spreading across Southeast Asia and governments are calling on China to fulfill its commitments for closer energy security by allowing the export of fuels and fertilisers, which were previously banned. China, however, has only made vague statements. It has not publicly acknowledged the export bans reported by others. Instead it is focusing on protecting its own economy against the war in 'Iran. Analysts do not expect this to change. They point out the tension between China’s declared ambition to become a more prominent player in regional affairs, and its realpolitik commitment to maintain its own economy ahead of global growth. China is the second-largest fertiliser exporter in the world and also a major supplier of fuel. China's export bans have cut off a major supply source for many Asian countries, including Bangladesh, Philippines, and Australia. Bangkok officials said that Dhaka had asked China earlier in the month to honor existing fuel contracts. Thai diplomats would then engage their Chinese counterparts so as to continue fertiliser shipments if necessary. Officials in?Malaysia said last week that the Chinese export ban will worsen fertiliser shortages, especially in the oil palm industry. This is the second largest in the world. It's a blow to the war in Iran. Even the Philippines has sought assistance despite disputes between the two countries over the South China Sea. The Philippines Minister of Agriculture visited the Chinese embassy in Manila on March 17 and announced that China had agreed to continue fertiliser deliveries. Beijing's readout of a single sentence said that the two countries had only discussed agriculture. On the same day, Australia, who imported a third its jet fuel last year from China, announced that it was in talks with Beijing about jet fuel exports. Eric Olander is the co-founder and director of the China Global South Project. He said that China may provide some formal assistance but it would be highly unlikely if not improbable for China to share any substantial amount of food, energy or other resources with other countries. Analysts said that Chinese policymakers likely quietly congratulated themselves for the strategic insight to start stockpiling weapons since?the early 2000s. This policy may have appeared excessive during peacetime, but it now appears surprisingly practical. In an editorial published earlier this month, People's Daily, China's Communist Party's leading newspaper, praised China's relative security of energy and claimed that the country's forward-looking nature meant it held "the energy lifeline" in China's own hands. China's Ministry of Foreign Affairs didn't immediately answer questions. "A Tried and Tested Playbook" China's Belt and Road initiative, which is the country's signature infrastructure project, has brought world leaders to Beijing regularly to discuss a 'win-win" cooperation. But with fuel and fertiliser in short supply across the region, Southeast Asian capitals have turned their attentions towards Russia. "China will not want to create unrealistic expectations. Ruby Osman is a senior adviser at the Tony Blair Institute for Global Change and says that Beijing does not want to be a "regional energy backstop for a period of disruption indefinitely". Beijing is likely to stick with its tried and tested playbook, which involves imposing broad, sharp curbs on exports of energy, energy-related products, before selectively restarting trade when officials are satisfied that the domestic demand will be met, said Ms. Liu. China's political consciousness is still deeply rooted in famine and scarcity, and the trauma of Mao Zedong’s Great Leap Forward (GLF) and Cultural Revolution is still fresh enough to remember. Max Zenglein is a senior economist with the Conference Board Asia. He said, "Only when China becomes more comfortable?with its exposure can I expect meaningful support." "I anticipate that any support provided will be transactional. Unfortunately, it's not a good situation to be in. Wang Jin, senior fellow at the Beijing Club for International Dialogue (a think tank within China's Foreign Ministry), said Beijing would also benefit from the shock if it pushed trading partners to "accelerate investments in green and nuclear energies, sectors that China leads following years of state-backed investing. Analysts said that China is under little pressure to act because no other major donors, such as Japan or a regional rival, are stepping up to help solve the shortages. Olander compared it to the COVID-19 Pandemic when officials in the region looked at India as Asia's primary source of vaccines only to have New Delhi halt exports after infections soared in the country. Osman says that China's partners who are seeking concessions should remind Beijing of their own commitments. "Maybe it's best to just quote this new part of the five-year-plan back to Beijing. 'Strengthening international cooperation in food and energy, data and biological security, sea passage security and counter-terrorism, among other fields'."
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Fed's confidence in inflation expectations anchored by the Fed may be under pressure
Federal Reserve officials who want to maintain price control and keep inflation under control face a challenge, as expectations of consumers and the price of gasoline rise. In addition, the bond market is spooked by the rising yields of U.S. Treasury securities. Treasury securities. The U.S. Central Bankers felt confident that the public's expectations of inflation,?particularly in the long-term, were anchored and in line with the Fed's 2% target. This was a sign of their confidence and commitment to achieving their inflation aims. The Fed is closely monitoring any signs of drifting in surveys and investments, which are thought to be a reflection of future inflation expectations. With gasoline prices rising almost daily and airfares and other increases not far behind and oil prices around $110 per barrel globally, they're paying attention to the Fed. Anna Paulson, Philadelphia Fed president, said at the San Francisco Fed Conference on Friday that "long-term inflation expectations" are in line with 2% but may be more fragile after years of inflation above target and a new potential price shock. A University of Michigan survey on Friday showed that household prices expectations have risen over the past year, despite weak U.S. Treasury sales last week. High yields were partly attributable to inflation fears. "That's?on everybody's mind," Fed chair Jerome Powell stated during a March 18 press conference that was dominated with questions about the central bank's assessment of the economic risks posed by the war in Iran. In particular, he said that another price shock after a five year?run where it has missed its target inflation could be what causes the public lose trust. Investors have priced in any Fed rate cuts, but are betting on a 'hike' this year. Even a hint - like some central bank officials are doing - could change the market's outlook and help the central bank to prove that it is serious on inflation. Policymakers have vowed to never forget this hard-learned lesson. It is believed that in the 1970s, inflationary psychology led households and firms to bid up prices and wages in the absence a central bank commitment. This dynamic was only altered by punishing rate increases that caused a sharp recession in the early 80s. Powell stated that the lessons learned from 50 years ago would not influence his decision making. "But it's been five years." We experienced the tariff shock. We also had the pandemic. We are now experiencing an energy shock. ... You worry about inflation expectations when you see a pattern of repeated events. We are very concerned about this. "We are committed to doing whatever it takes to maintain inflation expectations at 2%. EXPECTATIONS AT THE 'CORE' OF CENTRAL BANCKING In the current environment, hawkish monetary policies are inevitable. However, there is no consensus on how to measure what Powell claims to be trying to achieve. Abstract concepts like "expectations", in an institution that disagrees on how to interpret basic data such as the unemployment rate, become a kind of dealer's choice exercise. Different policymakers will give weight to different financial market measures or survey results of public perceptions of inflation. Ed Al-Hussainy is a fixed income portfolio manager and macro-manager at Columbia Threadneedle. He said that central banks' effectiveness depends on their ability to deliver on promises. Expectations are difficult to measure and subject to interpretation. Al-Hussainy stated that officials want to "make sure people believe they will do whatever it takes in order to keep inflation low." If you state what these expectations are, then I believe that you lose some of the strategic ambiguity. You also lose some of your discretionary policy making flexibility. In the next few weeks, there could be a heated debate over which metrics are important. The Fed's preferred measures of expectations have been relatively close to 2%, even when inflation spiked during the COVID-19 epidemic. Fed policymakers have taken note of some less certain signs. Investors viewed the recent weak performance of U.S. Treasury Auctions as a reflection of increased concern about U.S. Inflation. The New York Fed's long-standing monthly survey of consumers is also seen to show "anchored" expectations. In fact, the latest report showed a slight decline in short-term results. This data is for February, but it was before the month that has seen high oil prices and volatility on stock and bond market, as well as a lack of a clear conclusion to a conflict consumers feel at the pump and will eventually feel in other areas of spending. "We've had inflation at high levels for five years, and expectations of near-term inflation have increased again. I'm particularly worried that another price shock will increase expectations of longer-term prices," Fed Governor Michael Barr stated on Thursday, at an event at the Brookings Institution in Washington. "We must be extra vigilant."
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As investors purchase the dip, gold prices rise. However, fading bets on rate cuts cap upside.
Gold prices rose by more than 1% on Monday, as bargain hunters sought to get a good deal. However, the metal was on track for its largest monthly decline in almost two decades due to rising oil costs caused by the Middle East war. Gold spot rose 0.8%, to $4,529.58 an ounce at 0913 GMT. It had gained more than 1% earlier. U.S. Gold Futures for April Delivery gained 0.8%, to $4,558.30. Ricardo Evangelista, an analyst at ActivTrades, said that after prices reached multi-month lows a week ago, traders took advantage of the opportunity to buy a dip and drove the gains seen in precious metals today and Friday. Last Monday, spot gold dropped to $4,097.99 an ounce, its lowest price since November 24, 2025. The metal is on course to have its biggest monthly drop since October 2008. It has dropped more than 14% this month. This is due to the U.S. Dollar, which has gained over 2% since U.S. and Israeli strikes against Iran began on the 28th of February. Brent oil prices continued to rise on Monday. The price of Brent is on track for a monthly record after the Yemeni Houthis attacked Israel at the weekend, escalating the conflict. "Traders expect that oil prices will remain high for a long time, a trend which is likely to fuel inflation, forcing central banks to take restrictive measures and keep rates 'on hold' or even cause further increases," Evangelista said. Gold's appeal is usually boosted by inflation as a hedge. However, high interest rates can reduce its demand. The traders have priced in any chance of a U.S. interest rate cut for this year. Bullion is still on track for a 5% gain this quarter, despite hitting a record-high on January 29. Investors are awaiting Federal Reserve Chair Jerome Powell's remarks later that day at a Harvard conference. Spot silver increased 1.8% to $70.81 an ounce. Spot palladium rose 3.6% and platinum rose 3.7%. (Reporting by Ishaan Arora in Bengaluru; Editing by Shailesh Kuber)
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Stocks in Europe rise before German inflation data
European shares rose in choppy trade on Monday, as energy stocks rose. Investors awaited the inflation data that would be released by Germany, the largest economy of the euro zone, which could shed light on the impact the Middle East War has had on the Eurozone. The pan-European STOXX 600 index was up 0.2% to 576.55 as of 0938 GMT after two consecutive days of losses. The European stock index is down 9% this month, and will likely have its biggest monthly drop since March 2020. Michael Hewson is a senior analyst at iForex and expects that European stocks will continue to suffer as the conflict shows no signs of easing. Yemen's Iran backed Houthi tribe fired missiles on Israel at the weekend. This escalated the conflict, and raised fears that more disruptions to shipping routes would occur. Hewson said that the markets are undervaluing the possibility that this outbreak of violence will not be resolved quickly. Brent crude rose?above 115 dollars per barrel on Sunday, setting a new record for the month. Shell and TotalEnergies, two energy giants, added 1.3% and 1.8% respectively to push their energy index 1% higher. Orsted's shares jumped 7.6% when Bank of America upgraded its rating to "buy", citing improved outlook for offshore wind developer following the war. Data on the German consumer price index (CPI) and the harmonised consumer prices index are expected at 1200 GMT. Aluminum producer Norsk Hydro led the index gains with an 8% jump, after supply disruption worries lifted the price of the metal following Iran's attack on two of the Middle East's biggest producers. Data from LSEG showed that investors have reduced their bets about monetary easing due to rising price pressure. Money?markets are now pricing in three 25-basis point rate increases by the European Central Bank by 2026. This is a'sharp repricing' from the earlier expectation of steady rates throughout this year. Francois Villeroy de Galhau, the French central bank's chief, said that on Sunday ECB aims to stop energy-driven inflation spreading out. However it is too early to talk about dates for interest rate increases. The oil-sensitive travel industry fell by 0.9%, with Air France and Lufthansa both falling 1.5% and 0.60% respectively. Individually, UK-listed Rio Tinto shares rose nearly 4%, after the'miner' announced that operations had resumed at three of four Pilbara Iron Ore Port Terminals after Tropical Cyclone Narelle swept Western Australia's Pilbara Region. This helped London's FTSE 100 rise by 0.8%. Reporting by Avinash in Bengaluru, Editing by Sonia Cheema & Harikrishnan Nair
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Sri Lanka increases power tariffs when energy costs start to bite
Sri Lanka increased power tariffs on Monday for most households by 7.2%, and for industries by 8.7% as it grapples with rising energy costs resulting from the 'Iran War. The new power prices are linked to the $2.9 billion IMF program that Sri Lanka signed with them in 2023 for recovery from a severe economic crisis. Sri Lanka uses cost-reflective pricing for energy multiple times per year in order to maintain the financial stability of its state-run monopoly Ceylon Electricity Board. The country's energy regulator said in a press release that hotels linked to the?critical tourism sector of Sri Lanka?will pay 9.9% higher. The new prices will cost poorer households between 4.3% and 6.9% more. Prof. K.P.L. said that if 'energy prices' increase more because of the war, we will re-consider a request to raise electricity prices. Chandralal is the chairman of Sri Lanka's Public Utilities Commission. He spoke to reporters in Colombo. CEB initially requested a price increase of 13.56 percent to cover a revenue shortfall of 15.8 billion rupees ($52,6 million) due to rising costs. The new tariffs are set to be implemented at the beginning of April. Sri Lanka declared Wednesdays a public holiday. It also introduced fuel rationing and increased pump prices by 35% in order to manage fuel consumption. Janaka Rajakaruna, Chairman of the State-run Ceylon Petroleum Corporation, said that the island was in talks with Russia and India to ensure a continuous supply of fuel. The company will spend $600 million on fuel refinement for April. Rajakaruna stated that the country is struggling to buy 90,000 metric tons of crude to keep its island refinery operating and to produce enough furnace oil for its thermal power plants.
EU Energy Ministers Coordinate Iran War Response
A document containing an EU internal briefing revealed that the European Union's energy ministers would meet on Tuesday in order to coordinate their responses to the disruption of oil and gas market caused by the Iran War.
Europe's heavy reliance?on imports of energy has exposed it to spiraling prices, since the Strait?of Hormuz, the main shipping route was closed effectively and Tehran began attacking the energy infrastructure in Middle East.
Since the U.S. and Israel's war against Iran began on 28 February, European gas prices have increased by more than 70%.
The EU document asked ministers to "indicate which concrete measures can be taken to combat the tightening?of?the oil & gas markets?in a coordinated way."
The document stated that it was important to avoid fragmented, uncoordinated national responses as well as disruptive signals for the market.
In the document, it was stated that ministers should concentrate their efforts on filling up gas storage for winter next year and stabilising oil markets to ensure these supplies.
The EU claims that its oil and gas supply is secure for the near future, as the top two suppliers of the bloc are Norway and the United States.
The tightening of global supply of certain products, namely diesel and jet-fuel, is a concern for?Europe.
Shell CEO Wael Sawan warned last week that Africa could face energy shortages as early as April.
EU officials want to encourage countries to fill their gas storage caverns ahead of the winter season. This will help avoid any price spikes later in the year.
The meeting will take place via videoconference at 1300 GMT, on Tuesday. (Reporting and editing by Kate Abnett, Sudip Kar Gupta, and Andrew Heavens).
(source: Reuters)