Latest News
-
China bans light aircraft following Beijing tower crash: FT
The Financial Times reported that China had halted private fixed-wing aircraft flights after a plane crash into Beijing's tallest building last week. Local government announced on Saturday that the sole pilot of the twin-seater aircraft died in the Friday incident, which also injured 13 people at the ground. The aircraft hit a 528 metre (1,732-foot) high building known as CITIC Tower, or China Zun in Beijing's central business district at rush hour. The FT reported that a nationwide airspace order has been issued to cover recreational flights. All'relevant flying activities' have been banned. The restrictions were not announced in public. Could not verify immediately the report. The Civil Aviation Administration of China didn't immediately respond to our request for comment. Authorities are investigating and have not revealed any details about 'the possible cause of this crash. TIGHTLY CONTROLLED China’s skies are some of the tightest in the world. The military retains a primary authority over the allocation and access to airspace. Beijing is one of the most sensitive areas in this management framework. According to an official review of aviation navigation rules, there is a 100-square-kilometer (39 square miles) permanent no fly zone over the political and symbolic core of the Chinese Capital. The area that is prohibited lies immediately west of China's skyscraper-filled central business district and includes Tiananmen Square, the Zhongnanhai compound, which houses China's highest political leadership. A plane flying near Beijing's skyscrapers, aside from military aircraft formations at national parades and police aircraft, is a rare sight. Commercial jets are routed around Beijing’s densely populated urban areas. Low-flying general aircraft is largely restricted to the city's outer suburbs. Beijing banned drones in the city earlier this year. Drones are no longer allowed to be brought or sold into Beijing, and storage is also strictly regulated. As the crash occurred just a few days before the Communist Party's 105th Anniversary of its founding, on July 1, it has also been brought under increased political scrutiny. This puts pressure on administrators to implement tighter controls. Stocks related to China's low-altitude-airspace industry broadly fell on Monday, with CITIC Offshore Helicopter shares down 4% and Zongsen Power Machinery down 7.7%. Reporting by Shivani Tana in Bengaluru and Xiuhao Chan and Ryan Woo, Beijing; Editing and production by Kevin Liffey & Sharon Singleton
-
Two suspects are arrested after five people were shot dead in northern Germany
On?Monday five people were killed by gunfire in a town in northern?Germany. Police said that they had detained two suspects, including the shooter. According to a spokesperson for the police, it was not immediately clear what caused the incident at Stade near the port city of Hamburg. A second police spokesperson said that the role of 'the second person in custody' is unclear at this time, and added that no other suspects were on the loose. He said that it was unclear how many people were injured. The dead, he added, were all adults. Local media reported that the incident took place near a youth center in central Stade. This is a small town west of Hamburg, with a population of a little under 50,000. The spokesperson refused to provide any further details. Police had warned residents of the area to stay away from the scene shortly after the incident.
-
Bousso: The exodus of oil from the Hormuz region sets up a chaotic rebalancing.
The price of crude oil may have returned to levels seen prior to the Iran War, but the surge of?oil exported from the Middle East after the reopening of Strait of Hormuz has created a market chaos that could take several months to settle. Brent crude prices have fallen steeply to levels seen before the Iran war, around $73 per barrel, following the U.S./Iran interim agreement. At first glance, this might suggest that business is back to normal in the world's largest oil and gas hub. The conflict had effectively paralyzed the narrow?waterway that once carried a fifth or more of global oil and natural gas for over 100 days. The market may appear to be orderly, but it is not. What appears to be normal is actually a system that's trying to reboot itself all at once. There's a race to free trapped volumes. In recent days, dozens of tankers that were stranded in the Gulf during the conflict have been rushing to leave. U.S. Energy Sec. Chris Wright stated that flows briefly exceeded the pre-war level of approximately 20 million barrels per daily, but ship-tracking data shows overall traffic is still far below the roughly 125 crossings per day seen before the war. During transit, some vessels seem to disable tracking systems. This further clouds the picture. Undoubtedly, the Middle East oil market is growing. Clearing outbound cargo is just half of the equation. Inbound tankers are required to load crude oil in storage on land, an important step to allow producers to restart the fields and refineries that were closed during the war. The recovery of supply will not be possible without this inflow. This dynamic is especially acute for producers such as Kuwait and Iraq. Bahrain, Qatar and Bahrain have very few, if not any, alternative export routes. This constraint is expected to be temporary. Rystad Energy, a consultancy firm, estimates that the Gulf region's production was shut down by the middle of June from 11.7 millions bpd just three weeks before. By mid-June the figure had dropped to 9.6million bpd. The region is now expected to reach pre-war levels by December. Iran is a factor that may be even more important in affecting the outlook for supply. Iran is expected to rapidly ramp up its oil production following the U.S. lifting most sanctions that restricted Iran's oil sales and exports. Rystad estimates that Iran's oil production could rise to 3.3 million barrels per day by the end of the year, above levels seen before conflict, if sanctions are lifted. A flood of oil is likely to reach the markets, regardless of logistics. From SHORTAGE to GLUT This surge runs headlong into a weak short-term market. The refineries in Asia, Europe and North America have already secured a large portion of their crude oil supplies for the months of July and August. This leaves extra barrels without a place to go. The only option for many tankers is to stay at sea and effectively turn into floating storage, keeping the barrels off of the market for several weeks. After experiencing the biggest oil supply shock ever, the market could soon face the reverse problem. Investors appear to have priced in a "mini glut" for the short term. Last week, Brent futures for August traded below September contracts, resulting in a new market structure known as contango. This was the first time this has happened since the beginning of the war on February 28. This contango may persist for several more weeks, as the oil backlog in the Gulf is slowly cleared. It is unlikely that this contango will last. Once the flow of crude oil returns to normal, the market needs enormous quantities to meet the recovering demand in Asia as well as replenish inventories all over the world. Do you think that supply and demand can easily be brought back to balance? Most likely not. According to the International Energy Agency, while global supply is predicted to drop by 3.9 millions bpd by 2026, they expect it to rebound by approximately 8 million bpd by 2027, to 110.3 million. The demand, on the other hand, is expected recover much more modestly. This could create a surplus of approximately 5 million bpd in 2019. The physical constraints on the oil supply chain may prevent this scenario from occurring, but given the size of the possible supply-demand mismatch, the market is in for a bumpy ride. LINGGERING RISKS Exports are booming, but concerns over the future of the Strait of Hormuz have already returned. The U.S. and Iran interim agreement stipulates that transit along the waterway will be free of charge for 60 days while Tehran negotiates a long-term framework with Oman to regulate traffic. This temporary agreement leaves a lot of room for uncertainty. In recent days, Iranian forces shot at a Taiwanese ship transiting the Strait, triggering a round tit-for -tat with the United States. These incidents were less an escalation and more a sign that Tehran wants to assert its power through the newly formed Persian Gulf Strait Authority. Although the Gulf traffic quickly resumed after the incident many shipowners, and charterers will likely remain cautious about sending vessels back there. This caution is already reflected in the flows. According to LSEG, for every four tankers that left the region in the last week, only 'one' entered. This is far below levels seen before war. The markets seem to have brushed aside concerns about political risks, logistical issues or long-term changes in the area. After months of disruption, it is unlikely that the road to equilibrium will be easy. This suggests that today's optimism in the market might be exaggerated. You like this column? Check out Open Interest, your new essential source for 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.
-
Investors on edge as tensions between the US and Iran keep major Gulf markets calm
Gulf markets opened lower on Monday as investors were on edge due to recent strikes by the U.S. against Iran. This was despite a pact?between both?countries?to stop further attacks. After several days of retaliatory attacks, which were triggered by a projectile fired by Iran that struck a cargo ship in the Strait of Hormuz on last week, there will be?a renewed push for diplomacy throughout the Middle East. Since then, both sides have accused each other for violating an interim truce. Oil prices rose due to uncertainty over the durability of the peace deal, but crude oil has since lost?nearly its entire war-related gain as markets reassessed how likely it is that supply pressures will ease. The 14-point interim agreement reached on June 17 was intended to stop the fighting that started after U.S. and Israeli actions on February 28. It also reopened the Strait of Hormuz which is strategically important and allowed negotiations to continue regarding Iran's nuclear program. Saudi Arabia's benchmark stock index fell 0.6% after a 1.1% drop in oil giant Saudi Aramco a day following its end to an eight-session losing run. Aramco has resumed crude oil loadings at its Ras Tanura Terminal, west of the Strait of Hormuz. They had been halted nearly four months ago as oil producers increased their output and exports in anticipation of an interim deal. Dubai's main stock index fell 0.2% with the top lender Emirates NBD down 0.8% and budget airline Air Arabia down 0.9%. The?index fell 0.2% in Abu Dhabi. The Qatari Index fell by 0.2%. This was mainly due to a drop of 0.7% in Qatar Islamic Bank. (Reporting from Ateeq Sharif in Bengaluru; Editing by William Maclean.)
-
Data centers aren't a real problem for US power. Douglas J. Arent: Outdated policy is.
The data centers are blamed for the rising cost of electricity in America. The real problem is not that AI and consumers are increasing energy consumption. The real issue is structural and began before the recent infrastructure boom. The average residential electricity rates increased by 6% in the past year, which is more than double the inflation rate. About one-third of American homes now spend over 5% of their earnings on electricity. Investor-owned utilities will file the most rate increase requests in 2025. This is their highest level since mid-1980s. There is clearly a problem. The data centers that are driving the AI race and other industries moving towards electrification can be credited with these increases. Electricity bills for residents in some states, such as Nebraska, New Mexico, and North Dakota have decreased. According to two studies conducted by the Columbia University Center on Global Energy Policy, power costs are rising faster than inflation in the Mid-Atlantic region, California, the Northeast, and the Southeast, areas where data centers have been less prevalent. Why does demand growth lower bills in some areas and raise them in others? Two words: poor incentives. BUILT TO SPLEND Since the 1950s, American utilities have been rewarded for building new infrastructure and not for managing their existing assets. According to Federal Energy Regulatory Commission 'filings,' utilities receive reliable returns on their capital investments, typically between 9% and 10%. Upgrade an existing line or deploy software in place of new infrastructure instead? Answer is not so clear. Customers are liable for the cost of large capital investments, as the incentive is built in. In the past decade, this dynamic has been less viable due to the soaring inflation in the energy sector. Inflation, tight supply chains, and increased tariffs are driving up the cost of transformers that transfer electricity between circuits. The price of wire and cable has risen by 152%. These costs could be reflected in?customer's bills for many decades. Climate change is another issue. Some utility bills in Florida now include "storm cost recovery surcharges". California bills have increased in the last five year to reduce wildfires. These increases are not an anomaly. These are ongoing, compounding costs that the ratepayers have to absorb. This?backdrop' was the backdrop against which the data center boom occurred. It did not create a power affordability problem, but it exposed and accelerated an existing one. Not Keeping Pace This does not mean that data centers are benign. Data center power demands will range from 5 megawatts to 200 MW by 2024. This is equivalent to about 200,000 homes. Massive new data campuses, with power demands of 1,000 to 5, 000 MW, have been proposed and are currently under construction. Data centers are expected to use 5% to 15 % of the total U.S. electricty by 2030. This has caused concern across the nation. Grid upgrades are not free. In areas where the grid is overloaded, new large loads can increase local costs. This is especially true if utilities pass these expenses on to consumers. But the answer is not to limit demand. In fact, a broader view of the evidence suggests different solutions. New electricity demand can lower prices for all when wind and solar energy is available at low cost and where large users pay their fair shares. This outcome is not guaranteed. The grid's ability to connect with low-cost supplies and fairly allocate upgrade costs will determine the outcome. It could be that data centers are required to pay for transmission upgrades. Lower Costs, Better Rules The major problem for U.S. grid operator is that infrastructure required to supply higher volumes of energy has not kept up with demand growth. PJM is the biggest grid operator in America, and it serves 13 Mid-Atlantic states. CGEP's studies reveal that there are real solutions available. Innovative uses of existing technology could increase the capacity of transmission lines already in place. Dynamic line ratings, for instance, use real-time weather information to determine the actual capacity of electricity lines, instead of relying solely on static assumptions which often overestimate what is needed. This approach helped a Pennsylvania?utility reduce congestion on monitored?lines by as much as 65%. Upgrades to the lines themselves are another option. Replace steel-core wires by lighter, stronger carbon core alternatives to nearly double line capacity within months. CGEP analysis shows that deploying grid-enhancing technology nationwide could result in savings of $180 billion by 2050. Data centers can be part of the solution. Pilot projects in Arizona and North Carolina have demonstrated that data centers could be designed so as to not draw power from the grid when there is high demand. These tools are a temporary solution. But more fundamental reforms are needed. One possibility is to tie executive compensation for utilities to the efficiency of their systems, and not just on how much they build. Modernizing the permitting, interconnection and other processes that slow down new power plants and transmission systems could be a game changer. Data centers, and other large, energy-hungry infrastructure, could also shoulder a fair portion of the energy costs?they generate, rather than passing these costs on to residential ratepayers. States that have seen a decrease in electricity prices despite an increase in demand from data centres are not magic. They managed their supply, infrastructure and cost allocation in a sensible way. When these things are not managed properly, prices rise. These things do not need to.
-
Bousso: The exodus of oil from the Hormuz region sets up a chaotic rebalancing.
The price of crude oil may have returned to levels seen prior to the Iran War, but the influx of oil from the Middle East after the reopening of?the Strait of Hormuz has created a market chaos that could last for months. Brent crude prices have plummeted to levels seen before the Iran war, around $73 per barrel, following the U.S. and Iran interim agreement. This might make it appear that business is back to normal in the world's largest oil and gas hub. The conflict had effectively paralysed the narrow waterway that once carried a 'fifth' of global oil and 'gas for over a hundred days. The market may appear to be orderly, but it is not. What appears to be normality is actually a system that's trying to reboot itself all at once. There's a race to free trapped volumes. In recent days, dozens of tankers that were stranded in the Gulf during the conflict have been rushing to leave. U.S. Energy Sec. Chris Wright stated that flows briefly exceeded the pre-war level of approximately 20 million barrels a day. However, ship-tracking data shows overall traffic is still far below the roughly 125 crossings per day seen before the war. During transit, some vessels seem to disable tracking systems. This further clouds the picture. Undoubtedly, the Middle East oil market is growing. Clearing outbound cargo is just half of the equation. Tankers from abroad are required to load crude oil in storage onshore, an important step to allow producers to restart the fields and refineries that were closed during the war. The recovery of supply will not be possible without this inflow. This dynamic is especially acute for producers like Kuwait, Iraq?Bahrain, and Qatar who have very few, if not any, alternative export routes. The constraints should only last a short time. Rystad Energy, a consultancy firm, estimates that the Gulf region's production was shut down by the middle of June. It had been 11.7 million bpd just three weeks before. By December the region should be back to its pre-war levels. Iran is a factor that may be even more important in affecting the outlook for supply. Iran is expected to rapidly ramp up its oil production following the U.S. lifting most sanctions that restricted Iran's oil sales and exports. Rystad says that Iran's oil production could increase to 3.3 million barrels per day (bpd) by the end of the year, a level higher than before conflict, if sanctions relief is maintained. A flood of oil is likely to hit the markets, regardless of logistics. From SHORTAGE to GLUT This surge runs headlong into a weak short-term market. The refineries in Asia, Europe and North America have already secured their crude supply for July and August. This leaves the excess barrels with no place to go. Consequently, many tankers will have no choice but to stay at sea. They may become floating storage units and keep barrels from the market for several weeks. After experiencing the biggest oil supply shock ever, the market could soon be faced with the opposite problem. Investors appear to have priced in a "mini glut" for the short term. Last week, Brent futures for August traded below September contracts, resulting in a new market structure known as contango. This is the first time this has happened since the beginning of the war on February 28. This contango may persist for several more weeks, as the oil backlog trapped in the Gulf is slowly cleared. It is unlikely that it will last. Once the flow of crude oil returns to normal, the market needs enormous quantities to meet the recovering demand for crude in Asia as well as replenish the global inventories that were depleted by the conflict. Do you mean that'supply and Demand will easily return to balance? Most likely not. According to the International Energy Agency, while global supply is predicted to decline by 3.9 millions bpd by 2026, in 2027 it is expected that it will rebound by approximately 8 million bpd to 110.3 million. The demand, on the other hand, is expected recover much more modestly. This could create a surplus of approximately 5?million BPD next year. The physical constraints in the oil supply chain may prevent this scenario from happening, but given the size of the potential mismatch between supply and demand, the market is likely to have a bumpy ride ahead. LINGGERING RISKS Exports are surging, but concerns about the future of Strait of Hormuz have already returned. The U.S. and Iran interim agreement stipulates that transit along the waterway will be free of charge for 60 days while Tehran negotiates a long-term framework with Oman to regulate traffic. This temporary arrangement leaves a lot of room for uncertainty. In recent days, a stark reminder occurred when Iranian forces shot at a Taiwanese ship transiting the Strait on Thursday. This sparked a round of tit for tat attacks with the United States. The incidents were less a sign of escalation and more a message: Tehran wants to assert its power through the newly formed Persian Gulf Strait Authority. Despite the fact that traffic quickly resumed after the incident many shipowners, and charterers will likely remain cautious about sending vessels back to the Gulf. This caution is already showing in the?flows. According to LSEG, for every four tankers that left the region in the past week, only one returned, a far cry from pre-war levels. The markets seem to have shrugged off concerns over?political risk, logistical issues or lasting changes in a region. After months of disruption, it is unlikely that the road to equilibrium will be easy. This suggests that today's optimism in the market might be exaggerated. You like this column? 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.
-
Australia and Vanuatu sign a delayed security agreement that is seen to curb China
Australia and Vanuatu signed a development pact on Monday. The pact had been delayed by Vanuatu for several months because of their 'concerns' that it could stifle a broader investment. Australia, in a struggle for influence with China in the Pacific, will consult on any third party investment in Vanuatu’s critical infrastructure. It will also remain the preferred partner of the country in terms of security and law enforcement. Canberra announced funding of A$500,000,000 ($344.50,000,000) for the Nakamal Agreement, a pact that is known in Canberra as the Nakamal Agreement. At a press conference, Anthony Albanese, the Australian Prime Minister and his Vanuatu counterpart Jotham Napat said: "It is a statement of?Vanuatu’s sovereign decision to not allow its territory to host any foreign military base or infrastructure. Vanuatu’s critical infrastructure will remain?free of militarisation." The agreement, which was originally scheduled to be signed by September, was postponed after Napat stated that his coalition partner raised concerns?that it might restrict Vanuatu’s ability to obtain infrastructure funding from other nations. China is Vanuatu’s largest external 'creditor. It has provided loans via Chinese banks to Chinese contractors who have built major infrastructure projects including the Presidential office complex, Parliament building, and road network. Vanuatu is currently pursuing a?deal? with China, which Napat stated on Monday was waiting for approval from Beijing. He said: "We'll?share the contract, there's?nothing we can hide." In response to a question on whether the deal included security elements, he replied,
-
One Taiwan Coast Guard officer finds strength in the gods when facing China
Yeh Chih Sheng, a Taiwan Coast Guard officer, stepped aboard the CG1005 vessel in the choppy waters around the Taiwan Strait. He brought more than just his uniform and orders. Yeh Chih-sheng is the first mate on the 2,400 ton ship, based at Taiwan's Penghu Islands. He is part of Taipei’s maritime frontline in the face of China's claim of sovereignty. He is also an assistant priest (or "siohuat" or "siohuat", in Taiwanese) at a Penghu Temple dedicated to the Five Lords, guardian deities that coastal communities have long revered for their protection against plague and safe seas. Since primary school, Yeh has been serving the gods by assisting spirit mediums at rituals where deities are believed descend from the skies and give instructions. Yeh stated that "the Coast Guard is an?additional support people can see." The Five Lords have a strong spiritual presence in the hearts of people. Both bring fishermen and the ordinary people a feeling of comfort." SOURCE OF RELIEF This fusion of duty with faith has become a comfort to Yeh as Taiwan faces increasing?military?pressure from China. China has not ruled out the use of force in order to bring Taiwan under Chinese control. Taiwan rejects China territorial claims and Beijing's claim that it is entitled to conduct "law enforcement patrols" in Taiwan's water. The U.S., as well as some of its allies have expressed concern over China's actions. Last week they said that recent operations off Taiwan’s east coast posed a threat to stability. China's Defence Ministry said Thursday that its Coast Guard patrols are "legitimate, necessary and lawful". The ship of Yeh was in Penghu - an archipelago located in the Taiwan Strait through which billions in trade pass every year. CROSSING THE MEDIAN LINE Yeh stated that Chinese warships, and Coast Guard vessels often cross the median lines which once served as unofficial buffers and come close to Taiwan's 24 nautical mile contiguous area. Yeh stated that the Chinese had already removed the median line. He added that it was his responsibility to monitor the situation and keep Chinese vessels at bay using loudspeakers and LED boards, as well as radio messages and water cannons. Yeh, who is a member of the Coast Guard, said that he follows its principle "not to provoke and not to yield" and takes command tablets and talismans from his temple with him when he patrols. Yeh, standing next to the temple's Chienchiu Paochien or ceremonial divin boat, said that the vessel, just like his Coast Guard?ship, was used to protect fishermen and the general public in the Taiwan Strait. Yeh explained that "what we protect is the people's peace of mind and sense of security." The coast guard and navy are there to protect the people. (Reporting by Yimou, Famou Hamacher, and Ann Wang. Editing by Ben Blanchard & Kate Mayberry).
U.S. announces that Trump envoys Kushner, Witkoff and Witkoff are traveling to Doha for the Iran meeting
The United States announced that a high-level Iran meeting would be held on Tuesday in Doha. President Donald Trump's top envoys Steve Witkoff and Jared Kushner would attend, while technical?talks will also take place on the sidelines.
In a post on social media, Trump stated that Iran requested a meeting. He also said that the meeting would be held in Qatar's capital city without providing any further details.
Moments later, Trump’s press secretary, 'Karoline Laavitt', told Fox News Witkoff would attend the discussions.
Special Envoy?Witkoff will fly to Doha this week for high-level discussions as we continue to discuss our memorandum. She said that technical discussions will take place on the sidelines of high-level meetings.
"As far we are concerned, we're keeping our end of the bargain" Leavitt said that violence will be met by violence.
On June 17, the U.S. signed a memorandum of agreement with Iran that included 14 points. Both sides agreed to end the conflict after four months and reopen Strait of Hormuz.
The fragile 'accord' was threatened by tit-fortat weekend attacks. After several days of strikes and counter-strikes, the U.S. and Iran will return to the table for talks.
We hope that we don't have to see this. Leavitt stated on "Fox & Friends," that the president wants to see how the peace process plays out. (Reporting and editing by Doina chiacu, Katharine Jackson, Humeyra Pauk and Susan Heavey)
(source: Reuters)