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Bousso: The exodus of oil from the Hormuz region sets up a chaotic rebalancing.
The price of crude oil may have returned to levels seen prior to the Iran War, but the influx of oil from the Middle East after the reopening of?the Strait of Hormuz has created a market chaos that could last for months. Brent crude prices have plummeted to levels seen before the Iran war, around $73 per barrel, following the U.S. and Iran interim agreement. This might make it appear that business is back to normal in the world's largest oil and gas hub. The conflict had effectively paralysed the narrow waterway that once carried a 'fifth' of global oil and 'gas for over a hundred days. The market may appear to be orderly, but it is not. What appears to be normality is actually a system that's trying to reboot itself all at once. There's a race to free trapped volumes. In recent days, dozens of tankers that were stranded in the Gulf during the conflict have been rushing to leave. U.S. Energy Sec. Chris Wright stated that flows briefly exceeded the pre-war level of approximately 20 million barrels a day. However, ship-tracking data shows overall traffic is still far below the roughly 125 crossings per day seen before the war. During transit, some vessels seem to disable tracking systems. This further clouds the picture. Undoubtedly, the Middle East oil market is growing. Clearing outbound cargo is just half of the equation. Tankers from abroad are required to load crude oil in storage onshore, an important step to allow producers to restart the fields and refineries that were closed during the war. The recovery of supply will not be possible without this inflow. This dynamic is especially acute for producers like Kuwait, Iraq?Bahrain, and Qatar who have very few, if not any, alternative export routes. The constraints should only last a short time. Rystad Energy, a consultancy firm, estimates that the Gulf region's production was shut down by the middle of June. It had been 11.7 million bpd just three weeks before. By December the region should be back to its pre-war levels. Iran is a factor that may be even more important in affecting the outlook for supply. Iran is expected to rapidly ramp up its oil production following the U.S. lifting most sanctions that restricted Iran's oil sales and exports. Rystad says that Iran's oil production could increase to 3.3 million barrels per day (bpd) by the end of the year, a level higher than before conflict, if sanctions relief is maintained. A flood of oil is likely to hit the markets, regardless of logistics. From SHORTAGE to GLUT This surge runs headlong into a weak short-term market. The refineries in Asia, Europe and North America have already secured their crude supply for July and August. This leaves the excess barrels with no place to go. Consequently, many tankers will have no choice but to stay at sea. They may become floating storage units and keep barrels from the market for several weeks. After experiencing the biggest oil supply shock ever, the market could soon be faced with the opposite problem. Investors appear to have priced in a "mini glut" for the short term. Last week, Brent futures for August traded below September contracts, resulting in a new market structure known as contango. This is the first time this has happened since the beginning of the war on February 28. This contango may persist for several more weeks, as the oil backlog trapped in the Gulf is slowly cleared. It is unlikely that it will last. Once the flow of crude oil returns to normal, the market needs enormous quantities to meet the recovering demand for crude in Asia as well as replenish the global inventories that were depleted by the conflict. Do you mean that'supply and Demand will easily return to balance? Most likely not. According to the International Energy Agency, while global supply is predicted to decline by 3.9 millions bpd by 2026, in 2027 it is expected that it will rebound by approximately 8 million bpd to 110.3 million. The demand, on the other hand, is expected recover much more modestly. This could create a surplus of approximately 5?million BPD next year. The physical constraints in the oil supply chain may prevent this scenario from happening, but given the size of the potential mismatch between supply and demand, the market is likely to have a bumpy ride ahead. LINGGERING RISKS Exports are surging, but concerns about the future of Strait of Hormuz have already returned. The U.S. and Iran interim agreement stipulates that transit along the waterway will be free of charge for 60 days while Tehran negotiates a long-term framework with Oman to regulate traffic. This temporary arrangement leaves a lot of room for uncertainty. In recent days, a stark reminder occurred when Iranian forces shot at a Taiwanese ship transiting the Strait on Thursday. This sparked a round of tit for tat attacks with the United States. The incidents were less a sign of escalation and more a message: Tehran wants to assert its power through the newly formed Persian Gulf Strait Authority. Despite the fact that traffic quickly resumed after the incident many shipowners, and charterers will likely remain cautious about sending vessels back to the Gulf. This caution is already showing in the?flows. According to LSEG, for every four tankers that left the region in the past week, only one returned, a far cry from pre-war levels. The markets seem to have shrugged off concerns over?political risk, logistical issues or lasting changes in a region. After months of disruption, it is unlikely that the road to equilibrium will be easy. This suggests that today's optimism in the market might be exaggerated. You like this column? 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One Taiwan Coast Guard officer finds strength in the gods when facing China
Yeh Chih Sheng, a Taiwan Coast Guard officer, stepped aboard the CG1005 vessel in the choppy waters around the Taiwan Strait. He brought more than just his uniform and orders. Yeh Chih-sheng is the first mate on the 2,400 ton ship, based at Taiwan's Penghu Islands. He is part of Taipei’s maritime frontline in the face of China's claim of sovereignty. He is also an assistant priest (or "siohuat" or "siohuat", in Taiwanese) at a Penghu Temple dedicated to the Five Lords, guardian deities that coastal communities have long revered for their protection against plague and safe seas. Since primary school, Yeh has been serving the gods by assisting spirit mediums at rituals where deities are believed descend from the skies and give instructions. Yeh stated that "the Coast Guard is an?additional support people can see." The Five Lords have a strong spiritual presence in the hearts of people. Both bring fishermen and the ordinary people a feeling of comfort." SOURCE OF RELIEF This fusion of duty with faith has become a comfort to Yeh as Taiwan faces increasing?military?pressure from China. China has not ruled out the use of force in order to bring Taiwan under Chinese control. Taiwan rejects China territorial claims and Beijing's claim that it is entitled to conduct "law enforcement patrols" in Taiwan's water. The U.S., as well as some of its allies have expressed concern over China's actions. Last week they said that recent operations off Taiwan’s east coast posed a threat to stability. China's Defence Ministry said Thursday that its Coast Guard patrols are "legitimate, necessary and lawful". The ship of Yeh was in Penghu - an archipelago located in the Taiwan Strait through which billions in trade pass every year. CROSSING THE MEDIAN LINE Yeh stated that Chinese warships, and Coast Guard vessels often cross the median lines which once served as unofficial buffers and come close to Taiwan's 24 nautical mile contiguous area. Yeh stated that the Chinese had already removed the median line. He added that it was his responsibility to monitor the situation and keep Chinese vessels at bay using loudspeakers and LED boards, as well as radio messages and water cannons. Yeh, who is a member of the Coast Guard, said that he follows its principle "not to provoke and not to yield" and takes command tablets and talismans from his temple with him when he patrols. Yeh, standing next to the temple's Chienchiu Paochien or ceremonial divin boat, said that the vessel, just like his Coast Guard?ship, was used to protect fishermen and the general public in the Taiwan Strait. Yeh explained that "what we protect is the people's peace of mind and sense of security." The coast guard and navy are there to protect the people. (Reporting by Yimou, Famou Hamacher, and Ann Wang. Editing by Ben Blanchard & Kate Mayberry).
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Sources say that a power outage forced Venezuela's biggest refinery to close.
A power outage on ?Sunday forced the shutdown ?of Venezuela's ?largest ?refinery, the 645,000-barrel-per-day Amuay, workers from that facility said, the second refinery without electricity following two deadly earthquakes in the country. After the earthquakes, in which at least 1,450 people died, South America has struggled to supply power to industrial plants, refineries and businesses as well as its citizens. Amuay was key to fuel production for domestic distribution and processed 137,000 bpd before the earthquakes. Some workers have said that the lack of water in some?power plant and?industries, including the refinery located in the western Falcon State is also affecting the operations. Separate?sources' said that the smaller El Palito refinery, which produces 146,000 bpd of oil per day, and the Moron Petrochemical Complex located in the?central part of the country have not been able to restart their operations due to the unstable electricity supply. Oil ministry has said that the quakes had no impact on the country's crude oil output or exports which are the main source of revenue. However, domestic production?of fuels and petrochemicals may not be sufficient to meet demand when people return to work after the quakes, if refineries and other facilities can't sustain operations. Reporting by Deisy?Buitrago and Mircely?Guanipa, editing by Marianna Parraga, Editing by Muralikumar Anantharaman
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Bloomberg reports that Williams is in negotiations with Momentum Midstream for a $5.5 billion deal.
Bloomberg News reported?on Sunday that U.S. Pipeline Operator?Williams was in advanced discussions to acquire Momentum 'Midstream, the natural gas pipeline company of its rival, for $5.5 billion. This is according to people familiar with this matter. The Tulsa-based company, which is based in Oklahoma, is finalizing an agreement to purchase Momentum from the private equity firm EnCap Flatrock?Midstream. According to the report, a deal may be announced within a week. Could not immediately verify the report. Williams Companies, Momentum Midstream, and EnCap Flatrock Midstream didn't?immediately reply to a request for comment. Bloomberg reported that the deal would give Williams a greater capacity to transport gas from the Haynesville Shale to U.S. Gulf Coast terminals. According to the report, EnCap has not made a final decision and could still choose to keep the company. Williams is looking to acquire U.S. natural gas production assets to secure supplies for its hyperscalers, data center clients and other customers. According to the website of Momentum Midstream, it operates around 4,000 miles (6.437 km) of pipelines and serves more than 140 clients across its network. It also services?10 liquefied gas facilities and 26 electricity plants. (Reporting and editing by Edmund Klamann in Bengaluru, Bill Berkrot, and Bipasha dey)
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Serbians continue to protest even after President Vucic announces he will step aside
On Sunday, thousands of protesters are expected to descend on the Serbian town of Kraljevo, one day after Aleksandar Vucic announced that he was stepping down. This will pave the way for presidential and parliamentary early elections. Vucic has been the prime minister or president of Serbia for 12 years. He has faced student-led protests that began in October 2024 after a concrete awning collapsed at a train station in Novi Sad, a city in northern Serbia. The incident resulted in 16 deaths. The incident is a symbol of what many see as corruption and mismanagement under Vucic. The protests that followed were the biggest in Serbia since 2000, when Slobodan Milosevic was overthrown. Vucic denies all corruption. Jelena, a professor of?Serbian who met with friends before the rally in the city center, said: "This isn't just a struggle between good and bad. As people arrived in Kraljevo, they braved the heat to buy T-shirts that said "Students are winning". What started as a demand for justice for those who died later evolved into calls for Vucic's resignation and for early elections. Despite the fact that many protesters are vindicated, they don't expect Vucic to disappear from politics. Analysts believe he could run for the position of prime minister, and then install an ally as president to continue to exert power. Marko Djokic is a 41-year old IT expert from his hometown who attended the protests. EU AND RUSSIA Will Be Watching Closely Serbia, located on the eastern edge of the EU, is a candidate for membership. However, Belgrade has ties to both Russia and China. Vucic had to tread carefully in this area. Before joining the EU, Serbia needs to improve its state of law. This includes ensuring?free and fair election conditions, as well as eradicating corruption and organised criminality. It must also align its foreign policy with that of the bloc and establish relations with its ex-province?Kosovo which declared its independence in 2008. Both Moscow and Brussels will be closely watching the events in the next few weeks. The EU condemned the use force against peaceful demonstrators. The EU has also expressed concern about the press freedom and independence of the judiciary. (Editing by Edward McAllister & Alexander Smith)
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11 people killed in plane crash near the northeastern France
Local officials and a local witness reported that 11 people were killed, including 10 parachutists and the pilot, when a small plane crashed on Sunday in Tomblaine, a town located in northeastern France. The plane narrowly missed?neighboring homes. Officials said that the aircraft was used by a school of parachuting and carried five trainees parachutists, and five instructors. It crashed shortly after takeoff. French media said the trainees included a group of nurses. Witnesses who refused to identify themselves said the plane had been 'climbing' at 11:00 am local time (0900 GMT), when the noise of the engine'suddenly ceased, as if the engine had stopped. He claimed he did not see any fire, explosion, or other visible signs of a problem prior to the crash. Yves 'Seguy', the regional prefect told BFM that the plane plunged vertically into the ground. The crash happened in a residential neighborhood near a shopping center. The wreckage of the one-engine plane was lying on a bike trail. Seguy stated that "give or take a couple of meters, the accident could have resulted in collateral casualties." The media reported that the aircraft was registered to Germany. The German foreign ministry did not immediately respond. The cause of the accident was not immediately known, but the day before the incident the temperature in Nancy (a city near Tomblaine) had reached its highest ever level. The local prosecutor didn't immediately respond to our request for a comment. The?interior minister said that the French interior minister and transport minister were en route to the incident. The interior ministry said that the French interior minister and?transport minister were on their way to the scene.
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Fans of the World Cup in Los Angeles, a city dominated by cars, embrace buses and trains
On every World Cup matchday, tens and thousands of American and international fans throng Union Station, in downtown Los Angeles, to take special buses directly?to Inglewood Stadium, while thousands watch from the "Fan" Zone inside and outside of the ornate Art Deco Station. When a soccer fan is lost, "ambassadors", who are there to guide them, will help them find the Fan Zone or buses. If they feel overwhelmed by heat or stress, "calming pods" or hydration centers can be used. Armando Roma, manager of the civil rights, inclusion, and racial equity group at LA Metro, said that some people have come into the station and are overwhelmed by the noise and activity. We've had people come in to breastfeed and pray. LA Metro is not making a lot of money off the World Cup. The cost of a round-trip to the stadium is $3.50. Hundreds of extra staff are being hired, buses are being decorated in World Cup livery and traffic control and security surrounding the stadium make transport logistics more difficult than they already are. LA Metro's strategy to "build the most ambitious transportation network in the United States" includes doubling down on World Cup opportunities. For those who are familiar with the city's freeways and car culture it is not difficult to draw visiting football fans into the system. Crystal Gristina from New Orleans said, "We didn't like to be stuck in traffic, and this was cheaper." She was traveling with her husband, children and friends to the U.S.-Turkey game on Thursday. They also did not find it attractive to rent a car, and pay about $200 in parking fees near the stadium. The train was fun Brandon Luna, 29, from San Diego, and Brian Stanton 51, his uncle from Maryland, on the U.S. East Coast had just arrived by Amtrak train from San Diego. They were waiting in line for the World Cup bus. Luna said, "On Amtrak, you chill out, you sit down, have a drink and watch the ocean pass by." "I saw the World Cup busses?around the country and said, 'Yup! That's what's going to happen.'" Stanton was initially skeptical about taking public transportation in Southern California. He said "the train was enjoyable," and that some U.S. fans were dressed as historical figures like George Washington. More than 20,000 people have taken the World Cup buses to every match, and thousands more took normal buses or trains to reach the stadium area. More than 52,000 people used the transit system for the June 18 Switzerland-Bosnia and Herzegovina game, which is more than half of the stadium's total capacity. LA Metro reports that ridership has increased during the tournament. In the Fan Zone of Union Station, thousands of Colombian and German fans cheered their teams. Many fans would not be attending the match in the stadium, but instead had come downtown to share a fan experience. "We wanted to feel the World Cup, the fan-fest and to just be part of it," said Jorge Yunda 45, an Ecuadorean American, who came to Union Station along with his wife and sons, a grandson and his sister-in law and her family. "We love it. "We love it. (Reporting and editing by Christian Radnedge; Ed White, Reporting)
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As rescue efforts intensify, the death toll from the Venezuela earthquake has risen to 1,400.
On Saturday, the death toll in Venezuela's twin earthquakes reached 1,400 as foreign rescue teams poured into Venezuela and authorities pressed on the search for survivors along the?most severely affected?coastal areas. Rescuers have been working across La Guaira, and in parts of Caracas for days, pulling bodies and survivors from the rubble. They often complain about the lack of heavy equipment, and of an official presence. Officials announced that more than 1,600 foreigners had arrived, and that other teams were on their way. This is part of a growing international response following the twin earthquakes that hit on Wednesday. They also unleashed hundreds aftershocks. Residents in?La Guaira - a popular beach state - said that the response to the disaster had been uneven. Some people were digging through collapsed building by hand, searching for missing relatives. Jorge Rodriguez, a top lawmaker in the country, told state television that 1,430 people had died. He stated that thousands of people had been injured and families were moved to shelters. Aid was also being distributed in the disaster zones, particularly La Guaira. He said that authorities are still monitoring the frequent aftershocks. This highlights the power of the twin earthquakes as well as the difficulties faced by rescue workers working in unstable conditions. The authorities continued to restrict the access to La Guaira, and maintained controls on the main road from Caracas. They said that traffic was slowing down emergency vehicles. Citizens who were not part of official rescue teams required credentials to pass the checkpoints. The power was slowly restored throughout the entire region. Venezuela's power system, which has been crippled for years by underinvestment and sanctions, is prone to problems that cause daily blackouts lasting hours in certain regions. 55,000 MISSING Despite the fact that the government claims hundreds of people are missing or trapped in the rubble, a website run by the opposition lists more than 55,000 as missing. The U.S. Geological Survey estimates that more than 10,000 people could have died from the magnitudes 7.2 and 7.4, which would make them the deadliest quakes in Latin America of the past century. The disaster may have political implications for Rodriguez who, despite serving as Nicolas Maduro's vice-president, was arrested and ousted by the U.S. last January. Pope Leo spoke in Rome on Saturday and offered prayers for the victims, their family members and those who are involved in relief efforts. He also expressed his hope that global solidarity would continue with Venezuela. In the wake of?the earthquakes, the U.S. sent aid to Venezuela. On Saturday, a senior U.S. official stated that the Trump administration has committed $150 million in addition to a $9-figure package that will be announced within the next few days. White House officials also said that the renewed push by Venezuelan opposition Maria Corina Machado to get U.S. assistance for her return home, after she?left Venezuela last year, is frustrating Washington senior officials, who say it's too soon following the disaster. Vivian Sequera reported from La Guaira; additional reporting was provided by Mayela Armes and Deisy buitrago in Caracas; Julia Symmes Cobb from Bogota; Eliana Raszewski from Buenos Aires, and Karen J. Brettell, in Washington. Julia Symmes Cobb wrote the article. Alexander Smith, Alistair Bell, and Chizu Nomiyama edited it.
Australia and Vanuatu sign a delayed security agreement that is seen to curb China
Australia and Vanuatu signed a development pact on Monday. The pact had been delayed by Vanuatu for several months because of their 'concerns' that it could stifle a broader investment.
Australia, in a struggle for influence with China in the Pacific, will consult on any third party investment in Vanuatu’s critical infrastructure. It will also remain the preferred partner of the country in terms of security and law enforcement.
Canberra announced funding of A$500,000,000 ($344.50,000,000) for the Nakamal Agreement, a pact that is known in Canberra as the Nakamal Agreement.
At a press conference, Anthony Albanese, the Australian Prime Minister and his Vanuatu counterpart Jotham Napat said: "It is a statement of?Vanuatu’s sovereign decision to not allow its territory to host any foreign military base or infrastructure. Vanuatu’s critical infrastructure will remain?free of militarisation."
The agreement, which was originally scheduled to be signed by September, was postponed after Napat stated that his coalition partner raised concerns?that it might restrict Vanuatu’s ability to obtain infrastructure funding from other nations.
China is Vanuatu’s largest external 'creditor. It has provided loans via Chinese banks to Chinese contractors who have built major infrastructure projects including the Presidential office complex, Parliament building, and road network.
Vanuatu is currently pursuing a?deal? with China, which Napat stated on Monday was waiting for approval from Beijing.
He said: "We'll?share the contract, there's?nothing we can hide." In response to a question on whether the deal included security elements, he replied,
(source: Reuters)