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Sustained high crude oil prices to hurt downstream players
Devangshu Datta New Delhi
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The Iran-Israel conflict entered a more intense phase with the US carrying out airstrikes on Iran's nuclear facilities over the weekend. The heightened tensions have led to further spikes in crude prices with Brent crossing the $81 per barrel or bbl mark.
The fears centre around the possibility of supply routes being interdicted and hence, supply being disrupted, rather than Iranian oil being taken off the market.
Iran's exports are mainly to China and the quantum of Iranian exports could be compensated for by Saudi Arabia and other OPEC-plus nations. Net-net, even with Iranian supply off the market, there could
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India.com
40 minutes ago
- India.com
Even After U.S. Plea, Saudi Refused Defense Aid To Israel; Prince Salman Rejected Trump's Request Against Iran
Riyadh/Washington: A previously undisclosed standoff unfolded behind the scenes of the 12-day Iran-Israel war in June, as Saudi Arabia flatly refused a direct request from the United States to transfer its powerful American-made THAAD air defense systems to Israel, according to two senior U.S. defense officials cited by the Middle East Eye . At the height of the conflict, Iran had unleashed waves of advanced ballistic missiles, and Israel's stockpile of interceptor missiles, especially the high-altitude THAADs, was running dangerously low. Faced with the rapid depletion of its own interceptors like the Arrow and Patriot, the U.S. administration urgently reached out to Riyadh. But the response it got was immediate and firm. According to one official familiar with the internal deliberations, 'We were asking everyone to contribute. When that failed, we tried to negotiate. But this was not just about one country.' American officials tried to convince Saudi Arabia that Tehran was not only a threat to Israel; it posed a looming danger to Saudi national security as well. But the Saudis did not budge. Despite being fully capable of aiding Israel, the kingdom chose to prioritise its own defense. Saudi Arabia had already activated its THAAD systems in response to threats from Houthi rebels, with some units even deployed to guard the holy cities of Mecca and Medina. At one point during the war, Israeli defense officials were forced to let some incoming Iranian missiles fall on uninhabited areas as they rationed what little interceptor stock remained. U.S. think tanks had already flagged the issue in classified memos, highlighting Israel's supply of Arrow and Patriot systems was shrinking by the hour. Meanwhile, on July 3, nine days after a ceasefire between Iran and Israel, Saudi Arabia inaugurated a newly acquired THAAD battery from the United States, a move closely watched in Washington. Concerns were spiraling inside the Pentagon. The Guardian reported that the United States itself was down to just 25% of its Patriot interceptor reserves, and Pentagon planners were alarmed about whether America could even sustain its own global military posture if the Iran-Israel war escalated further. One American official told the Middle East Eye that internal projections showed a 'catastrophic depletion' of interceptors was imminent. In a desperate move, the United States tested its Standard Missile-3 (SM-3) from a Navy destroyer of the Arleigh Burke class to reinforce Israeli defenses. The Telegraph confirmed that Iran had already scored direct hits on five key Israeli military bases. The final twist came when The Wall Street Journal revealed that American officials had floated the idea of redirecting Saudi THAAD systems to Tel Aviv, but Crown Prince Mohammed bin Salman rejected it outright. Washington then turned to the UAE with a similar request. Whether the Emirates complied remains unknown. No official confirmation has surfaced. The silence speaks volumes. As it stands, this behind-the-curtain episode exposes not only the limits of U.S. influence in the Gulf, but also the extent to which Saudi Arabia has begun charting its own course, even when it means defying its closest Western ally in the middle of a regional war.
The Hindu
3 hours ago
- The Hindu
UN to use 'humanitarian pauses' to try to reach Gaza's starving
The United Nations said it would try to reach as many starving people as possible in Gaza after Israel announced it would establish secure land routes in for humanitarian convoys. The UN's World Food Programme (WFP) said it had enough food in, or on its way to, the region to feed the 2.1 million people in the Gaza Strip for almost three months. UN emergency relief coordinator Tom Fletcher said on X he welcomed the announcement of "humanitarian pauses". "In contact with our teams on the ground who will do all we can to reach as many starving people as we can in this window," he said. WFP said the pauses and corridors should allow emergency food to be safely delivered. "Food aid is the only real way for most people inside Gaza to eat," it said in a statement. It said a third of the population had not been eating for days, and 470,000 people in Gaza "are enduring famine-like conditions" that were leading to deaths. WFP said more than 62,000 tonnes of food assistance was needed monthly to cover the entire Gaza population of two million. The agency noted that, on top of Sunday's "pause" announcement, Israel had pledged to allow more trucks to enter Gaza with quicker clearances along with "assurances of no armed forces or shootings near convoys". "Together, we hope these measures will allow for a surge in urgently needed food assistance to reach hungry people without further delays," it said. 'Dystopian landscape' UN rights chief Volker Turk said Israel, as the occupying power in Gaza, was obliged to ensure sufficient food was provided to the population. "Children are starving and dying in front of our eyes. Gaza is a dystopian landscape of deadly attacks and total destruction," he said in a statement. He criticised a U.S. and Israel-backed outfit, called the Gaza Humanitarian Foundation (GHF), that in late May began distributing foodstuffs when UN-organised efforts were blocked. Mr. Turk said the GHF's "chaotic, militarised distribution sites were "failing utterly to deliver humanitarian aid at the scope and scale needed". His office says Israeli forces have killed more than 1,000 Palestinians trying to get food aid in Gaza since the GHF started operations -- nearly three-quarters of them in the vicinity of GHF sites. 'Starvation crisis' "The starvation of people in Gaza must end now," UN refugees chief Filippo Grandi said on X. "Standing with UN and NGO colleagues ready to deliver desperately-needed, lifesaving aid to hundreds of thousands at risk of death." Fletcher's UN Office for the Coordination of Humanitarian Affairs (OCHA) warned on Friday that conditions on the ground in Gaza were "already catastrophic" and deteriorating. "The starvation crisis is deepening," it said. OCHA said UN teams were in place to ramp up deliveries into the Palestinian territory as soon as they were permitted to do so. "If Israel opens the crossings, lets fuel and equipment in, and allows humanitarian staff to operate safely, the UN will accelerate the delivery of food aid, health services, clean water and waste management, nutrition supplies, and shelter materials," it said.
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Business Standard
3 hours ago
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EM debt hedge funds eye safeguards as world-beating rally blooms
Hedge funds dedicated to emerging-market debt are increasingly turning to risk-mitigating strategies to ensure they lock in double digit gains as a broad rally in developing nation assets deepens. After a banner first half of the year, hedge funds targeting EM debt have returned nearly 13 per cent on an annual basis — more than their peers positioned in any other asset class, according to data based on Bloomberg indexes. The latest global financial flows data shows the asset class remains thriving and the extra yield investors demand to hold the sovereign debt of developing nations over US Treasuries just hit a 15-year low. Such tight pricing, along with uncertainty over US policies and global conflicts, is pushing hedge funds to curb risks as they ride the historic rally. The funds do this by swapping longer-maturity bonds in their portfolios for less risky shorter-dated ones. They also focus on higher-rated debt and the most-liquid securities while keeping an ample cash pile. 'Do you just want to be massively long on credit on these valuations? I'd say probably not,' said Anthony Kettle, who co-manages BlueBay Emerging Market Unconstrained Bond Fund with Polina Kurdyavko and Brent David. 'Having a little bit of dry powder evidently makes sense, and also running elevated cash levels.' To be clear, Kettle said, there's still a 'decent environment' to gain additional returns as funds become more selective and can profit from both rising and falling asset prices, unlike index-based investors. The $784-million BlueBay fund has returned 17 per cent over the past 12 months. Investors have taken advantage of EM inflows stoked by increased interest for alternative assets amid US policy unpredictability, which has also weakened the dollar. While many developing countries have come out of distressed debt levels as sentiment improved, further risks include another Iran-Israel flare up and potential additional increases in US tariffs, including on the buyers of Russian energy. President Donald Trump's administration has caused a 'breakdown of the traditional safe haven correlations' by shaking up the post-Cold War world order, creating an 'unusual and unpredictable' environment, said Demetris Efstathiou, the chief investment officer of Blue Diagonal EM Fixed Income Fund. 'It is very hard to predict what they will do next with tariffs, and on top of that you have ongoing wars,' Efstathiou said. His fund is 'very conservatively' positioned with shorter-maturity bonds and he avoids weak credits to protect the portfolio in the event of a global slowdown and market downturn. He has increased holdings of AAA- and AA-rated EM sovereigns along with less-indebted countries with large domestic markets like Brazil, Turkey and Mexico. EM-dedicated bond funds have received $31 billion in inflows year-to-date, with positioning increased in each of the last 14 weeks as global markets recalibrate after an era of US dominance. A near-record $5.7 billion piled into the asset class in the week though July 23, according to EPFR Global data provided by economists at Bank of America Corp. For some, flows of such a magnitude signal that EM debt is alrdy predicting the best-case scenario. 'The market is now priced for a Goldilocks scenario with the risk of a severe recession receding significantly and expectations' of one or more rate cuts by the Federal Reserve, the $847 million Enko Africa Debt Fund said in a letter to clients. Managed by Alain Nkontchou, the Africa-specific hedge fund has returned 24 per cent over the past year. Nevertheless, the expected volatility means that traditional buy-to-hold trades may not necessarily succeed and that hedge funds will prioritize holding more liquid assets to ensure an easier exit in case sentiment turns, according to ProMeritum Investment Management LLP, a $700-million fund that invests in developing markets outside China. 'Liquidity management will be critical in the second half of the year because of an unpredictable environment and geopolitical risks,' said Evgueni Konovalenko, managing partner and head of strategy at the firm. Such a focus is needed 'to take advantage of both short and long positions with sudden policy changes and a daily barrage of headlines.' What to Watch: Markets will look out for any trade talks with the US ahead of the Aug 1 deadline for Trump's latest tariffs to take effect China manufacturing and non-manufacturing PMI; second-quarter GDP data for Taiwan and Mexico, South Korea export data Brazil, Chile and South Africa central bank meetings on benchmark interest rates; South Africa may cut rates by another 25 basis points to 7 per cent, despite the likely rise in inflation later this year. (With assistance from Jorgelina do Rosario)
