Latest news with #oil
Yahoo
2 hours ago
- Business
- Yahoo
Oil price drops, shares jump as Trump announces Israel-Iran ceasefire
Stocks rallied on Tuesday after US President Trump said that a "complete and total ceasefire" between Iran and Israel would take effect in the coming hours. Iran's foreign minister denied that an official ceasefire agreement had been reached, but noted that Tehran would not continue its attacks as long as Israel halted its 'aggression'. At the time of writing, Israel had yet to comment. The truce, which Trump is labelling the end of the '12-day war', came after Iran attacked a US base in Qatar on Monday, retaliating against the US bombing of its nuclear sites over the weekend. In response to Tuesday's development, oil prices dropped as fears over a blockage to the Strait of Hormuz subsided. About 20% of global oil and gas flows through this narrow shipping lane in the Gulf. Brent crude, the international standard, dropped 3.83% to $68.74, while WTI dropped 3.85% to $65.87. Last week, Brent reached over $78 a barrel, a level not seen since the start of this year. Related Why the Strait of Hormuz remains critical for the global economy The dollar sees a rebound after US strikes Iran, but can it continue? European markets opened in the green. The DAX was 1.99% higher at 23,730.98, the CAC 40 was up 1.71% at 7,666.69, while the FTSE 100 rose 0.81% to 8,828.83 in morning trading. The STOXX 600 increased 1.48% to 542.93, while the EURO STOXX 50 rose 1.9% to 5,320.97. Looking to the US, S&P 500 futures rose 0.97% to 6,135.75 on Monday, while Dow Jones futures increased 0.89% to 43,284.00. Australia's S&P/ASX 200 jumped 0.89% to 8,550.10, South Korea's Kospi rose 2.75% to 3,097.28, and the Shanghai Composite index climbed 1.07% to 3,417.89. Hong Kong's Hang Seng rose 2% to 24,162.70 and the Nikkei 225 increased 1.16% to 38,796.39. The US Dollar Index slipped by 0.32% to 98.10. The euro gained 0.25% against the dollar while the yen dropped 0.48% in comparison to the greenback. Economists had suggested that persistent threats to oil would increase the value of the US dollar and hurt other currencies such as the euro, notably as the US economy is more energy independent. Greg Hirt, chief investment officer with Allianz Global Investors, told Euronews earlier this week that although the dollar may see a short lift on the Iran-Israel conflict, 'structural issues around a twin deficit and the Trump administration's volatile handling of tariffs should continue to weigh on an overvalued US dollar'. Error while retrieving data Sign in to access your portfolio Error while retrieving data
Yahoo
2 hours ago
- Business
- Yahoo
Why the Strait of Hormuz remains critical for the global economy
As oil prices are climbing after the attacks on Iran by Israel and then the US, investors are closely watching the fate of a narrow sea passage in the Middle East. The Strait of Hormuz is vital for gas and oil exporters in the Gulf region, as this is the only route by sea to export large volumes of oil and gas produced among the oil-rich countries in the region. This narrow passage is located between Oman and Iran, connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea. It is about 167 km long, and at its narrowest point, 39 km wide. According to the Joint Maritime Information Centre, June 2024 averaged 114 vessels transiting the strait daily and so far traffic in June 2025 is consistent with this. On 21 June, for instance, there were 122 vessels passing through the strait. The passage is deep enough and wide enough to handle the world's largest crude oil tankers, and it is one of the world's most important oil chokepoints (narrow channels along widely used global sea routes that are critical to global energy security). Related Oil price drops, shares jump as Trump announces Israel-Iran ceasefire Israel-Iran conflict fuels best month for energy stocks since 2022 The health of the world economy depends on the flow of oil from this region. Oil tankers on average carry through the strait 20 million barrels per day (b/d), or the equivalent of about 20% of global petroleum liquids consumption, according to the US Energy Information Administration analysis. 'A potential Iranian blockade of the Strait of Hormuz would send shockwaves through the global economy," Professor Guido Cozzi, Chair of Macroeconomics at the University of St. Gallen, said to Euronews. He added that any disruption to the oil flow in this narrow waterway would drive up energy prices, fuel inflation, and strain supply chains. Related What's at stake for Europe if the Strait of Hormuz is blocked? Continental Europe and China are losing the most, both heavily reliant on imported energy and lacking domestic buffers. "They would face rising costs, slower growth, and heightened inflation without any upside," Cozzi said. Meanwhile, the US and the UK would see their exports become more competitive, as they are sourcing the majority of their energy from elsewhere. And if the strait would be closed, pushing prices up globally, that would benefit Western producers more than it would harm them, according to the professor. Besides oil, global natural gas supply could also be seriously impacted, as Qatar, one of the world's biggest natural gas exporters uses the narrow seaway to export about 77 million metric tons of liquefied natural gas (LNG) a year. This is one-fifth of the global LNG supply. "Alternative supply routes for Middle Eastern oil and gas are limited, with pipeline capacity insufficient to offset potential maritime disruptions through the Persian Gulf and Red Sea,' S&P said in an analysis. 'Any Iranian closure of the Strait of Hormuz would affect not only its own exports but also those of Saudi Arabia, the UAE, Kuwait and Qatar, potentially removing over 17 million b/d of crude oil from global markets,' added the analysis, saying that Saudi Arabia and the UAE have pipelines that can circumvent the strait. Analysts expect oil prices to skyrocket and surpass $100 a barrel if Iran decides to close the passage. Though insurance for the oil tankers passing through the strait increased and the situation is quite tense, according to the Joint Maritime Information Centre, there are no indications of threats to commercial shipping. Related The dollar sees a rebound after US strikes Iran, but can it continue? After US attacks on three Iranian nuclear sites, on 22 June, the Parliament in Tehran voted to close down the strait. A step that has never been taken. The decision is pending approval by the Islamic Republic's Supreme National Security Council. Iran threatened several times in the past that it would cut this artery of oil in the past but it never followed through with the threat. US Vice-President JD Vance called the move 'suicidal' for Iran's economy on Sunday at a press conference. Creating a major disruption in the strait would be extremely difficult due to various economic, political and military forces present in the region today, said the Robert Strauss Center for International Security and Law in an analysis. Experts agree that Iran itself has a lot to lose and very little to gain as it would cut its own oil exports to major trade partners such as China. Besides losing a key source of revenue, Iran would also anger its oil-producing neighbours whose support they may not be able to afford to risk. Related Oil rises and Europe's markets open lower after US strikes on Iran If Iran decides to close the passageway, another question is, for how long? The duration could be key, as global stockpiles are currently sufficient. The nations in need have at least 5.8 billion barrels of crude and fuel stockpiled between them, according to Bloomberg. This shows a healthy buffer, compared to the annual 7.3 billion barrels a year, passing through the strait. According to Barclays, other possible scenarios include Iran trying to target the Strait of Hormuz using missile attacks, making ships and insurance firms hesitant to use Hormuz. They could also consider mining the strait, which would hit traffic to a greater extent. There are also less aggressive ways to further disturb commercial shipping through Hormuz. For instance, the widespread jamming of GPS signals could make it harder to navigate safely in certain conditions. Error in retrieving data Sign in to access your portfolio Error in retrieving data
Yahoo
2 hours ago
- Business
- Yahoo
Oil price drops, shares jump as Trump announces Israel-Iran ceasefire
Stocks rallied on Tuesday after US President Trump said that a "complete and total ceasefire" between Iran and Israel would take effect in the coming hours. Iran's foreign minister denied that an official ceasefire agreement had been reached, but noted that Tehran would not continue its attacks as long as Israel halted its 'aggression'. At the time of writing, Israel had yet to comment. The truce, which Trump is labelling the end of the '12-day war', came after Iran attacked a US base in Qatar on Monday, retaliating against the US bombing of its nuclear sites over the weekend. In response to Tuesday's development, oil prices dropped as fears over a blockage to the Strait of Hormuz subsided. About 20% of global oil and gas flows through this narrow shipping lane in the Gulf. Brent crude, the international standard, dropped 3.83% to $68.74, while WTI dropped 3.85% to $65.87. Last week, Brent reached over $78 a barrel, a level not seen since the start of this year. Related Why the Strait of Hormuz remains critical for the global economy The dollar sees a rebound after US strikes Iran, but can it continue? European markets opened in the green. The DAX was 1.99% higher at 23,730.98, the CAC 40 was up 1.71% at 7,666.69, while the FTSE 100 rose 0.81% to 8,828.83 in morning trading. The STOXX 600 increased 1.48% to 542.93, while the EURO STOXX 50 rose 1.9% to 5,320.97. Looking to the US, S&P 500 futures rose 0.97% to 6,135.75 on Monday, while Dow Jones futures increased 0.89% to 43,284.00. Australia's S&P/ASX 200 jumped 0.89% to 8,550.10, South Korea's Kospi rose 2.75% to 3,097.28, and the Shanghai Composite index climbed 1.07% to 3,417.89. Hong Kong's Hang Seng rose 2% to 24,162.70 and the Nikkei 225 increased 1.16% to 38,796.39. The US Dollar Index slipped by 0.32% to 98.10. The euro gained 0.25% against the dollar while the yen dropped 0.48% in comparison to the greenback. Economists had suggested that persistent threats to oil would increase the value of the US dollar and hurt other currencies such as the euro, notably as the US economy is more energy independent. Greg Hirt, chief investment officer with Allianz Global Investors, told Euronews earlier this week that although the dollar may see a short lift on the Iran-Israel conflict, 'structural issues around a twin deficit and the Trump administration's volatile handling of tariffs should continue to weigh on an overvalued US dollar'.
Yahoo
3 hours ago
- Business
- Yahoo
Why the Strait of Hormuz remains critical for the global economy
As oil prices are climbing after the attacks on Iran by Israel and then the US, investors are closely watching the fate of a narrow sea passage in the Middle East. The Strait of Hormuz is vital for gas and oil exporters in the Gulf region, as this is the only route by sea to export large volumes of oil and gas produced among the oil-rich countries in the region. This narrow passage is located between Oman and Iran, connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea. It is about 167 km long, and at its narrowest point, 39 km wide. According to the Joint Maritime Information Centre, June 2024 averaged 114 vessels transiting the strait daily and so far traffic in June 2025 is consistent with this. On 21 June, for instance, there were 122 vessels passing through the strait. The passage is deep enough and wide enough to handle the world's largest crude oil tankers, and it is one of the world's most important oil chokepoints (narrow channels along widely used global sea routes that are critical to global energy security). Related Oil price drops, shares jump as Trump announces Israel-Iran ceasefire Israel-Iran conflict fuels best month for energy stocks since 2022 The health of the world economy depends on the flow of oil from this region. Oil tankers on average carry through the strait 20 million barrels per day (b/d), or the equivalent of about 20% of global petroleum liquids consumption, according to the US Energy Information Administration analysis. 'A potential Iranian blockade of the Strait of Hormuz would send shockwaves through the global economy," Professor Guido Cozzi, Chair of Macroeconomics at the University of St. Gallen, said to Euronews. He added that any disruption to the oil flow in this narrow waterway would drive up energy prices, fuel inflation, and strain supply chains. Related What's at stake for Europe if the Strait of Hormuz is blocked? Continental Europe and China are losing the most, both heavily reliant on imported energy and lacking domestic buffers. "They would face rising costs, slower growth, and heightened inflation without any upside," Cozzi said. Meanwhile, the US and the UK would see their exports become more competitive, as they are sourcing the majority of their energy from elsewhere. And if the strait would be closed, pushing prices up globally, that would benefit Western producers more than it would harm them, according to the professor. Besides oil, global natural gas supply could also be seriously impacted, as Qatar, one of the world's biggest natural gas exporters uses the narrow seaway to export about 77 million metric tons of liquefied natural gas (LNG) a year. This is one-fifth of the global LNG supply. "Alternative supply routes for Middle Eastern oil and gas are limited, with pipeline capacity insufficient to offset potential maritime disruptions through the Persian Gulf and Red Sea,' S&P said in an analysis. 'Any Iranian closure of the Strait of Hormuz would affect not only its own exports but also those of Saudi Arabia, the UAE, Kuwait and Qatar, potentially removing over 17 million b/d of crude oil from global markets,' added the analysis, saying that Saudi Arabia and the UAE have pipelines that can circumvent the strait. Analysts expect oil prices to skyrocket and surpass $100 a barrel if Iran decides to close the passage. Though insurance for the oil tankers passing through the strait increased and the situation is quite tense, according to the Joint Maritime Information Centre, there are no indications of threats to commercial shipping. Related The dollar sees a rebound after US strikes Iran, but can it continue? After US attacks on three Iranian nuclear sites, on 22 June, the Parliament in Tehran voted to close down the strait. A step that has never been taken. The decision is pending approval by the Islamic Republic's Supreme National Security Council. Iran threatened several times in the past that it would cut this artery of oil in the past but it never followed through with the threat. US Vice-President JD Vance called the move 'suicidal' for Iran's economy on Sunday at a press conference. Creating a major disruption in the strait would be extremely difficult due to various economic, political and military forces present in the region today, said the Robert Strauss Center for International Security and Law in an analysis. Experts agree that Iran itself has a lot to lose and very little to gain as it would cut its own oil exports to major trade partners such as China. Besides losing a key source of revenue, Iran would also anger its oil-producing neighbours whose support they may not be able to afford to risk. Related Oil rises and Europe's markets open lower after US strikes on Iran If Iran decides to close the passageway, another question is, for how long? The duration could be key, as global stockpiles are currently sufficient. The nations in need have at least 5.8 billion barrels of crude and fuel stockpiled between them, according to Bloomberg. This shows a healthy buffer, compared to the annual 7.3 billion barrels a year, passing through the strait. According to Barclays, other possible scenarios include Iran trying to target the Strait of Hormuz using missile attacks, making ships and insurance firms hesitant to use Hormuz. They could also consider mining the strait, which would hit traffic to a greater extent. There are also less aggressive ways to further disturb commercial shipping through Hormuz. For instance, the widespread jamming of GPS signals could make it harder to navigate safely in certain conditions. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 hours ago
- Business
- Yahoo
Equinor and Partners Approve $2 Billion Fram Sør Project
A new oil and gas project in the North Sea has been greenlit by Norwegian oil major Equinor and its Fram partners, which plan to invest NOK 21 billion or USD$2 billion. Equinor Energy owns 45 percent of the Fram Sør project, Vår Energi ASA holds 40 percent and INPEX Idemitsu Norge AS has 15 percent. The plan for development and operations was submitted on Thursday to Norway's Minister of Energy. The Fram Sør project is a combined development of several discoveries that will export oil and gas via Troll C. The Troll field contains about 40 percent of total gas reserves on the Norwegian Continental Shelf (NCS). The field consists of the main Troll East and Troll West structures. Troll is also one of the largest oil fields on the NCS. Oil from the Fram field is transported through Troll Oil Pipeline II to Mongstad, and gas is exported to Kollsnes via the Troll A platform. The Troll C platform. Source: Equinor Recoverable volumes at Fram Sør are estimated at 116 million barrels of oil equivalent, 75 percent of which is oil and 25 percent is gas. Production is scheduled to start at the end of 2029, reads a company press release. The field development is also technologically groundbreaking. Fram Sør will be the first project on the NCS to use all-electric 'Christmas trees' that eliminate the need for hydraulic fluid supplied from the platform and improve monitoring capabilities of the subsea equipment. The technology also reduces the risk of environmental impact. In the fall of 2019, Equinor and partners made a discovery of oil and gas in the Fram area of the North Sea. This discovery, called Echino South, supported the belief that more oil could be found, and contributed to nine discoveries made in the Troll-Fram area over a four-year period. In the spring of 2021, Equinor and partners made the Blasto discovery. Together with two smaller discoveries in previous years, Echino South and Blasto form the basis for Fram Sør. Water depth in the area is about 350 meters and the reservoir is between 1,800 and 2,800 meters deep. 'We have done a thorough job maturing the new resources discovered in the Fram and Troll area in recent years,' said Kjetil Hove, Equinor's executive vice president for exploration & production Norway. 'Fram Sør shows the importance of area solutions and close collaboration between partners and authorities in order to realize the resource values on a mature NCS. We have a large portfolio of projects that will phase in discoveries to our producing fields. Equinor expects to put more than 50 such projects on stream by 2035.' The Fram Sør announcement gels with Equinor's recent decision to pivot from renewables back to its core oil and gas competencies. Earlier this year the company said it is reducing its ambition for installed renewables capacity by 20 percent at the low end and 33 percent at the high end, from 12-16 gigawatts by 2030 to 10-12 GW. The higher target range was set in 2021. The firm also said it is scrapping a previous 2030 target to allocate 50 percent of gross capital expenditures to renewables. Equinor said in its press release reporting Q4 and full-year 2024 results that it plans to increase oil and gas production by 10 percent from 2024 to 2027. The company expects USD$23 billion in free cash flow for 2025-27 by reducing capital expenditures and addressing costs. Norway only produces about 2 percent of the world's oil supply, but it is the largest oil producer and exporter in Western Europe. Equinor is Norway's largest oil and gas company, outputting about 70 percent of its total production, or 2 million barrels of oil equivalent per day. By Andrew Topf for More Top Reads From this article on Sign in to access your portfolio
