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Iranian Oil Minister in Moscow seeks to strengthen ties with Russia
Mohsen Paknejad, the Iranian Oil Minister, said that during his visit to Moscow last Friday, Iran would increase cooperation with Russia in banking and agriculture. He also stated that he would remove all barriers between Russia and Iran in any sphere of cooperation. Since the beginning of the conflict in Ukraine, Russia has strengthened its ties with Iran and signed an agreement for strategic partnership with Tehran in January. Both countries are subject to Western sanctions. Paknejad, speaking on state television earlier on Friday said that Iran would sign a $4-billion agreement with Russian companies for the development of seven Iranian oilfields. Russia and Iran have a long-standing history of co-operation. In fact, the first nuclear reactor in Iran was built at Bushehr, in the southern part of the country. At a January meeting in the Kremlin with his Iranian counterpart Masoud Peshkian, Russian President Vladimir Putin said that Russia could eventually supply Iran up to 55 billion cubic meters (bcm), though initially at lower volumes up to 2 bcm. The 55 bcm figure is similar to that of the Nord Stream 1 pipelines, which were damaged in blasts and stopped delivering gas to Europe after 2022. Gazprom, the Russian gas giant, signed a Memorandum with National Iranian Gas Company in June last year to supply Russian pipeline natural gas to Iran. The possible routes of the pipeline are not known. Paknejad said, in a speech to a Russia-Iran Intergovernmental Commission at Moscow, that Iran would implement agreements with Gazprom. This included a regional hub of distribution for gas. Both countries have been discussing the possibility of setting up a regional hub for gas distribution in Iran. Paknejad, Putin's representative for relations with the Organization of Petroleum Exporting Countries(OPEC), met Alexander Novak on Thursday. Three sources familiar with OPEC+ discussions said that the meeting was held as several members of OPEC+ - the group consisting of OPEC, its allies, and Russia - suggested that the group increase oil production in June by a second month running. The proposed increases highlight a growing dispute between members about compliance with production quotas. The announcements come in response to President Donald Trump's calls for OPEC members to lower oil costs and his return to a "maximum-pressure" policy on Iran, whose exports Washington wishes to reduce to zero. (Reporting and writing by Olesya Aastakhova, Anastasia Teterevleva, Vladimir Soldatkin, editing by Mark Trevelyan).
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China's demand for long-range Hybrids is surging, and automakers are rushing to meet it
Chinese automakers are competing with foreign automakers to launch ever-more advanced hybrids that can travel long distances. This is in response to the growing demand for cars on the largest auto market. China, unlike many other markets, treats EVs and Hybrids as a single "new energy vehicle sector" where brands compete to offer consumers a range of electrified vehicles with longer driving distances. Zeekr, a Geely division, unveiled this week the 9X, a large plug in hybrid SUV, which can travel 400 km (249 mi) on its own electric power before the gasoline engine kicks into action. This is a range that rivals many electric cars and is far greater than the typical plug-in hybrids sold in America, Europe and elsewhere. Chinese automakers also have a flourishing business in the so-called "extended-range electric vehicles" (EREVs), with small petrol engines which serve as generators to extend their large batteries' range. According to the China Passenger Car Association, both EREVs (electric hybrid vehicles) and plug-ins (plug-in hybrids) grew faster in China than pure EVs last year. The whole electrified segment now accounts for about half of the new cars sold. EREVs sales grew 79%, to 1.2 millions vehicles. Plug-in hybrids sales jumped by 76%, to 3.4million units. EV sales grew by 23% to 6.3million units. In the first quarter, fully electric models outgrew both hybrids and led China's new energy sector. The hybrid boom in China, and worldwide, has led to more traditional automakers including gasoline-electric models into their lineups. Previously they had focused solely on expanding EV options. Volkswagen is planning a new platform for full EVs, EREVs, and hybrids to help reverse the slowdown in sales of foreign automakers in China. VW board member Ralf brandstaetter said that drivetrain flexibility is critical for the German automaker's efforts to "find its edge." Ola Kaellenius, CEO of Mercedes-Benz, told reporters at the Shanghai auto show that hybrids were "definitely" a trend. He predicted they would "coexist for a longer time with battery-electric cars." TRANSITIONAL TECHNOLOGY Some automakers, notably Tesla, have dismissed hybrids. They claim that they are a technology in transition and will only slow down the rapid EV switchover needed to reduce climate change. This view is shared by many environmentalists in the U.S. Pure-play Chinese EV manufacturers are also sceptical about hybrids, especially in China where the government and industry built a massive EV charging network. William Li, CEO at Nio Electric Vehicles, said: "It doesn't even make sense." Many Chinese automakers want to give their customers whatever they ask for amid a price war with consumers that is continuing to threaten their profitability. Plug-in hybrids are also a way to get around trade barriers, especially in Europe. The European Union has placed tariffs on Chinese electric vehicles and hybrids. In February, Geely's Lynk & Co announced that in June, it would launch a plug in hybrid SUV called the 08 with a range of only 200 km. This is the longest in Europe. Felix Kuhnert is an automotive analyst with PwC Germany. He said that China's auto industry was "technologically more dogmatic" than other global competitors. This is the position taken by Chinese EV manufacturer Leapmotor. It has launched four EREVs, despite its CEO Zhu Jiangming saying that typical EV ranges of 500 km allow consumers to buy an electric car "without a problem." The company sees EREVs in the market as a way to offer consumers more range for a higher price. "We think this is only for luxury cars," an area where consumers are willing to pay an additional 20,000 yuan (2,744) in order to relieve range anxiety. MORE HYBRIDS COMING According to research firm JATO Dynamic, China's automakers will launch 16 new EREVs, 37 new plug-ins, and 32 new fully electric vehicles in 2024. According to a major automaker, EREVs, plug-in hybrids, and EVs together will account for approximately 35% of the sales in China, which is the largest auto market in the world, compared with about 45% for electric vehicles. CATL, a Chinese battery manufacturer, has invested in the sector. In October, it launched its first battery for extended-range hybrids with a 400 km range. CATL stated that the battery was used by several Chinese EV brands including Li Auto and would be installed into nearly 30 models by industry giants such as Geely or Chery. Bo Yu, an expert in China's market for research firm Jato Dynamics predicted that automakers would continue to invest and innovate in the segment of hybrid vehicles for the foreseeable. She said, "We will see them more."
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Sri Lanka begins talks with India and UAE about a new energy hub
Sri Lanka's energy minister announced on Friday that the country will begin work on plans next month to create an energy hub in collaboration with India and United Arab Emirates. The nation is looking to leverage its strategic position to cement a return from the financial crisis. The three signed the deal during the visit of India's PM Narendra Modi to the island this month. He was the first world leader to visit since Anura Kumara dissanayake became president last September. Dissanayake was elected with promises of stability, after the worst financial crises in decades three year ago caused runaway inflation and sent the local currency into freefall. Trincomalee, a harbour city in eastern Sri Lanka, will be the hub for the construction of the multi-product pipeline and bunkering facilities. A refinery could also be built. The project will also involve the development of an old storage tank farm from World War II, which is partly owned by a Sri Lankan subsidiary Indian Oil. Udayanga Hemiapala, Energy Ministry Secretary, announced that representatives from the state-run Ceylon Petroleum and Indian Oil, as well as AD Ports, will meet in Sri Lanka at the end of May to begin discussions on a business plan for a hub. Hemapala said that a joint project monitoring group has been formed to monitor the development of business plans and finalise detailed proposal. The president's office reported that President Dissanayake and UAE Deputy Premier Sheikh Abdullah Bin Zayed Al Nahyan also discussed energy co-operation in Colombo with each other this week. Sinopec, the Chinese state-owned energy company, has signed an agreement to build a $3.2billion oil refinery in Hambantota, a port city located on Sri Lanka's south coast. (Reporting and editing by Christopher Cushing; Uditha Jayasinghe)
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Rhine River levels rise again, allowing sailings to resume in the north
After rains in Germany, the Rhine River levels have increased, allowing ships to carry more cargo, and sailings at normal speeds with full loads, in northern parts. Traders said that the extreme lack of rainfall in March and April had resulted in low water levels on the entire river south of Duisburg, Cologne and the choke point at Kaub. Traders reported that in the northern region around Duisburg vessels could sail with a full load on Friday. In previous weeks they were less than half-full. The Kaub was 70% full after rain in southern Germany. In shallow water, vessel operators charge surcharges to compensate for not fully loading the vessels. This increases costs for cargo owners. The cost of shipping cargo increases when it is shipped on multiple vessels rather than one. The Rhine is a major shipping route for grains, minerals and ores. It also carries coal, oil products and heating oil. German companies were faced with production and supply problems in the summer of 2022, after a heatwave and drought caused unusually low levels of water on the Rhine. (Reporting and editing by David Goodman.)
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Iran purchased about 60,000 tonnes of barley at auction this week, traders claim
European traders reported on Friday that the state-owned Iranian animal food importer SLAL purchased approximately 60,000 metric tonnes of animal feed barley at an international auction this week. Separate tenders for up to 120,000 tonnes of animal feed corn and barley, as well as 120,000 tonnes of soymeal closed on the 21st of April. They said that although no purchases of corn and soymeal were reported from the mainstream trading houses, some small purchases from regional trading firms could not be excluded. The reports reflect the opinions of traders, and it is possible to estimate prices and volume later. The tender requested that barley come from the European Union (EU), Russia, Ukraine, or other countries in the Black Sea Region, including Turkey and Kazakhstan. Prices were not available. The corn could be sourced from Brazil, Europe or other Black Sea regions, including Turkey. Soymeal was only available from Brazil and Argentina. Traders said that the Western sanctions on Iran have made it difficult for Iranian companies to participate in recent tenders due to payment problems. The sanctions imposed on Iran over its nuclear program do not apply to food, but they have affected the financial system of the country, causing complex and irregular payment arrangements. Traders say Iran is offering to pay for this week's auctions through two banks: one in Iraq, and another in Turkey. Michael Hogan (Reporting and Editing by David Goodman)
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Air India is in talks with Boeing about 10 planes that Chinese airlines have rejected.
Air India and Boeing are in discussions to purchase around 10 737 MAX aircraft after Chinese customers began refusing to accept deliveries due a trade dispute with the United States. Two people who were familiar with the talks confirmed this. Boeing CEO Kelly Ortberg stated on Wednesday that, "due the tariffs many of our Chinese customers have indicated that will not be taking delivery", the company may redirect jets to customers who are in need. Both the United States and China have imposed tariffs exceeding 100% each on the other. Air India, according to two sources who refused to name themselves because the talks are private, was looking for around 10 narrowbody aircraft from Boeing. Air India Express is a budget airline with a fleet that exceeds 100 aircraft. Air India, Air India Express, and Boeing have not responded to comments immediately. The first person stated that "Air India was very interested... If the deal is completed, the planes will be added to the Fleet by the end of the Year." She also noted that the talks are in the early stages. Air India Express previously acquired white tail aircraft, or jets that were manufactured for one client but purchased by another. According to a third source who is familiar with the talks between Air India, Boeing and Chinese customers, any differences in jet configurations between Air India's fleet and the planes that are coming for Chinese customers could be taken into consideration when negotiating prices. Air India could benefit from the move as its growth has been restricted by a shortage of new aircraft. Air India CEO Campbell Wilson stated last month that the airline is a "victim" of circumstances, referring to the delivery delays plaguing Boeing & Airbus. (Reporting and editing by Abhijith Ganahapavaram; Aditya Kalra and Aditi Shah)
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US to hold Alaska LNG summit and urge Japan and South Korea to support the project
A source familiar with this matter told Reuters on Thursday that the energy security council of U.S. president Donald Trump plans to hold a summit in Alaska early in June. It hopes Japan and South Korea announce their commitments to the Alaska LNG Project. Trump has praised the $44 billion Alaska LNG project. This project would send gas from North Slope fields in Alaska via a pipeline of 800 miles (1,300 km), for domestic use, and then ship it as LNG to customers in Asia, bypassing Panama Canal. The project has been discussed for many years but has not progressed due to the cost and amount of work required. Trump has asked Japan's Prime Minister Shigeru ishiba, who has simultaneously threatened trade tariffs and urged allies to purchase U.S.-produced energy, to support the Alaskan Plan. Taiwanese energy company CPC Corp. signed a nonbinding agreement last month with Alaska Gasline Development Corp. to invest and buy LNG. Taiwanese President Lai Ching Te said that this move would guarantee the island's security of energy. The summit planned by Trump's National Energy Dominance Council to maximize oil and gas production would be around June 2. The New York Times was the first to report this. The White House or the Interior Department didn't immediately respond to an inquiry for comment. Separately officials from Thailand, who could also be consumers of LNG from Alaska, as well as South Korea, are expected to visit Alaska to discuss the project in the next couple of weeks, according to the source, who spoke under the condition of anonymity. This would be the first time that officials from Thailand have visited Alaska to discuss the project during Trump's second term. Ahn Duk Geun, South Korea's Minister of Industry, said in Washington on Thursday that he wasn't aware of any plans to announce the company's commitment. He added that "there are many things to be done" in order to "understand the local situation better". Ahn stated that the country will be sending an inspection team. The results of due diligence must be seen before discussions can proceed.
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Source: US to hold Alaska LNG summit and urge Japan, South Korea, and other countries to support the project
A source familiar with this matter told Reuters on Thursday that the energy security council of President Donald Trump plans to hold a summit in Alaska early in June. It hopes Japanese and South Korean representatives will announce their commitments to the Alaska LNG Project. Trump has praised the $44 billion Alaska LNG project. This project would send gas from North Slope fields in Alaska via an 800-mile pipeline (1,300 km), for domestic use, and then ship it as LNG to customers in Asia, bypassing Panama Canal. The project has been discussed for many years but has not progressed due to the cost and amount of work required. Trump has asked Japan's Prime Minister Shigeru ishiba, who has simultaneously threatened trade tariffs and urged allies to purchase U.S.-produced energy, to support the Alaskan Plan. Taiwanese energy company CPC Corp. signed a nonbinding agreement last month with Alaska Gasline Development Corp. to invest and buy LNG. Taiwanese President Lai Ching Te said that this move would guarantee the island's security of energy. The summit planned by Trump's National Energy Dominance Council to maximize oil and gas production would be around June 2. The New York Times was the first to report this. The White House or the Interior Department didn't immediately respond to an inquiry for a comment. Separately officials from Thailand, who could also be consumers of LNG from Alaska, as well as South Korea, are expected to visit Alaska to discuss the project in the next couple of weeks, according to the source, who spoke under the condition of anonymity. This would be the first time in Trump's second term that officials from Thailand have visited Alaska to discuss the project. (Reporting and editing by David Gregorio; Timothy Gardner)
Why a Canadian freight rail stop would roil North American supply chains
Canada's 2 primary freight rail companies are set to lock out around 10,000 of their Canadian unionized workers on Thursday at 12:01 a.m. ET (4:01. GMT), starting an extraordinary synchronised work interruption that. would grind practically all train freight movement in the country. to a halt.
HOW INTEGRATED ARE THE RAIL NETWORKS THROUGHOUT THE United States AND CANADA?
Canadian National Train Co and Canadian Pacific. Kansas City have said their rail networks south of the. border will continue to run, but industry groups fear that a. work interruption would have significant impacts on the movement of. items and products across North America.
CN and CPKC's coast-to-coast rail networks in Canada link. south of the border and act as crucial supply chain links to. trade corridors and ports throughout North America.
The networks intersect with those of U.S. rail operators. such as BNSF Train, Union Pacific, Norfolk. Southern and CSX, facilitating the motion of. billions of dollars' worth of items and products through. ports and storage facilities across the continent.
CN's network extends south to New Orleans. CPKC's network. links to the U.S. ports of Corpus Christi, New Orleans and. Gulfport, and it extends further south to the ports of Tampico. and Lázaro Cárdenas on the east and west coasts of Mexico.
HOW WOULD A CANADIAN RAIL BLOCKAGE AFFECT THE UNITED STATES?
Around a third of the traffic moved by the 2 Canadian rail. business crosses the border with the United States.
Numerous U.S. business and manufacturers, especially those in the. Midwest, utilize Canadian ports for imports and exports, as Montreal. can be quicker for shipments to and from Europe, while Vancouver. can be quicker for ocean service to and from Asia.
Union Pacific, the No. 2 U.S. railroad operator, has actually warned. that a synchronised interruption would have devastating consequences. for the U.S. and Canadian economies.
Dozens of groups representing miners, farmers, exporters,. and fertilizer producers, to name a few, have actually alerted that their. sectors face debilitating supply-chain hold-ups, increased costs,. cash-flow constraints and prospective shutdowns in a lengthy. stoppage.
HOW WOULD THE U.S. AND CANADIAN FARM SECTORS BE AFFECTED?
A blockage would strike the movement of whatever from wheat. to ethanol, potash fertilizer and meat.
In specific, it would crimp shipments of U.S. spring wheat. from Minnesota, North Dakota and South Dakota to the Pacific. Northwest for export. A blockage would likewise hit Canadian potash. and grain exports.
The U.S. exported $28.3 billion of agricultural items to. Canada in 2023, making it the third-largest location for U.S. farming exports behind China and Mexico. The U.S. imported. $ 40.1 billion of Canadian farming items in 2015,. making Canada the second-largest pioneer of U.S. farming. imports.
Ethanol, potash, corn, cereals, food grains, cooking oils,. and meat are among the farming items traded in between the. 2 countries.
WILL TRADE WITH MEXICO BE AFFECTED TOO?
Mexico is Canada's third-largest single-country product. trading partner behind the U.S. and China, while Canada was. Mexico's fourth-largest merchandise trading partner in 2023.
Mexico exports trucks, cars and trucks and lorry parts to Canada,. together with mangoes and avocados. Canada exports wheat, meat,. aluminum, cars and parts to Mexico.
Two-way trade between the 2 countries, much of which moves. by means of the rails, was almost C$ 55 billion ($ 40.48 billion) in 2023.
CAN THE TRUCKING MARKET STEP INTO THE BREACH?
Truckers state they are dealing with a rise in need and that roadway. freight rates are increasing for carriers in Canada. Nevertheless,. industry experts state that while the trucking sector can manage. some of the need, it can not change rail circulation. In some. cases, the market does not have the equipment, nor the. capability, to handle bulk commodity freights such as potash, food. grains, or coal.
(source: Reuters)