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Joachim Klement: The next Iran war could be closer than you think.
The Iran war is over, but many people may mistake a pre-election break for peace. Tehran's economic leverage will remain strong until the U.S. midterm election in November but may weaken after the results are announced, increasing the risk of renewed confrontation. How can the rest of the globe avoid being collateral damage in this new dangerous environment? It is unclear whether the 60-day negotiations between the U.S. The most important thing for the markets is the fact that the interim agreement has restored the energy flow through the Strait of Hormuz. This was the crucial energy chokepoint which had been effectively closed off during the conflict. Crude prices have fallen to levels seen before the war. However, the clock is ticking. Many, including myself, argued from the beginning of the war that the rising oil price would have a greater impact on the politics of the conflict than missiles or diplomacy. This seems to be borne out now. Although the war may have been longer than anticipated, economic and political pressures seem to have heavily influenced Donald Trump's decision, as demonstrated by the U.S. willingness of giving Iran many items from its wish list for the simple act of reopening strait. The midterm elections held in November have always been a key deadline for the administration. This is still the case. What will happen to the power balance between Washington and Tehran once the midterm elections are over? Peace for Now The American public was unpopular about the war. Trump's net rating in anEconomist/YouGov survey fell from -negative 17 at the beginning of the war to -negative 24 before a ceasefire framework announcement, and it has since recovered to -negative 21. The rise in energy prices played a major role. Trump's net rating for inflation and price has plummeted to a negative 40. The trajectory of gasoline prices in the coming months will determine how much damage the Trump administration is able to control. Energy Information Administration data shows that pump prices have fallen from near $4.50 per gallon during the war to $3.90. If peace talks fail, this could change. Tehran may not need to even close the Strait of?Hormuz in order to influence energy costs. The Iranian government may not even need to close the Strait of?Hormuz in order to influence energy prices. This risk premium can quickly affect crude oil and gasoline prices as well as freight costs, fertilisers, and industrial input costs. This gives Iran more power in an election year. Brent crude is down 40% since the peak of the war. Energy traders are willing to ignore minor incidents between the U.S. This could change quickly, however, if Iran appears to be willing to use its Hormuz cards again. THE RISK RETURNS However, the delicate balance of power could change dramatically after the U.S. Midterm elections on November 3. If Republicans lose their seats, Trump may face a hostile or divided Congress that makes it more difficult to pass legislation and budgets. RealClear Polling shows that Democrats currently lead the generic congressional ballot with a margin of over five percentage points. They are believed to have an excellent chance of regaining control of the House of Representatives where they need only a net gain of 5 seats. Trump may be more tempted to pursue political victories overseas, where there are fewer restrictions from Congress and the courts. Trump has been criticized both domestically and internationally for an interim agreement that favors Iran. Brent's rapid retreat also suggests that energy traders are able to quickly dismiss political risks. This could make renewed military action more appealing after the midterm elections. Iran has the upper hand for now. But that could change in the fall if the parties cannot reach a final agreement. This is a possibility, given the distance between the parties on important sticking points, such as Iran's nuke program. This seesawing leverage does not lead to a permanent war, but rather persistent risk. The SAFER STRATEGIC BET This leaves the large energy consumers - such as Europe and Asia - susceptible to sudden spikes in gas and oil prices, and disruptions in the supply of fertilizers and other commodities. Reduce the influence imported fossil fuels have on their economies. Europe appears to have got the memo. Many governments in the area are reconsidering their domestic oil and natural gas production as a temporary solution and increasing investments in renewables, nuclear power and other energy sources to reduce their dependence on fossil fuels. This shift will increase the supply chain dependence on China as the dominant player in renewables. The nature of this dependence is not the same as a reliance on imported energy. If imports of gas and oil are stopped, the power plants and refineries who rely on these products will be immediately under pressure. If China restricted exports of'solar cells or?wind turbines, existing wind and solar farms would continue to operate. Which is a safer'strategic bet'? The Iran War may have ended, but a longer battle could be just beginning. It is important for countries that are vulnerable to prepare. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks. (Writing and Editing by Margueritachoy and Anna Szymanski.)
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Taiwanese ships should not board China coast guard vessels, Taipei claims
Senior officials said that Taiwanese vessels off the east coast of Taiwan should ignore any 'boarding and inspection' demands from China's Coast Guard. China, which views Taiwan, democratically governed, as its territory, sent Coast Guard vessels last month to the waters off Taiwan’s east coast, angering Taipei, for what they called a “special maritime traffic law enforcement operation”. China claimed that the operation was a response to an announcement made by Japan and Philippines that they were going to begin formal discussions on their maritime boundaries. Beijing believed this would involve Chinese waters near Taiwan. Hsieh Ching -chin, the deputy head of Taiwan Coast Guard, answered questions from lawmakers in parliament. He said that if there was an "incident", ships should "notify Taiwan Coast Guard" and "not reply to so-called "boarding inspections" by Chinese vessels. He added that if the situation was urgent, Coast Guard vessels would sail between the two boats to separate them. The China Taiwan Affairs Office has not responded to a comment request. China has said that the waters surrounding Taiwan are Chinese, and Taipei does not have its own'sovereignty. Hsieh stated that if the same request were made of a foreign registered ship in Taiwan waters then "in order to defend our sovereignty and maintain our waters we will intervene". He added, "China has no jurisdiction in our waters." The Chinese patrol last month did not include any requests for ship boarders from Taiwan or China. Taiwanese officials said that the Chinese coast guard vessels "harassed commercial shipping" by asking for information about its origin and destination, and claiming jurisdiction. In 2024, Chinese coast guard personnel briefly boarded an?Taiwanese tourist boat near Taiwan controlled islands adjacent to China's coastline. The United States, Britain, France, and Germany are concerned about China's patrols near Taiwan's eastern coast. (Reporting and editing by Raju Gopalakrishnan; Ben Blanchard)
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ROI-Putin's diesel export ban risks new fuel shock: Bousso
A looming Russian diesel export ban could not come at a worse time. Fuel inventories around the world are at a dangerously low level, and another supply shock could undermine a fragile economic recovery. Russian President Vladimir Putin said on Sunday the Kremlin is considering a diesel export ban after recognizing mounting domestic shortages. These shortages were caused by Ukrainian drone attacks on Russian refineries as part of Kyiv’s wider energy campaign against Moscow in the fifth year the Ukraine War. Fuels with high energy density are used to power heavy transport, agriculture, industry, and construction equipment, from trucks and ships, to construction machines and tractors. The market has yet to recover from the Strait of Hormuz closure, which cut off oil supply when the Iran conflict broke out on February 28, 2008. Diesel prices soared in April as 13% of the world's oil supply was cut off. This sudden shortage triggered severe shortages, and depleted already low global inventories. Reopening the strait after the interim U.S./Iran deal of June 17 has provided immediate relief. Tanker traffic is uneven and below pre-war levels. However, trapped Gulf barrels have started to flow again. This has helped drive Brent crude prices down by more than 40%. A new conflict is arising in the Middle East just as the worst effects of the Middle East's energy shock begin to fade. RUSSIAN RUSHING SHORTAGES The threat of a Russian diesel export ban highlights the country's own increasingly stressed position. In recent months, the world's third largest crude producer - and a major supplier of diesel - has suffered significant damage to its infrastructure as Ukraine intensified attacks against oil terminals and refining plants?across country. Moscow's main refinery was hit twice in the last month, and will remain offline for six months. The strikes have affected around a quarter (roughly 7 million barrels per day) of Russia's refining capacity. Fuel prices are up and there are long queues at filling station across the country. According to reports in local media, Russia could even be forced into importing fuel. This would be a dramatic reversal of fortunes for a nation that was a major supplier of refined products on the global market. Exports are already suffering a severe blow. According to Kpler, Russian seaborne diesel exports have dropped sharply over the past few months. In June, they fell to 426,000 bpd, their lowest level since January 2017. This is down from 827,00 bpd in the previous year, when Russia was second largest diesel exporter behind the U.S. and accounted for 11% global seaborne supply. Turkey and Brazil are the two largest buyers. The rest of the money is mainly going to Africa. The impact of a complete export ban will therefore be felt far beyond the borders of Russia, especially in light of its timing. This ban is coming at a terrible time. Global inventories of refined product have plummeted to alarming levels after being drained rapidly in the last few months to make up for lost Middle Eastern volumes. According to Energy Information Administration, the distillate stock in the U.S. is just above a 23 year low of 100 million barrels, reached in May. Other inventories tell a similar tale. According to Insights Global's report, diesel stocks in northwest Europe - a major region for diesel imports - have fallen by around 20% since the beginning of the Iran War, leaving little cushion against new supply shocks. The market is also 'entering a period of criticality, where inventories are typically rebuilt before winter in the Northern Hemisphere when demand increases due to heating, freight and agriculture. DANGER AHEAD The diesel refining margins have already begun to flash red. According to LSEG, in Europe, benchmark diesel refinery margins, also known as cracks, have jumped by more than 35% following the interim?deal between the U.S. and Iran. This reverses earlier declines, pushing them above $46 a barrel. Singapore cracks are now back over $40 per barrel in Asia. The gradual normalization of crude oil flows from the Gulf will allow Asian refineries to increase their run rates following months of disruption. This should help to alleviate some of the shortages in global fuel supply. This relief, however, may not be enough. If Russia removes more barrels from the market, then?the fragile balance that is now being achieved could be quickly upset. Diesel prices would rise again, inventories would continue to be depleted and costs for consumers, transport, industry, and the government will increase. The global economy cannot afford to suffer another energy shock after one of the worst in recent decades. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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StanChart and Uganda sign an agreement to finance roads worth EUR110 Million
The finance ministry announced that Uganda had'signed a EUR110.5m ($126.1m)?agreement? with the local unit of international lender?"Standard Chartered? to help finance the building of a new road in the northeastern region of the country. In a late-night post on X, the Ministry said that a new 115.8 km road would help "reduce transportation costs" and strengthen regional trade. * The road will be built in Karamoja in northeastern Uganda, near the Kenyan border. In recent years, the area has attracted a rush in investor interest because of its vast mineral potential. The Ministry said that the road would 'also support ongoing major investments in the area, including a $300 million cement plant?and an $72 million international airport. ($1 = EUR0.8766) Reporting by Elias Biryabarema, Editing by Tom Hogue & Sonia Cheema
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CMA CGM nears $1.4 billion deal for FedEx logistics unit, FT reports
The Financial Times reported that the French container shipping company CMA CGM was 'nearing' a deal to buy FedEx's third-party logistics division for $1.4 billion cash. The report said that the talks between the two companies have advanced to a point where a deal may be reached as early as Wednesday. Could not verify the report immediately. CMA CGM and FedEx didn't immediately respond to comments outside of regular business hours. CMA 'CGM will be diversifying into air freight and logistics. FedEx will be able to focus on its core network of air-ground deliveries after selling its third-party logistic business known as FedEx Supply Chain. FedEx Supply chain specializes in order fulfilment and product returns for major retail chains. FedEx announced the potential deal a month after it spun off its trucking division, FedEx Freight, to concentrate on its delivery business. The global?tariffs imposed on President Donald Trump have reduced demand for delivery services. The changing U.S. policies on trade, including the end of duty-free low-value "de?"minimis" e-commerce from China-linked discount retail chains such as Shein or Temu have affected volumes.
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Asian Airlines' Europe windfall diminishes as Gulf competitors rebound
Industry data shows that Asian airlines who gained passengers and increased fares for European routes following the start of the 'Iran conflict' are now losing those advantages as Gulf carriers offer lower ticket prices and restore flights. Although the shift was gradual, it raises doubts about whether carriers such as Singapore Airlines, Cathay Pacific Airways and Korean Air Lines, or ANA Holdings, can maintain much of the share gained during disruption. Nathan Gee is the head of Asia-Pacific Transportation Research at BofA Global Research. He said that the industry term for seat occupancy, or load factor, has reached its peak. The booking window for long-haul flights is usually six months, so the biggest contribution to revenue will come in the next quarters. Cirium data shows that Emirates, Qatar Airways, and Etihad Airways transported nearly one-third (and more than half) of all passengers traveling from Asia to Europe, and from Australia and New Zealand to Europe, before the conflict. Flightradar24 shows that at the beginning of the Iran War on February 28, the Gulf hub airports of these airlines were closed because of drone and missile strikes. By mid-June, however, the flights of the 'airlines' had returned to 90% of their normal levels. According to data from the International Air Transport Association, between March and May, Middle Eastern carriers saw a drop of nearly 60% in passenger numbers compared to a year ago. While non-stop flights from Asia to Europe were up by nearly 30% on an annual basis in March, the increase had shrunk to only 15% by May. ASIAN FLIGHTS FULL - In June, Australia lifted its "do not travel" warning which had voided insurance policies for travellers at Gulf hubs. Flight Centre Travel Group reported that its bookings for Emirates, Qatar, and Etihad rose 36% in the week following. As they assessed the situation, some travellers who had booked flights on Gulf carriers before the war bought refundable back-up flights to Europe with Asian airlines. Michael Schischka is a senior advisor at Mary Rossi Travel, Sydney, which specialises in luxury European holidays. He said, "I'd say that the majority of clients are now more comfortable in the Middle East and feel safer and more secure when flying there." "Asian flights were full, and cheaper fares weren't offered." People are now looking again at Middle East airlines. Korean Air's spokesperson stated that the airline had seen an increase in its load factor on European routes from March to May. However, the demand for transfer traffic had weakened as Gulf carriers resumed their operations during the second quarter. ANA has not yet reported data for May, but its load factor for European flights'slid from 93.1% to 86.9% last month, even though it was up 8.7 points on the year. Cathay Pacific said that the load factor on its entire network increased by 2 percentage points from a year ago to 86.8% in May. In March, it was up 9.5 points. Brendan Sobie, an independent aviation analyst, said that the data indicated a gradual rebalancing rather than a sudden one. Singapore Airlines' trajectory was also indicative of the trend. In March, the airline's Europe-load factor soared by 13.8 percentages points. However, gains dwindled to just 4.9 points in both April and May. Sobie stated that "in May, the load factors for Europe and Australia both normalized." "They saw a large increase in March, then a small one in April and a still smaller one in May. "To me, it's a gradual increase and not an overnight one." Cherie Lavin is a Travel My Dear travel agent in Brisbane. She said that her clients who are looking to fly within the next three months were still hesitant to book with Middle Eastern airlines. She said, "But for next year I don't think there will be any hesitation in quoting this." "And it is being received well."
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Oman Air is targeting tourists with a new Singapore route and looking to expand into North Asia
Oman Air's CEO stated that the airline is considering expanding to North Asia in the next year. Con Korfiatis, CEO of Oman Air, said that the new nonstop Singapore service was backed by the lower cost base, and Oman Air's membership in the Oneworld alliance, which helps with connections. Serving the city with a Kuala Lumpur stopover failed nine years earlier. He said that Singapore is one of the largest global?hubs...and Singaporeans were among the world's most avid travelers. "Oman is no longer a transit country, but a destination for tourists. This has opened up a new market." Korfiatis stated that the airline was targeting a load factor, or percentage of seats, in the mid-to high 70% range, for the Singapore route during the first year, and the first-month bookings are tracking above this level. Four days a weeks, the eight-hour flight is one of longest in the world on a Boeing 737 MAX. The government-owned airline is launching the new service as it has been executing its transformation plan since early 2024. This includes cutting routes, renegotiating contract, increasing fleet utilization and reducing staff. Korfiatis expects to announce at least one new nonstop destination within the next 12 months. He refused to mention specific cities, but said that China, Japan, and South Korea were markets with a lot of interest. He cited their travellers' desire for nature-based, off-the-beaten path destinations. Oman's airspace was open during recent Middle East disruptions. This gave the airline a temporary?advantage? as passengers were rerouted in the early weeks of the Iran War,?Korfiatis stated. He said that load factors were still down by 8-10 percentage points during the peak of the disruption, but have since recovered. (Reporting by Julie Zhu; Editing by Jamie Freed)
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Asian Airlines' Europe windfall diminishes as Gulf competitors rebound
Industry data shows that Asian airlines, which gained passengers on European routes and charged higher prices after the Iran conflict began are now'seeing their advantages eroded as Gulf carriers restore flights?and offer lower ticket price. The shift was 'gradual', but it raises doubts about whether carriers such as Singapore Airlines, Cathay Pacific Airways and Korean Air Lines, ANA Holdings, can maintain much of the share gained during disruption. Nathan Gee is the head of Asia-Pacific Transportation Research at BofA Global Research. He said that the industry term for seat occupancy, or load factor, has reached its peak. But long-haul bookings are usually made within a six month window. This means that the biggest contribution to revenue will come in the next quarters. Cirium data shows that before the conflict, Emirates, Qatar Airways, and Etihad Airways transported nearly a third of passengers from Asia into Europe, and over half from Australia and New Zealand. Flightradar24 shows that at the beginning of the Iran War on February 28, the Gulf hub airports of these airlines were closed because of drone and missile strikes. By mid-June, however, the flights of these airlines had returned to 90% of their normal levels. According to the International Air Transport Association?data, between March and May, Middle Eastern carriers saw a drop of 28% in passenger numbers compared to a 60% drop a year ago. While non-stop traffic between Asia and Europe increased by nearly 30% on an annual basis in March, the increase had shrunk to only 15% by May. ASIAN FLIGHTS FULL In?June Australia lifted its "do-not-travel" warning, which?had invalidated travellers' insurance policies in Gulf hubs. Flight Centre Travel Group reported that its bookings for Emirates, Qatar and Etihad rose 36% in the week following. As they assessed the situation, some travellers who had booked flights on Gulf carriers before the war bought refundable back-up flights to Europe with Asian airlines. Michael Schischka is a senior advisor at Mary Rossi Travel, Sydney, which specialises in luxury European holidays. He said, "Not all customers but the majority feel more secure and comfortable when flying through the Middle East." "Many of the Asian flights had very high demand and there were no cheaper fares available." This has led people to look at Middle East airlines once again. Korean Air's spokesperson stated that it experienced an increase in load factor on its European routes from March to May. However, transfer traffic had weakened as Gulf carriers began resuming operations during the second quarter. ANA has not yet reported data for May, but its load factor on European flight'slid from 93.1% to 86.9% last month, though this was still an 8.7 percent increase year-on-year. Cathay Pacific said that the load factor on its entire network increased by 2 percentage points from a year ago to 86.8% in May, while in March it was 9.5 points higher at 92.2%. Brendan Sobie, an independent aviation analyst, said that the data indicated a gradual rebalancing rather than a sudden one. The trajectory of Singapore Airlines also illustrated the trend. In March, the airline's Europe-load factor soared by 13.8 percentage points. However, gains dwindled to just 4.9 points in both April and May. Sobie stated that "in May, the load factors for both Europe and Australia were normalized." "They saw a large increase in March. A smaller rise in April, and a still smaller one in May. "To me, it's more gradual and not overnight." Cherie Lavin is a Travel My Dear travel agent in Brisbane. She said that her clients who are looking to fly within the next three months were still hesitant to book with Middle Eastern airlines. She said, "But for next year I don't think there will be any hesitation in quoting this." "And it is being received well." Reporting by Julie Zhu and Christine Chen, Sydney; editing by Jamie Freed
Maguire: The solar boom in Europe is masking an increasing strain on the power markets.
Solar power in Europe is soaring to new heights, but the power markets of this region are under increasing stress.
Solar generation in the European Union is on track to break new records this year. Capacity additions are continuing at a rapid pace, and favorable weather conditions have boosted outputs across key markets, such as Germany, Spain, and France.
Solar power now accounts for more than half the midday electricity mix in some areas.
The surge in output is an indication of the success of Europe’s clean energy drive, but it also reveals a growing mismatch between the time when electricity is generated and the time when it is required.
This imbalance is pushing prices down during peak production, which in turn reduces revenues for renewable generators. Grid operators are also forced to curtail their supply.
Europe has learned that producing cheap, clean energy at scale is just part of the problem - capturing their value is much harder.
SOLAR RAPID RISE
There are few comparables to the scale of Europe's expansion in solar power. Solar capacity in both residences and utilities has risen dramatically due to policy support provided by the Green Deal, REPowerEU and falling installation costs.
Spain is a solar powerhouse that exports surplus production to neighbouring markets. Germany, on the other hand, continues to be a leader in distributed solar deployment.
Southern Europe's increased irradiation is accelerating this shift. However, even the northern markets are experiencing strong growth.
This results in a system that is increasingly shaped and influenced by the daily solar production profile. There are sharp spikes around noon, followed by steep drops in the evening.
Especially in areas with limited storage or interconnection, the midday production sometimes exceeds local demand.
CAPTURE LOSS
The power price is being reshaped by this. Solar's capture rate, or the price that it earns in relation to wholesale prices on average, is declining across Europe.
It's simple: When solar overwhelms the grid at peak hours, the prices are depressed. In extreme situations, prices can turn negative. This means generators have to pay in order to remain online.
LSEG data show that the average capture price during the first six months of 2026 - across Germany, France and the Netherlands as well as Belgium, Italy, Spain, is down by 42% compared with the same period in 2023.
The implications for solar developers and utilities are huge. The production of solar panels does not guarantee a rise in revenue. Each additional megawatt of power cannibalizes existing production.
Merchant projects, or those exposed to wholesale markets, are particularly vulnerable. Even projects that are contracted feel the pressure as counterparties hesitate to lock in prices for long-term in a volatile market.
CUTTING GROWTH
Grid constraints force operators to waste more clean electricity.
In high-solar areas, curtailment is more common. It has reached record levels in Germany and Spain in 2026.
According to LSEG, in May, Germany's energy firms cut back on solar output by an estimated 1,28 terawatt-hours (TWh), while utilities in Spain curtailed more than 2.4 TWh.
When prices drop below zero, many producers will simply stop production rather than lose money.
UTILITY STRAIN
Solar boom has become a double-edged blade for utilities.
One side of the equation is that renewable energy generation continues to grow rapidly. This supports decarbonization and asset growth over time. The revenue profile for these assets is also deteriorating.
The price of power is becoming more volatile. There are deep troughs in sunny hours, and sharp peaks when there are low renewable output periods.
This volatility is good for flexible generation, such as hydro, gas and storage, but can be a problem for solar-heavy portfolios.
Utilities respond by investing in balance and flexibility services and seeking to increase revenue stability via power purchase agreements.
These strategies do not fully offset the structural decline of capture prices.
FLEXIBLE FIX
Too much solar is not the problem, but rather too little flexibility.
Battery storage is growing rapidly, but it's not at the scale required to absorb midday excesses.
The demand-side response is still underdeveloped. Industrial consumption remains relatively rigid, and new sources of demand such as heat pumps and electric vehicles are not fully optimized to balance the grid.
Another bottleneck is the expansion of transmission. To move power from "surplus regions" in the south, to the demand centers of the north, requires major infrastructure investment that is often slowed down by permit delays and public resistance.
The system will struggle until these gaps are filled to convert the growing renewable energy into valuable and usable electricity.
This creates a balancing act for policymakers.
Europe cannot afford to delay its solar rollout in order to achieve climate targets and reduce its dependence on imported fossil fuels.
Adding capacity to grids without improving storage, market design and grids risks undermining economics.
There are many potential solutions, such as incentives for co-located energy storage, reforms in electricity pricing and stronger signals to encourage flexible demand.
Implementing them at scale and quickly enough to keep up with solar growth remains a challenge.
The continent has mostly solved the problem of producing clean electricity at scale and low cost. Next comes the harder part: integrating that power into an existing system.
If flexibility, infrastructure and market structures do not evolve simultaneously, the paradox will become worse - cleaner power but with less value per unit produced.
Or, to put it another way, Europe's solar power is not limited by the amount it can produce. It is only constrained by its ability to use it effectively when all of it arrives at once.
These are the opinions of the columnist, who is also an author. This column is great! Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn, X and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets 7 days a weeks.
(source: Reuters)