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Air China's losses will increase in 2025 due to fare pressure and the risks of an Iran war.
Air China reported a loss of $1.77 billion ($256.17 millions) on Thursday, reversing signs that the carrier was recovering. The?country's flag carrier?was hurt by market competition. The company estimated a loss for the full year of 1.3 to 1.9 billion yuan, but it was significantly higher than its 2024 net loss of 233 millions yuan under IFRS standards. The airline posted a profit of 3,64 billion yuan during the 'fourth quarter, after a profitable third quarter fueled by the 'peak summer season. Air China's annual report stated that it will be focusing on efficiency and profitability this year. It also warned of external risks, such as those arising from fluctuations in jet fuel prices and exchange rates. Air China has lost money every year since 2020. The state-owned carrier is still struggling to make a profit after the pandemic despite the fact that the global industry returned to profitability in 2023. The factors that have contributed to this are the downward pressure on ticket prices, the reduced demand for international travel and the competition between its domestic competitors as well as China's expanding high-speed rail network. Airline also faces challenges resulting from the U.S. and Israeli war on Iran. This has disrupted aviation operations around the world, increased jet fuel costs, and caused some airlines to increase fares & boost fuel surcharges. China's state-owned airlines do not hedge against an increase in oil prices. The shares of Hong Kong listed?Air China fell more than 30% in the last month, compared with a 5.8% drop on the wider market.
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Sources: Russia resumes loading oil at Primorsk, but not to full capacity
Three sources confirmed that the Primorsk port in Russia, located on the Baltic Sea, resumed fuel and oil loadings on Thursday, following an incident caused by drone strikes on Sunday. However, it was at a lower capacity than usual due to damage done to its infrastructure. Sources said that the port, which is capable of loading up to 1 million barrels of crude oil per day, has started to load oil onto tanker Anlan. The sources said that another tanker, Minerva Georgia was also expected to start loading oil later Thursday. Sources claim that the port has also resumed diesel loadings, but at a slower pace. The sources stated that it was unclear when the port could resume normal operations with full capacity. Ust-Luga, Russia's second major Baltic oil port, remained closed after Wednesday's?drone attack. Transneft, the Russian oil pipeline monopoly, will attempt to redirect oil exports away from the Baltic Sea ports that were damaged, the?Interfax?news agency reported Thursday. According to calculations, recent drone 'attacks' have caused a 'worst oil export shortfall ever in Russian history. This is due to the fact that?some 40 percent of the state?s?oil-export capacity has been cut. Reporting by
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Sources say that the damaged Ust-Luga terminal could force Russian refineries reduce their production.
Two market sources say that the closure of Russia's Baltic Port of Ust-Luga after a drone strike?on Wednesday may force major refineries in Europe to reduce crude oil runs because of shipping restrictions. Sources and social media reports claim that the strike caused damage to a rail deloading rack at the Ust-Luga Terminal. The Ust-Luga bottleneck threatens oil processing in four of the largest refineries in 'the European part of Russia - Kirishi Yaroslavl Moscow and Ryazan. According to traders, they process around 55 million metric tonnes of crude oil each year (400,000 barrels a day). On Wednesday, the?Ust-Luga Oil Terminal stopped releasing rail cargoes including supplies from these big refineries. RUN CUTTING EXPECTED IN DAYS "Ust-Luga ceased?taking fuel oil and gasoline on Wednesday. We will need to reduce runs to the minimum within days and then possibly shut down units," said a refinery expert. All sources spoke under condition of anonymity, as they were not authorized to speak publicly about the matter. Traders estimate that Ust-Luga is one of Russia's main export hubs of refined products and handles 18 million tonnes of fuel oil per year. Sources said that disruptions in fuel oil export shipments are a major challenge for refiners. Fuel oil is not as popular in the home market, but it can still be purchased. The domestic market accounts for between 18% and 35% of all crude oil runs at the affected refineries. Reduced runs to curb fuel oil production would also reduce gasoline production during a season of increased demand. Refiners consider emergency measures Fuel oil is the bottleneck. "We are looking at ways to reduce dark yields, divert to bitumen and bunker fuel, as well as other ports. We will also cut runs, load secondary units maximally (fuel oil utilisation)," a refinery said. When operations will resume at Ust-Luga is unclear. On Wednesday, Kirishi Refinery was also hit by a drone and could reduce processing. This would ease the shortage of transshipment capacity, as fuel oil production will decrease. Barbara Lewis edited the report by Barbara Lewis.
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Investors fear a further Middle East escalated as oil prices rise by 5%
On Thursday, oil prices increased 5%, reversing the previous session’s decline, amid fears that a long-term conflict in the Middle East could disrupt supply. Brent?futures rose $5.26 or 5.2% to $107.48 per barrel at 10:57 am?EDT (1450 GMT), near the session high of $107,84. U.S. West Texas Intermediate Crude Futures rose $3.53 or 4% to $93.85 per barrel after reaching as high as $94.84. Both benchmarks fell more than 2% Wednesday. Iran has reviewed a U.S. plan to end this war but does not intend to hold talks, said Iran's Foreign Minister on Wednesday. U.S. president Donald Trump warned Iran to "get serious," on Thursday, about a deal that would end almost four weeks of fighting. A day earlier, White House press secretary Karoline leavitt had said the U.S. would hit Iran harder if Tehran refused to accept the fact that it has "been defeated militarily." "There is confusion and frustration over the veracity?of stories coming out of Iran and the United States." Timothy Snyder, Matador Economics' chief economist, said that investors are again moving into safer assets to conserve capital. Sources have confirmed that the Pentagon plans to send thousands more airborne troops into the Gulf in order to give Trump a wider range of options for a possible ground assault. This will be added to two Marine contingents currently en route. A Houthi leader said that the Iran-aligned Houthi Movement in Yemen is ready to strike again the Red Sea waterway as a show of solidarity with Tehran. Soojin Kim, MUFG analyst, said that "ongoing military escalation" - including troop deployments, fresh strikes and limited tanker movements under strict Iranian conditions - continues to strain the global energy markets. TRUMP'S FIVE-POINT PLAN According to three Israeli cabinet members familiar with the plan, Trump's five-point proposal would eliminate Iran's highly enriched uranium stocks, stop enrichment, curtail its ballistic missile programme, and cut funding to regional allies. Conflict has almost stopped shipments through Strait of Hormuz which typically transports about a fifth of world crude oil and LNG. The International Energy Agency called it the "biggest disruption of oil supply ever". Iraq's oil output has dropped, and storage tanks are at critical levels. Three Iraqi energy officials confirmed this on Wednesday. According to data from the U.S. Energy?Administration, Iraq will be the second largest crude producer in OPEC in 2025 behind Saudi Arabia. Sanae Takaichi, the Japanese prime minister, asked Fatih Birol, chief of the IEA on Wednesday for a coordinated release of additional oil stocks as Tokyo sought to protect itself against a prolonged conflict. According to calculations based upon market data, the Russian oil export capacity has been halted by at least 40% following Ukrainian drone strikes and the seizure or tankers. On Thursday, ?Russia's Kirishinefteorgsintez oil refinery, one of the largest in the country, halted processing on Thursday following Ukrainian drone attacks that ?caused fires in some parts of the plant, two industry sources said. Interfax reported Thursday that the head of Russia's oil-pipeline monopoly Transneft would try to redirect oil from Baltic Sea ports damaged by storms. Turkey's transport minister stated on Thursday that a marine drone had struck a Turkish crude tanker leaving?Russia and caused an explosion in the Bosphorus Strait near Istanbul. U.S. crude oil inventories increased by 6.9m barrels, to 456.2m barrels for the week ending March 20. This is the highest level of the last six years and exceeds analyst expectations. (Reporting from Siddharth Cavale in New York, with additional reporting by Ahmad Ghaddar, Yuka Obaashi, in Tokyo, and Siyi Lu in Singapore, and editing by Bernadette B. Baum, Ros Russell, and Paul Simao.
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Italian tax police search multiple office in IT contract probe
Two sources who have direct knowledge of this matter confirmed that the Italian tax police had searched the offices of several state-linked organizations and 'companies as well as an executive's office in Rome, as part of an investigation into the public IT procurement contracts. Sources said that the investigation is an extension of the 2024 probe, which was launched into Sogei (the Treasury's IT firm) in order to investigate a alleged scheme of rigging IT procurement contracts by creating slush fund. The company, Polo Strategico Nazionale, manages cloud infrastructures for the public sector. Sources said that police had also entered a building of the defence ministry and a Telecom Italia executive's office in Rome. The Defence Ministry?said that it would provide its full cooperation and support to the judiciary authorities. Terna, TIM, PSN (which is owned by TIM), Leonardo, CDP Equity, and Sogei were not available to comment. Sources say that Rome prosecutors are 'investigating allegations of corruption and money laundering' linked to certain contracts awarded by the companies searched as well as the environment ministry. Sources confirmed that 26 people are under investigation. (Reporting and editing by Crispio Balmer, Alex Richardson and Crispio Parodi)
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Interfax reports that Transneft, a Russian oil company, wants to divert oil away from ports attacked by terrorists.
Interfax reported Thursday that the Russian oil pipeline monopoly Transneft would try to redirect oil from Baltic Sea ports damaged by drone strikes, according to the head of the company. Calculations based on data from the market indicate that 'at least 40 percent of Russia's export capacity has been halted due to Ukrainian drone attacks and a dispute over an attack on a pipeline. Ukrainian drones have attacked the Baltic Sea ports of Primorsk,?Ust-Luga and other major hubs of Russian oil exports this week, forcing them suspend their loadings. It is hard to move such large volumes in a short time. The CEO of Transneft, Nikolai Tokarev, was quoted by Interfax as saying that these are large amounts. He said, "As far as our company is concerned, we'll do all we can to get things done as soon as possible." Tokarev didn't say if the ports ceased operations. PRIMORSK IS a major outlet for urals CRUDE Primorsk is one of the major outlets for Russia's Urals crude oil and high-quality diesel. Sources claim that Ust-Luga exported 32.9 metric tons of oil products in 2012, while Primorsk shipped 16.8 million. (Reporting and writing by Maxim Rodionov, Anastasia Teterevleva, Editing by Mark Trevelyan & Barbara Lewis).
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Sources say that the Kirishi oil refinery in Russia has ceased operations following a drone attack.
Russia's Kirishinefteorgsintez oil ?refinery, ?one of the largest in the country, halted processing on Thursday following Ukrainian drone attacks that caused fires in some parts of the plant, two industry sources said. This stoppage will exacerbate Russia's current oil supply problems as 40% of the country's crude oil exporting capability has already been closed due to drone attacks, tanker seizures and the Druzhba Pipeline?closure in Ukraine. Sources said that two primary and some secondary units caught fire following repeated drone attacks. One source said that it was difficult to predict the time for repair of the damaged units. They were not allowed to be named as they had no authority to speak?to the media. The refinery is controlled by Russian oil major Surgutgeftegaz. They did not respond to an immediate request for comments. GOVERNOR: MORE THAN 20 DRONES SHOT DOWN Alexander Drozdenko said earlier on Thursday that more than 20 drones had been shot down in the area, including Kirishi where the refinery was located. "The attack has been?repelled in the Kirishi District. Drozdenko stated on Telegram that there was damage to the industrial area. Drozdenko did not say which part of the industrial area was damaged. Ukraine repeatedly attacked the refinery last year. According to industry sources, the refinery will process 17.5 million tons of oil (350 000 barrels per day), which is 6.6% of Russia’s total oil refining volume. The country produced a total of 2 million tonnes of gasoline, 7.9 million tons diesel, 6.9 million tons fuel oil, and 600,000 metric tons bitumen. Two sources say that Russia's Baltic Sea port of?Primorsk? and Ust-Luga?, which are major export outlets?, suspended crude oil and oil product?loadings on Wednesday after Ukrainian drone strikes. Russian officials claimed earlier Wednesday that a fire had broken out in Ust-Luga following a drone attack by Ukraine. Reporting by Guy Faulconbridge; Editing by Jamie Freed, Barbara Lewis and Guy Faulconbridge
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Senior diplomat: US support Taiwan in defence and energy
In a speech to senior Taiwanese officials on Thursday, the top U.S. diplomatic representative in Taiwan tried to send a "reassuring" message that the U.S. government supports the island in terms of?both strengthening its defences and assuring energy supplies during Iran's?war. Despite the lack of formal diplomatic relations, the 'United States' is Taiwan's largest arms supplier and international supporter. Raymond Greene, speaking at an American Chamber of Commerce dinner in Taiwan with President Lai Ching te and top officials in attendance, said that U.S. obligations under the Taiwan Relations Act, which mandates, among other things arms sales, remained "rock-solid". "Our goal is to create an environment where the two sides can settle their differences peacefully and without coercion. He said that to achieve this goal, we view dialogue and deterrence both as sides of the same stable coin. Greene said, "In this context we continue to support Taiwan’s efforts to obtain critical?defence capability," pointing out Taiwan's focus to acquire cost-effective systems, such as integrated air and missile defenses, and drones. TRUMP TO MEET XI IN MAY Greene, the head of the American Institute in Taiwan which manages relations when formal diplomatic ties are not present, spoke just a few days after U.S. president Donald Trump announced that he will meet?Chinese leader Xi Jinping mid-May. This trip was postponed because of the Iran War. Beijing, which never renounced using force to subdue the island, demanded that U.S. arms sales be stopped to Taiwan, a democratically-governed country. Greene said that the United States would supply Taiwan with more natural gas and crude oil to "further reduce the effects of ongoing global commodities supply disruptions", though he didn't mention the Middle East war directly. He added that CPC, Taiwan's state owned refiner and U.S. LNG exporter Cheniere Energy, had recently agreed to double CPC's gas imports from the U.S. As I said last summer, America is ready to help Taiwan meet its energy needs using all available technologies and sources. (Reporting and editing by Joe Bavier, Alex Richardson and Ben Blanchard)
Mexico announces its support for the motor transport industry
The?Mexican?government announced on Thursday measures to support the motor transport industry in Mexico, particularly heavy vehicle manufacturers and owners.
At a recent press conference, Economy Minister Marcelo Ebrard said that the program includes tax incentives for local manufacturers and also aims to promote 'Mexico’s motor transport industry by protecting it against imports.
He added that the initial budget for the project was 2 billion pesos ($112,41 million) in tax deductibles and 250 millions pesos of direct investment.
The program will "support Mexico's heavy vehicles sector by providing incentives for the purchase of vehicles.
The President Claudia Sheinbaum stated that the "measures" will boost the production and use of commercial vehicles. She also said that the "modernization of heavy duty vehicles" would help to reduce pollution levels in the country, as well as improve the conditions of freight transport.
(source: Reuters)