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Maguire: The US gasoline market is set to be tested again after a near-record draw of stock.
The near-record drawdown of gasoline inventories in the United States is flashing a warning to fuel markets. The system is losing its buffer as seasonal demand is peaking. This combination doesn't guarantee shortages, but it increases the chances of unexpected price changes if something goes wrong with replenishing inventory during peak U.S. Driving season is upon us. U.S. gas prices have already risen by 50%, to near four-year highs, since the U.S. war with Israel against Iran began February 28. They currently average $4.33 a gallon. After 15 weeks of reductions in gasoline inventories, the national stockpiles are at their lowest level for this time of the year since 2014. A durable Middle East peace deal that restores tanker traffic quickly through the Strait of Hormuz may help to limit further price increases in the short term and prevent further steep reductions of U.S. gasoline stock. Any resumption of military hostilities which threatens to further hinder oil production and exports out of the Middle East is likely to spark a new rally in U.S. gas prices this summer. This will fuel cost-of-living concerns across the nation. Record Run EIA data show that the 15-week decline in U.S. gasoline stocks since mid-February is "equal" to the longest stock draw on record which took place between mid-February 2012 and late May 2012. U.S. gasoline stocks are now around 211.5 millions barrels. This is down from 253 million barrels just before the Iran conflict began and 5.5% lower than the average five-year figure for this time of the year. If the stock continues to fall, 2026 will be the year that the national gasoline stocks are continuously reduced without being replenished. The next update of EIA stock data is scheduled for June 3. A further reduction is likely, given the fact that gasoline consumption in the country has been steadily increasing as families begin to go on summer vacations. At this time, domestic crude oil stocks are also experiencing a sharp decline due to shortages resulting from the Iran War. The U.S. crude inventories are expected to decline for a sixth consecutive week, the longest stretch of weekly oil decreases since 2024. RISE IN PROCESSING RATES As U.S. refiners increase processing rates to boost refined product output, further declines in crude stock are likely. The U.S. refined 16.9 million barrels last week. This was the largest weekly processing volume since November last year. It should lead to a rise in refined product sales. It is not clear if any of this extra supply will reach the domestic market. This is because many U.S. refining plants are designed to serve export markets, where gasoline and diesel are often more expensive than in the U.S. Retailers will most likely be able to buy up any excess fuel that makes it on the U.S. Market in order to meet domestic demand. The consumption patterns are likely to continue increasing as the end of the U.S. School Year marks the beginning of the busiest time for U.S. motorists, when families hit the road on vacations and for family visits. This rising demand is likely to result in further draws on U.S. gas stocks, which may lead to an increase in gasoline prices. Prices are already near multi-year records. The author is a columnist and he has expressed his opinions here. You like this column? 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.
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Travel restrictions tightened as Ebola threat rises
World Health Organization declared the Ebola outbreak that has been occurring in Democratic Republic of Congo a Public Health Emergency of International Concern on May 17, and warned of a high-risk of it spreading to neighboring countries. This decision has led?governments?to step up containment measures related to travel. The following is a list with the screening measures and travel restrictions announced and implemented by various countries. UNITED 'STATES In may, Washington prohibited non-citizens from entering 'the United?"States after they had traveled to the DRC, Uganda, or South Sudan within the last few weeks. The Centers for Disease Control and Prevention extended the ban on May 22 to green card holders that had visited these countries within the last 21 days. On May 23, the CDC added Hartsfield-Jackson Atlanta International Airport, along with Washington Dulles, to its list of travel funneling airports. The CDC will take U.S. citizens returning from affected areas to designated screening zones for temperature checks, travel histories verification and symptom tracking. CANADA On May 26, the Canadian government announced that all residents of DRC, Uganda and South Sudan will be prohibited from entering Canada for 90-days starting on May 27. Canadian citizens, permanent residents?and foreign nationals?who have visited affected areas recently and have not shown symptoms?will be quarantined for 21 days starting May 30. THE BAHAMAS On May 26, the Bahamian Government announced that an immediate ban would be placed on residents of DRC, Uganda, and South Sudan. The ban will remain in effect for 30 days. The Bahamas announced that they would also be conducting enhanced health screenings, and possibly quarantining foreigners arriving within 30 days from the date of their arrival in the Caribbean nation. CAYMAN ISLANDS The Cayman Islands Government announced on May 20 that it would be implementing enhanced screening measures to prevent any further incidents after a flight with?two passengers who had recently traveled to the DRC landed. MEXICO David Kershenovich, Mexico's health secretary, addressed the media in a press conference on May 25. He outlined tighter Ebola-screening measures at airports and urged the public to avoid travel to the DRC. JORDAN According to Jordanian State Agency, the Jordanian Government suspended entry on May 19, for travellers coming from DRC and Uganda. Kenyan Ministry of Health announced on 25 May that it has enhanced screening of travelers at high-risk entry points, coordinated by the Kenya National Public Health Institute in full activation of National Incident Management System. The ministry said that in order to help contain potential incidents, it has activated holding and isolation facilities at border locations. ZAMBIA After two suspected Ebola cases were cleared, the authorities in Zambia have increased screening and surveillance. The health ministry announced on May 29, "Zambia's screening tools and protocol are being used at the entry points to Zambia, and among people who exhibit Ebola-like signs and symptoms within the country." BAHRAIN Bahrain announced on May 19, that it would suspend for 30 days, the entry of all foreign travelers arriving from South Sudan and Uganda. INDIA India has implemented screening and surveillance at airports and entry points. It also issued advisories about precautions and encouraged citizens to avoid travel to South Sudan, the DRC and Uganda that is not essential. THAILAND Thailand's Public Health Ministry announced that, starting May 27,?passengers from the DRC or?Uganda will only be permitted to enter Thailand through Suvarnabhumi Airport where they will undergo a screening. If they show symptoms of Ebola, travellers from or through these countries must quarantine themselves for at least a week. EUROPEAN UNION The EU Health Security Committee stated on May 22 that screenings at entry points were not required for passengers arriving from DRC or Uganda. They cited low risks to the population. The Dutch airline announced on May 29, that it had cancelled flights from and to Entebbe Airport, near Kampala in Uganda. This was due to restrictions related to the Ebola outbreak 'in Central Africa. The airline said that it was unable to operate its planned routes because of the travel and entry restrictions imposed by some countries for those who have recently traveled through Entebbe. This includes their crew. Brussels Airlines announced on Monday that the Ebola outbreak had not affected its flight schedule. However, it has changed the rosters for its long-haul crew, because if any of them have been to the DRC, Uganda, or both in the last 21 days, then they will be denied entry into the United States. (Reporting from bureaus, compiled by Mirko MIORELLI, Alexander KLYVE GUDBRANDSEN and Arda DIPOVA in Gdansk; Editing by Matt Scuffham & Milla Nissi Prussak.
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Ship operators call for clear rules to restore normalcy to Hormuz
Shipping executives met in Athens, Greece on Monday. They said that a peace agreement between the United States of America and Iran must include 'clear rules' allowing ships to resume normal operations via the Strait of Hormuz. Capital Link, an annual week-long shipping exhibition, began with a Capital Link Conference and other events. The following are some quotes in alphabetical order: PANKAJ KHANNA PRESIDENT, HEIDMAR HOLDINGS COMPANY "What we really need is a framework. A set of rules and regulations, or whatever it takes to tell us how to enter the country, and then get out. Even if there was a signed peace agreement, it would need to be clarified. Khanna noted that the company's vessel was stuck in the Gulf of Mexico for three months and the impact it had on the seafarers. "Of course, the seafarers are missing out on seeing their family, but also on births or deaths or marriages." VASILIS KIKILIAS - GREECE SHIPPING MINISTER Can anyone predict the end of the war? Unfortunately, no. There is no way to predict the future. Conflicts are messy and difficult to resolve. "We hope, of course, there will be a resolution. We can't accept that ships will not be able to travel freely around the world. "I wish they would leave out the shipping industry, seafarers and global trade, but this seems to be 'impossible. YIANNIS PROCOPIOU is the CEO of CENTROFIN MANAGEMENT. "While insurance is available, it doesn't mean the straits are a place you should transit, at least until we have clear rules of engagement for the shipping industry as to how we deal the two nations involved in this, the U.S.
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Sonatrach and Saudi Aramco cut prices by 18% & 31% respectively.
Saudi Arabian state oil producer Saudi Aramco raised its official selling price for liquefied gas by 1% to 3% between June and July, while Algerian Sonatrach cut it from 18% to 31% because of a higher supply on the Mediterranean market. Saudi Aramco increased its June OSPs by $10 per metric ton, to $760 for propane And?by $20 per ton up to $820 for butane . LPG comes in two types: Propane and Butane. They have different boiling points. LPG is used primarily as fuel for cars and heating, as well as as a feedstock for other chemicals. Sonatrach has reduced its June propane OSP by $125 per ton, to $575 And for?butane?by $270 per ton, to $610 . Saudi Aramco’s OSPs serve as a reference when negotiating contracts to deliver LPG from the Middle East?to Asia-Pacific. Sonatrach’s?OSPs? are used as benchmarks in the Mediterranean and Black Sea regions, including Turkey. (Editing by Kirovan Donovan).
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Italy's CDP and China's State Grid to renew governance agreement in Italy energy network
Sources say that the Italian state lender CDP, and State Grid Corporation of China, are planning to renew their governance agreement in a?company managing Italy's major energy networks. This is despite Rome's concerns over Beijing's influence on these assets. Sources who asked not to be identified said that the pact will expire in November, but it will automatically renew if neither party uses the option to terminate it six months prior to the expiration date. CDP Reti is one of the most important state-backed Italian companies. It owns about a third?of Terna, and Snam, which operate Italy's gas and electricity grids. Rome's fears about Chinese influence over its key energy assets became apparent in November when Snam canceled plans to buy a stake in Germany’s largest independent gas distribution firm. According to reports at the time, the German 'economy minister' opposed the deal due to State Grid Corporation of China being an indirect investor in Snam. Rome and Berlin both aim to counter China's increasing industrial and political influence in Europe while also trying to maintain vital economic ties with Beijing, which are crucial for their respective industrial sectors. Cassa Depositi e Prestiti, an Italian state lender, sold the State Grid Corporation in China a 35% share in CDP Reti in 2014. CDP Reti owns 31,4% of Snam and 29,0% of Terna, as well as about 26% Italgas. It is Italy's largest gas distributor. Snam?also owns 11.4% of Italgas. Qinjing Shen is a representative from the Chinese state-owned company. She sits on the boards of Snam, Terna Italgas, and CDP Reti. He has a seat on three different boards, which gives him a good view of the Italian energy sector. This raises concerns in government circles about the Chinese shareholder's potential to impede the expansion plans. The golden power rules of Italy, which allow it to shield strategic assets, cannot be applied in the case CDP 'Reti as the renewal of a?governance agreement? falls outside of the scope of the legislation. Sources, however, emphasized that the pact limited the scope of China's State Grid's action over CDP Reti and therefore safeguarded Italy's interests in all three companies. (Additional reporting in Milan by Francesca Landini, edited by Gavin Jones).
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FedEx Freight set for market debut as spinoff nears completion
FedEx Freight, the spin-off of?FedEx Corp., will begin trading on the New York Stock Exchange Monday under the symbol FDXF. FedEx Freight is the largest provider of less than truckload services in the U.S. Citizens only. Fadi Chamoun, analyst at BMO Capital Markets, said recently that the company, as a newly-separated, pure-play, offers a significant margin improvement opportunity. However, this depends heavily on execution. Chamoun said that the improvement depends on management’s ability to?translate network advantages into better service quality, higher revenues per shipment and sustained operating ratio improvements. J.P. Morgan analyst Brian Ossenbeck stated that he values FedEx Freight lower than its rivals XPO and Saia, as well as Old Dominion Freight Line. "Given execution risks and?transition cost related to the spinning as well as persisting underperformance on service metrics and volume metrics", he said. FedEx Freight's Chief Financial Officer Marshall Witt stated in April that the company expects an?average growth in revenue of 4%-6% over the medium term. Witt said that the company expects a core profit increase of between 10% and 12% in the medium term. Witt stated that investments in modernizing the business and separating it from FedEx would dampen the 'profits' in the short-term, but cost controls, automation, and the addition of more profitable cargoes will increase margins over the long term. Reporting by Lisa Baertlein and Nandan Mandayam, both in Bengaluru. Editing by Shinjini Giuli.
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Kremlin: French seizure a tanker bordering on piratery
The Kremlin said on Monday that the seizure by France of a?oil?tanker named 'Tagor' was 'illegal, and bordered on piratery. On Sunday, the French navy diverted a vessel that was sailing from Russia. Emmanuel Macron, the French president, said that the tanker was under international sanctions and the operation was conducted in accordance with maritime law. Dmitry Peskov, the Kremlin's spokesperson, said that Russia "didn't agree" with international law being followed. Peskov said that such actions bordered on international piracy. He added that Russia would respond to the incident by taking measures to ensure?safety? of cargo. A Kremlin official said in February that Russia would 'deploy its Navy to prevent the seizure of their vessels' and may retaliate if Russian ships are taken. Reporting by Dmitry Antonov; Writing by Alessandra Prentice; Editing by Guy Faulconbridge
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Ukraine strikes Russian energy sites: What was hit?
Kyiv intensified its attacks on Russian energy installations in recent months, as the peace talks that were supposed to end the Ukraine conflict failed to make any progress. The following is a list of recent attacks and their impact, in chronological order. YAROSLAVL According to Volodymyr Zelenskiy, Ukrainian forces attacked the Russian oil refinery at Yaroslavl on May 25. This was about 700 km (435 mi) away from the Ukrainian border. The refinery can process 15 million metric tonnes per year or about 300,000 barrels a day. SYZRAN On May 21, the Ukrainian military and President Zelenskiy announced that Ukrainian drones had struck Rosneft's?Syzran refinery, which is owned by Rosneft in the Samara area. Two industry sources reported that the refinery stopped operations following an attack on a primary processing unit. The oil refinery had been suspended following drone attacks on April 18, The refinery can process 8.5 million tonnes per year or 170,000 barrels a day. According to industry sources, in 2024 it will process 4.3 million tonnes of crude oil into 800,000 tonnes of gasoline, 1,5 million tons diesel, and 700,000 kilograms of fuel oil. TUAPSE Ukraine attacked a Russian refinery at the Black Sea port Tuapse, the Ukrainian general staff announced on May 27. Officials said that a drone attack on April 28 caused a major oil refinery fire. The facility, which exports the majority of its products, had to stop operations. The plant produces fuel oil, naphtha and vacuum gasoil. Its capacity is around 12 million tonnes per year, or about 240,000 barrels a day. The Ukrainian General Staff announced on May 20 that Ukraine's military had struck an oil refinery in the Nizhny Novgorod Region of Russia near Kstovo, and specifically its primary oil-processing unit. Two industry sources confirmed that NORSI, Russia’s fourth largest?oil refinery and owned by Lukoil, also halted operations on 5 April following an attack by a Ukrainian drone. NORSI is the second largest producer of gasoline in Russia. It can process up to 16 million metric tonnes of oil each year or about 320,000 barrels a day. MOSCOW Two industry sources reported on May 19 that the processing of oil at a Moscow refinery ceased after an attack by a Ukrainian drone. On May 17, Moscow Mayor Sergei Sobyanin said that although 12 people had been injured in the attack, the "technology" of the refinery was not damaged. This compact refinery in Kapotnya, a district of the capital, has an annual capacity of 11 million tons of crude oil. RYAZAN Two industry sources reported on May 19 that the Ryazan oil refining plant, which represents almost 5% of total refining volume in the country, had stopped processing after a drone attack by Ukraine. According to industry sources, the refinery will process 13.1 million metric tonnes of crude oil by 2024. It will produce 2.2 million tons gasoline, 3.4 millions tons diesel, and 4.3million tons fuel oil. ASTRAKHAN The local governor reported that debris from a drone strike caused an fire at a gas-processing plant on May 13, in the southern region Astrakhan. The plant can produce 12 billion cubic meters of gas per year and 3 millions tons of stable condensate. It produces diesel, gasoline, and liquefied oil gases. Two industry sources reported that the Perm oil refinery in Russia halted production after a drone strike on May 7 damaged equipment and caused a fire. The refinery will process around 12.6 million metric tonnes of oil in 2024. This is equivalent to 250,000 barrels of oil per day. It will produce 2 million tons gasoline, 5.3 millions tons diesel, 700,000.000 tons coke, and 200,000 litres of fuel oil. NOVOKUIBYSHEVSK Two industry sources reported that the primary oil processing was stopped at Rosneft's Novokuibyshevsk refinery on April 18, following a drone attack by Ukraine. Industry sources say that in 2024 it will process 5.74 million metric tonnes of crude oil and 1.10 million tons each of motor gasoline, diesel fuel, and fuel oil. Ukraine's military confirmed that it carried out an attack on the Bashneft Novoil oil refinery in Russia, more than 1,400 km (870 miles) away from the Russia/Ukraine border on April 2. The plant can process up to 7 million tonnes of oil per annum. KIRISHI After?Ukrainian attacks on drones, the Kirishi oil refinery stopped processing its products at the end March. Kirishi produced 2,000,000?tons gasoline, 7.1,000,000 tons diesel, 6.1,000,000 tons fuel oil, and 600,000. UST-LUGA PROCESSING PLLAN Three market sources reported on March 27, that Novatek Energy Company suspended the processing of gas condensate and export loadings of naphtha at its Ust-Luga Complex after drone attacks resulted in an fire. Three processing units of the Ust-Luga Complex, each with 3 million tons per year capacity, refine stable condensate to light and heavy naphthas, jet fuels, ship fuel oils and gasoils. According to company data, in 2025?the complex will have processed 8 million tonnes of gas condensate. PORTS/TANKERS Authorities in Krasnodar said that a fire broke out after an attack by a Ukrainian drone at Temryuk, a port located in southern Russia. Mikhail Yevrayev, the governor of Russia's Yaroslavl Region, said that fuel storage facilities also caught fire on May 29 following an attack by a Ukrainian drone in Russia. Ukraine attacked Russia's port on the?Baltic and Black Seas, including Primorsk, oil tanks and military ships, on May 3. After a drone strike on April 23, a fire broke out at an oil pumping station owned by Transneft that supplies crude to Russia's biggest export terminal, the Baltic port Primorsk. An official of Ukraine's SBU said that on April 21, Ukrainian drones hit an oil pumping and dispatch facility located in Russia's Samara Region. In April, Ukrainian drones started a fire in the Sheskharis Oil Terminal in Russia. Primorsk is one of Russia's biggest export gateways and can handle up to 1 million barrels a day. In March, it lost 40% of its storage capacity in a drone attack by Ukraine. Joe Bavier (Reporting and Editing)
The battle for Hormuz could spark the next Iran conflict: Bousso
The Strait of Hormuz is emerging as the "central battleground" of the Iran conflict. It is possible that the passage of several oil and gas tanks in recent days, with Tehran's apparent consent, indicates tacit acceptance of Tehran's control. This signals a dangerous new phase of what is rapidly turning into a "Hormuz War". The global energy market has been shook by the near-complete closing of the crucial trade artery in Tehran since the joint Israeli and U.S. airstrikes took place on February 28, as well as the reciprocal U.S. naval?blockade last month. The sudden loss of over 13% of the global oil supply, and about a fifth of the liquefied gas flow, has caused major problems for many countries, especially in Asia.
According to Kpler data, it was reported that three VLCCs, each carrying around 2,000,000 barrels of Iraqi crude oil bound for Asia, passed through the last week without their tracking systems on. Some indications suggest the transits may have been coordinated with Tehran. Qatar has also sent its first two LNG cargoes after the start of the war. The LNG is being sold ?to Pakistan - the primary mediator in U.S.-Iran negotiations - under a government-to-government deal, according to sources familiar with the matter.They said Iran had approved the shipment to help build confidence with Qatar and Pakistan. Sources familiar with the matter said that Iran had approved the shipment to help build confidence with Qatar and Pakistan. Uncertain is whether these passages were sanctioned or if shipowners paid an informal toll to ensure safe passage. Some, however, seemed to have traveled along shipping routes close to Iran's coast.
This trickle of cargoes is a welcome relief for import-dependent countries, but it does not mean that the global energy market is returning to its normal state.
These?movements are a fraction of the 140 vessels which crossed the Hormuz every day before the conflict. This means that global markets remain fragile and tight. They also point to an emerging new order. Iran is now dictating not only if Hormuz will be open or closed but also who can use it. This arrangement could last beyond the current conflict, and plant the seeds for the next.
PATTERNS CHANGE
Gulf exporters such as Saudi Arabia, United Arab Emirates (UAE), Qatar, Kuwait and Bahrain - whose economies rely on an unhindered hydrocarbon flow - will be concerned by a system where Tehran decides what cargoes are sent to global markets, and at what price.
The buyers will also be uneasy. Asian importers are already suffering from supply disruptions and will resist any framework which gives Tehran direct control over their economic stability and energy security. The U.S. will not tolerate any settlement which gives Tehran sweeping political and economic influence. Trump insisted on a return to the pre-war transit status for a permanent ceasefire. Permitting Iran to control the Strait of Hormuz would undermine Washington's declared war goals and render any claims of victory hollow. Iran will not want to relinquish control of the chokepoint and, by extension the global economy. Tehran's strongest weapon. The U.S. Blockade has reportedly cost Iran $3 billion to date. It will need revenue from selective transit fees.
STASIS DEVELOPS INTO CONFLICT
This logic leads to a grim conclusion. This selective transit pattern, mediated by Iran, could become a norm that persists even if a ceasefire agreement is reached. Tehran may agree that the strait be reopened to gain concessions from the U.S., but full and unconditional freedom of movement is unlikely.
This'stasis' would be unstable by nature - it would institutionalise disruption, rather than resolve it. As all sides test the limits to control the energy flow through the strait, a renewed confrontation between Tehran and Washington and possibly with Gulf States would become more likely.
U.S. War aims have changed repeatedly in recent years. Yet the conflict has essentially converged around one defining question: Who controls the "Strait of Hormuz"? This answer will probably shape the future for the Gulf.
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(source: Reuters)