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The Slovak Ministry says that Druzhba oil flows to Slovakia have resumed on Thursday morning.
The Economy Ministry of Slovakia announced that Slovakia began receiving crude oil via the Druzhba Pipeline early on Thursday. This confirmed the end of the outage, which lasted for months after a Russian attack on the pipeline, according to Ukraine. The Economy Ministry announced that at 2 am (0000 GMT), the reception of oil into Slovakia via the Druzhba pipe was resumed. Since the halt of Russian oil deliveries to Hungary and Slovakia, in January, the Druzhba?pipeline is one of Europe's most political pieces of?infrastructure. The oil flowing through the Ukrainian portion of the pipeline began on Wednesday. This prompted Hungary to lift their veto over a '90 billion euro (105.4 billion dollar) EU loan that Ukraine urgently needs. Ukraine said that the halt was due to the need to repair the pipeline. Hungary and Slovakia accused Kyiv, however, of being slow. Hungary and Slovakia are still reliant on Russian gas and oil despite EU efforts to stop imports of Russian energy after Russia invades Ukraine in 2022.
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Iran War boosts European Logistics Profits as Shipping Chaos Persists
Analysts say that the U.S./Israeli war against Iran will benefit European logistics companies, which are expected to post higher profits in the first quarter. However, analysts also said that the conflict could cloud their future prospects. Although increased supply-chain complexity is typically a positive for logistics companies like DHL, DSV and Kuehne+Nagel in terms of profitability, many analysts have warned that the long-term effects from the energy shock and broader economic fallout may impact demand later this year. In a client note, Jefferies analysts stated that Kuehne+Nagel management does not expect any further yield pressure on sea or air businesses in the first quarter. The brokerage stated that this reinforced its view that earnings are stabilised and set to improve. Jefferies analysts said that periods of geopolitical instability have historically favored sea-to-air spillovers, where DHL has a structural advantage. The volume of air freight is increasing faster Analysts at Bernstein said that while air freight volumes are expected grow at an annual rate of high single digits, sea freight volumes will only rise at a single digit pace. They said that sea freight volumes were impacted by comparisons, after shippers pre-loaded cargo in anticipation of U.S. tariffs on imports beginning April 2025. Analysts are also looking forward to DSV’s capital markets day on 12 May, where they will be updating their medium-term financial goals. Bernstein stated that the potential for upside surprises is significant. Conflict in the Middle East has a significant impact on freight markets. After a weekend of escalation, the Middle East conflict has seen ships avoid the Strait of Hormuz. This has led to a greater level of uncertainty along an important trade route already disrupted. As a result of the disruption, there has been a sharp increase in air cargo costs. The high demand for jet fuel and reduced capacity have all contributed to this. Impact is felt far beyond the Gulf. The Red Sea is also at risk due to the increased tensions in the region. This has delayed the expected return of transits via the Suez route. Rico Luman is a senior economist at ING Research. He said that "full resumption has been pushed back several months, and may even be until the end of the year." This should help logistics companies on the short-term. Morningstar analyst Ben Slupecki stated that global shippers such as Maersk, Hapag-Lloyd, and others have rerouted their vessels around Cape of Good Hope. This has kept freight rates high and increased margins, because the higher prices are quickly absorbed by the fixed costs of shipping lines. Analysts do not expect the global freight markets to return to normality quickly, even if there is a resolution of the conflict. Luman stated that although freight rates could fall after a peace agreement allows traffic through the Strait of Hormuz to resume, any decrease is likely to be slow as supply chains will have been adjusted and congestion will have abated. Shippers are expected to explore alternative routes and port, which suggests pre-conflict patterns of trading may not return in full. Reporting by Amir Orusov, Anastasiia Kozolova and Matt Scuffham
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Iran tightens its control over Hormuz following US call off of renewed attacks
Iran has seized two ships at the Strait of Hormuz, tightening its grip on this?strategic artery' after U.S. president Donald Trump announced that he would cease all attacks indefinitely and there was no sign of a restart of peace negotiations. Uncertainty remained about the status of a ceasefire that had been in place for two weeks and was due to expire earlier this week. Trump, who had threatened renewed violence hours earlier, made a seemingly unilateral announcement on Tuesday that he would extend the ceasefire until the U.S. discussed the Iranian proposal during peace talks in order to end the war. Iranian officials, however, did not confirm that they had agreed to an extension of the ceasefire. They also criticized Trump's choice to continue the U.S. Navy's blockade on Iran's maritime trade, which is considered by Iran to be an act of warfare. Mohammad Baqer Qalibaf, Iran's parliament speaker who is also the lead negotiator in the negotiations with Israel, said that a complete ceasefire would only make sense if there was an end to the blockade. Qalibaf, a social media user, said that reopening the Strait of Hormuz - the narrow chokepoint which carried a fifth of world oil trade prior to the war - was impossible because of such a "flagrant violation of the ceasefire". In his first reaction to Trump's statement, he wrote: "You didn't achieve your goals by military aggression and you won't achieve them either by bullying." The only way is to recognize the Iranian people's right. Trump again backtracked at the last minute from his repeated threats of bombing Iran's nuclear power plants and civilian infrastructure. The United Nations and others warned that this would be a violation of international humanitarian law. There has been little progress in the end of the war, which began with joint U.S. and Israeli attacks on Iran February 28. The two sides are now in a hold-up, with the Strait of Hormuz effectively closed and straining economies around the world. The Middle East has seen thousands of deaths, mainly in Iran and Lebanon where Hezbollah, a militant group allied to Iran, joined the fight against Israel. According to the semi-official Tasnim Iranian news agency and statements from shipping companies, the Islamic Revolutionary Guard Corps has seized two ships and escorted?them?to Iranian shores. The Revolutionary Guards claimed that the Liberia flagged Epaminondas, and the Panama flagged MSC Francesca they had seized were operating without the required permits, and that their navigation systems were tampered with. Maritime security sources report that a third Liberia flagged container ship was also fired on in the same area, but it was not damaged. It had resumed its voyage. Leavitt stated in an interview to Fox News that the seizure of the ships was not a breach of the ceasefire because they were not American or Israeli vessels. She called it "piracy". As part of its blockade of Iran, the U.S. Military said that it has so far ordered more than 30 ships either to return to port or turn around. Sources say that the U.S. Military has intercepted three Iranian flagged tankers far beyond the Gulf. They were diverted away from their positions near India Malaysia and Sri Lanka. Brent, the benchmark for international crude oil, was above $100 per barrel in Asian trading on Thursday. It had hit triple figures the day before, and it had been the first time since?two weeks that Brent has reached triple digits. NO NEW DEADLINE FOR CEASEFIRE Trump announced on Tuesday that the U.S. agreed to the request of Pakistani mediators, "to delay our attack on the country?of Iran" until?their representatives and leaders can present a united proposal... and discussions have been concluded in one way or another. White House Press Secretary Karoline Leavitt informed reporters that he has not set a deadline for either the proposal or discussion. Pakistan, the mediator, is still trying to bring both sides together, after they failed to appear for tentatively scheduled discussions in Islamabad, on Tuesday, before the two-week ceasefire was due to expire. The first round of talks between Iran, the U.S. and Islamabad took place 11 days ago. Trump wants Iran give up its highly enriched uranium, and to stop further enrichment in order to prevent the country from building a nuclear bomb. Iran claims it only has a civilian peaceful nuclear program and demands the lifting of sanctions, compensation for damages and recognition of control over the Strait. Iran also made a ceasefire agreement between Israel and the militant Hezbollah group in Lebanon a condition for truce talks. Israeli airstrikes on Lebanon Wednesday killed at least 5 people, including journalist Amal Khali. The day was the most deadly since Israel and Lebanon announced a 10-day truce on April 16, 2007. Iranian media reported that Iran executed a person convicted of having links with both an exiled group of opposition and Israel's Intelligence Service.
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China calls for further building on islands in territorial dispute
China announced on Wednesday that it would continue to build up the more than 11,000 islands that it claims as its own in order to better govern them. This is part of a long-term effort to increase maritime power, to secure more natural resources and to reinforce territorial claims. China has constructed?artificial island, airstrips and military facilities over the years during a?extensive?land reclamation effort in disputed waters of the South China Sea. In an article attributed by the Chinese Ministry of Natural Resources to party leadership, the People's Daily (owned by the Party) said that islands are a key to unlocking deep-ocean resource development. It added that "major countries around the globe are competing to shift their focus on development towards the ocean", without naming any specific countries. The Chinese government called for greater efforts to protect the islands that it claims by upgrading infrastructure, boosting connectivity and improving access. China has spent billions on its navy. From nuclear-powered'submarines' to aircraft carriers, it is pursuing a goal dating back to 2012 when Xi Jinping was appointed leader of the ruling Communist Party. Beijing declared a nature reserve in September last year at the disputed Scarborough Shoal, to assert its claim over the atoll. The atoll has been a flashpoint between the Philippines and China for many years. Gregory Poling, a CSIS think-tank analyst, said that the facilities on the artificial island bases allowed Chinese law enforcement, navy, and militia vessels spend every day of each year patrolling the water of their neighbours, up to 1,000 nautical mile from the Chinese coast. A senior Taiwan official did not let China's presence on the busy waterway stop him from visiting the island controlled by Taiwan, Itu Aba. Itu Aba is part of the disputed Spratly Islands. Itu Aba's runway is long enough to accommodate military resupply flights coming from Taiwan. A new wharf that opened in 2023 can house a 4,000 ton patrol ship. Democratically-governed Taiwan is claimed by China, despite the objections of the government in Taipei, which says only the island's people can decide ?its future. This week, the Philippines, the United States, and partner nations began military drills, including maritime operations across the Philippine archipelago. The exercise presents a multi-national front against China, in a region where more than $3 trillion of annual shipborne commerce is conducted. Poling, the head of the Southeast Asia program at this think tank, said that Beijing'seems to be reaching a point where it is generating fewer returns. It has failed to stop a single Southeast Asian project, supply or construction mission or anything similar in the last four years. (Reporting and editing by Clarence Fernandez; Xiuhao Xie, Ryan Woo)
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China calls for further building on islands in territorial dispute
China announced on Wednesday that it would continue to build up over 11,000 islands, which it claims as its own. This will allow it to better govern these islands in a "long-term" campaign to increase maritime power, gain more natural resources and strengthen territorial claims. China has built airstrips and military facilities in disputed waters of the South China Sea during its extensive land reclamation efforts over the years. In an article attributed by the Chinese Ministry of Natural Resources to party leadership, the People's Daily (owned by the Party) said that islands are a key to unlocking deep-ocean resource development. It added that "major countries around the globe are competing to shift their development focus to oceans", without naming any specific countries. China claims that it has urged for greater efforts to protect islands by upgrading infrastructure, boosting connectivity, and increasing access. China spends billions on its navy. From nuclear-powered subs to 'aircraft carriers, it is pursuing a goal dating back to 2012 when Xi Jinping was appointed leader of the ruling 'Communist Party. Beijing declared a nature reserve in September last year at the disputed Scarborough Shoal, to "assert" its claim to this atoll that has been a flashpoint between the Philippines and China for years. Gregory Poling, a CSIS think-tank analyst, said that the facilities on the artificial island bases allowed Chinese law enforcement, navy, and militia vessels spend every day of each year patrolling the water of their neighbours, up to 1,000 nautical mile from the Chinese coast. A senior Taiwanese official was not deterred by China's presence on the busy waterway from visiting the Taiwan-controlled Itu Aba island, which is part of the disputed Spratly Islands. Itu Aba's runway is long enough to allow military resupply flights from Taiwan. A new wharf that opened in 2023 will be able to?host a patrol ship of 4,000 tons. Democratically-governed Taiwan is claimed by China, despite the objections of the government in Taipei, which says only the island's people can decide its ?future. This week, the Philippines, the United States, and partner nations began military drills, including maritime operations across the Philippine Archipelago. The exercise presents a multi-national front against China, in a region where more than $3 trillion of annual shipborne commerce is conducted. Poling, the head of the Southeast Asia program at this think tank, said that Beijing'seems to be reaching a point where it is generating fewer returns. It has failed to stop a single Southeast Asian project, supply or construction mission or anything similar in the last four years." (Reporting and editing by Clarence Fernandez; Xiuhao Xie, Ryan Woo)
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Iran tightens its control over Hormuz following US call off of renewed attacks
Iran has seized two ships in the Strait of Hormuz, tightening its grip on this strategic waterway following the announcement by U.S. president Donald Trump that he would cease all attacks indefinitely and there was no sign of a restart of peace negotiations. Uncertainty remained about the status of a ceasefire that was due to expire?earlier this week. Trump's sudden reversal came hours after he had allegedly threatened renewed violence. He made what seemed to be an unilateral announcement on?Tuesday, that the U.S. was extending a ceasefire pending the outcome of peace talks with Iran to end the war. Iranian officials, however, did not confirm that they had agreed to an extension of the ceasefire. They also criticized Trump's choice to continue the U.S. Navy's blockade on Iran's maritime trade, which is considered by Iran to be an act of warfare. Mohammad Baqer Qalibaf, Iran's parliament speaker who is also the lead negotiator in the negotiations with Israel, said that a complete ceasefire would only make sense if there was an end to the blockade. Qalibaf, a prominent figure on social media, said that reopening the Strait of Hormuz - the narrow chokepoint which carried a fifth of world oil trade before war - was impossible because of this "flagrant" breach of ceasefire. In his first reaction to Trump's statement, he wrote: "You didn't achieve your goals by military aggression and you won't achieve them either by bullying." "The only way to achieve this is by recognizing the Iranians' rights." Trump has again backtracked at the last minute from his repeated threats of bombing Iran's civilian infrastructure and power plants, which would be a violation of international humanitarian law according to the United Nations. There has been little progress in ending the conflict that began with the joint U.S. and Israeli attacks on Iran, which took place on February 28, 2017. The two sides are now in a hold-up, with the Strait of Hormuz effectively closed and straining economies around the world. The Hezbollah militants, who are allied to Iran, have joined Israel's fight against the country. Thousands of people were killed in the Middle East. According to statements made by shipping companies and Iran’s semi-official Tasnim News Agency, the Islamic Revolutionary Guard Corps has seized two vessels and brought them to Iranian shores. The Revolutionary Guards claimed that the Liberia flagged Epaminondas, and the Panama flagged MSC Francesca were operating without the required permits, and had also tampered with their navigational systems. Maritime security sources report that a third Liberia flagged container ship was also fired on in the same area, but it was not damaged. It had resumed its voyage. Leavitt stated in an interview to Fox News that the seizure of the ships was not a breach of the ceasefire because they were not American or Israeli vessels. She called it "piracy". According to the U.S. Military, it has so far ordered more than 30 ships either to return to port or turn around as part of its blockade against Iran. Sources say that the U.S. Military has intercepted three Iranian flagged tankers far beyond the Gulf. They were diverted away from their positions near India Malaysia and Sri Lanka. Brent, the benchmark international crude oil, was trading above $100 per barrel in Asian markets on Thursday. It had risen to triple figures the day before for the first two-week period. NO NEW DEADLINE FOR CEASEFIRE Trump announced on Tuesday that the U.S. had agreed to the request of Pakistani mediators, "to hold our attack on the Country of Iran, until their leaders and representatives are able to come up with an unified proposal... and discussions have been concluded, either way." Karoline Leavitt, White House press secretary, told reporters that he has not set a deadline for the discussion or proposal. Pakistan, the mediator, is still trying to bring both sides together, after they failed to show up to tentatively scheduled discussions in Islamabad, on Tuesday, before the ceasefire's two-week expiration date. The first round of talks between Iran, the U.S. and Islamabad took place 11 days ago. Trump wants Iran give up its?highly-enriched uranium, and to stop further enrichment in order to prevent the country from building a nuclear weapon. Iran claims it only has a civilian nuclear program and is seeking a lifting of sanctions and reparations. It also wants recognition of its control of the Strait. Iran also demanded that Israel and Lebanon’s militant Hezbollah group cease fire. Israeli airstrikes on Lebanon Wednesday killed at least 5 people, including journalist Amal Khali. The day was the most deadly since Israel and Lebanon announced a 10-day truce on April 16.
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Top shipping executives say they are waiting for "safe and sustainable" strait crossings
Two top executives in the shipping sector said that they wanted to see a safe and sustainable passage through Strait of Hormuz before much oil or cargo leaves or enters the Gulf. We thought that there was some hope when, two weeks ago, the temporary ceasefire came into view. In reality, the agreement did not translate into safety and passage for the vessels", Jotaro Tamura, chief executive officer of Japan's Mitsui O.S.K. Lines in an interview conducted on the sidelines the Singapore Maritime Week. MOL is one of the largest shipping companies in the world and is the leading owner of liquefied gas and oil tankers. Tamura said that questions about safety would remain, even if the Strait were to reopen. The Iranian Islamic Revolutionary Guard Corps warned that there are mines in the area. It's about?the definition of the word open. Is it open or only half-open? "Is it really open or is there a risk?" Tamura spoke. "At some stage, the (voyages will resume) and normalisation is a reality. It's difficult to predict how the reality will be." He said that MOL follows international law which allows for free passage through the Strait. CMB.Tech in Belgium, a large and diversified maritime firm with more than 250 vessels, is also waiting to get more clarity. "We cannot hedge." Alexander Saverys, CEO of Saverys Group, said at the Singapore conference that we should just wait and see what happens in the Middle East. It creates a lot more uncertainty." He said, "We must be confident we can travel without any problems." Today, we are in no way reassured. "We will only be able to'reassurance when we see that the ships can pass through in a safe,?sustainable manner." Saverys stated that "the Strait of Hormuz is normally a free-passage where no toll should have been paid." If that were to change, we would investigate. He refused to comment on how many ships his company has stranded in the Gulf. "We are in constant communication with all the governments to ensure that our ships can navigate. As you may know, right now the situation is still not safe. Since the U.S. - Iran war broke out on February 28, energy supplies from Gulf have been disrupted. About 130 ships a day pass through the strait to enter or exit the Gulf. This translates into about 20% of daily global oil and LNG supply. (Reporting from Siyi Liu in Singapore and Florence Tan; editing by Jason Neely).
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Sources say that American Airlines and Alaska Air are exploring a deeper international partnership.
American Airlines and Alaska Air Group are in initial discussions to expand their partnership. This could include bringing Alaska into American's transatlantic or transpacific joint business agreements. Sources said that the talks are still in the early stages and may change. They center around allowing Alaska Airlines to join American's global joint ventures, such as those with British Airways, Iberia, Finnair, and Finnair, a Finnish airline, across the Atlantic and Japan Airlines, across the Pacific. These joint ventures are popular with airlines because they enable partners to coordinate schedules, fares and share revenue for international routes. This so-called "metal neutral" arrangement means that it doesn't matter which airline operates the flight. It allows carriers to expand networks, improve connectivity, and better compete on longer-haul routes, without adding aircraft. Sources said that there are no talks about a merger of the two airlines. American and Alaska declined comment. EXPANDING A TIE-UP American and Alaska have a partnership based on codesharing, loyalty rewards and West Coast connectivity to international routes. They have called it a "West Coast International Alliance." Alaska, the company that recently acquired Hawaiian Airlines, has been focusing on integrating this deal. Chief Executive Ben Minicucci said on Tuesday that he was "super excited" about their organic growth plan. Sources said that the current discussions would strengthen this relationship by going beyond codesharing and into closer coordination of long-haul markets internationally. The sources noted that there is no timeline as to when the discussions could lead to a formal proposal. They also pointed out that such arrangements can be complex and require coordination between airline partners and regulators. Alaska is part of the Oneworld Alliance, a global alliance of major airlines that already connects it to American and many of its international partners. REGULATORY HUNDLES AHEAD Sources said that any such expansion would need the?approval of the U.S. Department of Transportation. This department grants antitrust immunity to international joint ventures and allows airlines to coordinate pricing and capacity. The plan may still be scrutinized, given the recent pushback from regulators against airline partnerships. This is especially true when two U.S. carriers are involved. The now-defunct Northeast Alliance?between JetBlue Airways and American Airlines is a recent example. This partnership, which was centered on New York City and Boston, would have allowed the airlines share revenue and coordinate flights, but it was struck down in 2023 by a federal court after a challenge from the U.S. Department of Justice. This case shows that the DOT's approval may not be enough if the Justice Department decides it wants to challenge a deal. The Alaska structure would be different in important ways. Joint ventures between international companies have been in use for many years. They usually involve deeper coordination including pricing and revenue sharing across all routes. (Reporting and editing by Joe Brock, Kim Coghill, and Rajesh Kumar Singh)
Andy Home: Gulf aluminium disruption has ripple effects on the alumina industry.
The Iran War has caused the aluminum market to focus on what isn't?coming out of Strait of Hormuz. There is a second, equally important problem: What is not coming?in.
Gulf Aluminium Smelters depend heavily on alumina imports, the intermediate between bauxite (bauxite) and metal to maintain their operations.
Six smelters are located in the region, but there are only two alumina refining plants. Emirates Global Aluminium (EGA) Al Taweelah, one of them, was damaged by iranian missiles. The same reason is causing the smelter to be out of service at the site, and other smelters have reduced their capacity.
As shipments are diverted away from the Gulf, this disruption will have a first-round effect on the alumina markets that is already saturated.
Second-round effects could include further reductions in Gulf metal production, as smelters are running low on raw materials.
China is the only one who wins here, as it absorbs all of the displaced aluminum.
Under Pressure
Even before the Iran War, the alumina market was already under pressure.
Since the beginning of the year, the London Metal?Exchange price (LME), which is based on S&P Global Platts assessment of the Australian FOB price, has hovered around $300 per metric tonne.
This is a far cry from the frenetic rally of 2024 when prices soared above $800 after a series supply shocks.
Since then, the market has shifted from a shortage to a surplus due to the continued expansion of production in?China or Indonesia.
Macquarie Bank estimated the global surplus to be 2.54 million tonnes last year, and forecasted a surplus of 1,26 million tons by 2026.
Bank of America has increased its estimate for 2026 excess supply to 2.2 millions tons as Gulf bound shipments are being redirected onto the seaborne market.
The length of time the Strait is closed to shipping will be a determining factor.
INPUT RISKS
If the Strait is not reopened soon, there's a greater risk that Qatalum in Qatar and Aluminium Bahrain will have to make further cuts.
Ma'aden in Saudi Arabia is the only fully integrated Gulf producer. It operates its own bauxite mining operation, feeding Ras Al Khair alumina refining plant.
According to Wood Mackenzie, Ma'aden has been supplying emergency supplies to other countries.
Alumina isn't the only problem for Gulf operators.
According to AZ Global Consulting, the logistical problems could be even worse for coal tar pitch which is used in the manufacture of carbon anodes that are used in the smelting processes.
It said that while other carbon inputs, such as calcined coal and petroleum coke, can be "redirected, stockpiled or rebagged and trucked", liquid pitch needs heated storage, heated trucks and heated silos to keep it molten between the loading point and discharge point.
These facilities are rare and difficult to improvise. "Pitch could be the most difficult logistical problem in the carbon 'chain if disruptions continue," AZ Global stated.
CHINA WINS
China is the main beneficiary of the disruption to the alumina processing chain.
According to the World Bureau of Metal Statistics which gathers data from customs official figures, it?imported alumina of 338,315 metric tons in March. This is the highest monthly total since January 2024.
AZ Global anticipates that imports will remain strong in the months to come, thanks to an 'open import arbitrage' between domestic and foreign prices.
China's smelters enjoy a?strong profit margin, as the Gulf Crisis has also sent aluminium prices up to four-year levels.
According to the International Aluminium Institute, Western production in March fell by 312,000 tons on an annualised basis due to restrictions in the Gulf while Chinese production increased by 88,000 tonnes.
China's share in global production grew to a record 60.2% a month ago. This ratio will likely?continue to creep higher as the Iran War takes a greater toll on Gulf smelters.
Andy Home is a columnist at. This column is great! 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)