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Data shows that Russia's seaborne Diesel exports dropped in May due to drone attacks
Data from market sources and LSEG shows that Russia's seaborne gasoil and diesel exports fell 18% in the same month compared to a year ago, and 3% on the month, respectively, from 3.7 million metric tons. Sources said that the ultra-low-sulphur Diesel shipments from Primorsk - Russia's largest outlet for diesel exports - fell by 5% in April to 1.375 million tonnes. In May, drones struck several of Russia's largest refineries, including the Lukoil owned NORSI refinery as well as Rosneft Ryazan refinery and Surgutneftegaz Kirishi refinery. The latter is one of Russia's largest?diesel manufacturers. Diesel production in Russia dropped by about 10% in May. However, exports were only slightly affected as traders rushed to take advantage of the soaring fuel prices caused by tensions over the Iran War. In order to meet seasonal increases in domestic demand, Russia may tighten export controls. Shipping data revealed that in May, Turkey, Brazil and other countries continued to be the top buyers of cargoes. According to LSEG, despite carrying a total of 300,000 tons diesel,?tankers have not yet declared?their ports of discharge. A second group of ships carrying around 300,000 tonnes of Russian 'diesel' is headed to the anchorages near Port Said in Egypt and Limassol on Cyprus for ship-to -ship transfers. At this time, the final destination of these 'cargoes' is not known. According to shipping data, in addition to the top buyers, Morocco, Ghana, and Egypt were also major importers of Russian Diesel cargoes during May.
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Fuel price shock widens product gap between US Airlines
Fuel?shocks that hit U.S. Airlines are doing more than just squeezing the margins. They're widening an existing product gap, which may take many years to close, as strong carriers continue to invest in lounges and premium seating, along with technology, international networks, that their weaker competitors may not be able to match. Executives from financially strong carriers such as United Airlines, Southwest Airlines, and Alaska Air spoke at the International Air Transport Association (IATA)'s annual meeting in Rio de Janeiro. They said that a growing divide exists between those airlines who have the ability to upgrade their services and those who are forced to conserve money and slow down investment. In the U.S., there is also an increasing K-shaped economy where consumers with higher incomes continue to spend without restraint while travelers who are price sensitive pull back. Investments in premium products are designed to appeal to high-spending travelers. In an interview, Scott Kirby, CEO of United Airlines said that air travel was not a commodity. Customers care about technology, service, reliability and product. They want to have a wonderful experience. "They don't want just a seat." Kirby stated that United will recover all of the cost increases in fuel by increasing fares at year's end, even though he expects some pressure to be placed on demand. He said that the airline continues to invest heavily into aircraft, technology, and customer-facing product, all of which are supported by an earnings advantage. IATA's North American outlook this week predicted a growing gap between low-cost operators and resilient network carriers. The collapse of Spirit Airlines, a U.S. low-cost carrier, last month has raised concerns about carriers with lower margins and weaker balance sheets. Fuel costs are also increasing cash pressures. S&P Global Ratings cut JetBlue Airways credit rating further into junk territory on Monday, citing "higher fuel prices and its heavy debt burden." JetBlue CEO Joanna Geraghty stated in an internal note to viewed by that the company was not contemplating bankruptcy. However, she said fuel prices made the situation more difficult and "the decks were stacked against us" citing the larger competitors' loyalty, network and credit card advantages. United and JetBlue have a reciprocal loyalty agreement and network collaboration, and Kirby stated that he didn't expect JetBlue to file for Chapter 11 protection "anytime in the near future" citing the cash it has and its?unencumbered? assets. JetBlue didn't immediately respond to an inquiry for comment. INVESTMENT GAP Fuel prices are influencing how much airlines are willing to spend on premium seating, airport lounges and other products that passengers want. Southwest Chief Operating officer Andrew Watterson stated that the investment gap would likely widen, as borrowing costs increase and become a greater burden on more indebted companies. This is especially true for those who rely on aircraft leasebacks or new debt. Watterson stated in an interview that "if you borrow money, your interest expenses will go up." Watterson said in an interview that the higher your costs are, the lower the growth rate and the lower the investment you make in products. Southwest was able to invest because of its strong profits and solid balance sheet. Rivals were forced into defensive mode. Southwest is evaluating the products that were once associated with network airlines -- from airport lounges, to transoceanic flights and premium seating -- which could mark a possible shift away from its low-cost traditional model. Watterson says that the lounges are most advanced, and a decision could be made this year. LOYALTY BUFFER Alaska Air's Chief Financial Officer Shane Tackett stated that airlines without strong loyalty and premium revenue streams are facing the most strain following a near-doubling of fuel prices since Iran war began. He said that some airlines have a business model that is really challenged by the current environment. Alaskan demand is holding steady. Tackett stated that corporate bookings for the next 90-day period were up 20-30% from the year before, across all geographies and sectors. Fare increases will be expected to offset the majority of fuel costs in the second half. He said that if demand remains stable, operating cash burn may fall to zero, or even turn slightly positive. Alaska can continue to expand its premium and long-haul ambitions following its purchase of Hawaiian Airlines. Tackett stated that the airline plans to upgrade Hawaiian Airlines' Airbus A330 cabins with fully enclosed suites, international premium economy and international premium economy. Alaska's need to borrow shows the impact of higher fuel prices. Alaska Airlines raised $1 billion in secured debt and unsecured debt earlier this year, which was its first unsecured offering. Tackett stated that the deal had been well received by investors, and Alaska did not plan to increase liquidity or reduce capital expenditure. He said that credit markets assess airlines individually and rebutted concerns that multiple airline tapping the capital markets will automatically increase funding costs for the entire industry. In an interview, he stated that he did not believe the credit benefits or credit expenses are applied to all industries. It depends on your profile, balance sheet and ability to generate operating cash flow. (Reporting and editing by Jamie Freed; Rajesh Kumar Singh)
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Alberta's cheap natural gas is at odds with Canada’s clean energy goals
Alberta touts its abundance of cheap fossil fuels in order to entice companies to build data centers to support the AI boom. This would undermine Canada's plans to link data center expansion with clean energy development. Canada is the world’s?fifth largest producer of natural gases, with around 60% coming from?Alberta. The western province has a lot of fossil fuels, but also a cooler climate that can offset the costs of cooling data center infrastructure. All of this can make data center operations more cost-effective than in the United States where communities and legislators are pushing back. Tech companies may also be able to create a market for natural gas producers who have suffered in Western Canada. Drillers have faced a glut of gas over a period of years and have at times had to pay their customers to buy gas when the price has fallen. A rapid expansion of Alberta data centers would undermine Canada's plans for a clean AI boom powered by renewables, nuclear and hydro. Natural gas may be a cleaner energy source than oil or coal, but as a fossil-fuel it still contributes emissions. Mark Carney, the Prime Minister of Canada, has stated that Canadian data centers would run on "some the cleanest energy in the world." The June 4 AI Strategy of his government, which aims at speeding up Canada's adoption artificial intelligence, highlighted that more than 83% the country's electricity grid is derived from renewables. Canada has five data centers that are currently operating at the "hyperscale" level. These require at least 50 Megawatts of electrical capacity, which is equivalent to the energy needs of a small town. Research from York University shows that nearly 100 new projects are being planned, and 90 of them are for Alberta. The province has an electricity grid with emissions five times higher than the national average. In an interview, Alberta's Technology minister Nate Glubish stated that "we're looking at these data centres as digital refineries and pipelines for us to help bring the value of?our natural gases to global markets in a creative contemporary way." The province hopes to attract C$100billion in investment for data centers. Glubish has made a number of trips to Silicon Valley to pitch Alberta's natural-gas pitch to energy-hungry tech giants. Alberta's 20 small and mid-sized data centers already draw energy from its grid, which is powered 60% by natural gas. The government of Alberta is allowing new developers to choose to build their power sources in order to avoid limitations on power capacity. Julia Sawatzky is a doctor who belongs to the environmental advocacy group Canadian Physicians for the Environment. She said that there was an increasing discrepancy in the stated goals of Canada and the reality. Sawatzky stated that "there seems to be a vision or an idea that Canada can be a green economy, or a country that meets its climate goals." "But I think that the way in which this AI data-driven strategy could actually be implemented is a reason for us all to pay close attention." A spokesperson for Canada's federal Department of Innovation did not comment about how Alberta's proposal to build out natural gas-fired, data centers fit with the country’s clean-power AI strategies. She stated that Canada will align the development of new data centers with clean energy expansion and environmental standards as well as benefits to local communities. A spokesperson for the Alberta government did not respond when asked to comment. CONNECT FAST Many tech giants set climate and emission targets. This, in theory, would place Alberta's natural-gas-based electricity grid behind other Canadian jurisdictions, such as Quebec with its low carbon hydroelectric grid. Glubish says the companies with whom he has been in "talks" are more concerned about power availability and the ability to quickly connect to the grid. He refused to reveal the names of companies. Glubish stated that combining natural gas with carbon storage, a technology that aims to capture emissions from industrial processes underground and store them, could help future tech companies achieve their climate goals. Amazon, Alphabet, and Microsoft operate data centres in central Canada. However, they are smaller than those in the U.S. This offers hyperscalers a better tax incentive and closer proximity to their customers. Meta, Microsoft and Alphabet have declined to comment about their plans to expand into Alberta. Amazon's spokesperson confirmed that the company invested in two wind and solar projects in Alberta to power its data centers. Alberta's Pembina Pipeline, along with its partner Kineticor, are expected to reach a final investment decision by the end June for a proposed 900MW natural gas-fired generation facility?they have developed for a client who plans to build a massive data center?in the province. Pembina has declined to identify the customer. However, on a recent call with investors, CEO Scott Burrows stated that the project would increase demand for natural gases. Mike Belenkie is the CEO of Advantage Energy, a natural gas producer. He said: "The entire industry is scrambling to find ways to attract investment to our country to increase demand for energy and avoid wasting it at low prices."
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Emirates won't cut flights in the Middle East despite pressures
Tim Clark, the airline's president, said that despite the financial pressures from the Middle East war, Emirates does not plan to reduce its capacity. The airline is continuing to fly passengers via Dubai to destinations such as India and Australia. They are taking precautions, including carrying extra fuel. Clark added that he did not care about the extra cost. Emirates also wants to expand in Germany. It says that most stakeholders would benefit from increased long-haul flight capacity. Emirates has been campaigning for more access to Berlin since its inception. Clark said Emirates had secured slots in Berlin but lacked approval for 'operation. It has used the airshow as a regular platform to highlight its contributions to 'the local economy. This dates back to an order of?32? more Airbus A380s that created thousands of German jobs. Clark also criticised German?Lufthansa which has long claimed Gulf carriers "enjoy unfair regulatory advantages in Europe". He said: "It's a publicly listed company and it needs to fight its own corner, without going to the government and hiding under its skirts." Reporting by Maria Rugamer, Joanna Plucinska and Kirsten Donovan; Editing and Louise Heavens.
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Union: Ukraine rail tariff increase threatens 300 000 jobs and the steel sector
The Ukrainian steelmakers union UkrMetalurgProm warned on Tuesday that a proposed freight tariff hike by the'state railway' of Ukraine could lead to a reduction in GDP, permanent closure of certain facilities, and the loss of 300,000 jobs. Oleksandr P.rtsovskyi, CEO of Ukrzaliznytsia, said earlier in the month that his company intended to increase freight rates by at least 45 percent. The increase would reduce losses and help restructure the company's significant debt. Oleksandr Kalenko, president of the union, wrote a letter commenting on Ukrzaliznytsia’s statements. He said that Ukraine’s steel industry had suffered losses totaling 28?billion Hryvnias (about $632 million), and any further burden would be crippling for the industry. Ukraine has lost major steel plants during the war with Russia. Several plants are suspended, and others operate at a?significantly lower capacity. Kalenkov wrote that "under these circumstances, any increase in transport costs could be the decisive factor for additional enterprises to go from partial operation to permanent closure." He stated that the volume of rail freight transported in Ukraine has decreased to 160 million metric tonnes in 2026, down from 314 million tons approximately in 2021. Kalenkov stated that the occupation of Ukrainian territory and the loss industrial assets there caused half of this decline. He blamed his failure to achieve the target on a deteriorating economy, a reduction in industrial production and lowered export volumes. UkrMetalurgProm stated that despite the decline in freight shipments, it continued to maintain an infrastructure and operating cost largely designed for a much larger transportation market. The union said that while the CEO of?Ukrzaliznytsia told earlier this year the railway couldn't?afford to subsidise the other sectors of the?economy, freight customers are being asked to compensate for passenger transportation losses as well as unresolved structural inefficiencies within the rail system. Kalenkov stated that the proposed increase in rates will create a significant disadvantage for Ukrainian exporters at a time when the country is urgently trying to maintain industrial output, exports and jobs, as well as foreign currency revenue.
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Taiwan claims China Coast Guard 'harassed commercial shipping' off its shores
Taiwan's coast -guard claimed on Tuesday that Chinese coast guard vessels operating around Taiwan have been "harassing commercial shipping" by asking for information about their origin and destination, and claiming jurisdiction. China, which considers democratically governed Taiwan as its own territory was angry when Japan and the Philippines announced last month that they would start formal talks about their maritime borders, claiming this included waters off Taiwan. Chinese state media reported late on Saturday that ships were sent to "carry out special maritime traffic law enforcement operations" in the east of Taiwan as a'response' to the Japanese announcement. Taiwan's Coast Guard said in a statement that the Chinese ships have been sending messages to passing commercial vessels since Sunday, asking for information like their ports of departure and destinations. The coast guard stated that Taiwanese ships had broadcasted back to Chinese vessels that they should not "harass" ships in Taiwanese water. The China Taiwan Affairs Office has not responded to a comment request immediately. Beijing does not recognise Taiwan's claims to sovereignty. Taiwan's Coast Guard said that it had also sent a message to passing merchant vessels to ignore the questions of Chinese vessels. The coast guard stated that ships passing through Taiwan's waters were not boarded or inspected by Chinese government vessels. A U.S. State Department spokeswoman said in a statement, that the U.S. expects differences between China and Taiwan to be settled peacefully and without coercion. The spokesperson said: "We urge Beijing not to continue its pressure on Taiwan in terms of military, diplomatic and economic means, but instead to engage in meaningful dialogue with the elected leaders." Taiwan's government has rejected Beijing's claims of sovereignty. Beijing says that Taiwan President Lai Ching Te is a separatist and refuses to talk with him. (Reporting and editing by Kate Mayberry; Ben Blanchard)
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Trump says US helicopters pilots who were downed in Strait of Hormuz will be fine
Donald Trump confirmed that two U.S. helicopter pilots who were rescued from the Strait of Hormuz after their aircraft crashed near Iran's controlled waterway "are fine". The New York Times had reported on Tuesday that the crew of an Apache gunship was rescued. The report stated that it was not immediately clear if the Apache had been shot down by Iranian fire or if there was a mechanical problem. The White House, the U.S. Department of State and the U.S. Central Command have not responded to our requests for comment. When asked if he was aware of the cause of the crash, Trump replied that a report would be released later on Tuesday. Trump told reporters on the John F. Kennedy International Airport runway that "the pilots are fine." He was returning to Washington, D.C. The incident occurred a day after Iran & Israel announced they'd stopped attacking each other in response to Trump. However, Tehran warned that it would resume hostilities should Israel continue to attack Hezbollah. The tenuous ceasefire has been resumed as Washington attempts to reach an accord with Tehran in order to end the war that has lasted for more than three months. Trump told reporters that he would have an "idea" of a deal with Iran within the next few days. He did not elaborate. Trump, who is struggling to maintain record-low approval ratings in advance of the November midterm elections and has been announcing an imminent deal with Tehran, but no such deal has materialized. The weekend was the first time since April that Israel and Iran had engaged in a direct confrontation. Tehran fired'missiles at Israeli territory late Sunday night, claiming that the strikes were a retaliation against attacks on Hezbollah, the Iranian-backed militia on the outskirts Beirut. Israel then struck Iranian air defence systems, and a petrochemical facility that it claimed was used to manufacture ballistic missiles. Iran's Islamic Revolutionary Guard Corps claimed it had retaliated by striking a similar Israeli facility in Haifa. Authorities on both sides reported no deaths. TRUMP TELLS NETANYAHU 'BE CAREFUL.' U.S. officials and Israeli officials confirmed that Trump and Benjamin Netanyahu, the Israeli prime minister, spoke on Monday. In an Axios interview, Trump stated that he warned Netanyahu to be careful, as he could find himself on his own if the Israeli leader returned to war against Iran. Trump stated that he warned Netanyahu to be careful or he would be fighting alone very soon if?the Israeli leader went back to war with Iran. A senior Israeli military official stated that Israel would continue its operations "for as long as it takes", whereas Iranian officials adopted a similar defiant attitude. According to a military source cited by the semi-official Tasnim News Agency, Tehran was prepared for a "prolonged conflict" and could renew attacks against U.S. interest in the region. Esmaeil baghaei, a spokesperson for the Iranian Foreign Ministry, said that Tehran exchanged messages with Washington amid an atmosphere of "extreme distrust." Tehran has said for years that any deal with the U.S. is contingent on the end of fighting in Lebanon. Israel invaded Lebanon in March to pursue Hezbollah militants who fired across the border. Israel has not halted the Lebanon campaign that has claimed thousands of lives, claiming it should be treated independently from any U.S. - Iranian ceasefire. Hezbollah also continues its attacks. Tehran continues to block the majority of shipping through the Strait of Hormuz. Before the war, the Strait of Hormuz carried about a fifth of the world’s crude oil and natural gas liquefied. Washington has imposed a blockade on Iranian ports. Trump said that any deal for peace must guarantee Iran's inability to develop a nuclear bomb. Iran demands the lifting of sanctions, the release billions in frozen assets, and recognition of their control over the Strait. (Reporting and writing by Bureaus; Editing and proofreading by Kate Mayberry).
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London is chosen as the European hub for AI-coding startup Cursor.
An executive revealed that the AI coding startup Cursor will be opening its European headquarters in London, and hiring 200 employees, as the demand for automated software development tools grows. Elon Musk’s SpaceX is preparing for a highly anticipated IPO this coming week. In April, it announced that it had acquired an option to acquire the code-generation startup Cursor later this year for $60 billion, or pay $10 Billion for their new partnership as it pushes further into the lucrative'market for AI developer tool. Cursor, based in San Francisco, chose London because of its 'access to multilingual workers and deep talent pool,' allowing it to serve multiple European markets with a single base. London is home to the largest concentration of technology talent in Europe, and it's second-largest worldwide after San Francisco. Elmas?said that Cursor plans to open smaller offices in Paris as well as?Munich?, Frankfurt?, Amsterdam?, and Stockholm?. Cursor has grown rapidly since it was founded in 2022. According to data provided by the company, business-to business revenue and enterprise sales have risen sharply. Customers include British Airways, BP Nokia, and Sanofi. "Running out the business from the U.S. does not work." Elmas stated that the European market has its own needs and that being in this region is very important. He said that the company is seeing an increase in demand from its customers to keep their data in the region. This is especially true for regulated industries who are concerned about privacy and compliance. Elmas?refused to comment on SpaceX's option. By the end of this year, the company aims to hire 200 employees in EMEA. This is an increase from the 70-80 employees it has now. Cursor software allows users describe applications using natural language. This helps companies accelerate development and modernise legacy system, which, according to the company, can increase developer output. Cursor is competing with Microsoft-owned GitHub Copilot, OpenAI, and Google. It positions itself as a platform that allows customers to choose from different AI systems. (Reporting and editing by Nia William; Sam Tabahriti)
Inpex will ask Australia's workplace Tribunal to block any labour action at Ichthys LNG
Inpex, a Japanese company, said that it will seek urgent orders from Australia’s Fair Work Commission to stop protected industrial actions at its Ichthys liquid natural gas facilities.
A supply disruption from prolonged strikes would exacerbate the tightness of global LNG markets already reeling from the Iran War and the close closure of the Strait of Hormuz which carries about a fifth of crude oil and LNG worldwide.
Asia Spot LNG Prices
Inpex took this action after being warned by the Offshore Alliance on Monday that it would escalate its strike at three Ichthys offshore sites and in Darwin if the FWC's facilited bargaining failed to resolve the key pay and condition claims.
The company plans to seek to stop the strike by citing section 424 in the Fair Work Act, to avoid an extended action that would affect its LNG customers and domestic gas supplies in Darwin.
Bill Townsend's email stated that the disruption in fuel supply would be significant.
He added that despite the progress made in negotiations, there were still issues to be resolved, including rates of pay, allowances and career advancement.
Around 400 workers will intensify their efforts starting Thursday. This includes a ban of loading LNG and condensate (a type of lighter oil).
Brad Gandy said that Inpex had decided to abandon any pretence of bargaining in good faith. The Offshore Alliance is a grouping of the Maritime Union of Australia, the Australian Workers' Union and the Australian Workers' Union.
Gandy who is also branch secretary of the AWU Western Australia said that the decision was made after six months of negotiations, countless meetings and 'weekends spent in negotiations'.
The plant produces approximately 9.3 million tons of LNG per year, supplying primarily buyers in Asia.
This is a joint venture between Inpex, TotalEnergies, and the Australian subsidiaries CPC Corporation?Taiwan?Osaka Gas?Kansai Electric Power?JERA?and Toho Gas?
TotalEnergies and CPC Taiwan each take about 1.8 millions tons of coal a year. Last week, strike action delayed a ship headed for a Taiwanese port by 24 hours.
The Northern Gas Pipeline, which is also owned by Ichthys, could also potentially send gas to Darwin if the supply were to be cut off. Reporting by Helen Clark and Rajasik Mukherjee; Editing by Nivedita Battacharjee, Clarence Fernandez
(source: Reuters)