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Sinograin, a Chinese soybean company, announces its fourth major auction since July.
Sinograin, a Chinese company, announced on Friday that it will auction 360,000 metric tonnes of imported soybeans on August 19. Industry experts believe that the state stockpiler is clearing out space for incoming U.S. soyabeans, as evidenced by its fourth sale since July. According to a?notice from the National Grain Trade Centre, a?sale is scheduled for 1:30 pm (0530 GMT) on Wednesday. It will include soybeans produced between 2022 and 2025. After a 'May summit between Donald Trump and Xi Jinping, China agreed to purchase 25 million tons of U.S. soya beans annually until 2028. Two traders in 'Asia' said that China has 'already bought about 7 million tonnes of U.S. soya beans as of this week and they expect Sinograin will continue auctions over the next few weeks. Reporting by Shi 'Bu, Yukun Zhu and Liz Lee Editing and David Goodson by Hugh Lawson
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The financial week in five charts - Bank boom, aluminum squeeze and smart freight
Open Interest (ROI), every Friday, distills the previous five days' financial week into five charts that highlight the most important trends, surprises, and overlooked moves. 1. HORMUZ REALISTIC CHECK CLYDE RUSSEL, 'ROI Asia Commodities and Energy'?Columnist : Middle East crude exports, including?flows across the Strait of Hormuz?, have been depressed this summer, say commodity analysts Kpler. The data is in line with other vessel tracking companies but it stands in stark contrast to the claims made by U.S. Energy Sec. Chris Wright this week that 15 million barrels of crude oil per day were leaving the region. This includes 9 million bpd flowing through 'Hormuz. 2. JAMIE MCGEEVER, ROI Markets columnist: The workers' share of U.S. GDP continues to decline, reaching a record low 52.9% in the second quarter. The Q2 earnings season showed a 'eye-watering' U.S. profit growth of more than 50%. Main Street and Wall Street are gaining ground in the economic pie. 3. INVENTORY DRAINS ANDY HOME, ROI Metals columnist: Aluminum inventories at the London Metal Exchange are down to their lowest levels since 1990. The supply-chain shocks from the Iran War are dwindling a market that was historically characterized by an oversupply. 4. AUTOMATION SHIFT GAVIN MAGUIRE, ROI Global Energy Transformation Columnist: The transportation sector, the largest energy consumer in the U.S., could be affected by automation. Automation could be used to reduce energy waste and change fuel demand in the U.S. 5. EURO BANKS BEAT MAG7 Mike Dolan, ROI Finance & Markets columnist: Goldman Sachs analysts this week tried to?bust myths that underlie negative views?of European equities. The most striking observation they made was that the boring old euro zone banks have outperformed U.S. megacap tech giants since early 2023 - before the term for Wall Street's high-flyers even existed. The Roundhill "Magnificent 7" exchange-traded funds has grown 182% since its launch. The main euro zone banking index, however, is up almost 210% in the same time period. This is driven by AI and the return of durable positive interest rates. The opinions expressed are solely those of their authors. These opinions do not represent the views of News. News is committed to the Trust Principles and to integrity, independence and freedom from bias.
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Air Canada anticipates record revenue in September and October as premium passengers escape summer heat
Air Canada's revenue in?September?and October?will likely?break?records, as premium travelers are avoiding the summer heat and crowds of Europe and Japan. In recent years, large North American airlines have built their business around corporate clients, loyalty program members and premium travelers. They bet that these customers will not pull out when fares increase. The increased demand for corporate flights in the?autumn, combined with changing travel patterns of premium leisure passengers, are raising expectations among executives for seasons that were once considered slower as compared to peak travel months like July or August. Mark Galardo, Chief Commercial Officer at Air Canada, said in an interview with The Canadian Press on Thursday that "we anticipate that September-October will be the strongest ever from a revenue perspective." He added: "We have seen a tremendous increase in the?demand of people who travel business class for trips to Italy, Spain and France. The Mediterranean region in general is also a popular destination, as well as Japan." "And these customers tend to avoid the summer peak." Delta Air Lines, United Airlines and other U.S. carriers have reported that the changing travel patterns are driving more demand for autumn travel, especially to lucrative European destinations. This summer, Europe has been hit by record heat, wildfires, droughts, and lack of air conditioning. Some destinations have become less appealing to tourists because of this. Japan has also experienced very hot days, with temperatures exceeding 40 degrees Celsius (104 degrees Fahrenheit). Galardo noted that the trend amongst premium travellers, who began to fly more in spring or autumn two or three year ago, has accelerated and is even showing an increase in November. PREMIUM STORY Air Canada hasn't seen any similar changes in the travel patterns of budget passengers. Galardo stated that "that shift to the autumn season is really a premium story." Galardo stated that the change in Air Canada's business model has already led to it adding flights to European leisure destinations such as Sicily and Mallorca. There will be even more next year when new aircraft are delivered to the carrier. He said that he expected the fall and spring to be major contributors?to these routes. Air Canada has been prompted to develop a maintenance strategy to help balance seasonality. For example, some planes could be brought in for repairs in the summer so that they are ready to fly in September. (Reporting from Allison Lampert, Montreal; Additional reporting from Rajesh Kumar Singh, Chicago; Editing done by Jamie Freed).
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Sources: Drone attack damages Novatek's Ust-Luga processing complex for gas condensate, according to sources
Three industry sources have confirmed that a drone attack on August 14 'damaged' the complex for processing gas condensate at the Baltic port of Ust-Luga, owned by Russian gas producer Novatek. Novatek didn't respond to an immediate?request for comments. Two sources confirmed that the drone attack had no impact on oil export operations at the terminal in?Ust-Luga. Ust-Luga, one of Russia's most important?oil-export terminals, loads about 700,000 barrels?of crude per day. Alexander Drozdenko, the Leningrad Region Governor, said earlier on Friday that a drone had caused a fire in the Ust-Luga Port. Drone attacks have repeatedly targeted Ust-Luga’s port infrastructure and terminals. Three processing units at Novatek’s Ust-Luga Complex each have a?capacity? of 3 million metric tonnes a year. They refine stable gas condensate into light and heavy naphthas, jet fuels, ship fuel oils and gasoils. According to company data, the complex processed 3.8 million tonnes of gas condensate in the first half this year.
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Smart trucks and tugs that never sleep. Automation rewires US transport: Maguire
U.S. Transportation has become increasingly efficient with advances in engine technologies, infrastructure upgrades and more sophisticated logistic networks. The next wave will be different. The automation of transportation networks is transforming them into continually optimizing systems. These systems consume less energy for each unit moved, work longer, and reduce labor bottlenecks. They also reshape the demand for fuels, electricity, and other resources. Software increasingly dictates the way energy is consumed in the United States and how goods are transported. In Texas, driverless trucks haul commercial loads while AI is deployed on Mississippi River tugboats. Rails are increasingly relying on automated inspection and machine vision systems. Aviation regulators prepare for a world where cargo flights will operate with less human intervention. Viewed separately, ?these developments may appear incremental. They point to an increasingly autonomous, constantly?optimized, and more productive freight economy. According to the Energy Information Administration (EIA), transportation is the biggest source of energy in the U.S. It accounts for 37% of the total energy consumption. Around 70% of the total U.S. petroleum product demand is accounted for by transportation. A major overhaul in the transportation sector will have a far-reaching impact on the U.S. as well as global energy markets for the next decade. THE MISSISSIPPI GOES DIGITAL The Mississippi River, the oldest freight artery of North America, is one of the latest adopters. America's inland waters move hundreds of millions tons of commodities each year, including fertilizer and grain, as well as biofuel feedstocks. Waterborne transportation accounts for just 4% of U.S. fuel consumption. In the past, river navigation was a human-experienced activity. To navigate the changing river conditions, captains relied on their local knowledge, visual observations and accumulated judgement. This is changing. The situation is changing. The technology can monitor hazards, track vessels, calculate stopping distances and analyze river conditions. It also identifies strategies to save fuel. It goes beyond navigation. The river transportation has an energy efficiency advantage over trucking. Towboats use buoyancy to do the majority of the work, while the water flow does the rest. According to the U.S. Army Corps of Engineers, one?gallon of diesel fuel can move a cargo of one ton more than 500 miles by barge. This compares to 60 miles for a truck. Automating barge traffic will increase this advantage by reducing fuel consumption, improving planning and minimizing delays. It is important because many of the commodities that travel on these waterways have energy content, from fuels, crude oil, and coal to biofuels. Transport costs that are lower can have a ripple effect on commodity markets and ultimately result in lower prices for energy-intensive goods. TRUCKS THAT NEVER SLEEEP American highways are likely to see the most noticeable automation revolution. The trucking industry, which accounts for more than 60% of the total fuel used in U.S. transport, is on the verge of a major overhaul. Trucking has improved over the years due to better aerodynamics and logistics software, as well as new engines. One constraint, however, remained the same: trucks would stop when drivers stopped. This limitation is removed by autonomous trucking. Aurora Innovation, along with other self-driving tech developers, have shown that driverless freight operations are commercially viable in Texas. They are working on a model where trucks will be used almost continuously. Theoretically, autonomous trucks could operate around the clock and not just during federally mandated driving times. This is a very different type of productivity improvement from previous transport advancements. The Industrial Revolution largely improved transportation by enhancing the power of machines. Automation increases asset utilization. The productivity of a truck that can move freight 20 hours a day, instead of 10, is doubled. This reduces the need for idle equipment across the network. Energy implications are complex. Automated systems can optimize speed, brake and acceleration to reduce fuel consumption per mile. Improved routing and platooning - where trucks move in close convoys for reduced drag - could reduce diesel consumption. A reduction in freight costs may stimulate demand. The history shows that efficiency improvements have often led to an increase in overall activity. If driverless systems dramatically lower shipping costs, freight volume could increase enough to offset fuel saving. Over time, however, autonomous fleets may also be able to accelerate the electric trucking industry through centralized fleet management and optimized charging schedules. It would not only reduce costs, but also shift the energy demand away from diesel. RAIL'S QUIET REVOLUTION The railroads are one of the most mature examples of automation, but they're also the least talked about. Rail automation, unlike the autonomous truck story, is happening behind the scenes, through sensors, digital maps and predictive analytics. Freight railroads deploy automated track inspection systems more and more while trains are still in motion. Lasers, cameras, and machine-learning system continuously monitor track condition, wheel integrity, and equipment performance. This is a major shift in the way we monitor our systems. In the past, maintenance of rails was based on visual inspections. Defects are usually discovered after they become significant problems. Automated systems are increasingly able to identify problems before they pose a risk. Wabtec is a major rail technology company and locomotive manufacturer. They have developed Pathfinder, an easy-to-use device. Pathfinder equips standard locomotives using hardware and sensors with digital capabilities, cameras and autonomous?operation. Pathfinder, and other digital upgrade systems, could enable smaller railroad operators to upgrade their train lines using advanced autonomous technologies such as Positive Train Control and trip Optimizer. Benefits go beyond safety. A more reliable infrastructure allows trains to move faster, reduces bottlenecks, and increases asset utilization. Rail is the most efficient land transportation mode, accounting for only 2% of all transportation fuel used in the U.S. Any shift from trucks to rails could reduce energy intensity across the economy. This may be one of the most underrated energy contributions of automation: it allows for greater use of modes of transport that consume less fuel per tonne-mile. AVIATION'S NEXT FUTURE Aviation is the least automated sector of transport, but this may change soon. The Federal Aviation Administration has started developing regulatory frameworks to support increasingly automated operations. Reliable Robotics, for example, is developing FAA-certified autonomous cargo aircraft that can operate from gate to door under remote supervision. The U.S. Air Force also invests in pilotless cargo planes that can be integrated into civil airspace. Aviation automation is about increasing operational flexibility. Remote or autonomous cargo planes could connect smaller towns, improve logistics resilience, and create new freight network that is currently uneconomical. Initial energy savings could be modest. Aviation fuel consumption in the United States is only 9%, but aircraft are heavily optimized. Automation could open up new transport models, especially in regional cargo, advanced air mobility, and electric-powered flight. Aviation automation could be compared to the early days on the Internet: the biggest impact may not come from making current activities cheaper, but by creating new options that were previously unavailable. What this means for energy markets The narrative that is most commonly heard about transport automation is that machines will replace people. This is a narrow view. Software is replacing inefficiency. Backhauls that are empty. Backhauls that are empty. River delays. Fuel waste. Preventable rail slowdowns. Unutilized aircraft. This inefficiency represents hidden energy consumption throughout the economy. Automating these losses is a direct way to reduce them. Maintenance can be more proactive than reactive, and as transportation systems become smarter, they can smoothen freight movements, increase asset life, and improve logistics networks. This could lead to an economy that is able to move significantly more goods, without having to increase?energy consumption proportionally. NON-STOP LOGISTICS? Fuel transitions is often referred to as energy transitions. History shows that productivity shifts are often the most important economic transformative factors. Steam power was important because it multiplied human effort. Electricity increased productivity in factories and homes. Computing has reduced the cost to obtain information. Transportation automation is part of that lineage. AI-assisted boats on the Mississippi and autonomous trucks in Texas are part of the U.S.'s freight system, which is designed to save time, reduce fuel consumption, and maximize output. It may not matter whether trucks run on batteries, diesel or hydrogen. The question is whether trucks ever have to stop. The opinions expressed are those of the columnist, author. This column is a great read! Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn, X 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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Drone incursions cause chaos and fear along NATO's Baltic border with Finland
The presence of military drones in the airspaces of Finland, Estonia Latvia and Lithuania is raising concerns that the conflict in Ukraine could spill over into NATO's northern border with Russia. Some of Ukraine's drones missed their targets, causing security warnings to be issued in neighboring countries. In Latvia, it led to the collapse of the government. The following is a timeline of recent drone incidents that involved Finland and the three Baltic states: March 25 - Two Ukrainian military drones that escaped from Russia enter Estonia and Latvia. One drone crashes into a chimney near the Russian border at Estonia's Auvere Power Station, while another crashes in Latvia. Lithuania reported earlier that a Ukrainian drone crashed into a lake. From March 29-30, Finland reports that unmanned aerial vehicle (UAV) have violated its territorial boundaries in the southeast of the country and deploys F/A-18 jet fighters. One object identified as a Ukrainian AN-196 manned drone. According to Petteri Orpo, the Finnish Prime Minister, strong Russian electronic jamming may explain why drones are drifting in Finnish airspace. The 31st of March - Estonia, Latvia and Finland detect foreign drone activity in their border areas with Russia. A drone is also found by the Finnish border guard. Estonia discovers drone debris in Tartu County. Estonian armed forces claim that drones found in the country are believed to be from Ukraine, and were intended for Russia. May 7 - Latvian and Lithuania ask NATO to increase air defences following two suspected stray drones that crossed from Russia and crashed in Latvia. One of the drones explodes in the Latvian area of Rezekne and damages four empty oil tanks. Andris Spruds, Latvia's Defence Minister, resigns on May 10, after Evika Silina said that anti-drone system had not been deployed quickly enough. Ukraine claims that the drones are Ukrainian, but were diverted by Russian electronic warfare. Silina resigns from her position as Latvia's prime minister on May 14, triggering the collapse?of Latvia's coalition government after Spruds’ Progressives party withdrew its support. The authorities in Finland have warned 1.8 million residents of the greater Helsinki area to remain indoors due to suspected drone activity. They also suspended air traffic at the airport and scrambled fighter jets. Alexander Stubb, President of Finland, says that Finland is not directly under military threat. May 17-18 - Explosives were found near the debris from a suspected Ukrainian drone that crashed near the Latvian border, Belarus and Lithuania. A Romanian NATO fighter plane shoots down an suspected Ukrainian drone after it entered Estonian airspace via Russia on May 19. Ukraine apologizes to Estonia and other Baltic Allies, claiming that Russia redirected a drone via electronic warfare and denies using Latvian and?Estonian territories to launch attacks on Russia. Lithuania warns the people of Vilnius that they should take cover and stops traffic at its airport due to a drone flying in their airspace. Lithuanian legislators seek shelter underground in the parliament while train traffic has been suspended and schools and kindergartens have taken children to shelters. NATO fighter jets have been sent to the border regions of Russia and Belarus in order to combat this threat. On June 3, Latvia and Estonia issued warnings to residents in the bordering regions of Russia asking them to seek shelter overnight if they suspect any drone activity. In response, Latvia claims that NATO fighter jets have been scrambled. June 8: A French NATO fighter plane shoots down an unmanned aerial vehicle in Latvian airspace. Officials say that tourists have cancelled their visits to the Latvian bordering regions of Russia due to fears about drone incursions. Andris Kulbergs, the new Baltic Prime Minister, has stated that he plans to spend his summer holidays in the affected region. Finland temporarily restricts airspace and marine traffic off its coast, near the Russian border. From July 2 to 28, the restrictions will last for a period of time. The military announced on July 28 that these precautionary measures are being taken to "ensure the authorities can?operate" if drones stray in the area. The Latvian armed forces report that on August 14, jets in a NATO defense mission shot down a drone which entered Latvian airspace. Finland's defence forces have announced that it has temporarily restricted airspace and maritime traffic in the eastern Gulf of Finland to prevent possible drones.
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Governor says that fire effects have cleared at the Russian port of Ust-Luga following a drone attack
The Russian authorities quickly cleaned up the damage caused by an attack from a Ukrainian drone that sparked a fire in Ust-Luga on Friday, a major hub for oil exports. Ukraine has struck targets in Russia, including ports, refineries, and commercial warehouses in an effort to raise the cost for Moscow to continue the full-scale conflict it launched in 2022. Drozdenko wrote on the Russian messaging service MAX that "all the consequences of the attack at the port of Ust-Luga?have been cleared." "There were not any casualties." He did not provide any further information. Drozdenko had earlier claimed that more than '50 drones were brought down 'overnight' in the northern area around St Petersburg. Fuel shortages have resulted from the attacks on more than a dozen refineries, some of which were hit repeatedly. The governor of Tver, northwest of Moscow, reported that an attack was carried out 'overnight' on the warehouse of Wildberries.com. Their sites had been targeted over?20 time in the last month. He said that debris from "enemy" drones damaged the wall of the facility, but no one was injured. Finland has temporarily curbed movements in certain parts of the Baltic Sea in order to protect against drone attacks. (Reporting and editing by Mark Trevelyan, Clarence Fernandez and Jekaterina Glubkova at the Tokyo and Moscow bureau)
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Smart trucks and tugs that never sleep. Automation rewires US transport: Maguire
U.S. Transportation has become increasingly efficient with advances in engine technologies, infrastructure upgrades and more sophisticated logistic networks. The next wave will be different. Automation transforms transportation networks into continually optimizing systems. These systems consume less energy for each unit of movement, work longer hours, and reduce labor bottlenecks. They also reshape the demand for fuels, electricity, and other resources. Software increasingly dictates the way energy is consumed in the United States and how goods are transported. In Texas, driverless trucks haul commercial loads while AI is deployed on Mississippi River tugboats. Rails are increasingly relying on automated inspection and machine vision systems. Aviation regulators prepare for a future where cargo flights will operate with less human interaction. These developments, when viewed separately, may seem incremental. Together, these developments?indicate a freight industry that is more autonomous, continually optimized, and more productive. According to the Energy Information Administration, transportation is the largest source of energy in the U.S. It accounts for 37% of the total energy consumed. The transportation sector also accounts for around 70% of the total U.S. petroleum product demand. A major overhaul in the transportation sector will have a far-reaching impact on the U.S. as well as global energy markets for the next decade. THE MISSISSIPPI GOES DIGITAL The Mississippi River, the oldest freight artery of North America, is one of the latest adopters. America's inland waters move hundreds of millions tons of commodities each year, including fertilizer and grain, as well as biofuel feedstocks. Waterborne transportation accounts for just 4% of U.S. fuel consumption. In the past, river navigation was a human-experienced activity. To navigate the changing river conditions, captains relied on their local knowledge, visual observations and accumulated judgement. This is changing. The situation is changing. The technology can monitor hazards, track vessels, calculate stopping distances and analyze river conditions. It also identifies strategies to save fuel. It goes beyond navigation. The river transportation has an energy efficiency advantage over trucking. Towboats use buoyancy to do the majority of the work, while the water flow does the rest. According to the U.S. Army Corps of Engineers, one gallon of gasoline can?move more than 500 miles a ton of cargo on a barge compared to 60 miles in a truck. Automating barge traffic will increase this advantage by reducing fuel consumption, improving planning and minimizing delays. It is important because many of the commodities that travel on these waterways have energy content, ranging from crude oil and coal to fuels, to biofuel inputs. Transport costs that are lower can have a ripple effect on commodity markets and ultimately result in lower prices for energy-intensive goods. TRUCKS THAT NEVER SLEEEP American highways are likely to see the most noticeable automation revolution. The trucking industry, which accounts for more than 60% of the total fuel used in U.S. transport, is on the verge of a major overhaul. Trucking has improved over the years through better engines, aerodynamics and logistics software. One constraint, however, remained constant: trucks would stop when the driver stopped. This limitation is being removed by autonomous trucking. Aurora Innovation, along with other self-driving tech developers, have shown that driverless freight operations are commercially viable in Texas. They are working on a model where trucks will be used almost continuously. Theoretically, autonomous trucks could operate around the clock and not just during federally mandated driving times. This is a very different type of productivity improvement from previous transport advancements. The Industrial Revolution improved transportation by making machines more powerful. Automation increases asset utilization. The productivity of a truck that can move freight 20 hours a day, instead of 10, is doubled. This reduces the need for idle equipment across the network. Energy implications are complex. Automated systems can reduce fuel consumption by optimizing speed, braking and acceleration. Improved routing and platooning - where trucks are moved in close convoys to reduce drag - could further reduce diesel consumption. A reduction in freight costs may stimulate demand. The history shows that efficiency improvements have often led to an increase in overall activity. If driverless systems dramatically lower shipping costs, freight volume could increase enough to offset fuel saving. Over time, however, autonomous fleets may also be able to accelerate the electric trucking industry through optimized charging schedules, and centralized fleet-management. It would not only reduce costs, but also shift the energy demand away from diesel. RAIL'S QUIET REVOLUTION The railroads are one of the most mature examples of automation, but they're also the least talked about. Rail automation, unlike the autonomous truck story, is happening behind the scenes, through sensors, digital maps and predictive analytics. Freight railroads deploy automated track inspection systems more and more while trains are still in motion. Lasers, cameras, and machine-learning system continuously monitor track condition, wheel integrity, and equipment performance. This is a major shift in the way we monitor our systems. In the past, maintenance of rails was based on visual inspections. In most cases, defects were only discovered after they became serious problems. Automated systems are increasingly able to identify problems before they pose a risk. Wabtec is a major rail technology company and locomotive manufacturer. They have developed Pathfinder, an easy-to-use device. Pathfinder equips standard locomotives using hardware and sensors with digital capabilities, cameras and autonomous operation. Pathfinder, and other digital upgrade systems, could enable smaller railroad operators to upgrade their train lines using advanced autonomous technologies such as Positive Train Control and trip Optimizer. Benefits go beyond safety. A more reliable infrastructure allows trains to move faster, reduces bottlenecks and increases asset utilization. Rail is the most efficient land transportation mode, accounting for only 2% of all transportation fuel used in the U.S. Any shift from trucks to rails could reduce energy intensity across the economy. This may be one of the most underrated energy contributions from automation: it allows for greater use?of modes of transportation that consume less fuel per tonne-mile. AVIATION'S NEXT FUTURE Aviation is the least automated sector of transport, but this may change soon. The Federal Aviation Administration has started developing regulatory frameworks to support increasingly automated operations. Companies such as Reliable Robotics pursue FAA-certified autonomous cargo?aircraft that can operate from gate to gate under remote supervision. The United States. The U.S. Aviation automation is about increasing operational flexibility. Remote or autonomous cargo planes could connect smaller towns, improve logistics resilience, and create new freight network that is currently uneconomical. Initial energy savings could be modest. Aviation fuel consumption in the United States is only 9%, despite aircraft being heavily optimized. Automation could open up new transportation models. This is especially true for regional cargo, advanced air mobility, and electric-powered flight. Aviation automation could be compared to the early days on the Internet: the biggest impact may not come from making current activities cheaper, but by creating new options that were previously unavailable. What this means for energy markets Transport automation is often characterized by the narrative that machines replace people. This is too narrow. Software is replacing inefficiency. Backhauls that are empty. Backhauls that are empty. River delays. Fuel waste. Preventable rail slowdowns. Unutilized aircraft. This inefficiency represents hidden energy consumption throughout the economy. Automating these losses is a direct way to reduce them. Transportation systems can become smarter as they become more advanced. Freight movements can be smoother and assets can run longer. Maintenance can become proactive rather than reactive. The result could be an economy that is able to move significantly more goods with a lower energy consumption. NON-STOP ?LOGISTICS? Fuel transitions is often referred to as energy transitions. History shows that productivity shifts are often the most important economic transformative factors. Steam power was important because it multiplied the?human effort. Electricity increased productivity in factories and homes. Computing has reduced the cost to obtain information. Transportation automation is part of that lineage. AI-assisted boats on the Mississippi and autonomous trucks in Texas are part of the U.S.'s freight system, which is designed to save time, reduce fuel consumption, and maximize output. It may not matter whether trucks run on batteries, diesel or hydrogen. The question is whether trucks ever have to stop.
The paper trail that links a US fuel dealer to a Mexican cartel
According to Mexican sources who have direct knowledge of this matter, and four Mexican government documents, Ikon Midstream is being investigated in Mexico for fuel smuggling.
Documents and sources indicate that the probe is part and parcel of ongoing investigations on maritime shipments from the U.S. to Canada of petroleum products in an alleged scheme of evading a large tax due for these imports.
Ikon Midstream was allegedly one of the "central pieces," in a alleged scheme that involved one of Mexico's largest crime groups, Jalisco New Generation Cartel, or CJNG. According to a document, Mexico's Attorney General's Office?opened an investigation against the company based on "testimonies, documents, and surveillance."
The Attorney General's Office of Mexico did not respond to any requests for comments.
According to security sources and the document, the Texas trader’s export of Diesel aboard the tanker Torm Agnes, is being examined for possible cartel connections, as well as Ikon Midstream’s purported relationship with an alleged CJNG related trucking company who helped offload cargo from the vessel in the ports Ensenada, and Guaymas.
According to the U.S. Government, smuggled fuels and stolen crude oils are now the second largest source of revenue behind narcotics for Mexico's cartels.
Two documents described the alleged racket and its players. Ikon Midstream, for example, was accused of being a supplier in Mexico of petroleum products, which were allegedly moved through an intricate web of importers and distributors, as well as transporters and facilitators. The summaries for the other two documents were included. The security sources confirmed that the four documents were produced in March and April.
Rhett Knagy, Ikon Midstream's Executive Director, responded in an email on May 12 that "not one shred of evidence" could be found to support the allegations. The company would not respond to hearsay accusations.
Homeland Security Investigations (HSI), the U.S. Department of Homeland Security's primary transnational investigation agency, executed a criminal warrant at Ikon Midstream Houston offices on 14 April, a DHS spokeswoman said in a statement released April 17. The statement stated that the search warrant was part of an ongoing criminal investigation. DHS didn't elaborate and did not say if it was working with Mexican authorities.
Ikon Midstream repeatedly denies wrongdoing. Ikon Midstream, in a statement dated April 24, said that it has never provided and does not provide material support or resources for CJNG.
Mexican authorities announced that at least 16 arrests have been made since September, in relation to fuel smuggling. Officials have claimed to have uncovered "a criminal structure" behind alleged illicit activities, but have not publicly identified the detainees.
In an October report, detailed how diesel exported by Ikon Midstream on the tanker Torm Agnes found its way to Intanza, the Mexican company authorities suspect of being a front for CJNG. Intanza does not have a listed phone number, a website, a social media presence, or a physical address that authorities could locate.
This story detailed how Mexican cartels make billions each year by smuggling fuel - mainly from the U.S. - to Mexico. It's a huge tax dodge. Diesel, gasoline, and naphtha, are declared as lubricants in trade documents to avoid a high import duty charged by Mexico on these imported fuels.
According to the U.S. Government, smuggled fuels and stolen crude oils have become Mexico's cartels' second largest source of revenue behind narcotics. The government has intensified efforts to crackdown on this illicit trade. In February 2025, the Trump administration designated CJNG a terrorist organization.
Trade experts, tax officials and law enforcement officials have reported that the paperwork used for import-export transactions is often incomplete, or even faked, by smugglers. They use front companies and established players in the oil industry to help facilitate these deals, with some colluding and others unknowingly, while others are acting without their knowledge.
Ikon Midstream filed a defamation suit on November 14, in a Texas district court, claiming that the news agency had made "categorically untrue" statements in the article from October about its business. The news agency stands by its reporting, and it is fighting the lawsuit.
Ikon Midstream has said that it did not do business with Intanza. Ikon Midstream released internal documents after the publication of the 'October report. These showed that the Torm Agnes cargo, along with three other 2025 shipments containing diesel and naphtha on the tanker TormLouise?were sold by Ikon Midstream to a Mexican client named Azteca Cone.
Azteca Cone is also under investigation, along with Intanza, for suspected fuel smuggling, and possible links to CJNG. This is according to three Mexican security sources, and two government security documents.
Azteca Cone is a mystery in the fuel business. Azteca Cone, like Intanza has no phone number, web address or physical location.
Ikon Midstream's internal documents, which it shared with us, also showed that Ikon Midstream had incorrectly classified the cargo in at least four of its shipments to the United States last year. Ikon Midstream had some of its own documents that described the cargo as being lubricants. This contradicted statements made last year by both the Texas company's attorney and the commercial manager for the tankers who said the vessels were carrying diesel and naphtha. It is important to make this distinction because fuels imported from Mexico are taxed heavily.
According to law enforcement officials, smuggling can be difficult to detect when mislabeled records are matched with what is declared by the recipient country. For example, both parties declare cargo as lubricants, but the product in question is actually diesel.
Ikon Midstream, in its statement of April 24, acknowledged that it made mistakes in its export filings. This was a reversal from earlier statements by the company claiming that it used the correct product code in its declarations to U.S. Customs. The company's updated statement characterized the repeated inaccuracies of its paperwork as "clerical mistakes" and stated that there was "no intention to avoid duty."
The story was not commented on by the oil shipping giant Torm. It is responsible for managing the tankers Torm Agnes, and Torm Louise. Torm, a Danish company, said last year it ended its business with Ikon Midstream based on "what has been revealed." However, the company did not provide any further details.
Four sources familiar with this deal have confirmed that Imperial Oil is the Canadian oil company which owns the majority of Exxon Mobil.
Documents shared by Ikon Midstream show that Exxon was also listed on the inspection reports for three Torm Louise shipments. This indicates that the oil giant provided the fuel to Ikon Midstream. On inspection certificates, the parties listed are usually the buyer and seller as well as terminal operators.
Exxon has not responded to numerous requests for comments. A person with knowledge of the matter stated that Exxon cut ties with Ikon Midstream by mid-2025.
Ikon Midstream purchased 120,000 barrels last year, which were loaded on the Torm Agnes tanker in Canada and transported to Mexico. Intanza received it. Port records show that the cargo was declared twice to Mexican customs, first at the Port of Ensenada where a portion of it was loaded into fuel trucks and then in the Port of Guaymas where the remainder was discharged in the same manner.
This misclassification enabled Intanza avoid paying around $7 million of tax on diesel. The tax was calculated based on volume and tax rate.
Mexican security sources said that Mefra Fletes, a trucking firm in Mexico, helped remove the Torm Agnes Diesel from both ports. According to four documents from the government, the company was also identified as a central piece in the alleged fuel-smuggling plot.
According to two security documents and three Mexican sources of security, Mefra Fletes has worked closely with Ikon Midstream in the past, transferring petroleum products from tanker to truck at several Mexican ports. In August, a reporter stopped at the Houston offices of Ikon Midstream and was turned away by an employee who claimed to be from Ikon Midstream. He had previously worked for Mefra Fletes. The man refused to reveal his full name.
Five owners or representatives of Mefra Fletes were named in a fifth, undated, Mexican government security document. The document was partially viewed. It also alleged that the five had ties to CJNG. It was not possible to determine if any of these people had been charged or to reach Mefra FLetes. The company does not have a presence on social media, nor a listed phone number or an address.
Ikon Midstream has not answered any questions regarding its purported relationship to Mefra Flates.
The FUEL TRADER'S VANISHING Clients
Ikon Midstream, in its lawsuit against a Mexican company, claimed to be an exporter and that it is solely responsible for the declarations made at Mexican customs.
Eight legal experts were consulted to determine what U.S. exporters should do to ensure that their customers are not sanctioned and are not connected to sanctioned parties. Ephraim Wernick is a Vinson & Elkins partner and former U.S. Department of Justice prosecution who specializes in foreign corruption and anti-money laundering cases. He says that such vigilance will be critical once CJNG, five other Mexican cartels, and the United States list of designated terrorist organizations are updated in February 2025. He said that U.S. prosecutors have greater leeway in pursuing parties suspected of giving cartels material support.
Wernick said, "You can't bury your head in the ground." He noted that he was unfamiliar with Ikon Midstream and its transactions in Mexico.
Ikon Midstream, in a statement dated April 24, said that it screens customers with a "risk based due diligence program." The company said that it has never transacted with an entity on the U.S. sanction list and that no counterparty had displayed "payment behaviour inconsistent with that of a legitimate wholesale purchaser."
Azteca Cone's physical address and even the most basic of information was not available.
Two journalists visited an industrial area on the outskirts Monterrey, in northern Mexico, in November using an Azteca Cone address listed on four invoices for 2025 provided by Ikon. This location was the home of a metalworking firm called C.W. Tech. C.W. Tech has been located at this address for three years.
C.W. Tech has not responded to any requests for comments. No indications exist that the company is involved in this alleged fuel smuggling scam.
According to an analysis of permits issued since 2021 or 2022, Azteca Cone and Intanza have never held the permits required by Mexico’s Energy Ministry for the importation of diesel or naphtha to Mexico. Two Mexican attorneys who specialize in energy and tax issues said that importers without these permits could face heavy fines or even prison time.
The Energy Ministry has not responded to any requests for comments.
Ikon Midstream stated that it was not responsible for verifying Azteca Cone's physical presence, nor did it have any obligation under U.S. law or Mexican law, to verify if its Mexican client held these permits. This statement, dated April 1, said.
Azteca Cone, as well as Intanza, have also had an important government approval revoked. In order to import any goods into Mexico, each company must be registered with the SAT (the nation's tax authority). According to the official list of suspended firms, Intanza as well as Azteca Cone, were both suspended from SAT's importers' registry on March 31, 2025. These suspensions were made less than one month after Torm AGNES arrived at the Mexican port of Ensenada in March 2025.
According to the list of suspensions, Intanza? and Azteca Cone lost their import authorizations due to their connection with another party who had been banned from importing. The document didn't name the third-party or explain why they were suspended.
The Mexican tax authority has not responded to any requests for comments.
Ikon Midstream stated in a statement dated April 1, that "it cannot be held responsible for any regulatory actions taken after the fact against a client."
Altana, a trade analytics firm in Mexico, reported that in addition to Azteca Cone, Intanza and other Mexican companies, thirteen others declared doing business with Ikon Midstream from October 11, 2019 to May 4, 2025. They imported products such as lubricants, fuel trucks, but no diesel, gasoline, or naphtha. Mexico's tax agency also suspended ten of these companies from the import registry - seven in 2025, according to its list of suspensions.
This list gave a number of reasons why these suspensions occurred: some of the companies were not able to be located by tax authorities. Others didn't file tax returns. Some didn't have all the documentation required to justify their foreign transactions. These cases were not detailed in the suspension list; tax authorities do not make details public.
SAT has not responded to any requests for comments about the suspension of Azteca Cone or Intanza, nor did it respond to questions regarding its suspensions. In a public document published by the tax authority in 2026, SAT said that it suspects that one of these firms - Komercialis – is a phantom firm that issued fake bills for transactions that did not take place.
No one responded to the requests for comments. The majority of companies did not have a listed phone number, or an internet presence. Many questions sent via courier were not delivered because the listed addresses of most companies could not be located.
Ikon Midstream stated that all of its counterparties had a business address at the time they transacted with it, in a statement dated April 24, 2004.
"IF NOTHING, THIS IS SUSPICIOUS"
The World Customs Organization developed product codes to standardize the way countries identify and track goods that enter or leave their borders. These codes are called Harmonized Tariff Scheduling (HTS) in the U.S.
The system is easy for smugglers to abuse, despite its precision. Customs officials cannot inspect each shipment to verify that the codes on the trade paperwork match the goods. Trade experts and authorities say that smugglers who want to avoid Mexican import duties for fuel often code their cargo as lubricants, or another type of petroleum product which is exempt from levy.
Ikon Midstream reported that it used Torm tankers for at least five shipments to Mexico of petroleum products. Both companies said that the cargoes they delivered were naphtha and diesel. The export documentation that the fuel trader provided for four of these shipments revealed that Ikon Midstream had used HTS codes to identify lubricants.
Two bills of lading were issued, one on January 7, 2025 and the other on January 24, 2025 for shipments departing Texas aboard the vessel Torm Louise. Both bills of lading had the HTS code for both cargoes, 2710.19.3020. According to the description of this code in the online database of HTS Codes by the U.S. Government, the number represents lubricating oil used in marine, automotive or diesel engines. Written descriptions on the bills of lading also described the cargo as being lubricating oil.
Ikon Midstream provided U.S. Export Documents for two additional shipments - a cargo containing diesel and naphtha that was sent aboard the Torm Louise in February and March of last year and diesel aboard the Torm Agnes. Both shipments used HTS codes as lubricants.
Ikon Midstream lawyer stated in an email dated October 29, that it was appropriate to use 2710.19.3020 because "it is a general product category and not a specific cargo listing."
The U.S. Government disagreed with this interpretation. U.S. Customs and Border Protection declined to comment on specific companies, investigations or reports. However, it did say that 2710.19.3020 was not the correct code for naphtha or diesel.
It is possible to make occasional mistakes on documents relating to international trade due clerical error, misunderstandings or a language barrier. CBP spokesperson stated that repeated inaccuracies could be considered as a violation of the foreign trade regulations.
CBP takes repeated errors in HTS code seriously, both for imports and exports. CBP may take enforcement and compliance actions including seizures, penalties, and increased scrutiny.
James Swanson is a former director of cargo security and controls for CBP. He said that Ikon Midstream repeatedly used incorrect HTS codes in U.S. Export paperwork. This was especially alarming to him because the Mexican importer had made the same error on their customs filings. He said it was hard to believe that this was an accident. This is at least suspicious.
Ikon Midstream, when presented with CBP's position regarding the product codes, admitted that it made mistakes in its export filings. It described the errors as minor and unintentional and stated in its statement on April 24 to the news agency that it was "committed" to accurately classifying products going forward.
Speaking generally about fuel smuggling and the use of false tariff codes, a former investigator for Mexico's tax authorities said that smugglers are now coordinating both ends of the transaction, using the same fake tariff codes in Mexico and the U.S. to make it harder for law enforcement officials to detect their deception.
Former investigators said that such subterfuge was "the most sophisticated and complex we've ever seen." It requires both importers and exporters to work together, as well as a good deal of technical expertise and a solid strategic plan.
Ikon Midstream stated in its statement of April 1, "There was no coordination between Ikon Midstream, Azteca Cone and tariff codes"
(source: Reuters)