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Qantas raises fuel price forecasts as Middle East conflict shakes up oil markets
Qantas Airways, Australia's national airline, said on Tuesday that it had raised its fuel cost outlook and hadn't started its planned stock buyback. It cited a soaring and volatile price of jet fuel after the Middle East war cut off oil supplies. The airline's fuel estimate for the second half fiscal 2026 has increased from A$2.2 billion to A$3.1 billion (2.20 billion to 2.34 billion dollars). This surge in jet fuel prices shows how geopolitical events are quickly affecting airline costs. Refineries have had to cut production due to a lack of Middle East crude oil. Qantas said that while it has hedged much of its crude oil exposure, the company remains exposed to the increase in jet fuel spreads. Qantas has raised fares to offset the rising cost of its flights and shifted them towards stronger routes, such as Europe where demand is still strong. It also reduced domestic capacity in the second quarter by approximately 5 percentage points. The airline stated that revenue per available seat-kilometre (RASK), which is a key measure of pricing power, will grow between 4% to 6% in international operations, and around 5% in domestic operations, in the six months to June. This growth will be due to higher fares. However, the airline also said that about half the 'fourth quarter sales' were already locked in prior to the crisis. Qantas is still seeing a high demand for travel to Europe, as customers are looking for alternative routes. The Group responded by redeploying capacity from the U.S. to its domestic network in order to increase flights to Paris, Rome and other destinations. The management has decided to delay a previously announced A$150m buyback due to the'scale and speed of the fuel shock.
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Bloomberg News: United Airlines CEO pitches possible merger with rival American
Bloomberg News reported that a person familiar with the talks said that 'United Airlines CEO Scott Kirby has floated a potential merger?with rival American Airlines Group. Bloomberg said that Kirby had pitched the idea to government officials. However, it is unclear if there have been any further overtures or if a process has begun to "explore" a possible deal. United Airlines declined comment. The White House and American Airlines did not respond to comments immediately. The merger of four U.S. airlines, American Airlines, United Airlines, Delta Air Lines and Southwest Airlines, would consolidate the U.S. domestic market. After the bell, American Airlines shares rose more than 5% while United Airlines was flat. Kirby was previously the president of American Airlines between 2013 and 2016. According to LSEG, United Airlines' market capitalization is?nearly 31 billion dollars, while American Airlines is valued at $7.42 billion dollars. (Reporting by Natalia Bueno Rebolledo in Mexico City; Editing by Maju Samuel)
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Sources: Petrobras is in the initial stages of talks with Mubadala to purchase back Brazil refinery.
Two sources familiar with the matter said on Monday that the Brazilian'state-run oil company Petrobras has begun direct negotiations with Abu Dhabi’s sovereign wealth fund?Mubadala to repurchase Brazil's Mataripe refinery. Luiz inacio Lula da silva said last month Petrobras will repurchase the refinery that was sold under the previous administration of Jair Bolsonaro. Petrobras announced that it would 'analyze a possible deal' after Lula made his remarks. Sources said that a deal could be signed by the end of this year. Mataripe is Brazil's second-largest refinery but only operates at 60% capacity. Petrobras plants are running at maximum capacity to boost local production. Petrobras plans to increase its refining capacity 'have become more urgent after the U.S./Israel conflict with Iran caused global prices of diesel to soar, 'impacting Brazilian consumers because the country is dependent on foreign 'diesel. Brazil imports approximately a quarter its total diesel requirements. Lula is 'concerned about the rise in fuel prices ahead of an October presidential election, in which he will seek to win a fourth term. Petrobras declined to comment immediately. Mubadala refused to comment. Reporting by Rodrigo Viga Gaier, Writing by Andre Romani & Fabio Teixeira ; Editing by Natalia Siniawski & Inigo Alexander
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FedEx CFO John Dietrich will step down
FedEx announced 'on Monday that Chief Financial Officer John Dietrich will step down, effective June 1, after the parcel company completes the spin-off of FedEx Freight as a publicly listed company. Claude Russ will serve as interim CFO while the board searches for Dietrich’s successor. Dietrich's tenure will last until July 31. FedEx announced the spin-off of its trucking division, in December 2024. This was part of a restructured operation to concentrate on 'its core delivery business. The divestiture should be complete by June 2026. FedEx also confirmed on Monday its adjusted profit projection for the fiscal period ending May 31,?between $19.30 to $20.10 per shares. FedEx Freight is the leading provider of less than truckload (LTL),?services, in the U.S. The company expects its average revenue to grow between 4% and 6% over the next few years. FedEx's third-quarter results were a bit above analysts' expectations last month, thanks to its high-margin Express segment, which is time-sensitive and has higher margins. Increased volume -and- stronger pricing - helped it achieve the most profitable peak period in its history.
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Minister: TPAO will begin buying shares in foreign firms.
Alparslan bayraktar, the Energy Minister of Turkey, said that TPAO, Turkey's upstream oil and 'gas company will'start acquiring shares' in foreign companies as part 'of Ankara’s 'plans 'to develop international partnerships 'to boost its energy exploration. TotalEnergies, a French oil company, announced earlier that it had signed a preliminary agreement to explore 'Turkey’s Black Sea waters in search of hydrocarbons. This is the 'fifth such accord signed by Turkish firms with oil majors this year. "We will soon turn a new page, too." Bayraktar did not elaborate on the fact that TPAO will be entering a new field by purchasing shares in companies overseas. He said that the agreement between TotalEnergies and Ankara would allow both companies to carry out exploration in Angola. Ankara also aims to expand its operations in Libya, Pakistan in the upcoming months. Turkey is pushing to develop its own resources through international partnerships. One of these partnerships includes a partnership with Exxon. This will boost the security of supply and help Turkey become a regional supplier. Reporting by Tuvan Gumrukcu and Can Sezer, Editing by Chizu Namiyama
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Former Brazil spy chief arrested in the United States by ICE
ICE reported on Monday that former 'Brazilian intelligence chief Alexandre Ramagem was 'detained in the United States by ICE. He fled Brazil in September after being convicted of plotting a coup against President Jair Bolsonaro. Ramagem was sentenced to more than 16 years for his involvement in a plot that aimed to overturn Luiz Inacio Lula's victory in the 2022 elections over Bolsonaro. Ramagem's attorneys did not respond immediately to a comment request. He has maintained his innocence for a long time. Paulo Figueiredo - a Bolsonaro ally living in the 'U.S. - said on X, that Ramagem had been arrested for 'a minor traffic offense. Could not verify his arrest or whether it was in relation to Brazil's extradition request. Bolsonaro is a leader of the far right. The case against him, which he brought to light, was used by Donald Trump last year as a reason for imposing steep tariffs on Brazilian products. Trump's response did not derail the case. It ended in September of last year, with 29 convictions. Bolsonaro, for example, is currently serving a sentence of 27 years. Trump lifted most of the tariffs that he had imposed. Ramagem, the head of Brazil’s intelligence agency under Bolsonaro's administration from 2019 onwards, was accused of investigating former President's critics and providing information that would help him discredit Brazil’s electoral system. Reporting by Ricardo Brito and Eduardo Simoes from Brasilia, with additional reporting by Andre Romani from Sao Paulo. Writing by Manuela Andreoni. Editing by Brad Haynes.
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Sources say that Chevron and Shell will sign agreements in Venezuela for oil and gas fields.
Three sources said that Chevron is expected to sign an agreement on Monday to return the Loran field to Venezuela, and to participate in a new extra-heavy crude area in Venezuela's main oil regions. Shell will sign a contract to operate the Loran field. Three sources close to the preparations said that Shell will sign a contract for the Loran gas field. The agreement is part of a series of changes and expansions since the U.S. launched a $100 billion plan to rebuild Venezuela's energy industry after it captured President Nicolas Maduro. Sources said that the agreements, which have not yet been finalized, will be signed in the presence of the acting president Delcy Rodriquez by the oil ministry and the state-owned PDVSA. Chevron, Venezuela's oil minister and other companies did not respond to our requests for comments. Shell refused to comment but had told investors in the past that Loran, which extends into Trinidad and Tobago's Manatee oil field, was a good investment. Sources told us earlier this month that Shell was in advanced discussions with Venezuela's Government in recent weeks about developing oil and gas in South America, including Loran. Sources said earlier this month that Shell had signed preliminary agreements in March with Rodriguez's government to advance the Dragon project, as well as the Carito onshore crude oil and gas areas. Chevron has been in parallel discussions to relinquish Loran. Loran is a field that?it explored years ago and confirmed had more than 7 trillion cubic foot of reserves, but which it did not develop. The U.S. giant is now focusing on expanding Petropiar - its main oil project in Venezuela - into the nearby Ayacucho 8, in the vast Orinoco Belt. Reporting by Sheila Dang and Marianna Pararaga; Editing and production by Julia Symmes Cobb, Paul Simao
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Sources say that the freight rates for Russian Urals crude oil are expected to ease in April.
According to calculations and data from sources, the freight rates for shipping Russia’s flagship Urals crude to India in April weakened, giving exporters an additional $8 per barrel. The Iran War has caused a'surge' in energy prices that has kept benchmark oil prices above $100 per barrel. Urals, the company’s key Indian market, is now trading at a higher price than the North Sea benchmark. The spike in freight prices last month increased exporters' costs, and reduced the benefits of higher crude oil prices. The rates eased in April as the ice conditions at Russia's Baltic port improved and the availability of tankers on the global market increased following the suspension of shipping through Strait of Hormuz. According to traders' calculations and data, the drop in transportation?costs of Urals cargoes sent to India in late April and May could be between $3 and 8 per barrel, depending on where the cargo is loaded and its size. Drone attacks from Ukraine could threaten supplies and revenues coming out of Russia's western port. Early April, Russia's exports increased from March levels. However, the ports of Novorossiisk & Ust-Luga still operate below capacity. Sources said that freight costs for Urals cargoes transported?from the Baltic port of Primorsk to India?stand?at?about 16 million dollars for Aframax tanks carrying 100,000 tons. This compares to roughly $20 million to $23 million per one-way trip?in March. Transport costs for Urals shipments to India from the Black Sea port of Novorossiisk on Suezmax tanks carrying around 140,000 tonnes have also decreased, dropping from $20 million to $21 millions per voyage last month. The majority of Urals shipments is currently handled by shadow fleets that are trying to avoid Western restrictions. This is because Greek shipowners are still cautious to work with Russia, due to the sanctions. (Editing by Mark Potter).
The commodities supercycle has arrived. How can investors get involved? : Taosha Wang
Commodities supercycles have the power to reshape market trends for many years, even decades. We appear to be back in one, as the Iran War has amplified a number of long-term bullish tendencies. Many investors are now asking how to engage in the supercycle, rather than whether they should. Oil recorded its biggest monthly gain ever following the U.S. and Israeli strike on Iran in February. Add to that the substantial gains in copper and gold since mid-2025, and the race to find energy, metals, and minerals to fuel the artificial-intelligence arms race. A commodities supercycle is underway.
Commodities supercycles are long, powerful waves that are driven by major structural changes. Think of the oil booms of 1970s or the urbanisation boom of China in the early 2000s.
How can investors participate?
Commodities tend to be treated as one asset class. However, a bullish market does not always occur in the same way across all of them. Leadership tends to change. Rotation within an asset class is as important as the overall direction.
As an example, while a geopolitical event may immediately lift the oil price, copper and gold prices may fall or even lag as investors reduce their crowded positions, or reassess risks to growth.
In 2022, energy prices spiked following Russia's invasion in Ukraine. Meanwhile, some industrial metals fell as concerns about recession grew.
We're seeing such divergence again today.
After the Iran War began, oil prices soared by 64% as energy supplies were squeezed. This acted as a hedge for portfolios against volatility in equity markets. Gold fell by 12% in March, its worst month since 2008. This was largely due to the fact that it had been inflated for months by heavy speculative purchases and was among the few liquid assets that investors could sell when margin calls were made.
What are the most important things that investors need to keep in mind when they're considering riding the latest commodity waves?
Small Pool, Big Waves
Investors should first remember that even small changes in the allocation of commodities can have a "massive" impact on prices.
Commodities play a huge role in the real economy but are not as important for investors as stocks and bonds. Energy and materials account for less than 6% of S&P 500 compared to more than 30% in the case of the "Magnificent 7" tech giants.
The price is determined by the margin. Even if a small amount of capital is moved from broad equities and bonds to commodities, whether via physical exposure or listed options, the price impact could be significant. A small market will only absorb so much new capital before prices adjust.
Another key issue is interconnectedness: the movement of one commodity can change the outlook for other commodities.
Many commodities are interconnected through the potential substitution of demand or as raw materials. High natural gas prices, for example, can increase oil consumption. Increasing energy costs affect the price of food, fuel and fertiliser. In some industrial applications, copper and aluminium are interchangeable.
Inventories are another factor to consider. While firms may value cost-efficiency in a situation where supply is not constrained, geopolitical events can lead to a shift towards higher inventories.
Iran is a good example. The ability of Tehran to block the Strait of Hormuz, which is a choke point for energy and other goods, has highlighted how vulnerable these products are.
In the future, both governments and businesses will likely place a higher priority on the security of supply for many goods. This will lead to a greater stock of strategic materials. This could lead to a structural premium for the entire complex.
STOCKS OR BARRELS?
Next, you will need to decide whether or not you want to own the commodities themselves or related equities.
Commodity-related stocks are affected by many factors. These include the hedging policies of each company, their capital allocation decisions and pipelines of projects, as well as their position within the commodity value chain.
Take the energy industry. Consider the energy industry.
Not all producers upstream benefit in the same way, of course.
The U.S. has not suffered any direct damage during the current conflict. Due to their different geological profiles and production techniques, these producers have greater flexibility in adjusting the rate of production.
Many U.S. companies were also well-adapted to the price regime that existed before the Iran war, which was roughly $70 a barrel. This allowed them to generate a healthy cash flow. The windfall at current prices could be significant.
Energy companies, no matter where in the world they are located, also have their own unique?risks relating to management, debt, long-term strategy concerns, and other issues. These issues do not need to be considered when investing directly in commodities.
Positive Convexity
Investors should also not overlook the positive convexity of commodity return profiles. The price upside is usually much greater than the downside.
The physical nature of commodities and their direct link to the productive activities necessary to keep an economy humming are at the root of this.
Investors can short sell or delay the purchase of financial assets when they rise in price.
It is rare that the same logic applies to tangible commodities where it's difficult to delay or reduce consumption quickly. Prices may increase and eventually cause demand destruction, but not quickly enough to avoid a sudden squeeze.
This asymmetry can be one of the reasons commodity cycles can become more powerful than investors expected once they have taken hold. Understanding this can make the difference between being in a good position for a commodity cycle or being run over by one.
The views expressed are the author's. Taosha is the portfolio manager at Fidelity and creator of "Thematically thinking" newsletter. This column is a favorite of yours? 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.
(source: Reuters)