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Investors weigh U.S. Iran talks as they muzzle European shares
Investors waited for any signs of progress in the latest round of U.S. and Iran negotiations to resume shipping through the Strait of Hormuz - a vital artery for the global oil trade. Brent Crude prices fell 1.6% and traded below $80 a barrel after mediators Qatar and Pakistan announced that Washington and Tehran agreed on a roadmap and measures to protect shipping through the Strait of Hormuz. Tehran declared the waterway closed on Sunday, casting doubt on its sustainability. By 0711 GMT, the pan-European STOXX 600 Index was up 0.05% at 635.92. Tech stocks led the sectoral gains with a 1.2% rise. Chipmaker Infineon gained?4.5%, and semiconductor equipment manufacturer Aixtron gained?2.3%. These gains were in line with those of Asian equity markets. M&A activity saw shares of?easyJet rise 2.3% following a US investment firm's?public offering?of PS4.74 billion ($6.26billion). Danone shares fell 0.4% following the announcement that the French food giant would acquire Australian company MADE Group for an undisclosed sum. Babcock, a UK defence and engineering group, dropped 3.3% after a sharp drop in its annual profit due to a PS140m frigate charge.
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Experts say China's efforts to use green energy in AI projects face hurdles.
China's efforts to increase renewable energy for its rapidly expanding AI data centre sector are running into obstacles. Industry experts warn that it is difficult to forecast peak demand and grid operators do not want to take on additional risk. In China's work report for 2026, released earlier this summer, the government highlighted that ensuring reliable electricity is a priority. It also pledged a stronger integration of computing infrastructure with power supply networks. An ambitious plan is a key component of this effort to direct more green?electricity into the rapidly expanding data centre industry. The authorities aim to have renewables supply four-fifths (from just 11%) of the total electricity consumption in the data centre sector by 2030. According to Pei Shapeng, director of the Chinese power company State Power Investment Corp., China's data centers are expected to increase their electricity consumption by 300 billion to 500 billion kilowatt hours between 2026 to 2030. This represents 18% of overall growth in total demand. The estimate's lowest range is equivalent to the UK?s entire annual electricity consumption. Despite the booming demand from China's data centers, this sector is not a good fit for green energy providers, especially compared to traditional energy-intensive industries like aluminium smelting. This is because its peak demands are harder to predict. Pei, speaking at a conference on the industry in Beijing last Thursday, said that "at least for now they don't appear to be very versatile (in managing energy demand)." We understand that data centres cannot adjust their power consumption loads very much. Once GPUs have been purchased, operators will want to use them quickly and intensively. He said that the move to increase green power usage by data centres was more about reducing emissions than it was about lowering electricity prices. Grid operators may also be reluctant to adopt a wider range of "direct green-power connections" to data centres. They are concerned that electricity sales will decline, and it would become harder to recover large investments made in transmission and distribution infrastructure. Experts say that China's fast-tracked rollout of data centres has already begun to strain the power sector, increasing average and peak grid loads and forcing operators balance rising demand with reliability risks. Wang Zelin is deputy director of State Grid Jibei Electric Power Research Institute. He said that if 15% of the power consumption load can be reduced, this will reduce the capacity expansion pressures on the grid in the next 3 to 5 years. (Reporting and editing by Eduardo Baptista and Che Pan; Miyoung Kim, Shri Navaratnam and Miyoung Kim)
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Fuel relief from the Iran deal may keep airline ticket prices high.
Oil prices are expected to fall after the interim U.S. Iran peace agreement, but it is unlikely that passengers will see any immediate relief. Carriers may be able to maintain fares above those of pre-war. The U.S. market is the most obvious example. Fuel costs have risen this year, but fare increases are still behind. Domestic seat growth is also limited. This gives airlines the opportunity to use lower fuel costs to rebuild margins, rather than reverse recent price hikes. U.S. Jet Fuel Spot Prices were $2.85 per gallon on 17th June, down from a high of $4.88 in early April. According to calculations based on fuel consumption, a decline that large would reduce the U.S. airlines' annual fuel bill by over $40 billion. FARES STILL LAG FUEL As jet-fuel prices rose, U.S. Airlines raised ticket prices, bag fees, schedules and reduced them, but these steps only offset part of the increase in fuel costs. Jet fuel prices increased three times faster than airfares between January and May, according to industry data. Deutsche Bank estimates that U.S. carriers will only recover 60 cents for every dollar more spent on fuel - $14.4 billion of higher revenues against $24.1 billion of higher fuel costs. Alaska Air reported that it would recover about one-third of the fuel cost increase. Delta Air Lines and United Airlines, as well as American Airlines, estimated second-quarter recapture to be between 40% and 50%. JetBlue Airways, Frontier Group and other airlines expect to recover less that half. United CEO Scott Kirby said that his airline is getting closer to recouping fuel costs through price: "We're going to recover 100% by the end the year." Raymond James data shows that domestic average fares were up by 34.1% compared to a year ago as of June 8th. Fuel prices are falling, so the question that needs to be answered is whether or not airlines can maintain their recent increases in fares. Conor Cunningham, Melius Research analyst, said that the ability to maintain prices is crucial. Lower gasoline prices may ease consumer pressure on high fares. Uneven Pass-Through Fare relief outside the U.S. is likely to be uneven. Jet fuel prices will not fall immediately because crude oil prices are still low. Until jet fuel prices drop to levels seen at the beginning of the year, airlines may keep their fares steady or even increase them if demand permits, according to Dudley Shanley. Europe could see a split. Ruairi Cullinane, RBC analyst, said that long-haul fares will be more lenient because airlines are more successful in passing on fuel costs on these routes. Short-haul prices may be firmer, if bookings and demand are supported by the peace agreement. Analysts at HSBC said that China's three largest airlines are facing weak pricing power, and falling aircraft utilization. Hong Kong's Cathay Pacific, however, is in a better position, as higher fares and cargo revenues, along with premium demand, could offset fuel costs. Middle East traffic was disrupted by the war, which is why it's the only exception. Aviation analyst John Strickland said that some airlines could use promotions to gain back traffic. However, fuel is still too expensive to offer widespread discounts. He added that United Arab Emirates airlines could be more aggressive, and get stronger government support. Earnings Before Discounts The length of time that prices remain low will determine how much benefit airlines receive. Fuel bills are based on purchases made over time and not spot prices. Even after the most recent declines, jet fuel costs 54% more than it did a year earlier, according to the International Air Transport Association. Southwest Airlines Chief Operating Office Andrew Watterson summarized the pressure. Watterson replied, "When is fuel going to drop?" when asked by a reporter about Southwest's return to its pre-pandemic profit margins. As airlines attempt to rebuild their earnings, there is little incentive to reduce fares. Jefferies estimates that each?5% decrease in its $3 per gallon fuel cost forecast for 2027 would increase projected earnings by 10 to 15% for Delta and Southwest, and as much as 50% for American Airlines. No Broad Fare War In previous U.S. fuel cycle, falling oil prices would often trigger a race to increase capacity that drove fares down. These conditions do not exist in most cases. The 'risk' of a wide-scale domestic fare war is being limited by aircraft delivery delays, tight capacity at airports and weaker low cost carriers. Industry data shows that U.S. domestic airlines seats are expected to increase by just 0.4% in the third quarter compared to 4.6% before the latest Middle East tensions. J.P. Morgan analysts say that limited aircraft deliveries, and the pullback of budget carriers in the United States reduces the risk of "meaningful" capacity creep. This gives airlines an easier time than usual to maintain current pricing. Fuel prices may not be as important to passengers than the demand for fuel. Shanley stated that the power of the consumer is a major factor. Reporting by Rajesh Singh in Chicago, Alessandro Parodi and Joanna Plucinska from London; Additional reporting in Hong Kong by Julie Zhu; Editing by Jamie Freed).
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Qatar brings LNG tankers into Hormuz despite shipping slowdown
Shipping data revealed that four liquefied?gas tanks controlled by Qatar headed into the Strait of Hormuz despite a drop in?ship traffic following Iran's announcement over the weekend that the waterway had been closed again. Shiptracking data by analytics firm Kpler revealed that the tankers - Wadi Al Sadd, Mekaines Al Sadd, and Mesaimeer – entered the strait via Iran for the first since the U.S./Israeli war against Iran began. QatarEnergy's LNG exports, which have been severely curtailed since the beginning of the war on February 28, didn't immediately respond to an inquiry for comment. LSEG data shows that the dry bulk vessel Summit Success, which is registered in Marshall Islands and sails under its flag, also entered Gulf waters on Monday. Kpler data revealed that five vessels crossed the Strait of Gibraltar on Sunday. This is down from 26 ships seen a day before. Three Very Large Crude Carriers were among them, each carrying 2,000,000 barrels of Saudi crude oil and fuel oil. One of these vessels was headed to Japan. It is possible that more ships could be plying the Strait with their transponders turned off. Iran lifted its effective Blockade of Hormuz after agreeing to extend a ceasefire in April for 60 days with the United States, to allow peace negotiations. But Tehran's Islamic Revolutionary Guard Corps declared the waterway closed once again on Saturday, as retaliation for Israeli attacks in Lebanon. OIL EXPORTS MOVING U.S. Central Command reported that 55 merchant ships with over 17 million barrels for global markets transited through the strait Saturday. The data revealed that three VLCCs were carrying crude oil from the United Arab Emirates (UAE), Kuwait, and Iraq and three tankers were carrying various products of oil. The data shows that there were 13 ships, including two VLCCs. Hamid Bovard from the National Iranian Oil Company told state television on Sunday that over 25 million barrels of Iranian crude oil had passed through the virtual blocking line since Monday. Gulf producers Abu Dhabi National Oil Co. and Kuwait Petroleum Corporation have issued tenders for selling crude oil with the option of loading it from within or outside the Strait of Hormuz. Seoul's Ministry of Oceans and Fisheries announced on Monday that two?vessels operated South?Korea passed through the strait following the U.S. and Iran signing their interim peace agreement last week. The ministry did not name the vessels. Kpler data and LSEG data showed that two ADNOC controlled?LNG tanks were delivering cargoes on Monday to India, after having recently exited the strait. Data reveals that the Al Hamra tanker discharged at Ennore LNG Terminal, while the Mubaraz tanker would be offloading its cargo on the Kochi terminal at the end of June. The data showed that both tankers had been seen last in ballast, east of the strait, in late May or early June. They then reappeared on the ship tracking data at the weekend with their cargos loaded off the coast of India. ADNOC didn't immediately respond to an inquiry for comment. Al Hamra has completed two "dark voyages" out of Hormuz. Reporting by Florence Tan and Emily Chow; Editing by Stephen Coates, Sonali Paul and Sonali Paul
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Kuwait's KPC issues first spot naphtha tender since US-Iran conflict, sources say
According to trade'sources' and a document that was reviewed by, Kuwait Petroleum Corp (KPC), has made its first offer to?sell spot naphtha -cargoes from its ports for?July. This is the company’s first tender since the start of the U.S.Iran War. Documents showed that the state-owned oil company is offering 55,000 metric tons (495,00 barrels) of petrochemical feedstock or 80,000 tonnes, with the loading scheduled for the weekend of July 5-7 at any port in Kuwait. The bid closes on 22 June with same-day valid. KPC didn't immediately respond to a request for comment made outside the working hours of the company. Two sources confirmed that the refiner had last bid for February shipments in January. KPC offered prompt June-loading of refined fuels, such as naphtha and diesel via ship-to -ship transfers off the west coast of?India and?Oman or from Fujairah tankers.
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Authorities say 54 injured and 18 missing following explosion at Qatar LNG site
Authorities said that 54 people were injured and 18 others are missing following an explosion on Sunday at Qatar's main liquefied gas processing site, Ras Laffan. In a statement, QatarEnergy said that an incident occurred during the start-up operations of Ras Laffan industrial city which resulted in "an explosion and fire" at the Barzan gas supply facility Sunday evening. It said that emergency response teams had been deployed to control the fire. The fire was now under control. In a statement, the Interior Ministry of Qatar said that 54 people were injured and 18 people are missing. The ministry attributed the blast to a "technical error" and said there was no danger to public safety. QatarEnergy has not indicated whether the explosion caused any damage to its plant that supplies gas for the domestic market. Witnesses reported hearing a loud boom in Doha's capital, south of Ras Laffan. Barzan's gas facility is capable of producing 1.4 billion cubic foot per day and provides pipeline gas for local industries as well as Qatar's electricity generation sector. The Barzan gas facility has the?capacity of producing ethane and condensate for both domestic?and international markets. The facility is located at Ras Laffan, QatarEnergy’s main site for LNG export and production. It has a total 77 million tons of LNG per year via 14 trains. In the midst of a U.S./Israeli war against Iran, two of Qatar's LNG train and one of its gas-to liquids facility were damaged by strikes. This knocked out 17% of Qatar's LNG export capacity. Repairs are expected to take many years.
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Moscow says it has shot down 60 drones and reopened airports after the incident
Local authorities reported that the Russian capital, Moscow, shot down dozens drones early on Monday morning and temporarily suspended airport flights, only days after Ukraine struck the city's refinery. Sergei Sobyanin, the Mayor of Moscow, said on Telegram that 'nearly 60 drones headed for Moscow have been downed. Sobyanin didn't provide any further details but did say that emergency services had been sent to the areas where drones had crashed. Separately, the aviation watchdog reported that flights had been suspended at Sheremetyevo and Domodedovo airports as well as Zhukovskiy, near the capital. However, these flights were later resumed. Last week, drones attacked Moscow's only oil refinery. Moscow's defence system shot down almost 200 drones during that offensive. It was one of the largest air attacks on the city since Russia invaded Ukraine in 2022. Mikhail Razvozhayev said that the city of Sevastopol, in Russia-annexed Crimea, canceled all public events and would 'keep street lights off' on Monday. He also called for people to reduce their electricity consumption. The popular Russian tourist destination of Crimea has stopped selling fuel to the general public and to businesses. Fuel is only available to government agencies that are responsible for essential services and security. (Reporting and editing by David Dolan in Tokyo, Jekaterina Glubkova)
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AirAsia X CEO: Prices for jet fuel have fallen since June 15, resulting in a reduction of fares.
Bo Lingam said that the CEO of Malaysian budget airline AirAsia?X, has announced a 5% reduction in fares since June 15. The airline will continue to monitor the situation on a weekly basis as jet fuel prices fall, he added. As the U.S. - Iran war wreaked havoc on travel around the world, the airline has used the last three months to reduce underperforming flights, shift the demand, and renegotiate all contracts with vendors and lessors. Lingam said to reporters that they were still renegotiating and restructuring all of their contracts. He added that "week by week we will be revising our fares as the fuel prices go down." AirAsia?X was hard-hit by the volatile jet fuel price. It posted a loss in its first quarter this year, cutting 10% of its flights and adding fuel surcharges as a result. In a Monday statement, the airline stated that it expects to have its full capacity restored by August. Singapore jet ?fuel The price of oil was around $112 per barrel on Friday, after recent?declines attributed to an interim U.S.-Iran agreement. This was higher than pre-conflict prices of $80 per barrel, but less than half the high of March 30, $242. Lingam said that the airline would receive its first Airbus A220 aircraft by the end of 2027. These jets will be used in the Philippines. (Reporting and editing by Julie Zhu, Christian Schmollinger, Anne Marie Roantree and Jamie Freed).
US closes investigation into 2024 Delta Air Lines melting down sparked by CrowdStrike failure
The Trump?administration announced on Monday that it had?closed?an?investigation, without seeking penalties, into a July 20, 2024 meltdown of Delta Air Lines sparked a global outage which disrupted the plans of 1.3 millions customers and cost $500 million to the carrier.
Biden's administration launched an investigation into Delta after the CrowdStrike computer software outage. Other major carriers had been able to quickly resume normal operations.
The U.S. Transportation Department spokeswoman said that the review revealed "Delta passengers received prompt refunds and adequate baggage assistance as well as appropriate?assistance to passengers with disabilities."
USDOT, under President Donald Trump's administration, has rolled back some of the consumer protection initiatives announced by then-President Joe Biden. It has also reversed?a number?of penalties.
Delta stated in a statement that it was thankful USDOT acknowledged "the catastrophic circumstance we faced as an Industry during the unprecedented outage" and dismissed the investigation by citing our care for customers. This included millions of dollars of refunds, hotel, food, and baggage assistance.
USDOT stated that its decision to close the investigation included a directive to Delta to "provide adequate customer service assistance, including timely notification of your right to request a refund."
Politico was the first to report on Monday that this decision was made back in November.
USDOT waived an $11 million fine on Southwest Airlines in 'December. This was part of a settlement for $140 million over the airline's meltdown during a busy travel season.
As part of the settlement, American Airlines was also required to pay $16,7?million in 2024. This was due to their treatment of wheelchairs and disabled passengers.
The Federal Aviation Administration (FAA) closed its investigation last month into airlines that failed to comply with the required flight reductions at 40 major airports in 2025 during the government shutdown, without seeking any fines.
(source: Reuters)