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Iraqi PM confirms Kurdish region agreement to resume oil exports
After a two-year hiatus, Iraq will resume the export of crude oil from its Kurdish Region to Turkey. This follows what Prime Minister Shia al-Sudani described as an historic agreement between Baghdad's regional government and the Kurdish region. According to the agreement, Iraq’s state oil marketing company SOMO will export crude oil from Kurdish fields via a pipeline into Turkey. Kurdistan Regional Government announced on X, that oil exports would resume in 48 hours following the tripartite accord between the Iraqi oil ministry, KRG Ministry of Natural Resources and oil producing companies. The flow of oil through the Kirkuk to Ceyhan pipeline has been halted since March 2023, after the International Chamber of Commerce (ICC) ordered Turkey pay Iraq $1.5 Billion in damages due to unauthorised exports of Kurdish regional authority. In a press release, the Iraqi oil minister said that it had reached an accord to export all crude from Kurdistan, except for volumes used for local purposes, via SOMO to Ceyhan. The ministry didn't specify when the flow would resume. On Wednesday, eight oil companies in Iraqi Kurdistan representing 90% of production reached an agreement in principle with Iraq's federal government and regional governments on the resumption of exports. Before the suspension of exports, Iraq shipped about 230,000 barrels a day through the pipeline. The Turkish government is appealing against the compensation order that Iraq received for shutting down the pipeline, but it says they are ready to restart. Reporting by Yomna Alashray and Enas Ehab Editing by Elaine Hardcastle and Peter Graff Lisa Shumaker
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Portugal's Azores are on alert for extreme weather as Cyclone Gabrielle approaches
Portugal's Azores Archipelago closed all schools and shut down public services and tourist activities on Thursday. They urged people to remain indoors in anticipation of cyclone Gabrielle. The Meteorological Agency IPMA put the islands on Red Alert - the highest level of emergency, only used for extreme weather events. Alonso Miguel Alonso, the regional government's environment secretary, told reporters that any activity along the coast and riverside areas was prohibited for the following 24 hours. According to the IPMA, the hurricane was expected to produce sea swells of up to 18 metres (59 feet) and winds between 130-200 kilometres an hour (81-124 mph). About 250,000 people live in the Azores. They are known for their lush volcanic terrain, rainy weather, and free-grazing cattle. (Reporting and editing by PhilippaFletcher; Sergio Goncalves)
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Mexico President welcomes the billionaire's acquisition of stakes in local Citi retail unit
Mexican Claudia Sheinbaum, president of Citigroup in Mexico, said that it was "good" news on Thursday that a local billionaire signed an agreement to buy a 25% stake. Sheinbaum praised the Citigroup deal that put Banamex in the hands of Mexicans by selling the stake to business magnate Fernando Chico Pardo who chairs airport operator ASUR for $2.3 billion. Analysts viewed the announcement as an important step in Citigroup's divestment. The value of the Banamex stake at $9.12 billion effectively sets a floor for any potential Initial Public Offering (IPO). In a telephone interview, Wells Fargo bank analyst Mike Mayo said, "At the very least, it clarifies how much money a complete divestiture would raise". In a Thursday note, Mayo stated that a possible Banamex IPO may be delayed until mid-to-late 2026 instead of the previously expected early 2026 timeline. Ebrahim Poonawala, an analyst at Bank of America, said that the deal was a positive step in achieving higher profitability. Poonawala believes the deal is a replacement for a share sale at an IPO. Citigroup estimated that they would sell between 15 and 20% of the shares in the initial transaction. In a Thursday note, he stated that the deal "could be viewed as a possible floor price for Banamex before an IPO". The analyst said that Fernando Chico Pardo and Banamex have a long-standing relationship. His wife Veronica Hernandez is the sister Roberto Hernandez, the former owner and CEO at Banamex. Reporting by Kylie Madry, Tatiana Bautzer and Hugh Lawson; Editing by Aida Pelaez-Fernandez & Hugh Lawson
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Denmark informs Latvia that drone activity is linked to state actor
Baiba Braze, Latvia's Minister of Foreign Affairs, said that Denmark had informed its allies about drone incursions in Denmark that briefly affected airports and military installations. Braze told a reporter that the Danish government had said that it was a state-run activity. "We will wait to hear more from our Danish counterparts, but we are all clear that we must invest in counter-drone capabilities, both on the side of our allies and our own." The Danish Foreign Ministry did not respond immediately to a comment request. Denmark said Thursday that the incidents are hybrid attacks intended to spread fear. However, authorities were unable to identify the perpetrators. Latvia has developed counter-drone capability, including acoustic sensor, and worked closely with Ukraine which is subject to drone attacks almost every day from Russia. "We have invested consciously in counter-drone activities. These scenarios are also asymmetric. "It's difficult to know when and where," said she. Braze said that it was difficult to deal with countries such as Latvia and Denmark, given that they are not at war. Their airspace is not closed like in Ukraine. There's a great deal of legitimate activity going on. "We have to work it out correctly," she said. The EU is looking into how to build a "drone fence" along the EU’s eastern border. This project has been given a new urgency after a Russian drone intruded into Poland. Analysts and officials claimed that the incursion revealed gaps in Europe and NATO's capability to protect against drones. However, Polish and NATO forces did shoot down a few of them using expensive air defense systems and warplanes. "The time you need to accomplish this is very short, and you also don't want F-35 fighters," Braze said, whose nation leads a NATO coalition that aims to move the alliance on this issue. (Reporting from John Irish and Jacob GronholtPedersen in Copenhagen, editing by Michelle Nichols & Howard Goller).
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Sources say that Google is likely to face a second EU antitrust fine
Three people with direct knowledge said that Alphabet’s Google will likely be hit with a second fine in the next few months under EU tech regulations. The European Commission is currently drafting their decision. As the EU's enforcer of competition, the Commission fined Google 2.95 billion euros ($3.45billion) earlier this month. This was for favoring Google's online display technology and reinforcing the central role of its ad-exchange AdX to the detriment rivals and publishers. The second fine, which is looming, relates to accusations made in March, that Google favored its vertical search engines, such as Google Shopping and Google Flights, over competitors. No rush to close the case despite Trump's criticism and trade tensions The two cases against Google were filed under the EU Digital Markets Act. This law outlines a number of dos and donts for tech giants. These rules are designed to limit the power of big companies and give rivals a chance to compete, while giving users more choices. Violations may cost a company as much as 10 percent of its annual global sales. In an attempt to alleviate concerns and avoid a second fine, the world's most popular online search engine made a number of proposals. However, it has not been able to appease comparison shopping sites and other critics, including airlines, retailers, and hotels. Sources said that Google could avoid a fine by submitting a better proposal. The Commission has declined to comment on a request. Google responded to the questions by pointing to comments made earlier this year by Oliver Bethell, its senior director of competition. He said: "While we've invited feedback through this process, it is now time to end this debate without prioritising the interests of few over the millions in Europe that benefit from Search." People familiar with the matter say that the Commission has no plans to close the case, given the criticisms from the Trump Administration over the EU's crackdown against Big Tech as well as the current tensions in trade between the EU and the US.
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According to Ukraine, Russians have cut power to 70,000 Chernihiv consumers.
Officials said that Russian airstrikes on Thursday temporarily cut off power to at least 70,000 customers in the northern Chernihiv Region of Ukraine. Moscow is renewing its airstrikes on the shattered infrastructure for energy ahead of winter. The regional electricity distribution operator reported that there were power outages in Chernihiv, its surrounding districts, and in Nizhyn. It added that the restoration of electricity supply was underway. Overnight, Russian forces targeted energy plants in Vinnytsia. They disrupted power flow for parts of central city, and caused fires. In the three-and-a half years since Russia's invasion began, it repeatedly attacked Ukraine's energy infrastructure in advance of the winter and autumn months. It has intensified such attacks over recent weeks. The CEO of the company said that Russian troops have also launched "systematic attacks" on Ukraine's rail system since this summer. (Reporting and Editing by Ros Russel)
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Israel strikes Yemen’s Sanaa one day after Eilat drone strike
Israeli officials said they struck targets in Sanaa, Yemen that were linked to the Houthis. This comes a day after a drone was claimed by the group for an attack on a resort in Israel's Red Sea resort Eilat. In a press release, Israel's air force said that the Houthi General Staff control headquarters, intelligence and security compounds, as well as military camps, were among the targets it had attacked. Israel Katz, Israel's Defence Minister, said on X that "we have now delivered a strong strike on many terror targets of the Houthi terrorist organization in Sanaa". These strikes are part of an ongoing war between Israel and Houthi militants that has lasted for more than a decade. Residents of Yemen told residents that the strikes targeted areas to the south and west Sanaa. The strikes occurred while Abdul Malik al-Houthi, the leader of the Houthi movement, was delivering a recorded speech. The Israeli ambulance service reported that at least 20 people were hurt on Wednesday when a drone launched by Yemen struck a hotel located in Israel's Red Sea resort town of Eilat.
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Norway approves the start of a new gas export line Troll B
It was announced on Thursday that the Norwegian Offshore Directorate, or NOD, had granted permission to build a new gas pipeline from Troll B. This will reduce the decrease in production of natural gas in the coming years. The NOD stated that the tie-in will connect Troll B with the Kvitebjoern export pipeline which leads to the Kollsnes onshore processing plant. It is expected to start up in the fourth quarter this year. It was revealed that some of the gas from Troll B had been re-injected and exported via Troll A to Kollsnes. According to the statement, gas injection will no longer be required at Troll B. This new solution will allow for increased gas export. NOD stated that the new pipeline offers additional flexibility, as gas can be exported through both the Troll A gas pipeline and the Kvitebjoern Gas Pipeline. Equinor, the operator, said that Troll is Europe's biggest gas field. In 2024, it will deliver a record 42,5 billion standard cubic meters (bcm), meeting 11% of European Union demand. (Reporting and editing by Louise Rasmussen, Nick Zieminski and Nora Buli)
Asian spot prices remain stable on low demand
The Asian spot LNG prices remained stable this week, as regional demand was muted. Meanwhile, a gas supply agreement between Russia and China could curb future LNG shipments by the largest Asian importer.
Average LNG price for delivery in October to Northeast Asia
Masanori Odaka of Rystad Energy said that east Asian importers showed a muted interest in purchasing cargoes, although some Japanese and Korean firms offered to deliver them by the fourth quarter. Current prices are still above what some end users consider acceptable.
He added that Chinese importers also stayed away from the current spot price, and most utilities were only interested in buying at $10.50/mmBtu.
Beijing and Moscow signed an agreement this week to increase the gas supply through the existing Power of Siberia pipe and to build the Power of Siberia 2 pipeline. However, they are yet to agree on the pricing.
Klaas Dzeman, an analyst at Brainchild Commodity Intelligence, stated that China is sending out a geopolitical message that it wants to receive more Russian natural gas. This will reduce its LNG dependence from other sources by 2027, and influence the profitability of LNG producers.
Analysts and industry players are also watching to see if more tankers sanctioned with Arctic LNG 2 supplies will deliver additional cargoes into China.
In Europe, S&P Global Commodity Insights set its daily North West Europe Gas Marker benchmark price for cargoes to be delivered in October ex-ship at $10.475, a discount of $0.625/mmBtu from the October futures prices at the Dutch TTF Hub.
Spark Commodities set the price at $10.442/mmBtu while Argus put it at $10.49/mmBtu.
Aly Blakeway is the manager of Atlantic LNG for S&P Global Commodity Insights.
This also comes as imports to Europe have experienced a slight decline, due to the cooling of heatwaves. Also, easing concerns over storage has added more bearish tailwinds in the market.
Qasim Afghan, Spark Commodities analyst, stated that the U.S. arbitrage for Northeast Asia via Cape of Good Hope has shrunk significantly in recent weeks, and only marginally influenced U.S. cargo shipments to Europe. Arbitrage via Panama also increased and now opens to Asia.
He said that the Atlantic LNG rates dropped to $28,500/day last Friday while Pacific LNG rates fell to $32,500/day.
(source: Reuters)