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Travel companies in the US are resilient enough to absorb Middle East shock.
Early earnings reports show how travel companies, from hotel chains and cruise operators, have relied upon resilient business demand from Americans as well as a short-term boost provided by the World Cup to offset the effects of the Middle East war. Fuel costs have increased and international travel has been disrupted by the conflict. However, earnings reports released on Tuesday indicate that many consumers are not deterred by economic uncertainty or higher travel costs. The founder of GetCruiseInfo.com, Brian Rooney, said that "JetBlue Hilton and Royal Caribbean have all shown continued strength with higher-valued products. This suggests that travelers still prioritize experiences, even though they are becoming more selective in their discretionary spending." These results confirm that we are still experiencing a K-shaped economy. Value-conscious travelers adjust their travel plans and schedules, but higher-income travelers book premium experiences. Hilton Worldwide Holdings increased its forecast for room revenue growth in the full year, driven by strong demand at its luxury properties, and the expected benefits of the World Cup during the third quarter. However, the U.S. hotelier's revenue from the Middle East and Africa region fell 29.5% compared to the previous period. Hilton CEO Christopher Nassetta stated in an earnings conference that the World Cup helped boost earnings. However, the mid-scale hotels saw the greatest turnaround, as they benefited from the business and group travel demands. Hilton's RevPAR (room revenues) grew by about 1.7% in the second quarter due to the soccer event. Royal Caribbean, the cruise operator, raised its profit forecast for this year but cut its revenue growth projection as it factored a slight hit in bookings due to prolonged geopolitical tensions. The Miami-based company reported an increase of 27% in its quarterly fuel costs to $355 millions from the previous year. However, it slightly reduced its forecast for full-year fuel expenses from $1.35 to $1.34 billion. Naftali Hoetz, Royal Caribbean's chief of finance, said: "Consumer interest in our vacation experiences continues to be strong. Guests continue to show a willingness to spend money on unforgettable experiences." Airline companies have been hit the hardest by the war in Iran. Although most U.S. In the second quarter, carriers recovered close to half the fuel costs that have increased since the beginning of the war. However, the impact on their profits is still mixed. The prices of air travel are expected to remain high. JetBlue Airways reported that higher demand and higher fares allowed it to recover more fuel costs than anticipated, even though its quarterly fuel bill ballooned by nearly 81% or approximately $407 million. JetBlue's President Marty St. George stated during an earnings conference that "nobody likes fare increases but, at the end of the day, we need to cover our costs." As a result of stabilizing fuel prices due to the war, the airline's?visibility? into the second half of the year?improved. Travel is the most resilient part of luxury. Adam Sebba is the CEO of The Luminaire, a luxury travel agency based in London. (Reporting and editing by Arpan Varghese, Sahal Muhammed and Anshuman Jain in Bengaluru)
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Iran proposes temporary Hormuz Plan giving it greater control over transit routes
Iran has proposed to Oman an arrangement that would temporarily reopen the Strait of Hormuz. Under this arrangement, one direction of traffic will pass through Iranian waters and part of the other route will also be in Iranian water. This was revealed by Kazem Gharibabadi on state television. Gharibabadi stated that Tehran rejected the Omani proposal of an equal division between transit routes in both countries. He said such a plan would not address Tehran's concerns about security until regional stability was achieved. He added that Tehran had never recognized the southern route along Oman’s coast. Gharibabadi said that Tehran had also?made it very clear to Muscat, that it does not recognise the Traffic Separation Scheme. This is because the path roughly in the middle lies mostly in Omani waters. It also runs counter to Iran's desire to?monitor the transiting vessels following the attack by the U.S. Due to a 'risk' of mines, the TSS adopted by IMO is not currently usable. Instead, Iran's northern and Oman's south routes have been substituted. Gharibabadi stated that "this is for national security, not for bullying. Because when the TSS spent 60 years in Omani water we did not say anything." The Iranian diplomat also warned that Tehran would not allow any country to demine the Strait of Hormuz, even if Oman invited them.
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Erdogan: Turkey wants to sign an energy deal with Iraq
After he met with Iraqi Prime Minister Ali al-Zaidi, President Tayyip 'Erdogan' said on Tuesday that Turkey wanted to sign a comprehensive deal for energy cooperation as soon as possible. Erdogan, speaking at a press conference held after a signing event that was expected to include a deal keeping the Kirkuk-Ceyhan oil pipeline open 'for another year', said the state-owned Turkish oil and gas firm TPAO - would operate the Kirkuk oilfield currently used by BP. The deal to extend a decades-old agreement that governs the exports via the?pipeline, and which officially expired on Monday, was not signed by the sides. After signing three agreements?on collaboration in various fields?,?Erdogan stated that more agreements would be expected. However, his ministers abruptly briefed him on stage, and the two leaders then proceeded to their remarks, without any further signatures. The Iraq-Turkey crude petroleum pipeline agreement came to an end yesterday. Erdogan stated that the goal was to sign an energy agreement which would benefit both parties as soon as possible. In a press release on X, Turkish?Energy?Minister?Alparslan Bayraktar stated that TPAO acquired a 15 percent stake in BP Energy Company of Kirkuk?Limited. He added that this would enable the Turkish?company? to operate in the area. Bayraktar stated that "it will work with BPECKL to bring the 3 billion barrel reserve potential into production." BP has confirmed the agreement and welcomed the partnership between TPAO and BP.
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Sources say that China has been in contact with the Houthis of Yemen to allow ships to pass through the Red Sea.
Six sources familiar with the situation have confirmed that China held direct discussions with Yemen's Houthi Movement to allow its?tankers the freedom to navigate through the southern Red Sea, without fear of being attacked by the Iran-aligned militia. The 'Houthis' declared their blockade of the U.S. on July 20. This opened a new front in the Iran War against the U.S. According to sources, including a senior Iranian official, Beijing asked the Houthis to guarantee safe passage for their tankers. Sources who refused to be named due to the sensitive nature of the issue said that China was one of the first countries to directly contact the Houthis about transits across Bab el-Mandeb. Bab el-Mandeb is the strait between the Red Sea and Yemen at its southern end. Sources say that China cleans vessels individually with Houthis. Beijing wants to keep oil flowing out of Saudi Arabia via Yanbu terminals at the Red Sea, in order to plug the supply gap caused by Iran's closure of the Strait of Hormuz. Requests for comments from the Houthis media office, China's Transport Ministry and Iran's Foreign Ministry were not immediately responded to. According to Kpler 'analysis, LSEG and MarineTraffic data on ship tracking and Kpler 'analysis, at least four tankers have travelled through Bab el-Mandeb and?loaded crude oil from Saudi ports bound for China since the Houthis announced restrictions. Two officials briefed on the situation by Tehran said that Chinese?officials had cleared each vessel with the Houthis individually. Both sides informed Iran about their actions. In an email, the Houthis warned international shipping companies that they could be attacked by Saudi Arabian authorities if their vessels load or discharge cargo in Saudi Arabian ports. Two separate Chinese sources confirmed that some tankers attempting to enter the Red Sea via the Bab el-Mandeb changed their course due to safety concerns. TWO TANKERS - CHANGE COURSE IN ORDER TO AVOID STRAIT According to an analysis of data from MarineTraffic and Lloyd's List Intelligence, both the New Champion and New Prime supertankers sailed out of Gulf of Aden and into open water. According to Kpler, other industry data, and ship tracking, the New Prime had already been loaded with oil when it was due to arrive at Yanbu. Associated Maritime of Hong Kong did not respond immediately to a comment request. Last week, the Houthis claimed to have carried out missile and drone attacks on two Saudi oil tanksers: the Encelia & the Layla. The Encelia attack was confirmed by maritime security sources, but the Layla attack could not be immediately confirmed. It takes 16 days to travel southwards from Yanbu, through Bab el-Mandeb, towards Asia. It takes 50 days to sail around Africa and then turn north for the Suez Canal. Two sources close to Houthis said that the Houthis had good relations with China, and they have worked closely together in the past, particularly on oil shipments from Saudi Arabia to China. (Reporting and editing by Kevin Liffey, Jonathan Saul, Parisa Haifezi, Mohammed Ghobari Timour Azhari Florence Tan Aizhu, Siyi Liu, Sam Li, and Florence Tan)
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The largest US power grid has plans to address the growing electricity shortages due to data center demand.
PJM Interconnection - the largest U.S. grid operator - which serves a fifth (or?americans) - announced this week it would 'file plans with federal regulatory authorities?to reduce a growing gap between a?electricity _supply on its system and a demand primarily brought by data centres. PJM, the grid operator for 13 U.S. States in the Mid-Atlantic region and Midwest, plans to submit two proposals to the Federal Energy Regulatory Commission to manage the surge in demand and secure more electricity on the grid. One of these plans establishes a "reliability-backstop procurement" that is designed to match supplies with the data center power requirements that cannot be met by long-term contracts. The backstop procurement will begin on September 30, and run until October 21, with the results being released in December. PJM is looking for ways to increase generation to meet the rapidly increasing electricity demand - largely due to the expansion of the data centers in this region. It anticipates that demand from new large energy consumers will increase by 70 gigawatts in 2038. A gigawatt can power approximately 750,000 homes. The backstop procurement process will cover any supply shortages that may have occurred in PJM’s recent power auctions. In its annual capacity auction, held this month in New York City, the power price was capped at $325 per Megawatt-day. Despite high prices meant to 'incentivize construction of new power stations, PJM failed to meet its reliability requirements by 6.8 gigawatts despite the high prices. This is a greater shortfall than the one that resulted from the previous auction. The'second proposal' that the PJM Board of Directors directed staff to submit with FERC, would create a database for data centers and other large energy 'users. This registry would track their location and electricity usage. PJM suggests that, for 'data centers that don't supply their own electricity, it could temporarily cut off the power to these sites if there is a high demand on a grid. This would help to prevent rolling blackouts. PJM stated that it 'doesn't have the capability to curtail this electricity, and would need the cooperation of each state government. Reporting by Laila K. Kearney, New York; Kavya B. Balaraman, Noel John and Mark Potter in Bengaluru. Editing by Mark Potter and Aurora Ellis.
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Sources say that three Russian Black Sea terminals have restricted grain shipments by truck due to shipping risks.
Five industry sources have confirmed that three major Russian Black Sea grain terminals have limited grain deliveries via?truck due to increased shipping risks and the increased flow of grain following restrictions on the Sea of Azov. This month, Russia, the largest exporter of wheat in the world, has restricted shipping on the Sea of Azov after Ukrainian drones targeted several Russian grain ships along the route. The route accounts for about a quarter of Russia's grain exports. The authorities redirected grain that was previously shipped by rail and truck through the Sea of Azov from the fertile south to terminals at the Black Sea. Attacks on ports in the Black Sea have also increased. One source said, "Risks have increased and people are less willing to take reckless, bold risks." TERMINALS SHIP MORE THEN 20 MILLION TONES OF GRAIN Sources said that the three terminals in Novorossiysk -- NZT, KSK and ZTKT -- had limited deliveries by road. They can ship a total of more than 20 million tons of grains annually. The total annual Russian seaborne grains exports is around 50 million tonnes. One source said that the two terminals at Novorossiysk are able to accept grain by rail. However, these deliveries can only come from the southern Russian regions. ZTKT only accepts grain by truck. About a third is transported by truck. The terminals are a major supplier of grain to Russia, including Egypt and Turkey. The terminal owners, Delo Group and Demetra, have not responded to requests for comment. Sources said that the port of Kavkaz was shut almost immediately following restrictions imposed by the?Sea of Azov?on 10 July. A week ago, Russia banned vessel movements into and out of Novorossiysk port at night due to drone attacks. Another source confirmed that the ban is still in place. BALTIC PORTS ARE SEEN AS SAFEST ALTERNATIVE? Sources say that Russia is looking to diversify its exports. The Baltic region will be the priority in the future, as it's the most safe alternative route. Sources said that the Caspian Sea route was also an option. However, it's mainly used to ship goods to Iran. The risks are increasing due the the Middle East war and the recent attack by the Ukrainians on an Iranian vessel. Sources claim that shipments via the Caspian haven't increased since mid-July. (Reporting and Editing by Jan Harvey).
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Russia claims to have hit at least two Ukrainian vessels in the Black Sea, and also the port of Mykolaiv
The Russian Defence Ministry reported that Russian forces struck at least two Ukrainian vessels on Tuesday, including a bulk carrier transporting military cargo to the Black Sea, and another vessel in the port Mykolaiv. The statement said that it had also targeted the port itself. The Defence Ministry released a statement that said: "As a result of strikes using hovering munitions or attack drones, infrastructure facilities at the Mykolaiv port transhipment complex?used for delivery and storage of military cargo as well as fuel and oil tanks intended to provide the Ukrainian Armed Forces were damaged." It said that "in addition, in a strait (11km?east of Odesa), an unmanned aerial vehicle struck a dry-cargo vessel which was delivering military cargo to?Odesa's and?Chornomorsk's ports." In recent weeks, Russia and Ukraine have increased their military activity in and around the Black Sea and the Sea of Azov. Each?side has attacked dozens of ships, including cargo and oil tankers. Could not independently verify battlefield report. Reporting by Gleb Stlyarov, Writing by Andrew Osborn; Editing by Andrew Osborn
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Japan's major earthquakes over the last 15 years
On Tuesday, a powerful earthquake hit southern Japan, causing thousands of houses to lose power, and many factories to be suspended. Many people are presumed dead inside a partially-collapsed shopping center. Japan is located on the "Ring of Fire", an arc of volcanoes, oceanic trenches, and other geological features that partially surrounds the Pacific Basin. It accounts for 20% of all earthquakes of 6 or higher magnitude in the world. Each year, up to 2,000 quakes can be felt. Here are a few of the most significant quakes to have struck Japan over the past 15 years. On March 11, 2011, a 9.0-magnitude quake and tsunami struck northeast Japan. The earthquake killed nearly 20,000 people, and the Fukushima Nuclear Power Plant melted down, causing the worst nuclear disaster in the world since Chernobyl. On April 16, 2016, an earthquake of 7.3 magnitude struck Kumamoto. This is the same place where the temblor occurred on Tuesday. More than 270 people were killed, including some who were caught in landslides or heavy rains in the aftermath. On June 18, 2018, an earthquake measuring?magnitude 6.1 in Osaka (Japan's second largest metropolis) killed four people and injured hundreds. It also halted the production lines of factories in a nearby industrial area. On September 6, 2018, an earthquake measuring 6.7 magnitude paralyzed Japan's northern Island of Hokkaido. The quake killed more than 40 people and triggered landslides, knocking out electricity to 5.3 million residents. On?February 13th, 2021, an earthquake measuring 7.3 magnitude struck off the coasts of Fukushima and eastern Japan. Dozens of people were injured, and there was widespread power outage in Greater Tokyo. On March 16, 2022 a magnitude-7.4?earthquake again jolted?off Fukushima, leaving behind three dead and more than 200 injured, and reviving the memories of the quake that devastated?the Pacific Coast region just over 10 years earlier. On January 1, 2024 a 7.6 magnitude earthquake rocked central Japan's west coast on New Year's Day. More than 300 people died. On August 8, 2024, an earthquake measuring 7.1 on the southern coast of Miyazaki triggered Japan’s first ever advisory about higher-than-usual megaquake risks. The advisory was lifted one week later. (Reporting and editing by Alex Richardson; Kantaro Kommiya)
American Airlines resumes nationwide flights after IT issue caused a brief halt
American Airlines and its regional carriers resumed flights on Tuesday evening after a short nationwide suspension of departures due to an IT problem, the airline announced.
Federal Aviation Administration (FAA) issued a ground-stop for American Airlines flight due to an IT outage which began around 6:30 pm. ET (2230 GMT), and was cancelled at 7:18 pm.
The issue caused hundreds of delays as planes couldn't leave until it was resolved. This happened at a time when many U.S. East Coast airports were experiencing major delays and ground stoppages due to thunderstorms.
American Airlines said in a press release that "systems are now back online and flights are once again departing." "We temporarily halted flights while our teams resolved the problem. We apologize to our customers for any inconvenience.
FlightAware, an 'airline tracking site', reported that American delayed or cancelled 1,100 flights on Tuesday, which is 30% of all flights. Flightradar24 is another aviation website that reported as of 7:15 p.m. There were '130 less flights? in the air at ET than there were last week. (Reporting and editing by Jacqueline Wong, Jamie Freed, and David Shepardson)
(source: Reuters)