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India: Oil price rise unlikely to cause inflation to spike sharply
India's Finance Minister Nirmala Sitharaman stated on Monday that the country does not expect the inflation rate to increase significantly as a result of a?"jump" in crude oil prices caused by the?war in the Middle East. Domestic price levels are still a "bit below the lower end of the central banks tolerance band." Early trade saw oil prices rise by 26%, the highest level since July 2022. This was after Iran announced that Mojtaba Khmenei would succeed his father Ayatollah Ayatollah Khamenei who had been killed in an air strike by Israel and the United States a little over a week earlier. The major Middle Eastern oil producers have cut their supply because they can't safely ship shipments across the Strait of Hormuz. Mojtaba was appointed after Donald Trump, the U.S. president, had rejected him earlier as a possible candidate for Iran's supreme leader. Israel also said it would target anyone who leads Iran. Sitharaman, in a written response to parliament, said that global oil prices, including India's crude, had been falling for over a year, until the conflict in the region escalated on February 28. The Indian basket increased from $69.01 per barrel at the end of February to $80.16 per barrel on March 2. According to the government, there will be a limited impact on consumer prices for now. Sitharaman stated that the impact of inflation on India is not expected to be significant at this time, given the fact that the country's inflation rate is close to the lower limit. Retail inflation in January was 2.75 percent, which is close to the bottom of Reserve Bank of India’s target range of 2%-6%. She said that the RBI's Monetary Policy Report for October 2025 estimated a 10% rise in crude oil prices would raise inflation by 30 basis points if it were to be fully passed through to domestic fuel costs. Sitharaman said, "However the medium-term effect of a?global crude oil price increase?on the inflation depends on a number of factors, including exchange rate fluctuations, global demand-supply situation, monetary policies transmission, state of general inflation and the extent the indirect pass-through." Reporting by Sarita Chantanti Singh, Editing by Raju Gopikrishnan
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Wanhua Chemical, a Chinese company, declares force majeure for Middle East supplies
A?representative of Wanhua Chemical said that the company has declared "force majeure" on its Middle East clients. According to an email sent by Wanhua to its customers and seen here, the 'force majeure' - a clause in a contract which relieves parties of their obligations due to a unforeseen event - took effect on March 7th. The letter said: "We face the'severe disruption of the shipping routes in Strait of Hormuz which makes?delivery unreasonably unsafe or impossible." According to traders, the petrochemical major sells its derivatives like isocyanates - a building block used in polyurethane for furniture, bedding and automobile interiors - mainly to Middle East. The company operates two crackers with a combined ethylene production capability of?2.2 million tons per annum? at its site in Yantai, in the Shandong Province. Two sources with knowledge of the situation said that both crackers continue to run at high rates. Wanhua refused to comment when asked if?production cuts were made at the two crackers. Reporting by Trixie YAP and Chen Aizhu, additional reporting by Siyi Liu. Editing by Kirby Donovan.
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Saudi Aramco is offering oil at a rare price as the Iran war disrupts exports.
Several traders said that Saudi Aramco had 'offered over 4 million barrels in rare tenders of 'Saudi crude as the U.S. Iran conflict?disrupted the Middle East exports. Aramco has offered to load 2 million barrels Arab Heavy crude at the Ain Sokhna Port in Egypt. The tender will close on Monday at 5 pm Beijing time (0900 GMT). According to an agreement between traders, the loading date is subject to confirmation, and will be from March 10 until March 30. Free-on-board, the sale is for Asia. Three traders reported that Aramco had offered 650,000 barrels on a cost and freight (CFR basis) in a separate tender, which closed Sunday. According to the document of tender shared by traders, the delivery date is to be decided. The document also stated that the arrival time will be determined by the voyage time between Yanbu port and respective discharge port for customers. The tender stated that "after deal confirmation the cargo will begin loading from Yanbu?and an estimated arrival time will be advised accordingly." Aramco has tried to reroute a portion of its crude exports via the Red Sea port of Yanbu to avoid the Strait of Hormuz where Iranian attacks have slowed down shipping to near halt. Three traders reported that Aramco sold 2 million barrels (of Arab Extra - Light crude) to Japan's largest refiner, Idemitsu Kosan, in a third bid. Two of the three added that the cargo, which was sold on a CFR,?was already aboard a vessel near Taiwan. Aramco and Idemitsu didn't immediately respond to comments. Reporting by Siyi Liu, Singapore; editing by Jamie Freed and Muralikumar Aantharaman
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The government's response to the oil price spike and the Middle East conflict escalating
Share markets are down on concerns that a U.S. - Israeli war against Iran is escalating and will lead to a squeeze on energy supplies around the world. Here are some?actions? that governments have taken?or? plan to take in order to lessen the impact the war has on their economies. SOUTH KOREAN PLANS FUEL CAPITAL South Korean President Lee Jae Myung announced on Monday that the government would be capping domestic fuel prices for nearly 30 years. The country will also look for sources ?of energy beyond supplies shipped via the Strait of Hormuz, and a 100 trillion won ($67 billion) ?market-stabilisation programme should be expanded if needed, he added. JAPAN TELLS SITE OF NATIONAL OIL RESOURCE TO PREPARE FOR RELEASE Akira Nagatsuma of the Centrist reform Alliance, an opposition party member, said on Sunday that the Japanese government had instructed a storage facility for national oil reserves to prepare for any possible crude release. Nagatsuma stated that details such as the timing of?the?release are unclear. VIETNAM WILL REMOVE FUEL INVESTMENT TARIFFS The government of Vietnam said that it plans to eliminate import tariffs for fuels in order to maintain supplies during disruptions. INDONESIA WILL INCREASE FUEL SUBVENTIONS Finance Minister Indonesia said that Indonesia will increase its allocation for fuel subsidies in the state budget. The budget for the country is 381.3 trillion rupiah (about $22.5 billion), which includes energy subsidies, compensation for state-owned Pertamina as well as utility company PLN. CHINA ASKS REFINERS to Suppress Fuel Exports Sources with knowledge of the situation said that China had asked refiners not to sign any new contracts for fuel export and to try to cancel any shipments already made. They argued that the guidance does not apply to bonded bunkering, jet fuel refuelling on international flights or supplies to Hong Kong and Macau. BANGLADESH WILL CLOSE ALL UNIVERSITIES Bangladesh is closing all universities on Monday as part of an emergency measure to conserve fuel and electricity. (Compiled by Edwina gibbs; edited by Lincoln Feast, Shri Navaratnam).
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McGeever: Wall Street's immunity against the Mideast oil shock is now being tested.
Wall Street was awash with complacency as oil prices soared by 30% and global stocks fell. Investors are likely to have bet that the turmoil would have a?short-lived and mild economic impact', similar to most crises of recent years. Is it a market inefficient or is this wishful thinking? Soon we'll find out. West Texas?Intermediate Crude rose 35% in the past week. This is the largest weekly increase?since U.S. benchmark oil futures were introduced in 1983. Yet the S&P?500 only fell 2%. The Nasdaq fell just over 1%. What is going on? Investors may think that the U.S. has a better chance of coping with an energy shock because it is a net exporter. There could be a lingering belief in "U.S. exceptionalalism". Geopolitical risks are notoriously hard to value, so it's possible that many asset managers simply wait for clarity and sit on their hands. Whatever the cause, it is possible that this optimism is either misplaced or complacent. Take a look at this. According to The Kobbeissi Newsletter, a global market newsletter, in the first 41 trading day of 2026 the S&P 500 trading range was only 2.7%. This is based on the difference between daily closing prices. This is the smallest range ever recorded for this period, dating back to 1928. This will be put to the test. Brent and WTI both soared above $100 a barrel on Monday, putting oil on course for its largest daily gain in decades. The prices were up by more than 25% during the?Asian hours of trading, but have since retreated. Stock markets in other countries have also been shook. The benchmark European, Asian, and emerging markets indices that fell 5-7 % last week are now suffering even more losses. Japan's Nikkei index is down 5% more today. Korea's benchmark index has also fallen. These countries, however, are net importers of energy, which means they are more vulnerable to historical spikes in the price of oil and gas than the United States. Japan, for instance, imports 90% its energy. 95% of the oil it imports comes from the Middle East. Can Wall Street still be an outlier WON'T HISTORY REPEAT ITSSELF? The Middle East conflict is a terrible time for the U.S. economy. The Federal Reserve had set a 2% inflation target, but the rate of inflation was at 3%. Payroll data released on Friday revealed that the U.S. lost 92,000 jobs during February. Fed officials are unable to ignore the growing stench of stagflation. Wall Street, or more likely bond investors, could condemn Jerome Powell and Kevin Warsh if they take a dovish position in the future, risking letting inflation out of hand. They also risk angering the markets if, instead of focusing on price stability and growth, they adopt a hawkish anti-growth stance. But policy paralysis is also not good. Investors seem to be betting that history will repeat itself. Most recent bouts of geopolitical volatility have been accompanied by a few weeks' mild volatility and then a rapid recovery. According to research by Parag Thatte at Deutsche Bank, geopolitical events have a negative impact of?around 6-8% over the following three-week period. The markets recover these losses within three more weeks. Larry Adam, Raymond James' chief investment officer, says that the S&P 500 is higher one, three and six months after geopolitical events. JPMorgan analysts claim that a typical scenario for a geopolitical shock is a stock decline of 5-6%, followed by a recovery within a couple weeks. They wrote that macro-strategists tend to ignore geopolitics and oversimplify their response, saying "just buy the dip". This rule of thumb was true 80% of the times over the past 60 years. They added, "We believe the current episode of the Iran invasion is a scenario where you buy the dip." But the drawdowns seem to be getting smaller, and there was hardly a dip on Friday to buy. Now that computers do the trading, are markets becoming smarter and able to see 'through headline noise? Perhaps the 'playbook' of past crises is still relevant. Has complacency taken hold, or is it different this time? Wall Street futures were down on Monday morning, even though the jury has not yet been seated. A verdict could be coming soon. The opinions here are those expressed by Jamie McGeever a columnist at. Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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LME Aluminium reaches nearly 4-year high amid supply fears
The escalating conflict between Israel and Palestine in the Middle East has fueled concerns over a'shortage of global supplies. This is countering downward pressure on demand due to a stronger dollar. The benchmark?three-month Aluminium on the London Metal Exchange reached its highest level since March 31, 2020, earlier in the session, when it hit $3,544 per ton. By 0706 GMT, it was up 0.75% to $3,472 per metric ton. The Shanghai Futures Exchange's most traded aluminium contract closed the daytime session up 1.61% to 24,950 yuan (US$3,607,84) per tonne after reaching its highest level since January 30, at 25,860?yuan. The U.S. and Israel war against Iran has caused shipping to be disrupted through the Strait?Hormuz. This is a vital waterway in the Gulf that accounts for about 9 percent of global aluminum production. Last week, the light-weight metal?used for construction and packaging?posted its largest weekly gain since January 2023. This was due to supply concerns that grew after Qatari smelter Qatalum halted production and Aluminium Bahrain declared a force majeure on shipments. "An extended disruption in the Strait will simultaneously choke off alumina exports from Middle Eastern smelters and alumina imports." This would result in a significant tightening of global supply," EwaManthey, commodities analyst at ING wrote in a report. Manthey said that the escalation in the Middle East could push aluminum prices above $4000 per ton. The rise in oil prices by more than 25% has largely tamed the price of other base metals. The dollar's strength makes commodities that are denominated in other currencies less affordable to investors. Copper, nickel, lead, and tin all fell in price, while zinc rose 0.55%. The better?inflation figures in China have boosted sentiment and helped to reduce losses for other base materials. Due to the effects of the Lunar New Year holiday, China's consumer price inflation increased at its highest level?in over three years. Shanghai copper fell 0.59%. Tin dropped 2.4%. Nickel eased 0.16%. Lead shed 0.15%. Zinc rose 0.62%.
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Iron ore continues to rise on the back of surging energy and rising freight costs
Iron ore futures were trading at a'month-high price on Monday. Dalian iron ore was up for the sixth straight session, largely due to the surge in 'energy prices and freight prices resulting from the Iran war. The most traded contract for?May?iron ore on China's Dalian Commodity Exchange was 2.28% higher, at 784.5 Yuan ($113.44). As of 0705 GMT, the benchmark April iron ore traded on Singapore Exchange was $103.15 per ton, up 1.54%. The oil prices rose by more than 25% Monday, as the U.S. and Israel's expanding war against Iran caused some Middle Eastern oil producers cut their supplies. The price increase was also influenced by fears of a prolonged disruption of shipping through the Strait of Hormuz. Atilla Widnell is the managing director of Navigate Commodities. She said that rising?energy prices will increase costs for bunker fuel, war risk premium and insurance. He added that the risks of central banks increasing interest rates to curb inflation risk are more likely in the medium and long term, which will dampen the outlook for steel and iron ore. China exports steel to the Gulf via the Strait of Hormuz, which is now its second largest market. It accounted for 16% of China's exports in 2013, as other countries erected trade barriers. Iran is the tenth largest producer of steel in the world. Iran's steel production would also be affected by a blockage, since it imports coal and exports its products. Steelhome data showed that iron ore inventories at major Chinese port cities increased by 0.67% in the week ending March 6. Steelhome data showed that spot prices for seaborne iron ore rose by 1.51% to $100.6 per ton on March 6. Coking coal and coke, which are used to make steel, have both increased in price by 5.51% & 3.82% respectively. The Shanghai Futures Exchange steel benchmarks mostly rose. Rebar rose 1.3%, hot-rolled coil grew 1.58% and wire rod increased 1.44%. While stainless steel fell 0.42%. $1 = 6.9155 Yuan (Reporting and editing by Janane Venkatraman; Ruth Chai)
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Takaichi, the PM of Japan, says that Japan is considering measures to cushion its economy from the conflict with Iran
Sanae Takaichi, the Prime Minister of Japan, said that the country would 'consider steps to cushion economic damage caused by rising fuel costs resulting from the conflict in the Middle East. This includes reducing gasoline prices. Takaichi, a member of the Japanese Parliament, said that many people were concerned about rising gasoline prices. The government has been evaluating what steps it can take to address this concern since last week. She said that she was considering measures to prevent gasoline prices from increasing?to levels unacceptable for the public. Such measures could be funded through reserves. Takaichi has ruled out a major overhaul of the draft budget for fiscal 2026, currently being debated by the Parliament. The oil price surged by more than 25% on Monday, reaching its 'highest level' since mid-2022. Fears of shipping disruptions due to the expanding U.S.-Israeli conflict on Iran gripped the market. If the spike in oil prices continues, it will be a heavy blow to Japan's economy, given that its economy is heavily reliant on fuel imported from abroad. (Reporting and editing by Tom Hogue, Thomas Derpinghaus, and Leika Kihara)
Finmin: Indonesia will absorb the shock of oil price increases using its state budget
Indonesia's Finance Minister?said? on Monday that the country will absorb the shock of a rise in oil prices by increasing the allocation to fuel subsidies and using the state budget.
Indonesia has budgeted 381.3 billion rupiah (22.50billion dollars) for energy subsides and to compensate Pertamina, the state energy company and PLN, the utility company for their efforts to maintain some fuel and electricity prices at an affordable level.
The budget is based on assumptions that Indonesian crude oil prices will average $70 per barrel in 2026 and the average rupiah rate of exchange for dollars will be 16,500.
Oil prices rose to more than $100 per barrel on Monday, amid fears that the Middle East conflict would cause a prolonged supply shock. Investors rushed to "safe haven" assets, causing the rupiah to hit a new record low on Monday of 16,990 per dollar.
Purbaya Yudhi Sadewa, finance minister, told reporters that "even if oil prices increase globally, we will absorb the shock" with our budget and control the impact to the maximum extent possible.
He said that the amount of money allocated to subsidy will increase. However, the size of the increase will depend on the length of time oil prices remain high. The government will evaluate the situation in the next month and formulate a more specific policy response.
He said that after a month we could better predict the direction of oil prices and decide on an appropriate policy.
We're not smart enough. "Any adjustment we make will not disrupt the economic growth."
According to state news agency Antara, Energy Minister Bahlil Lahadalia, Indonesia has a sufficient fuel supply and no plans are in place to increase the subsidised 'fuel prices until Eid al-Fitr which is at the end next week. $1 = 16,950 rupiah (Reporting and editing by Gayatri Suryo, Ananda Teresia)
(source: Reuters)