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Delta Air Lines refinery investment looks more valuable with jet fuel squeeze
The purchase of an aging refinery by Delta Air Lines outside of?Philadelphia, in 2012 was a move that seemed unusual. Most airlines buy jet fuel directly from suppliers. Delta bought a refinery to convert crude oil into jet fuel, among other products. This deal, which was intended to reduce fuel costs for airlines, also attracted scrutiny due to the growing pressure on them to cut emissions. As 'jet fuel prices' rise faster than crude during the 'Iran war, increasing airline fuel bills by a wider refining margin, this bet looks more significant. A wider gap between jet fuel and crude fuel will result in higher fuel prices for most airlines. Delta continues to pay market prices for fuel that is transferred from its Monroe refinery into its airline operations. Delta said that by owning a refinery, the profits from fuel refining will stay within the company and not go to external suppliers. The Math Behind the Squeeze In recent weeks, jet fuel prices have increased sharply. This has led to a widening of the crack spread - the difference between crude oil prices and fuels made from them. According to the International Air Transport Association, North American jet fuel prices averaged $179 per barrel in the week ending March 20. Brent crude was around $110, according to their data. U.S. spot fuel prices rose even more, to $4.56 per gallon or $192 per barrel on March 20. This was according to the trade group Airlines for America. This spread is included in the fuel price that airlines pay. If the spread widens, fuel costs for airlines can increase quickly, even if crude oil prices are not moving as sharply. Alaska Air Group CEO Benito Minicucci stated last week that the airline consumes approximately 100 million gallons per month. This means a $1 increase to jet fuel costs adds around $100 million to monthly costs. REFINERY OFFSET Delta didn't say how much the current Monroe spike could be offset, but filings show that it has kept fuel costs down in periods where refining margins have widened. Delta reported that Monroe had lowered its average fuel prices by 23 cents per gallon, 10 cents a year in 2023 and 4 cents a year in 2025. According to its reported fuel consumption, these reductions are equivalent to $785, $393, $41 and $171 millions, respectively. Monroe?generated $777 millions in operating income by 2022 when the refining margins surged following Russia's invasion in Ukraine, which disrupted global markets. Delta's fuel cost benefit has historically increased as refining margins widen and decreased when they shrink. Morningstar analyst Nicolas Owens says the structure can help to reduce the impact of spikes on refining margins. Owens said that when crack spreads increase, Delta pays itself the crack spread on the fuel portion. It does reduce the impact of fuel price increases for Delta. Refineries can also become a hindrance when margins are tight. Delta's filings reveal that Monroe suffered a $216-million operating loss in 2020 when the pandemic slowed jet fuel demand, and disrupted markets for refined products. How does it compare? The last time fuel prices spiked, the difference was noticeable. Delta's fuel costs rose from $2.02 to $3.36 per gallon, in 2022, bringing its annual fuel bill up from 20% to $11.5 billion. United Airlines paid $3.63 per gallon on average in 2022 compared to $2.11 a year earlier. This pushed its fuel bill up from 22% to 31%, or $13.1 billion. The mix of fleets, routes and other factors affect the price per gallon that airlines pay. RIVALS FEEL SQUEEZE Minicucci stated that Alaska is shifting fuel away from the U.S. West Coast -- including tankering from Singapore to Seattle -- because refinery margins in Alaska have driven jet fuel prices up about 20 cents a gallon. American Airlines said that higher fuel prices have added $400 million to the first quarter fuel bill. This is since their last update late in January. United CEO Scott Kirby told employees last week that fuel prices had risen by more than two-thirds in just three weeks. If sustained, this could result in an increase of $11 billion on United's fuel bill annually, which is more than twice its best ever yearly profit. Denton Cinquegrana is the chief oil analyst for Oil Price Information Service. Costs and Limitations Delta is still exposed to fuel price increases. The refinery's profits may fluctuate depending on market conditions. Refineries also incur regulatory costs. Delta reported that its expenses?for compliance with the U.S. Renewable Fuel Standard?rose to $312 millions?in 2020 from $203million in 2024. These compliance costs can eat away at the financial benefits Monroe offers in years where refining margins have been tight. DELTA'S EDGÉ Delta CEO Ed Bastian stated last week that rising jet fuel costs had increased the airline's fuel bills by about $400 million in March. He said that the refinery is a "meaningful hedge", in terms of the refining margins between crude oil, jet fuel and other products. He said that the refinery would not cover all of the cracks. "But it gives us an important hedge." Bastian stated that Monroe's profits would begin to contribute in the second quarter. (Reporting and editing by Rod Nickel; Additional reporting from Nicole Jao in New York, Chicago; Reporting by Rajesh Kumar Singh)
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Sources: Russia's Baltic ports halt oil loadings following massive Ukrainian drone attack
Two sources said that the Russian Baltic ports of Primorsk & Ust-Luga - major export terminals - halted crude oil & oil product loadings on a Wednesday, after a massive Ukrainian drone attack sparked an blaze visible from Finland. The drone strikes on the Baltic ports are one of the biggest strikes against Russia's oil-exporting facilities during the four-year war, and will likely add to the uncertainty surrounding the global oil market amid the conflict in the Middle East. According to?videos that were posted on Telegram, massive plumes of black ash billowed into the air on Wednesday. According to the newspaper?Helsingin Sanomat, the smoke could be seen dozens of mile away across the Gulf of Finland. On Wednesday, Russian officials claimed that a fire had broken out in?Ust-Luga after an?attack by a Ukrainian drone. Primorsk, which is located nearby, has also been targeted in recent days. In recent weeks, Ukraine increased drone attacks against Russian oil refineries, export routes, and other military targets in order to undermine Russia's war-economy and because the peace talks, mediated by Washington, are stalling. Reports state that Ust-Luga, Primorsk and other ports on the Gulf of Finland were also forced to stop exports of oil and crude after drone attacks on Sunday, but tentatively resumed loadings of these products on Monday. Primorsk is one of the major outlets for Urals crude and high-quality diesel. Sources claim that Ust-Luga and Primorsk exported 32.9 million tons of oil-based products each last year. Alexander?Drozdenko said that the fire broke out in Ust-Luga following a drone attack on the entire region. No injuries were reported. Sources - who spoke anonymously - said that the terminal was'sealed and reservoirs are on fire. The Russian defence ministry reported that 389 Ukrainian drones were shot down in Russia over night, including the Moscow region. (Reporting and aditional reporting in Helsinki by Anne Kauranen; Editing by Guy Faulconbridge and William Maclean).
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UPS opens 100 million Taiwan logistic hub to meet the tech boom demand
United Parcel Service, riding on a wave of demand from tech companies, opened a new $100 million logistics center in Taiwan on Wednesday. It is the largest United Parcel Service facility in 'Asia Pacific. TSMC is the largest contract chip maker in the world and the dominant supplier of advanced semiconductors that are powering the boom of AI technologies. UPS announced that Applied Materials (the largest U.S. manufacturer of semiconductor equipment) will use the site in Taoyuan to serve as a distribution centre for Asia. Lauren Zhao, President?of UPS Asia Pacific Supply Chain Solutions and Freight Forwarding told reporters that 80% of freight was 'high-tech. She added, "Everyone knows Taiwan's semiconductor industries is the most advanced industry in the world. And?the manufacturing process related to the semiconductor industries is also where Taiwan leads?the world." UPS only currently flies out of Taoyuan Airport, but its managing director for Japan South Korea and Taiwan Sam Hung said that the company is also considering flights from Kaohsiung to the south depending on the demand. TSMC is building a 'large new factory' in Kaohsiung as part of a growing semiconductor cluster in southern Taiwan. (Reporting and editing by Alexander Smith; Ben Blanchard)
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Commerzbank's supervisory board met 11 times in order to discuss UniCredit 2025.
According to the annual report published by Commerzbank on Wednesday, a special committee of the?supervisory council met '11 times' in '2025 to discuss Italy's UniCredit. The Italian bank is the largest shareholder and made a hostile takeover bid last week. Commerzbank’s supervisory committee formed a temporary committee when UniCredit began to amass its large stake in?2024. The annual report stated that the committee had "conducted a thorough examination of UniCredit’s stake in Commerzbank, and its impact on the bank. It also received reports from the board of managing director as well as external and internal advisers." Last week, UniCredit increased the 'pressure on Commerzbank by submitting a lowball offer to increase its?stake above?30%. The?management of Commerzbank has called UniCredit’s approach hostile. UniCredit has been rejected by both the German government and unions. The German government is a large Commerzbank investor. In the annual report, it was stated that 'the special committee discussion?on UniCredit included a?market climate and the share price of both banks.
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Mobico, owner of National Express, appoints Iglesias to be its CEO in order to turn around the company
National Express's owner Mobico Group named insider Paco Iglesias its new Chief Executive Officer?on Wednesday. The company is looking to streamline its operations and increase profits. At 0836 GMT, the company's share price was down 1% to 19.6 pence. Iglesias is currently the chief operating officer of the company and has been the head of its largest unit, which is the Spanish transport business Alsa, since 2016. In a press release, Executive Chairman Phil White stated that "(Iglesias is) the ideal candidate to lead the business into its next chapter of growth and ensure the value inherent in Group's Portfolio is better reflected." Mobico took steps to help stabilize the business, including cost-cutting measures, integrating certain?of its companies and reevaluating contracts. White, who had taken on executive responsibilities in May of last year after the departure from CEO Ignacio Garat will resume his role as non-executive chairman starting October. In February, Mobico forecast an adjusted operating profit for 2026 of between 195 and 210 million pound ($261.03 to 210 million pounds), compared to the 198 million pounds reported by 2025.
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Fuel costs are increasing, so airlines are reducing their prices and cutting back on their outlook.
The U.S. and Israeli war against Iran has caused a surge in jet fuel costs, which has impacted the global aviation industry. Airlines have raised fares?and revised financial forecasts. In recent days, jet fuel prices have increased from $85 to $90 per barrel up to $150 to $200 per barrel for an industry where fuel can account for as much as a quarter or more of their operating costs. Here is an alphabetical list of the ways airlines are responding to this issue: AEGEAN AIRLINES The Greek airline anticipates that a rise in fuel prices and the suspension of Middle East flights will have a "notable" impact on its first quarter results. AIR FRANCE-KLM The airline group announced that it would 'increase long-haul tickets prices due to the rising fuel costs. Cabin fares will increase by 50 euros ($57.50) per round trip. AIR NEW ZEALAND On March 10, the airline was among the first to announce a large increase in ticket prices. The airline also suspended its earnings projections for the full year due to volatile fuel markets. Price increases for domestic flights are NZ$10 ($6), NZ$20 for short-haul international routes and NZ$90 for long-haul flights. Further price, schedule and network changes may be made if fuel prices continue to rise. AKASA AIR Akasa Airlines, based in India, announced that it would be introducing fuel surcharges ranging from 199-1300 Indian rupees (between $2 and $14) for domestic and international flights. AMERICAN AIRLINES Fuel prices are on the rise, and U.S. carriers expect to incur $400 million more in expenses for the first quarter. CATHAY PACIFIC Hong Kong Airlines announced that it will increase fuel surcharges for all routes starting March 18. The airline cited a doubled in jet fuel prices from the beginning of the month. Last month, the carrier, which reviews fuel charges monthly, maintained them at $72.90 per flight between Hong Kong and Europe, North America, or both. CEBU AIR The Philippines-based carrier said that the sharp increase in fuel prices is a major concern. It will continue to review pricing and network strategies and try to minimize the impact. EASYJET EasyJet CEO Kentonjarvis says European consumers can expect to pay higher ticket prices at the end of summer when fuel hedges end. FRONTIER AÉRIENS Fuel prices have risen significantly since the airline's forecast was made, and it is now reviewing its outlook for the full year. HONG KONG Airlines The airline announced that it would increase fuel surcharges up to 35.2% starting March 12. The biggest increases would be on flights between Hong Kong, the Maldives and Bangladesh, and?Nepal where the charges would go from HK$284 to HK$384 (49 dollars). British Airways' owner IAG announced on March 10 that it does not intend to raise ticket prices immediately as it has hedged a large portion of its fuel in the short to medium term. INDIGO India's largest airline announced that it will begin charging fuel fees on both domestic and international flights as of March 14. The charges include 900 rupees per flight to the Middle East, and 2,300 rupees per flight to Europe. Sources say that the company is lobbying for the Indian government's reduction of fuel taxes. PAKISTAN INTERNATIONAL FLIGHTS The airline said that it would increase domestic and international flight prices by $20, and up to $100 depending on fuel surcharges. PHILIPPINE AERLINES The airline stated that it had enough fuel to support its scheduled operations but didn't have a clear picture beyond the months of May and June. The company president Richard Nuttall said that the Philippines may eventually look at measures like rationing fuel purchases, as some countries have already done. QANTAS AIRWAYS The airline announced that it would increase fares on international routes, and consider adding capacity to its existing Europe routes in the next few months. Scandinavian Airlines announced that it would cancel 1000 flights in April due to high fuel and oil prices. In March, the airline said that it had "cancelled" a few hundred flights. SAS, which has already increased flight prices, stated that the surge in fuel costs would be a major blow to the aviation sector, even if they tried to absorb it. THAI AIRWAYS The Thailand-based airline said that it would increase fares between 10 and 15% to combat rising fuel prices. UNITED AIRLINES Scott Kirby, CEO of the U.S. carrier, said that the airline is preparing to cut unprofitable flights in the next two quarters. He also predicted that oil prices would remain over $100 until 2027. He added that at those levels the fuel bill would be more than double the profit earned by the airline in its best-ever year. Andrew Nocella, United's Chief Commercial Officer, said that the company was able to increase fares in response to a rapid rise in jet fuel and oil prices. VIETJET Vietnamese budget airline said it had reduced flight frequencies on certain routes due to possible fuel shortages. VIETNAM Airline Vietnam's Aviation Authority announced that the carrier plans to cancel 23 flights a week on domestic routes starting in April after it requested assistance from the government to remove a tax on jet fuel. VIRGIN AUSTRALIA Virgin Australia announced that it would be adjusting its fares in order to reflect the rising costs across the aviation industry, which were being exacerbated significantly by the Middle East situation.
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Turkey's Middle East oil dependency manageable at 10% supply amid Iran War
Energy Minister Alparslan bayraktar stated on Wednesday that despite the Iran conflict, Turkey's dependence on Middle East crude oil is at a "manageable and minimal" 10% of total supplies. On a programme of the state-run Anadolu Agency, he stated that the war caused a "crisis in global energy security". He added that Turkey, as a "large energy importer" and a neighbor to Iran, has taken steps to diversify its energy supply. Bayraktar said that a $1 rise in the price per barrel of oil cost Turkey $400 million. When asked about the natural gas supply, Bayraktar replied that there have been no cuts yet from Iran but said this was still a possibility. He said, "Reports indicated that Iranian gas had been cut off a few days ago." This has not happened yet. This does not mean that it will not happen in the future. We are therefore?diversely addressing any risks that could arise here. He said that as part of its diversification efforts, Turkey was planning to sign a deal with TotalEnergies in the near future. Bayraktar also said that connecting the flow from Syria to the Iraq - Turkey crude oil pipeline was a priority for them, and had been communicated to their Syrian counterparts. Can Sezer, Tuvan Gumrukcu and Jonathan Spicer edited by Alison Williams, Christian Schmollinger and Jonathan Spicer.
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British industrial parts manufacturer RS Group reports lower revenue due to Mexico's woes
RS Group, a provider of electronic and industrial components, warned on Wednesday that its annual 'like-for like' revenues would be lower due to the tough market conditions in Mexico. The distributor of?industrial and electrical equipment and solutions said that it expects to see a decline in its Americas revenues in the second half as tariff-driven concerns continue to constrain market conditions in Mexico. It expects to see a?decrease of 0.6%? in LFL revenue for the year ending on March 31 from 3.88 billion pounds (2.90 billion pounds) that it made last year. According to a compiled consensus by the?company, analysts?expect that the firm will log an annual revenue?of?2.92billion pounds. A strict cost discipline will help the firm to achieve a pretax adjusted profit that is marginally higher than the 'average market expectation' of 241 million pounds.
Japan PM Takaichi requests IEA chief to release additional oil stocks
When they met on Wednesday, Sanae Takaichi, the Japanese prime minister, asked Fatih Birol of the International Energy Agency for a 'coordinated release' of additional oil stockpiles. Tokyo is trying to protect itself against a long-term Middle East conflict.
Takaichi said that Japan would open joint oil stocks co-owned with producing nations to compensate for the Middle East's supply shortage.
Birol?said in Australia, this week, ahead of a Group of Seven Meeting that the IEA was consulting with governments from Asia and Europe regarding the release of additional?stockpiles if needed. The Iran war has disrupted the flow of?oil from the 'Middle East.
Takaichi stated in a post on social media that he had asked for the preparation of an additional coordinated release to prepare for a possible prolongation of the situation. "We will continue working closely with the IEA."
Birol, who spoke in Tokyo on Tuesday, said that the 400 million barrels of oil and oil products held by the consuming nations, which the IEA coordinates, represents only 20% of their total oil and oil product stocks.
Birol told Takaichi that he was "ready to move forward if and when it is necessary."
Hitoshi Nagasawa said that 45 Japan-related vessels are still stuck in the Gulf because the Strait of Hormuz is closed. He also heads the?NYK Group of Japan, which is one of the largest shipping companies in the world. Reporting by Kiyoshi Okasaka, Katya Glubkova and Kentaro Komiya; Editing and production by Thomas Derpinghaus and Chang-Ran Kim
(source: Reuters)