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Data shows that shipping traffic through Hormuz is virtually at a standstill.
Shipping data shows that shipping traffic in the Strait of Hormuz was virtually halted on Monday, with only three?crossings within a period of 12 hours. According to data analytics specialists SynMax, and tracking data provided by the Kpler platform, the oil products tanker Nero left the Gulf of Mexico and was sailing through Strait. The data revealed that two other ships, a chemical tanker as well as a liquefied petro-gas (LPG) tanker, sailed separately into the Gulf on Monday. Axon 1, a LPG tanker operated by Axon, was subject to separate U.S. sanction for Iran trade activities. The United States and Iran's ceasefire appeared to be in danger?on Sunday after the U.S. announced that it had seized a cargo ship from Iran?that was trying to break its blockade?. Tehran then vowed to retaliate by refusing to take part in new peace talks. The timing of any lasting 'breakthrough' is highly uncertain, according to a Monday note from ship broker Clarksons. Reporting by Jonathan Saul, Nerijus Adomiaitis and Kevin Liffey
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Middle East markets drop on renewed US-Iran tensions
Gulf equities fell in?early trading on Monday on fears that the ceasefire?between Washington, D.C., and Tehran, could unravel, after the U.S. seized?an Iranian freight vessel. Meanwhile,?traffic along the?Strait of?Hormuz remained largely halted. The hope for a lasting peace in the Middle East dimmed when Iranian state media reported Tehran's rejection of new talks. It also said that Tehran would not participate in a second round if negotiations, which the U.S. hoped to convene before Tuesday's ceasefire expired. The war, now in its eighth year, has triggered an historic shock for global energy supply, sending oil costs soaring, as the Strait of Hormuz is effectively closed. Dubai's main stock index fell 1.3%. This was due to a fall of 1.4% in the blue-chip developer Emaar Properties, and a drop of 2.2% in toll operator Salik Co. Shares of Abu?Dhabi fell 0.3%. Wall Street Journal reported that the United Arab Emirates have begun discussions with the United States about a possible financial backstop in the event the U.S./Israeli war against Iran worsens the Gulf nation’s crisis. Could not verify the report immediately. Qatar Islamic Bank dropped 1.1%, while the Qatari index lost 0.4%. Trump warned earlier that if Iran refused to accept his terms, the United States would destroy Iran’s bridges and power plants. He repeated threats he made throughout the war. Iran said that any attack by the United States on its civil infrastructure would lead to strikes against power stations and desalination facilities in Gulf Arab neighbouring states. Saudi Arabia's benchmark index fell 0.3% in choppy trading, due to a 0.4% drop in the?Al Rajhi Bank. Saudi Aramco, on the other hand, gained 0.3%. Brent crude futures jumped 7% in the early Asian trading as investors dealt conflicting messages regarding the war.
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Nigerian Airlines suspend flights as Minister urges discussions on fuel prices
The 'airlines' said over the weekend that Nigerian airlines had temporarily suspended their 'planned nationwide shutdown of flights operations due to crippling fuel costs. This was after the government made an appeal to halt the action until talks could be held. Airline Operators of Nigeria, an industry group composed of 12 primarily domestic carriers, had announced that they would cease services on Monday April 20 due to the rising costs of jet fuel. AON announced that it had agreed to suspend the action after an appeal by Festus Keyamo (Minister of Aviation and Aerospace Development in Nigeria), who called for restraint and dialog. AON released a statement saying that "as a result of an emergency meeting this evening, the Airline Operators of Nigeria reached a conditional but concessionary decision to temporarily suspend its planned shutdown action." AON stated that the suspension was conditional until the result of a meeting with all parties concerned scheduled by the minister for the 22nd April. In a stipulation, airlines asked government agencies and service providers not to demand upfront payments and to continue to provide services. They said that this was adding to their financial strain. As a result of the 'Iran war,' soaring jet fuel costs have upended global aviation. Airlines are now forced to increase fares, reduce growth plans, and rethink their forecasts. Nigerian airlines claim that the 'price spike' in jet fuel has been caused by foreign exchange pressures and a shortage of supply, which have led to a significant increase in operating costs. Fuel accounts for over a third in Nigeria's airline expenses. (Reporting and editing by Emelia Sithole Matarise; Reporting by Isaac Anyaogu)
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UAE stock exchanges relax amid renewed tensions between the US and Iran
Early trade in the UAE on Monday was a decline as concerns grew that the 'ceasefire' between Washington and Tehran might unravel after the U.S. seizes an Iranian cargo vessel, while traffic through the Strait of Hormuz remains largely suspended. The prospects for peace in the Middle East have been further dimmed by reports in Iranian state media that Tehran has'rejected' new talks and will not participate in a second round of negotiations which the U.S. hoped to convene before Tuesday's ceasefire expired. They cited the continuing blockade, the threatening rhetoric and the United States'shifting positions' and 'excessive requests'. Dubai's main stock index fell 1.3%. This was due to a drop of 1.6% in Emaar Properties, a blue-chip developer and a fall of 2% in Salik Co. Brent crude futures rose about 7% in early Asian trading to $96.85 per barrel as investors dealt with conflicting messages regarding the war. The war, now in its eighth weeks, has caused a 'historic shock' to the global energy supply, sending oil prices soaring, as the Strait is effectively closed. In Abu Dhabi the index fell?0.3%. The Wall Street Journal reported that the United Arab Emirates had begun "talks" with the United States about a possible financial backstop in the event the U.S.-Israeli conflict with Iran exacerbated the crisis of the Gulf nation. Could not verify the report immediately.
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Opening Hormuz was the easy part. Bousso: Restoring oil flow is not the easy part
The sporadic shipping through the Strait of Hormuz highlights the uncertainty that hangs over the world's most critical oil and natural gas chokepoint. One thing is certain: even if all the guns are silenced, it will take years to restore the flow of oil and gas through the Strait of Hormuz to its pre-war level. Iran announced on Saturday it would tighten control of the strait as a response to an?U.S. Blockade of Iranian tankers. Fired at several vessels. Warned?mariners about the closure. It was just hours after Tehran had announced a temporary "reopening" amid a 10-day ceasefire. Donald Trump, the U.S. president, said that negotiations were in progress and threatened to resume military action should shipping be disrupted once again. After the U.S. and Israeli aerial bombing of Iran began on February 28, Tehran effectively closed down the strait. Traffic through the strait, which normally transports around a fifth global oil and natural gas supplies, has been reduced to a trickle since then. Immediate impact was severe. The Gulf has been unable to release around 13 million barrels of oil per day and 300 million cubic metres of LNG per day, forcing oil producers to close refineries, LNG plants, and oil fields. This has impacted economies in Asia and Europe. Fighting has caused damage to the energy infrastructure and diplomatic relations in the region. How will the recovery unfold, and at what point can the industry expect to return to pre-war levels of operation? THE RELIEF RUSH The speed of recovery depends not only on the diplomacy between Washington, D.C., and Tehran?but also on logistics and availability of tanker insurance, freight rates, and the willingness of the shipowners risking the passage. According to Kpler, the first tankers leaving the Middle East are the 260 vessels that have already sailed into the Gulf. They carry 170 million barrels?of oil and 1.2 million tons of LNG. The majority of these initial cargoes will likely be shipped to Asia. This region normally receives about 80% Gulf oil exports, and 90% of LNG. After these vessels leave, over 300 empty oil tankers in the Gulf of Oman will slowly move into the Gulf to load terminals like Saudi Arabia's Ras Tanura or Iraq's Basrah Oil Terminal. The first thing they will do is empty the onshore storage tanks that grew rapidly during the shutdown of 'Hormuz. According to the International Energy Agency, commercial crude storage in Gulf is currently?at around 262 million barrels. This is the equivalent of twenty days of interrupted production. However, the logistics of tanker transport will continue to slow down any full-scale recovery in energy flows. A trip from the Middle East up to India's West Coast, for instance, usually takes 20 days. The longer-haul routes, such as those to China and Japan, can take up to two months. Finding enough tankers can be difficult. Many are tangled up in the shipping of oil and LNG between Americas and Asia, which can take as long as 40 days. Even under benign conditions, a full rebalancing and return to the pre-war rhythms of Gulf loading operations will take eight to twelve weeks. CHICKEN AND EGG PROBLEM Saudi Aramco, the United Arab Emirates ADNOC and other producers will need to restart production at oil fields and refineries that were closed during the fighting. This will require careful coordination and the return of thousands skilled workers, contractors, and other professionals who were evacuated due to the conflict. The speed of recovery will be determined by the amount of storage available at coastal terminals. This creates a feedback loop that links upstream and downstream activity. The IEA estimates around half of Gulf oil fields and gas reservoirs retain enough pressure to return production to pre-war levels?within two weeks. Another 30% of the oil and gas fields could return to pre-war output?within two weeks. The remaining 20%, or roughly 2,5 to 3 million bpd, faces far more difficult technical challenges. Some fields may take several months to recover due to low reservoir pressure, damaged machinery and power supply issues. Repairing major energy assets such as Qatar's Ras Laffan LNG Hub, where 17% of its capacity was affected, could take five years. It could take up to five years to repair some complex and ageing wells in Iraq and Kuwait. Drilling new wells in the region could offset any persistent supply losses, but this process would take at least one year and require an improvement of security conditions. Iraq and Kuwait are expected to lift force majeure declarations once the backlog of tankers is cleared and oilfields resume a steady production. These clauses allow exporters suspend deliveries in uncontrollable situations such as war. Even if the most optimistic scenario is realized - that peace talks are successful, no new conflicts occur and infrastructure damage is not as bad as feared – a return to full pre-war operations will take years. 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.
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One person killed in a drone attack by Ukraine on Russia's Tuapse Port
Russian officials said that a major Ukrainian drone strike on Russia's Black Sea Port of Tuapse caused a fire, and at least one person was killed. This comes just hours after the blaze?was extinguished in the aftermath of a similar attack?on April 16th. Tuapse, one of Russia's most important southern ports, is an oil export hub. It also handles dry bulk cargo, including coal and fertiliser. It is also home to the Rosneft-owned major oil refinery with the same name. Veniamin kondratiev said that Tuapse had been subjected to a'massive drone strike,' on the messaging app Telegram. "A fire broke out at the seaport." Kondratiev said that a man died at the port, and another was injured. Debris?from drones also damaged several city buildings, including a primary school, kindergarten, church, and residential apartment block. The Russian?defence minister said that?112 Ukrainian 'drones' were destroyed over night. (Reporting and editing by Christopher Cushing, Clarence Fernandez and Clarence Cushing; Guy Faulconbridge and Vladimir Soldatkin)
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Opening Hormuz was the easy part. Bousso: Restoring oil flow is not the easy part
The sporadic shipping through the Strait of Hormuz highlights the uncertainty that hangs over the world's critical oil and natural gas chokepoint. Even if the gunfire stops, it will take months and perhaps years for the flow of oil through the Strait of Hormuz to return to its pre-war level. Iran announced on Saturday it was tightening its control over the Strait as a response to the U.S. blocking of Iranian tankers. It fired at?several vessels, and warned mariners the strait had been closed. This was just hours after Tehran had announced that the strait would temporarily reopen following a 10-day truce. U.S. President Donald?Trump stated that negotiations were in progress, but threatened to resume military action should shipping be disrupted once again. After the U.S. and Israeli aerial bombing of Iran began on February 28, Tehran effectively closed down the strait. Traffic through the strait, which normally transports around a fifth global oil and natural gas supplies, has been reduced to a trickle since then. Immediate impact was severe. The Gulf has been unable to supply the oil and LNG needed to sustain economies in Asia and Europe. The fighting in the Gulf has caused damage to energy infrastructure and diplomatic relations across the region. How will the recovery unfold, and at what point can the industry expect to return to pre-war levels of operation? THE RELIEF RUSH The speed of recovery depends not only on the diplomacy between Washington, D.C., and Tehran but also on logistics. According to Kpler, the first tankers leaving the Middle East are the 260 vessels that have already sailed into the Gulf. They carry 170 million barrels oil and 1.2 millions metric tons of LNG. The majority of these initial cargoes will likely be shipped to Asia. This region normally receives about 80% Gulf oil exports, and 90% of LNG. More than 300 empty oil tankers that are currently idling on the Gulf of Oman's shores will be able to move into the Gulf, and eventually head for loading terminals like Saudi Arabia's Ras Tanura or Iraq's Basrah Oil Terminal. The first thing they will do is empty the onshore storage tanks that quickly filled up during the Hormuz shut down. The International Energy Agency estimates that the Gulf's commercial crude storage is currently at 262 million barrels. This is the equivalent of 20 days production disruption, leaving little room to produce until exports resume. However, the logistics of tanker transport will continue to slow down any full-scale recovery in energy flows. It takes about 20 days to travel from the Middle East up to India's West Coast. The longer-haul routes, such as those to China and Japan, can take up to two months. Finding enough tankers can be difficult. Many are tangled up in the shipping of oil and LNG between Americas and Asia, which can take as long as 40 days. Even under benign conditions, a full rebalancing and return to the pre-war rhythms of Gulf loading operations will take eight to twelve weeks. CHICKEN AND EGG PROBLEM Producers?such Saudi Aramco, and ADNOC of the United Arab Emirates will need to restart oil and gasoline production at fields and refineries that were closed during the fighting. This will require careful coordination and the return of thousands skilled workers who were evacuated due to the conflict. The storage capacity at coastal terminals will dictate the pace of recovery, creating a feedback loop that links upstream and downstream activity. The IEA estimates around half of Gulf oil fields and gas reservoirs retain enough pressure to restore pre-war production within two weeks. Another 30% may take?to 6 weeks, depending on the security situation and the restoration process of supply chains. The remaining 20%, or roughly 2,5 to 3 million bpd, faces far more difficult technical challenges. Some fields may take several months to recover due to low reservoir pressure, damaged machinery and lack of power. It could take five years to repair damage to major energy assets, such as Qatar's Ras Laffan LNG Hub - which lost 17% of its capacity. It could take up to five years to repair some complex and ageing wells in?Iraq or Kuwait. Drilling new wells in the region could offset any persistent supply losses, but this process would take at least one year and require an improvement in security. Iraq and Kuwait are expected to lift force major declarations once the backlog of tankers is cleared and oilfields return to a steady production. These clauses allow exporters suspend deliveries in uncontrollable situations such as war. Even if the most optimistic scenario is realized - that peace talks are successful, no new conflicts occur and infrastructure damage is not as bad as feared – a return to full pre-war operations will take years. 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.
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Asian Airlines report Europe demand surge due to Gulf hub disruption
Major Asian airlines report a surge in demand for European routes, as travellers avoid Middle -Eastern hubs that are disrupted. This trend could continue 'for some time after the Iran conflict is over. Last week, Cathay Pacific Airways of Hong Kong, Singapore Airlines, Korean Air Lines, and Australia's Qantas Airways revealed robust performance on European routes for March, despite a doubled price of jet fuel. Cathay's Chief Customer and Business Officer Lavinia Lav said on Friday that "we have... increased flights and capacity into Europe in March andApril to meet the surge in demand from passengers who are prioritising alternative routes." She added that she expected the strong demand to continue into April, fueled by Easter travel as well as increased long-haul bookings transiting in Hong Kong. Singapore Airlines reported that the percentage of seats filled on their European flights increased to 93.5%, from 79.7% one year ago. This was due to spillover traffic to Europe as Middle East hub capacity fell. This was the largest gain of any region. GULF CARRIERS CHALLENGES Cirium, a firm that collects aviation data, estimates that before the conflict, Emirates and Qatar Airways, together with Etihad Airways, accounted for a third of the passenger traffic between Europe,?Asia, and transported more than half of passengers from Europe to Australia and New Zealand, as well as Pacific Islands. Flightradar24's data indicates that the major Gulf carriers are?gradually? restoring their capacity. All three have reached at least 60% more flight numbers than before the conflict. Travel insurance does not cover them because Australia warns its citizens against traveling to the Gulf or changing planes there. According to Google Travel, as a result of this, customers will need to pay more for flights that do not fly over the Gulf. Etihad's economy class return Sydney-London tickets departing next Saturday are the cheapest, at A$1,861 (1,333.59). United Airlines, at A$3,144 via San Francisco, and Thai Airways A$3,901 via Bangkok are the most affordable one-stop options to avoid the Middle East. Bank of America analysts stated in a note published recently that "tight prices and gains on Asia-Europe route could persist for 6-12 month even after the war due to forward booking delays and traveler aversion to risk." ALTERNATIVE HUBS Korean Air reported a strong European performance in its first quarter estimated results. Operating income increased 47.3%, to 517 billion dollars won. This growth was partly due to an "increased need between Europe and Asia because of the Middle East war", with European passenger revenues up 18% compared to a year ago. The airline expects a "strong transit demand", resulting from the reduced market supply of Middle East carriers. Qantas has adjusted its operation to reflect the shift. It re-deployed capacity from U.S. routes and domestic routes in order to increase flights to Paris and Rome. The airline stated that "Qantas continues?to see strong demand for international travelers to Europe as customers search for alternative routes." Airservices Australia's manager of air traffic control said that Australia-Middle East travel was down 77% on an annual basis in March, as flights were rerouted through other cities. Airservices stated that Asian gateways like Singapore, Kuala Lumpur and Hong Kong could become alternative travel hubs. ($1 = 1,479.7600 yen) ($1 = 1.3955 Australian Dollars) (Reporting and editing by Jamie Freed; Julie Zhu)
Kremlin hopes Iran talks will continue for the benefit of Gulf economies and the global economy
The Kremlin said on Monday that it hopes the 'negotiations with Iran continue in order to avoid negative consequences for the region and global economy. Russia added that, while not acting as mediators, they are ready to help if necessary.
"We can see that the Gulf situation remains unstable and unpredictable." Dmitry Peskov, Kremlin spokesperson, told reporters that they hoped that the 'negotiation process would continue - and that we could avoid further escalation to a military scenario.
Peskov stated that Russia was not acting as a'mediator' in the talks about Iran, but stood ready to assist if asked.
Peskov stated that "Russia is currently not a mediator in the negotiation process. However, we are ready to offer any assistance necessary to help facilitate a peaceful resolution or?help to reach an agreement." (Reporting Anastasia Lyrchikova; Writing Anna Peverieri, Editing Guy Faulconbridge).
(source: Reuters)