Latest News
-
Italy's beach access dispute pits campaigners against lido operators
In this hot summer in Italy, the clash between cultures has intensified. Campaigners for free beach access are pitted against lido operators that charge for essentials like umbrellas, sunbeds, food stalls and lifeguard services. Santa Severa is an ancient Etruscan village located about 50km (30 miles) to the north-west from Rome. The battle lines are clearly defined. The beach is lined with parasols of all colours, and there are narrow strips of sand in between each lidos. Simone Vincenzi is the manager of Pino al Mare, a family-run lido that has been in operation for three generations. In his establishment - which also has a restaurant and hotel with 57 rooms - guests can pay EUR42 ($48), for two sunloungers and an umbrella near the sea. They will also have access to a beach volleyball field and children's playground. All day, lifeguards are in duty. Vincenzi stated that Santa Severa was a destination for families with small children. "We take the utmost precaution in this regard." Campaigners want more beaches in Italy to be 'free of charge' and claim that those who are unable or unwilling to pay are marginalised. "Public beaches tend to be located in the most undesirable spots, like rocky areas, or near drainage outlets," Elisabetta Gallo said, an activist for the Free Seas National Coordination which promotes free beach access. She added, "This is not a logic that promotes free beaches but one of exclusion." LUCRATIVE LIDO Concessions Santa Marinella is a neighbouring city with fewer free beaches and more difficult access. "On weekends, the small beaches, coves and inlets are crowded because not everyone has money to spend on lidos," said Simonetta Gazzella, an activist. The European Union has pushed successive Italian governments towards a more transparent system of allocating these 'lucrative' licences, but the reforms have been slow. The government of Prime Minister Giorgia meloni passed a law 2024 that allows existing business licenses at seaside resorts to continue to be valid until September 2027. A possible extension could extend to March 2028. Santa Severa, Santa Marinella and the local councils published public notices for the allocation of beach concessions up to 2033. In most cases, existing operators were assigned the concessions in the absence competing applicants. Italy's highest administrative court is currently reviewing the procedure that has been subject to a legal challenge. According to Vincenzi beach concessions are a way of ensuring cleanliness and order on the coast. Gallo, the campaigner, said that local authorities should take responsibility of public beaches and provide basic services like showers, trash bins, and lifeguard assistance. She said: "We believe the sea belongs everyone, and it should be welcoming to all." (Writing and editing by Matteo Negri)
-
Bombardier tops profit estimates, free cash flow turns positive on strong jet demand
Bombardier reported a second-quarter profit that was above analyst expectations. This was due to a robust demand for private jets, which also led to a turnaround in the company's free cash flow and increased its order backlog. Montreal-based Bombardier said that its quarterly revenue increased 6% annually to $2.15billion, despite having delivered four fewer aircraft. According to data compiled from LSEG, analysts estimated the company's revenues at $2.18 billion. Business jet manufacturers are benefiting from "strong demand" as AI startups and SpaceX generate new customers for private aviation. Bombardier is reducing debt and increasing production in order to deliver more aircraft. Analysts and 'planemakers' say that aerospace supply chains are improving since the COVID-19 pandemic, with overall deliveries increasing?this year. However, there remain lingering concerns regarding certain parts. Bombardier has delivered 32 business planes for the first quarter of this year, down from 36 a year ago. This is due to lingering supply-chain constraints. Bombardier expects to deliver more planes by?the second half of 2026. Bombardier's U.S. competitor Gulfstream Aerospace - a division within General Dynamics Corp - said earlier this week that deliveries had risen by three planes, to 41. Textron Inc also said they were still dealing with issues relating to some key components. Bombardier had a backlog of $21.8 billion at the end of June, up $4.3 billion from December. Investors closely monitor the company's metric of?free cashflow, which was $228 million for the second quarter. This is up from a negative $164 in the same period last year, due to customers making firm deposits on new plane orders. The quarterly profit was $2.50 a share on a 'adjusted' basis. This compares to analysts' expectations of $1.41.
-
Norwegian Cruise Line reduces annual profit forecast
Norwegian Cruise Line Holdings reduced?its annual profit forecast?on Thursday and said that demand was still under pressure due to softer booking trends. In premarket trading, shares of the company dropped by about 5.7%. As a result of looming geopolitical uncertainty and higher airfares to reach the starting destination, cruise operators have seen a slowdown in bookings. John W. Chidsey, CEO of Chidsey & Co., said: "While we're confident in our brands and in the long-term benefits that will come from the actions we have taken so far, we're still at the beginning stages of our turnaround." Norwegian Cruise Line is 'working on cost saving measures, such as streamlining their supply chain. The company also felt the pressure of increased investments in?ship -maintenance?, more dry docking days and new fleet additions. The company's forecast for?fiscal?2026 adjusted earnings per share is around $1.50. This compares to its previous forecast of $1.45?to $1.79?per share. LSEG data shows that analysts expected a profit of $1.67 a share. (Reporting by Sanskriti Shekhar in Bengaluru; Editing by Joyjeet Das)
-
Ukraine grain and oilseeds forecast increased after favorable weather
The Ukrainian association of 'grain producers' and 'exporters' said that the 2026 crop is expected to reach 84.6 metric tons. According to the statement of the grain association, this forecast has been increased by 1,000,000 tons due to favorable weather conditions. The association estimates that potential exports for the 2026/27 seasons could reach almost 52 million tonnes. It said that the wheat harvest is expected to be 23.7 million tonnes, and exports will reach 18 million tons. The capacity of Ukraine to export grain has declined significantly over the past few weeks, as Russia intensified its strikes against Black Sea ports and civilian vessels. This has led to ship owners halting calls to ports. Ukraine is one of the major exporters of grains and oilseeds in Europe. Corn?and wheat dominate the area planted. The country has already exported?34.4 millions tons of grain during the season 2025/26. The Ukraine's grain harvest for 2026 could be 60 million tonnes, which is almost the same as the previous year.
-
TC Energy exceeds its quarterly profit expectations on the strength of North American operations
Canadian pipeline operator TC Energy surpassed analysts' expectations for a?second quarter profit on Thursday. The growing demand for natural gas from industrial and power users in North America is a boon to pipeline operators. The adjusted core profit of TC Energy’s U.S. - natural gas pipelines, its largest segment, grew to C$1.22?billion in the second quarter, up from C$1.09 billion a year ago. Calgary-based company reports adjusted core earnings from Canadian natural gas pipelines of C$961 millions for the three-month period ended June 30. This is up?from C$923million a year earlier. The core quarterly adjusted profit for its "Mexican Natural Gas Pipelines" business increased to C$409 million, up from C$319 millions a year earlier. LSEG data shows that TC Energy earned 94 'Canadian Cents per Share' on an adjusted basis during the second quarter. This compares to analysts' average expectations of 83 Canadian Cents ($0.5908). ($1 = 1.4049 Canadian dollars) (Reporting by Sumit Saha in Bengaluru; Editing by Shreya Biswas)
-
Bombardier's free cash flow turns positive with stronger private jet orders
Bombardier reported positive free cashflow for the second quarter of '17, reversing a cash burn from a year ago. Strong demand for private 'jets has helped to increase the backlog of?orders? for this?Canadian business aircraft manufacturer. Bombardier, based in Montreal, reported that its quarterly revenue increased 6% annually to $2.15billion, boosted by the demand for aftermarket services and despite having delivered four fewer aircraft. The demand for business jets is strong, thanks to a new wave of wealth created by AI startups and SpaceX. Bombardier is reducing debt and increasing production in order to deliver more aircraft. Analysts and planemakers agree that the supply chain has improved since COVID-19, with deliveries increasing this year. However, there are still concerns over certain parts. Bombardier delivered 32 business jets during the first quarter of this year, down from 36 a year ago. This was due to lingering supply-chain constraints. It expects to deliver more planes by the second half of 2026. Gulfstream Aerospace, Bombardier’s U.S. competitor and a division of General Dynamics Corp., announced earlier this week that deliveries had increased by three planes, to 41. Textron Inc. said they were still dealing with issues relating to some key components. Bombardier had a backlog of $21.8 billion as of June 30. This is up $4.3 billion since December. The company's second-quarter cash flow was $228 million, an important metric for investors. This is up from a negative $164 millions a year ago, thanks to customers' deposits on new plane orders. The adjusted quarterly profit was $257 million or $2.50 a share, up from $117 million or 1.11 per share in the same quarter last year.
-
How Volkswagen's flying car dream crashed in China
Volkswagen, China's leading automaker for years, looked beyond the streets it dominated in 2019, and set out to take a piece of space. VW had a vision of a battery powered airborne vehicle. The 82-year old manufacturer needed Chinese technology and design to make it a reality. The German automaker wanted to work quickly with a startup team in Beijing in order to create a?flying car, a challenge that Porsche and Audi had failed to meet. VW was to deliver what they called a "luxury, futuristic drone" that could transport four rich passengers in style. It was intended to sell them vehicles that could fly between cities such as Beijing and Tianjin with a noise level half that of a helicopter. (Read the full story at?.com) In a video for 2022 posted on the Volkswagen website, VW project leader Zhou Jin stated that this segment has a strong potential to be a major market segment. Volkswagen is still grounded, even though local startups are preparing to launch flying cars in China. Volkswagen's flying car effort could not match China's low altitude economy. This is the aviation industry's term to describe an emerging market that includes drones, air-taxis and other aviation service aimed at airspace under 1,000 meters. Local rivals, government and supply chains have moved more quickly in China than VW. VW is a legacy company with a culture that values deliberation and compliance. VW's stumbling is another example of how older automakers are losing business rapidly to Chinese competitors. The project's failure also highlights the shifting legal risks that foreign companies face in China. VW faced a 5-year legal battle with a Chinese partner who claimed that VW had violated trade secrets when developing flying cars. Western companies have accused Chinese firms for years of stealing their technology. There is also a criminal investigation into?Zhou, the Chinese manager who VW promoted as its face of innovation. Emerson Xu is the CEO of NexAvian, and former China director of air-taxi manufacturer Volocopter. He said that Volkswagen's experience shows just how "brutally select" China's mobile industry has become. "If you are not Chinese enough, or faster, or both, then you will not stand a shot." Volkswagen's spokesperson stated that the automaker would not comment publicly on its development of flying cars or the case brought against Zhou, its employee. The spokesperson stated that "we are convinced the allegations brought against us have no substance." Zhou said, "I can't understand why I was left to deal with a criminal matter I was innocently involved in by simply carrying out my job duties." I have repeatedly asked the company to intervene and resolve the commercial dispute fully. Volkswagen's battle to bring a flying vehicle to market, and how the company ended up killing the project in 2024, has never been reported before. This report includes hundreds of pages from Volkswagen documents relating to its plans for flying cars, including planning papers, legal documents, and corporate communications. The reporters also interviewed five individuals with knowledge about the project and reviewed disclosures made by former VW partners regarding flying-car development. VW is still partnering with Chinese companies, such as automaker Xpeng to help with electric cars and Horizon Robotics for autonomous driving. The company has made such agreements because it has been losing sales and market share in the largest auto market to Chinese brands. VW's sales in China peaked in 2019 at 4.2m but dropped to 2.7m last year. This has pushed the automaker down to third position behind rivals BYD & Geely. VW's profits have been hammered by these struggles, as well as mounting pressure from its German manufacturing network and U.S. Tariff costs. In recent weeks, the company announced plans to cut vehicle models and up to 100,000 positions as it scrambled to stabilize its business. Early, then overtaken Volkswagen joined the rush of automakers to adopt electric vertical takeoff-and-landing (eVTOL). The term "flying cars" is often used by automakers to describe the new sector, alongside eVTOL. The idea was simple. Electric flying cars would reduce travel times in crowded cities, and car manufacturers could reinvent themselves to investors as "mobility companies". Toyota, for instance, invested in Joby Aviation, an air taxi startup in New York that has recently tested air cabs. Porsche Consulting, a VW management-consulting arm, promoted an industry it estimated could be worth $32 billion by 2035. VW's Porsche brand partnered with U.S. aerospace giant Boeing, while Audi's sister brand teamed up with Europe's Airbus to develop flying cars. Both ventures failed to produce a product that was commercially viable, so Volkswagen executives turned their attention to China, the auto market in which they dominated at the time. The market for flying cars was relatively open when VW started its China project in 2019. The race was tightening dramatically by the time the project closed in 2024. China's government made the "low altitude economy" a strategic national priority in those five years. This attracted a flood of local competitors. According to CCID Consulting (a Chinese think tank affiliated with the Chinese government), at least seven Chinese firms are expected to provide eVTOL cars by the year 2026. Guangdong Province opened China's first flying car testing center in March. Xpeng is a key partner in VW's China turnaround plan for the EV market. It has begun to deliver its own flying vehicle: a futuristic, extended-range EV or "mothership", built to launch a drone with two passengers from its cargo bay. In recent years, the eVTOL industry has seen many failures, as startups in Europe and America have filed for bankruptcy before launching a vehicle into commercial operation. The flying car concept has not been a sustainable business. 'ESTABLISHED LIFESTYLE ENJOYERS" Volkswagen's original goal was to build a V.MO full-scale model in two years. VW's planning materials target wealthy Chinese individuals who are looking for exclusivity and status. Marketing and product plans indicate that the cabin would have to be big enough to accommodate four passengers with their luggage and include screens for entertainment. The team consisted of fewer than ten members, led by Zhou (the 39-year old director of Volkswagen Beijing's innovation center). VW promoted the team in press releases and videos as a "young Chinese expert" who had "started at scratch." VW concluded that it needed a Chinese partnership because its local market "was ahead of European R&D," Zhou stated in a promotional film. VW was unable to find a partner who could offer technical capabilities without the political risk associated with government ties, which one internal presentation warned would "trigger scrutiny beyond China." Volkswagen considered working with EHang based in Guangzhou, China's only eVTOL startup that has listed shares. VW concluded that the company had a gap to close in order to meet VW standards for automotive engineering, according to an internal assessment from August 2020. EHang did not respond to a comment request. Sichuan Tengden, a Chinese manufacturer of military drones, also resigned from consideration. The company cited "capacity constraints" that an internal VW memo linked to the “China-U.S. Arms Race." Tengden did not respond to a comment request. VW's legal department also highlighted another risk associated with working with the firm: its role as a supplier of military equipment. Tengden is founded by a former employee of Aviation Industry Corporation of China, a state-run defence contractor that has been targeted by U.S. restrictions on trade because of its role developing killer drones. AVIC is the manufacturer of China's J-20 Stealth Fighter, as well as other major weapons. Records reviewed by us show that VW instead approved a contract for AVIC General Huanan Aircraft Industry Company, AVIC GA, to provide consulting services on its flying vehicle. When the arrangement was signed in 2021, AVIC faced U.S. Export restrictions but wasn't a completely blocked entity. AVIC did not respond to any questions regarding its involvement. STAR WARS VIRTUALITY, "UNCONTROLABLE" RISKS VW chose Pantuo Aviation - a Shanghai-based startup that had been operating for two years - to carry out a feasibility report on a flying luxury car that would bear the VW badge. Pantuo Aviation was owned by Zhang Qiong. Zhang Qiong is a Chinese entrepreneur with a successful business in supplying aviation fuel to private planes. Two people have said that the design of the startup - an elegant craft with rotating wings – impressed Volkswagen managers. Pantala was a sleek craft that looked more like an aircraft than a Star Wars vessel. Zhang Pantuo thought VW's team was full of imagination, but had no plan concrete for the future. She said, "At first they had absolutely nothing." They had never done it before. Zhang said that VW approached the project with a traditional auto mindset. Zhang felt that while Pantuo viewed itself as developing an innovative, complex aircraft that required tolerance for uncertainty and step-by-step design, the automaker approached the project as a simple assembly project. She said, "They appeared to think that it should be similar to assembling a vehicle - all the pieces are there and you can just put them together." VW has not commented on Zhang's story. A person involved in the project said that VW had returned to Pantuo at one point to inform them that its focus group found potential V.MO drivers were uncomfortable with boarding or disembarking near to the rotating blades of their vehicle. The person involved said that the automaker asked for a redesign of the rotors to protect them 60 days prior to the project deadline. VW and AVIC GA evaluated Pantuo’s design, finding it to be "uncontrollable." VW's project status document from September 2021 states that the concept did not show "convincing viability" because of poor aerodynamic performance, which left the projected range far below the target. The technical teams warned that the vehicle could not be made lighter enough. In the same report, Pantuo's collaboration was called a "mistake." The VW team was blamed for not having "in-house experience in aviation" and Pantuo's "too ambitious design" had a "limited budget and development period." VW decided that the project would need to be re-drawn. VW's presentation stated that the automaker had offered to cancel the contract worth $590,000. This would cost about $414,000. Pantuo, however, refused to accept the offer. Pantuo argued that Volkswagen shared incorrect concept details with AVIC GA in a subsequent arbitration. The arbitrator found in favor of VW and ordered Pantuo, Inc. to pay damages and costs totaling more than $120,000. VW's legal department hailed the ruling in an email as "an outstanding outcome". The arbitration commission did not respond to our request for a comment. The matter was not over. According to Zhang and other witnesses, Shanghai Police opened an investigation in late 2015 into a criminal case that Pantuo filed against VW 2021, for alleged violation of trade secrets. The automaker's internal correspondence from December 2023, reviewed by reveals that it regarded the criminal complaint against Pantuo as "baseless". It also viewed the tactic as a way to exert pressure on Pantuo for a favorable settlement in civil litigation. The dispute escalated in September 2025, when Pantuo filed a $30 million lawsuit in a Guangdong court against VW and AVIC GA for intellectual-property theft. Pantuo alleged that Volkswagen, by sharing its designs and research with AVIC, had transferred the startup's intellectual property to an entity they considered an established rival. AVIC did not respond to any questions regarding Pantuo's lawsuit against its unit. Shanghai police and Guangdong Court did not respond to requests for comments. China's Supreme People's Court dismissed Pantuo's suit against Volkswagen in June, saying that the claim should have resolved through arbitration. The ruling allowed the suit to continue against AVIC GA and left the possibility open that Pantuo might return to the arbitrator to present its VW claim. Zhang, now based out of Singapore, said she would be evaluating her legal options. The shoe on the other foot Some market observers say that VW's dispute against Pantuo is indicative of a wider shift in the way Western companies operate in China. Since decades, foreign firms entering the Chinese marketplace have been worried that local partners will copy technology and pass it on to other domestic players. Chinese firms are more likely to defend novel technologies developed by them, especially in areas where the government has set national priorities like the low altitude economy. Mark Cohen, a former senior IP attache with the U.S. Embassy in Beijing, said: "The shoe is on the opposite foot." China will become more litigious as it acquires more desirable technology. Businesses and law firms report that Chinese prosecutors are becoming more aggressive when it comes to pursuing cases of intellectual property, particularly in areas identified as national priority. The national agency overseeing prosecutions announced in February that it would be stepping up enforcement of IP theft claims due to "intensifying risks of technology leakage". Chinese courts accepted 11,066 intellectual-property cases involving foreign parties in 2025, up 34% from 2024, according to a report by the Supreme People's Court. These figures do not indicate how many cases involved Chinese plaintiffs. The court reported in April that the number of foreign-related cases handled by the Intellectual Property Court of China grew at a rate of 19% per year between 2019 and 2025. This equates to 2,546 cases or one-tenth the total. China's State council?Information office referred 'questions about flying-car developments and IP legal questions to the National Development and Reform Commission (the country's leading economic planner). The National Development and Reform Commission did not respond. 'FLYING TIGER' VW partnered with Hunan, a manufacturer of drones, light aircraft, and flying cars, in 2022. The partnership developed the first full-scale model, dubbed "Flying Tiger" after the Chinese zodiac year. The Flying Tiger's basic configuration was eight rotors to lift the aircraft and two for forward flight. VW and Sunward developed two full-scale prototypes on the basis of that?model. The "Sky Garden" model, which featured a luxurious, spacious cabin, was the showcase for this project. The mock-up was occupied by the Chinese Premier Li Qiang in March 2023. This served as a sign of approval for the project, which aligned with China's increasing ambitions within the sector. Sunward did not respond to any questions regarding its involvement. The model was sent to Volkswagen's Wolfsburg headquarters for a review of the project by Arno Antlitz, CFO, and CEO Oliver Blume. Antlitz encouraged the team to move forward, citing a need to learn from made-in China efforts. The people reported that a third prototype was tested in Inner Mongolia at remote sites where engineers lived in and converted shipping containers. VW will launch its new car in October 2023. Wanfeng Auto Holding Group, which already has a well-established aviation division, is helping VW prepare. Wanfeng is a Chinese car wheel manufacturer that acquired Austrian aerospace company Diamond Aircraft. Volkswagen's top management committee for group operations held a meeting in March 2024 to discuss the possibility of bringing the flying cars to market. The legal, compliance, financial and strategy teams expressed concerns. One risk was the long time to profitability. Competitiveness was another risk. VW's strategy paper warned that "established Chinese players have already captured the momentum in China," naming rival automakers such as Xpeng, and Geely. Ralf Brandstaetter, VW's China director, was the one who made the final decision. Brandstaetter decided that VW had to concentrate on its core business, at a moment when passenger car sales were declining. Two people said that he killed the project by telling the team in June 2024 that it had been disbanded. According to documents, he broke the news in a WeChat Message to Wanfeng. The Chinese partner. Brandstaetter did not respond to any questions regarding the decision to abandon the flying car, which was later confirmed by the board at VW China. Wanfeng did not respond to the request for comment either. In a regulatory filing from November 2024, one of its units stated that the joint venture agreement with VW was over. The COPS Investigate After the failure of Volkswagen's flying car project, Zhou's legal troubles continued. Documents in the case show that when the criminal investigation into an alleged violation of trade secrets began in December 2023 the police identified Zhou as the suspect - and not VW. Shanghai prosecutors began investigating the case in 2024. Zhang, Pantuo, claimed that she filed her criminal complaint not against Zhou but VW. Zhou was subjected to travel restrictions while the investigation proceeded. This is according to records from police that were seen by. She called it "shocking" and "heartbreaking" that Volkswagen treated the case against Zhou as an individual matter. Top executives told her this just a month ago. The criminal investigation was not addressed in the Supreme People's Court's decision of June on the civil case. Shanghai prosecutors did not respond to an inquiry about the case of Zhou. During the ongoing dispute over the flying cars, Wanfeng - the company VW once selected to bring its vehicle to the market - swooped into the fray to rescue German aerospace startup Volocopter from bankruptcy. Reporting by Ju-min Park in Beijing and Kevin Krolicki, Zhang Yan in Shanghai, and Claire Fu from Singapore. Kevin Krolicki, David Dolan and Kevin Krolicki wrote the article. (Editing by Brian Thevenot, David Crawshaw and David Thevenot.)
-
Bousso: The future of Mideast oil is bleak as Iran tightens its grip on Hormuz.
Energy markets are stuck in a limbo of uncertainty that is not easy to get out. Buyers are increasingly worried about the reliability and security of Gulf supply, which is creating a new alarming norm for producers in the region. The energy sector in the Middle East is more vulnerable and weaker than ever before, five months after Israel and the United States launched their military strikes against Iran. Energy infrastructure is under attack, and shipping routes are becoming increasingly restricted. Importers are starting to avoid supplying a region which accounted for a fifth of the world's oil and LNG exports prior to the war. The conflict has spread from the Strait of Hormuz, which was the main front of this war, to the Red Sea in recent weeks. Yemen's Iran backed Houthi militia declared last week an embargo against Saudi exports. The attacks on oil tankers and energy assets have made it difficult to ship goods from the west coast of Saudi Arabia, which was a vital alternative route for shipments after Hormuz effectively closed earlier this year. The security situation has continued to deteriorate since the breakdown of the U.S. Iran interim ceasefire agreement on June 17th. After a short hiatus of a few days, the U.S. Military resumed Tuesday its strikes on Iranian targets in the area after Tehran and its militias in Yemen, Iraq, and Kuwait targeted oil tankers, energy infrastructure and two major refineries that had to be shut down. Once again, the result is a dramatic drop in Middle East exports. The combined exports of the Gulf and Saudi Arabia’s west coast fell this week to approximately 6.2 million barrels a day. This is less than half of the peak wartime exports of 13.4m bpd, which were reached in late June. It's also far below the 20m bpd average that used to leave the region prior to the conflict. What is most alarming is that this volatility isn't the only thing on the energy market. It is also a sign that complex and opaque trading patterns, created by "this stop-and start conflict", may be here to remain. AN ACT IN DEPRAVED DESPERATION The first question is whether Iran has control over the Strait of Hormuz. Gulf states are desperate to resume energy exports after months of conflict to replenish their state revenues. Many are willing to consider an idea which was 'almost unthinkable just weeks ago.' This is granting Iran a role in managing the traffic through this critical waterway. Oman had presented Tehran with an Oman-backed proposal earlier this week under which Iran was to help administer the Strait and collect voluntary fees from vessels using the route. Iran rejected the proposal and insisted that "the entire inbound shipping route as well as part of the outbound routes should be under its control," according to an Iranian official. Washington has consistently rejected the idea that ships would have to pay tolls to cross the Strait. But military realities are narrowing the options. U.S. Air Strikes have failed to stop Tehran from disrupting shipping, and President Donald Trump seems reluctant to engage in a regional war. In these circumstances, it is becoming more likely that a compromise will be reached which gives Iran some authority over the Strait of Hormuz. Tehran would see an agreement formalising Iran's influence on the world's largest energy chokepoint as a major victory and it could have far-reaching implications. RISK PREMIUM It is easy to see the immediate impact on finances. The cost of oil and gas exports from the Gulf would be increased by a toll system. However, the psychological impact would be more significant. Gulf energy has been a reliable source of energy for decades. This reputation allowed the producers to charge a premium price from Asian buyers. The war showed that Iran could disrupt one of the most important trade routes in the world using inexpensive means such as missiles and drones. The threat will remain even if diplomatic agreements are reached and shipping resumes. This sword is not cheap. Gulf exporters may be forced to discount their products to retain customers, even after today's physical disruptions are resolved. Already, signs are emerging that this will happen. Mangalore Refinery, India's state owned refinery, issued a crude procurement tender this week that explicitly requested suppliers to avoid the Strait of Hormuz and the Red Sea. In effect, this means that suppliers will have to continue to use more expensive and less efficient routes, regardless of what happens in the next few months between the U.S.A. and Iran. Asian and European importers are looking for lower prices and more reliable supply guarantees from Qatar and the United Arab Emirates. Insurance premiums that are higher, shipping costs that are more expensive and concerns about supply security will likely become the new cost of doing business. The energy market will become more opaque as a result of this new reality. Gulf producers may be forced to agree on more direct, bespoke supply deals with importers outside the highly liquid and efficient market today. The Middle East is drifting towards a new balance in which energy flows but always under the shadow of coercion. The immediate crisis may pass, but damage to the reputation of the region could be far more lasting. You like this column? 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.
Sources say that Iraqi oil exports to Turkey are expected to continue, as both sides negotiate an extension agreement.
Two Turkish sources have said that the flow of crude oil from northern Iraq to Turkey's Ceyhan Port is expected to continue, as both countries negotiate a deal to allow the pipeline to run for another 12 months. An agreement that spanned decades expired on Monday. Iraq and Turkey, contrary to expectations, did not sign a 12-month extension on Tuesday during Prime Minister Ali al-Zaidi’s visit with President Tayyip Erdoan in Ankara.
One of the Turkish officials said that the Iraq-Turkey Pipeline (ITP), Baghdad’s only export pipeline in operation, would continue to operate as long as both sides continued their talks.
A request for comment was not immediately answered by either the Iraqi or Turkish energy ministries. Alparslan Bayraktar, the Turkish Energy Minister, said earlier this month that both countries had reached an agreement on a 12-month period extension. Erdogan said that the two sides were aiming to sign an energy agreement as soon as possible.
A?extension will allow for more time to talk about a comprehensive?agreement. The Turkish government wants to use the pipeline's 1.5 million barrels of oil per day capacity and extend it if possible - possibly even to southern Iraqi oil fields.
According to Turkish data, the pipeline currently transports around 170,000 bpd.
(source: Reuters)