Latest news with #Hormuz
Zawya
a day ago
- Business
- Zawya
Gulf shipping costs drop as Israel-Iran ceasefire holds
Shipping costs for the Gulf have fallen in the past two days after a ceasefire was reached between Israel and Iran, although rates could rebound if tensions increase, shipping and insurance industry sources said on Thursday. The conflict had raised concerns that Iran could close Hormuz, the strait between Iran and Oman through which around 20% of global oil and gas demand flows amid broader fears that oil could soar to $100 a barrel. Shipping rates for supertankers, which can carry 2 million barrels of oil, jumped over the past week before the ceasefire - more than doubling to over $60,000 a day. Rates were quoted around $50,000 a day on Thursday, freight data showed. "Tanker rates ... have been pulling back following the halt to hostilities between Israel and Iran," Jefferies analyst Omar Nokta said in a note. Israel and Iran agreed to a ceasefire on Tuesday after 12 days of war. Greece's shipping ministry on Thursday eased requirements for its merchant fleet, no longer advising them to report voyages through Hormuz, saying the situation "appears to have been improved". War risk insurance premiums for Gulf shipments softened to between 0.35-0.45%, from a peak of 0.5% on Monday, sources said. This compares with levels of around 0.3% in recent months. The cost of a seven-day voyage is based on the value of the ship and the drop will translate into tens of thousands of dollars less in additional costs each day. "Rates have definitely softened," said David Smith, head of marine with insurance broker McGill and Partners. "Whilst war premiums are still significant there is a large number of war risk insurers looking to underwrite risks and offer capacity, which in combination with the improved political situation is adding ever downward pressure on rates. That said, the situation remains very fluid." Iran would respond to any future U.S. attack by striking American military bases in the Middle East, Supreme Leader Ayatollah Ali Khamenei said on Thursday, in his first televised remarks since the ceasefire. (Reporting by Jonathan Saul, Renee Maltezou and Yannis Souliotis with Reuters, additional reporting by Michael Jones with The Insurer, editing by Ed Osmond)
Bloomberg
4 days ago
- Business
- Bloomberg
Ceasefire or Not, The World Is Swimming in Oil
After the war, the hangover. While hysteria about the closure of the Strait of Hormuz gripped the oil market for the last few days, the reality couldn't be more different: a wave of Persian Gulf crude was forming. Now, the swell is heading into a global oil market that's already oversupplied — hence Brent crude trading below $70 a barrel on Tuesday. The Northern hemisphere summer, which provides a seasonal lift to demand, is the last obstacle before the glut becomes plainly obvious. Oil prices are heading down – quite a lot. If anything, the Israel-Iran '12-Day War' has worsened the supply/demand imbalance even further – not just for the rest of 2025, but into 2026 too. On the demand side, geopolitical chaos is bad for business — let alone tourism. Petroleum consumption growth, already quite anemic, is set to slow further, particularly in the Middle East. But the biggest change comes from the supply side: The market finds itself swimming in oil. Ironically, one of the countries pumping more than a month ago is Iran. Hard data is difficult to come by, as Iran does its best to obfuscate its petroleum exports. Still, available satellite photos and other shipping data suggest that Iranian production will reach a fresh seven-year high above 3.5 million barrels a day this month, slightly up from May. That bears repeating: Iranian oil production is up, not down, despite nearly two weeks of Israeli and American bombing. Reading between the lines, President Donald Trump has made two things clear: He doesn't want oil prices above $70 a barrel, and he still thinks Washington and Tehran can sit down to talk. So it's very unlikely that the White House will tighten oil sanctions on Iran, an issue where Trump is very similar to former President Joe Biden: Lots of talk, very little action. Across the Persian Gulf, Saudi Arabia, Kuwait, Iraq and the United Arab Emirates are all pumping more than a month ago. True, a large chunk of the increase was expected after the OPEC+ cartel agree to hike production quotas. Still, early shipping data suggests that exports are rising a touch more than expected, particularly from Saudi Arabia. Petro-Logistics SA, an oil tanker-tracking firm used by many commodity trading houses and hedge funds, estimates that Saudi Arabia will supply the market with 9.6 million barrels a day of crude in June, the highest level in two years. The firm measures the flow of barrels into the market, offsetting stockpiling moves, rather than wellhead output (the latter is OPEC's preferred measure). 'Looking at the first half of the month, there has been a large rush of oil flowing out of the Persian Gulf region,' Daniel Gerber, the head of Petro-Logistics, tells me. Data covering the first couple of weeks of June show strong exports from Iraq and the United Arab Emirates, two countries that typically cheat on their OPEC+ production levels. The risk here is more, not less. And then there's US shale output. In May, the American oil industry was on the ropes, with crude approaching $55 a barrel. At those prices, US oil production was set to start a gentle decline in the second half of the year and fall further in 2026. The recent conflict that drove crude to a peak of $78.40 a barrel handed US shale producers an unexpected opportunity to lock-in forward prices, helping them to keep drilling higher than otherwise. Anecdotally, I hear from Wall Street oil bankers that their trading desks saw some of the largest shale hedging in years. With shale, small price shifts matter a lot: The difference between booming production and declining output is measured in a fistful of dollars, perhaps as little as $10 to $20 a barrel. At $50, many companies are staring at financial calamity and production is in free-fall; $55 is survivable; $60 isn't great, but money still flows and output holds; at $65, everyone is back to more drilling; and at $70 and above, the industry is printing money and output is soaring. In the oil market, history is a very good guide. Look at what happened after the first Gulf War in 1990-1991, or the second one in 2003. Amid the carnage, oil keeps flowing – often in greater quantities. When the conflict ends, the flow increases further. The Iran-Israel conflict isn't over yet. The ceasefire is, at best, tentative. And other supply disruptions may change the outlook. But, right now the world has more oil than it needs.
Yahoo
4 days ago
- Politics
- Yahoo
Iranian closure of strait of Hormuz would be monumental act of self-harm, says Lammy
Any Iranian move to close the strait of Hormuz waterway would be an act of monumental self-harm, said David Lammy, the UK foreign secretary, as he continued to refuse to endorse the Israeli and American strikes on Iran, or lay out the UK view of their lawfulness. Lammy said there was no need for the British government to say if the strikes were legal since the UK was not involved in the action and had not been asked by the US to take part, or to allow the US to use the UK's Diego Garcia base in the Indian Ocean to target Iran. The US used B-2 stealth bombers and a salvo of submarine-launched missiles to hit Iran's nuclear facilities on Saturday night. Lammy denied that the US was involved in regime change, saying the attacks were very targeted. No assessment had yet been completed on the effectiveness of the US attacks, he added, raising questions over whether Iran has moved its enriched uranium to a new site. Lammy, in an hour-long statement to the Commons, also disclosed an RAF plane had evacuated 63 British nationals and their dependents to Cyprus from Israel. He said negotiations were under way to help the 4,000 British nationals in Israel that had registered with the Foreign Office. Referring to the Iranian parliament's decision to vote for the closure of the strait of Hormuz, he said contingency plans were in place. He told MPs: 'Be in no doubt we are prepared to defend our personnel, our assets and those of our allies and partners. We are closely monitoring how energy markets are responding to the conflict. We have been extremely clear to the Iranians. Any action to blockade their straits of Hormuz would be a monumental act of self-harm, making a diplomatic solution even harder.' Related: The strait of Hormuz: how could Iran close it and why does it matter to global trade? Lammy repeated his plea for Iran to return to the negotiating table. He said: 'My message for Tehran was clear, take the off-ramp, dial this thing down, and negotiate with the United States seriously and immediately. 'The alternative is an even more destructive and far-reaching conflict, which could have unpredictable consequences.' For the first time since the crisis broke, party political splits started to emerge with Liberal Democrats, Scottish National party and Labour backbenchers, including the chair of the foreign affairs select committee, Emily Thornberry, challenging the trustworthiness of the US and the legality of its action. Lammy was repeatedly asked if the UK's reputation as an upholder of the rules-based order was not damaged if it could not admit the acts of its allies were unlawful. By contrast the Conservative frontbench and Reform MPs congratulated the US's actions, with some MPs backing regime change. Lammy said: 'It's not our belief that it is for us to change the regime of any country – that is for the people of that country.' He added: 'I am confident that this is not about regime change and the Israelis have been clear they are not attacking the civilian population.' Asked about the Israeli bombing of the gates of Evin prison in Tehran, he said he had been reassured in a phone call by the Israeli foreign minister, Gideon Sa'ar, that 'nuclear targets remained their objective and focus at this time'. The UK has long taken the view that any public criticism of the US only reduces the UK's private influence, but it has been rare for the government to be so circumspect in setting out its views on such a major crisis. Lammy did implicitly question the wisdom of a US strategy based heavily on air power, saying that 'strikes cannot destroy the knowledge Iran has acquired over several decades nor any regime ambition to deploy that knowledge to build a nuclear weapon'. Thornberry expressed her concern over whether diplomatic negotiations favoured by Lammy would occur since that required a modicum of trust. She said given that Donald Trump tore up the previous nuclear deal in 2018, Israel had ended the previous US-Israel talks by striking Iran and an emboldened Benjamin Netanyahu was talking about regime change, it was difficult to see how negotiations based on trust could take place. Lammy broke new ground by saying for the first time that the UK's focus in any future diplomatic negotiations would be a requirement for Iran to accept zero enrichment of uranium, saying we have 'moved on' from the 2015 Iran nuclear deal that allowed Iran to enrich to 3.75%. He said Iran was in breach of its obligations by enriching uranium at levels of purity as high as 60% and said the country was engaging in deception and obfuscation. Speaking to the BBC, he refused to say if he agreed with the latest US intelligence assessment that Iran was close to securing a nuclear weapon, saying instead that he relied on the report from the International Atomic Energy Agency, the UN's nuclear inspectorate, which said in its latest report it had no evidence that Iran was seeking to make a nuclear bomb.
CNA
5 days ago
- Business
- CNA
Oil falls 6% as Iran focuses retaliation on US military base
HOUSTON: Oil prices tumbled US$5 a barrel, or over 6 percent on Monday (Jun 23) after Iran attacked the US military base in Qatar in retaliation for US attacks on its nuclear facilities, and took no action to disrupt oil and gas tanker traffic through the Strait of Hormuz. Brent crude futures LCOc1 were down US$4.90, or 6.3 percent, at US$72.19 a barrel by 2.13 pm ET (2.13am, Singapore time). US West Texas Intermediate crude (WTI) CLc1 eased US$4.60, or 6.2 percent, to $69.23. Global benchmark Brent had kicked off the week with nearly 6 percent jump to a five-month high as markets opened after US President Donald Trump said on Saturday he had "obliterated" Iran's main nuclear sites in airstrikes, joining an Israeli assault in an escalation of conflict in the Middle East as Tehran vowed to defend itself. Iran, which is OPEC's third-largest crude producer, said on Monday that the US attack on its nuclear sites expanded the range of legitimate targets for its armed forces. The oil market, however, started to sell off after Iran retaliated, saying it carried out a missile attack on the Al Udeid US airbase in Qatar, the largest US military installation in the Middle East. "Oil flows for now aren't the primary target and is likely not to be impacted, I think it's going to be military retaliation on US bases and/or trying to hit more of the Israeli civilian targets," said John Kilduff, a partner at Again Capital. There was no interruption to QatarEnergy shipments or production after the attack, a source with direct knowledge of the matter said, and no other Iranian attack detected at any US military base other than in Qatar, a US military official told Reuters. "It is somewhat the lesser of the two evils. It seems unlikely that they're going to try and close the Strait of Hormuz," said Kpler analyst Matt Smith. About a fifth of global oil supply flows through the Strait. However, a complete shutdown is unlikely, analysts have said. Even so, at least two supertankers made U-turns near the Strait of Hormuz following US military strikes on Iran, ship tracking data shows, as more than a week of violence in the region prompted vessels to speed, pause, or alter their journeys. About a fifth of global oil supply flows through the strait. However, the risk of a complete shutdown is low, analysts have said. A telegraphed attack on a well defended US base could be a first step in reducing tensions provided there are no US casualties, Energy Aspects said in a post. "Unless there are indications of further Iranian retaliation or escalation by Israel/the US then we may see some geopolitical risk premium come out of the price in subsequent days," it said. Meanwhile, Trump expressed a desire to see oil prices kept down amid fears that ongoing fighting in the Middle East could cause them to spike. On his Truth Social platform, he addressed the US Department of Energy, encouraging "drill, baby, drill" and saying, "I mean now." Investors are still weighing up the extent of the geopolitical risk premium, given the Middle East crisis has yet to crimp supply. HSBC expects Brent prices to spike above US$80 a barrel to factor in a higher probability of a Strait of Hormuz closure, but to recede again if the threat of disruption does not materialise, the bank said on Monday. Iraq's state-run Basra Oil Company said international oil majors including BP, TotalEnergies and Eni had evacuated some staff members working in oilfields.
The Guardian
5 days ago
- Business
- The Guardian
Oil prices sink after Iranian strike on US airbase reduces fears of market disruption
Oil prices dropped sharply after Iran's retaliatory missile strike on a US airbase reduced concern that the country was poised to strain energy markets by closing off a vital trade route. Crude oil prices sank by 7% on Monday, with West Texas Intermediate (WTI) futures dropping to $68.51, as the Iranian action on the Al Udeid base in Qatar raised hopes that the conflict would not immediately disrupt oil supplies from the region. No casualties were reported after the strike, which the US defense department described as 'largely symbolic' after the US bombed three nuclear sites in Iran on Saturday. While the Iranian parliament voted to close the strait of Hormuz – through which more than a fifth of the world's oil supply, 20m barrels, and much of its liquefied gas passes each day – it has so far remained open. 'It is somewhat the lesser of the two evils,' said Kpler analyst Matt Smith. 'It seems unlikely that they're going to try and close the strait of Hormuz.' John Kilduff, a partner at Again Capital, said: 'Oil flows, for now, aren't the primary target, and are likely not to be impacted. I think it's going to be military retaliation on US, bases and/or trying to hit more of the Israeli civilian targets.' US stocks also rose slightly, with the benchmark S&P 500 up 0.6% and the Dow Jones industrial average up 0.5% in New York, on a broadly muted day of trading in the global equity markets. Other leading indices struggled for direction. The FTSE 100 closed down 0.2% in London. The Nikkei 225 finished down just 0.1% in Tokyo. Investors have become 'jaded to geopolitical risks and greater uncertainty after the events throughout this year so far', John Canavan, lead analyst at Oxford Economics, observed earlier on Monday. Reuters contributed reporting
