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Asia's oil traders remain bullish on prices despite the Middle East conflict.
As fresh attacks dim the prospects of an end to the Middle East conflict, oil traders in Asia expect prices to stay high. Meanwhile, strong refining margins are driving demand for physical supply. Benchmark Brent crude futures rose back to?above 100?a barrel in the past week, and rose another 3% on Sunday. This is their highest level since May. Last week, the rally spilled over to physical markets where premiums on benchmark Dubai and Oman oil rose to their highest level since March. This highlights fierce competition among cargoes. The premiums for crude oil from West Africa, America and Latin America have also reached multi-month highs. A trader at an Asian refiner said, "Unlike March, when there was no oil in the market, we now have oil but must pay higher prices." The trader declined to be identified as he wasn't authorized to speak with media. TRADERS: PREMIUMS ARE WELL ABOVE THE LEVEL OF LAST MONTH SK Energy, a South Korean company, bought 4,000,000 barrels of?U.S. WTI crude oil for December delivery was purchased last week with a premium of around $24 per barrel over November ICE Brent swaps. The sources said that GS Caltex bought 2 million barrels on a delivered basis of U.S. Crude at a similar 'premium' to the benchmark price in November Dubai. This compares to a premium of around $13 per barrel to the?Dubai quotations on delivered basis? for U.S. shipments?sold in last month. Chinese independent refiners are looking for alternatives to the dwindling Iranian, and Russian, supplies. Shenchi Petrochemical bought al-Shaheen last week at about $23 per barrel over Dubai's delivered quotes, according to trade sources. Andreas H. Lien said, "The crude market is looking relatively positive and tightening" on the sidelines last week of APPEC, an industry gathering. "That's because Asia is pulling cargoes out of the U.S.A. and South America with high delivered prices." HORMUZ UNCERTAINTY, TIGHTENING SUPPLY Three Asian refiners claimed to be running at maximum capacity in order to maximize margins for products and petrochemicals. One of them reported that Iraq's Basrah Medium was still widely available but with a premium of around $20 per barrel compared to Dubai quotes, for loading via ship-to -ship transfers outside the Strait of Hormuz. Last month, there were only single-digit premiums. Three other traders estimated last week that 6 to 8 million barrels of oil a day were passing through the Strait of Hormuz. A naphtha trader said naphtha flow had recovered from 50-60% of its pre-war level. The Strait of Hormuz was the transit point for 20% of world crude oil and natural gas before the war with Iran began on 28 February. Price forecasts have been influenced by the uncertainty over the speed of recovery of Hormuz flow. S&P Global Energy's base-case scenario predicts that crude oil prices will average under $100 per barrel next year. Prices could rise to $120 per barrel if disruptions in Hormuz traffic continue, but fall below $60 if a rapid recovery scenario occurs. Wood Mackenzie predicted that Brent prices would rise to close to $110 per barrel around the end of 2026 and the beginning of 2027 before falling to about $60 per barrel until the start of 2028, assuming that the Strait of Hormuz will resume full flow in January 2027.
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CPC increased oil output by 22% in august after fewer tanker attacks, say sources
Two industry sources reported that the Caspian Pipeline Consortium increased its oil exports by 22% in August compared to the previous month. This is equivalent to 1.6 million barrels per day. The increase was due to a stabilisation of loadings and fewer attacks on tankers. CPC Blend oil loads in July fell to 5.172 millions tons or 1.32million bpd as a series of attacks against tankers on the Black Sea caused the terminal to suspend loadings, and the majority of shipowners to refuse requests to sail to Russian ports. According to a source, exports of Kazakh crude oil via the CPC increased to?5.7m tons in August, from 4.6m tons in July. This represents a 25% increase on a daily base. Shipments of Russian crude dropped 4%, to 550,000 tons from 570,000 ton. CPC doesn't comment on its commercial activities. The total oil loadings on CPC's Black Sea Terminal fell from 48.9 millions tons to 44.8 in January-August. This is a decline of 8%. Due to maintenance at the Karachaganak oil & gas -condensate?field in Kazakhstan, the consortium expects to reduce its exports to 1.5 million bpd by September. CPC, which mainly exports Kazakh oil, suspended oil flow in July following drone attacks near its Black Sea terminal, Yuzhnaya Ozereyevka. CPC is responsible for shipping more than 80% Kazakhstan's crude oil exports. Most of the crude oil comes from the massive Tengiz, Kashagan and Karachaganak fields. CPC's shareholders include Russia, with 31%, Kazakhstan, with 20,75%, Chevron, with 15% and several private companies.
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Palm oil prices close up following a rise in crude prices
Malaysian palm oil futures rose on Monday due to higher crude oil prices. Also, rival soy oil prices in the Chicago market also helped. At closing, the benchmark palm oil contract on Bursa Malaysia's Derivatives exchange was up 39 Ringgit or 0.81% at 4,853 Ringgit ($1,191.21) per metric ton. A Kuala Lumpur trader stated that "Today's FCPO is holding steady on the back of a strong?crude?oil with the anticipation of better demand?for bio-diesel use in the future." Crude oil prices rose more than 3% on the Monday after a new attack on Saudi Arabian energy infrastructure and an attack on ships in Middle East. Palm oil is a better option as a biodiesel feedstock because crude oil futures are stronger. Dalian's soyoil most active contract fell 1.08% while palm oil?contract dropped 1.24%. Prices of soyoil on the Chicago Board of Trade rose by 0.14%. As palm oil competes for a piece of the global vegetable oils' market, it tries to keep up with rival edible oils. The palm ringgit's currency has weakened by?0.15% versus the dollar. This makes the commodity cheaper for buyers with foreign currencies. Exports of Malaysian palm oil products fell between 11.7% to 17.5% in September, based on cargo surveyors.
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Hyundai Motor will roll out a driver-assist technology in-house in 2029
Hyundai Motor Group is launching?vehicles with its proprietary software for driver assistance?in late 2029. This is two years later than originally planned. In the interim, Nvidia will be used to accelerate deployment. Hyundai executives said that the South Korean automaker would partner with the U.S. chipset maker to launch advanced driver-assistance technologies, also known as Level 2+ or Level 2++ in 2028. Analysts say that the delay in developing automated-driving technology in-house has left Hyundai more dependent on Nvidia, as rivals such as Tesla and Chinese automakers strive to introduce increasingly sophisticated driver-assistance technologies to the market. Park Min-woo is the president of Hyundai Motor Group. He told a?media briefing that "our partnership?with Nvidia does not mean we leave our destiny in their hands." Park stated that Hyundai would co-design technology with Nvidia and then use data from the system in order to train and fine tune its own software platform called Atria. DEEPENING ties with NVIDIA Park, who was a former Nvidia executive and joined Hyundai in January, has spearheaded the automaker’s growing ties with the chipmaker. His strategy is a departure from the one of his predecessor Song Chang-hyeon who, before his abrupt resignation in December, focused heavily on software development within his own company. Park stated that Hyundai could have deployed their in-house capability Level 2++ sooner but deliberately slowed down the timeline to concentrate internal resources on a longer-term goal. Park stated that Hyundai vehicles powered by Nvidia’s Hyperion 10 will initially forgo expensive lidar sensors in favor of cameras, ultrasonic sensor and a Radar. Hyundai, however, is looking at lidar technology for its Level 3 automated driving systems that allow hands-free driving in certain conditions. Park did not provide a timeframe for the Level 3 commercialisation. Park stated that Hyundai and Kia Corp., the third largest automaker in the world with annual sales of more than 7 million cars, will use their global fleet to collect data for their autonomous driving technologies. Hyundai expects to surpass its competitors by 2033 in terms of accumulated driving data. Hyundai Motor Group is intensifying its collaboration with Nvidia, spanning autonomous driving, artificial intelligence (AI) data centers, and humanoid robots developed by Hyundai's Boston Dynamics. Level 2+ systems are more capable on the highway, while Level 2++ systems can handle urban driving more complex, similar to Tesla Full Self-Driving System. Both require driver supervision.
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Iranian Strait Authority updates list of sanctioned ships
Iran's Persian Gulf Strait Authority - set up by Iran to handle requests for passage through the Strait of Hormuz - published on Monday an updated listing of 77 vessels that "violated Iranian protocols" in the Strait of Hormuz. After the recent attacks on oil?transit route in the Strait of Hormuz, and Bab 'el-Mandeb Strait in the Middle East, prospects for peace are as bleak now as they have ever been. The?body said that vessels listed would face restrictions for future passage, including?fines or detention, and confiscation. They also added that vessels cooperating with them would be added to the?list. The authority warned that "Insurance Companies, P&I Clubs, and Classification Societies are advised to refrain from providing service to these vessels in order to avoid any consequences arising when dealing with them," it posted on X. P&I Clubs are mutual insurance organizations that cover ship owners and charterers for maritime third party liabilities. Preliminary ship-tracking data on Monday showed that the number of commodity?vessels transiting the Strait of Hormuz dropped to a single-digit number per day over the weekend. This is well below the 10-day-average of 14. The figures do not include any vessels that may have crossed the strait without their Automatic Identification System transponders on to avoid detection.
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SPACs are a popular investment vehicle for defense and space companies.
The appeal of "flexible capital" and a quicker route to market in a time when investor interest is surging for the space and defense industry has led to an increase of early-stage companies seeking backdoor listings. These listings are different from traditional initial public offering because they involve mergers between special?purpose acquisitions companies (SPACs) -- shell firms who raise money 'through an IPO, and then merge with a privately held company to make it 'public. SPAC mergers allow companies to negotiate private valuations and secure funding before going public. This gives them more certainty about fundraising and reduces their reliance upon favorable market conditions. Experts say that many smaller defense and aerospace companies relying on government contracts, with their unpredictable development cycles, will find SPACs an easier way to access public markets. Kat Liu, Vice President of IPOX, said that a SPAC merger could be a flexible option for companies who have government contracts, strategic backing or a growth pipeline but do not yet have the scale, margin or predictability to generate revenue. As smaller companies look to become public, they can also benefit from the wave of mega-deals. Last month, Ursa Major, a U.S.-based defense company that develops propulsion for missiles and rasssls, signed a SPAC agreement worth $2.3 billion. Ursa Major CEO Chris Spagnoletti said that the SPAC transaction will provide capital to close this gap. Spagnoletti explained that a traditional IPO would mean taking the timing of the market, rather than our customers. "We didn't want to be set up by the defense window next year," Spagnoletti stated. Public market capital allows us to expand domestic production when customers demand more capacity, faster and better pricing. According to SPACInsider, six defense or space-related companies announced SPAC mergers this year. This represents about 10% of the total deals. In 2025, there were only three. TRUMP, SPACE, DEFENSE AND DEFENSE According to LSEG, besides the?SPAC merges, seven other defense and aerospace companies have also gone public via IPOs in 2026. This indicates that issuers want to take advantage of the booming market. Space is a popular sector, largely due to the?increased government and commercial expenditure on satellite networks and communication, and the listing of Elon Musk’s SpaceX. Earlier this week, it was reported that the hypersonic flight firm Stratolaunch is preparing to go public. Private investors are also showing a strong interest in this sector. Sierra Space's valuation grew by more than 50% to $8 billion in its March funding round. The Trump administration has also placed national security at the forefront as it seeks to reinforce U.S. defences and replenish stocks depleted by weapons shipments to allies, and munitions that were used in the Iran conflict. The President Donald Trump proposed an increase of about $1.5 trillion in the U.S. Defense budget for 2027, compared to the budget enacted in 2026, which was $901 billion. Drones are playing a greater role in conflict in Ukraine and Middle East, which is changing the nature of warfare. Startups increasingly rely on newer technologies and low-cost systems to compete with traditional contractors who have held the majority of government contracts for decades. The sector has attracted prominent political connections. Eric Trump is the son of U.S. President Trump is an investor of Space-Eyes - a company that makes anti-drones. It has also backed drone manufacturer XTEND. Trump's son Donald Jr. has been involved in several defense and space investments. This shows the growing relationship between the Trump family and the industry. However, early-stage defense and aerospace companies can be vulnerable to disruptions due to fragile supply chains, delays in orders and reliance on a small group of government clients. SPACS OFFER FLEXIBLE ROUTES SPACInsider CEO Kristi Martin said that nine?SPACs currently seek defense or space targets. With about $2.35bn held in trust, more deals may be forthcoming. Quantum Space, Elroy?Air and others announced SPAC agreements in June. Quantum Space, which develops spacecraft to support orbital mobility, satellite servicing, and refueling and is backed up by over $88 million of secured government contracts, won a multi-year, $46 million contract with the U.S. Army for developing an autonomous hybrid-electric airborne system. SPAC mergers can offer greater flexibility and faster access to capital. However, existing shareholders may be diluted, especially when private equity is involved. Analysts see that the risks are manageable. "SPAC investors do not necessarily need to see profit or revenue to invest in a promising start-up," said Matt Kennedy. He is a senior strategist at Renaissance Capital. Renaissance Capital provides IPO research and ETFs. The 2-year chart is much better looking despite the fact that a few big-name SPACs mergers have dropped from their recent peaks - such as Rocket Lab, Intuitive Machines and AST SpaceMobile.
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Airline companies urge greater competition for used jet engine parts
Following a European settlement regarding turboprops, global airlines have asked jet engine manufacturers to make it easier for independent companies to provide reconditioned components to airlines. The International Air Transport Association's call, which represents around 300 airlines, is just the latest in a long-running battle over engine shortages and competition. The European Commission concluded its antitrust investigation last month into Pratt & Whitney Canada's alleged anticompetitive behavior after the company agreed to lift the restrictions on used parts. After meeting certification standards, independent suppliers can now easily access dismantled engines. These can be stripped down for their parts and then reassembled to compete with new engines. Pratt & Whitney Canada agreed to change the contractual clauses that restricted the supply and use of engine sections for the?harvesting used parts'. Nick Careen, IATA senior vice president operations, safety, and security said: "That will certainly help the ATR or Dash-8 (turboprop) aircraft operators." In a phone interview, he said: "Now is the time to expand this into the main markets for (jet) engines because that's where the gold lies and where the greatest challenge is." Pratt & Whitney Canada welcomed the agreement reached with the European Commission last month. Parent company RTX had no immediate comment. Since the COVID-19 pandemic, airlines have accused engine manufacturers of restricting competition and increasing prices. Engine manufacturers argue that they take enormous technology and financial risk to develop each new generation of engines, and must recoup these investments over time in order to maintain innovation. Manufacturers vary in their willingness to allow other shops to be involved in the aftermarket. The debate over used parts is also affecting a three-way fight over engine supplies, which has been one of the biggest headaches for industry this year. By repairing more parts from existing fleets, you can reduce the pressure on new aircraft by allowing them to purchase more brand-new parts. IATA estimates that the shortage of engine parts and maintenance capability cost airlines nearly $6 billion in last year. Aviation executives?at an international conference of the International Society of Transport Aircraft Trading held in Copenhagen on Sunday said that they expect engine delays will continue for a while. Jennifer Moulton said that it would take some time to resolve this issue. Pratt & Whitney announced in July that the engine maintenance disruption is easing. IATA has extended an agreement to French-U.S. Engine Maker CFM International, Pratt's main competitor in the aftermarket, earlier this year.
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Second judge blocks Trump's restrictions on voting by mail
On Sunday evening, a second federal judge moved to?block the Trump administration from implementing new U.S. Postal Service regulation that would tighten the requirements for mail-in votes, although the U.S. Supreme Court has yet to?consider the administration's?request to overturn an?order blocking this rule. The Washington-based U.S. district judge Carl 'Nichols made his decision as Trump's Republicans fight to retain control of both houses of Congress during the November 3 midterm elections. Trump has been calling for voting restrictions by mail for years, despite his false claim that voter fraud was to blame for his defeat in the 2020 presidential election. Nichols granted the Democratic Party's request for a?preliminary?injunction to block the rule. The?party called it an?unlawful interference by the federal government in election administration. The judge who was appointed by Trump in his first term as president wrote that "no statute" gave the Postal Service authority to issue the key parts of this rule.
Asian refiners are waiting for word from Saudi Arabia on shipments and expect a tighter supply
Industry sources reported on Monday that Asian refiners were preparing for a tighter supply of sour oil as they awaited Saudi Arabia's guidance on exports via Red Sea following the attacks on the East-West Pipeline.
Saudi Arabia closed a pipeline on Friday after it was attacked.
The shutdown helped?push up the oil prices by 3% Monday.
Sources at Asian refineries say that Saudi Arabia hasn't said how long it may take to repair the pipeline and Saudi Aramco is not providing updates on shipment schedules or supply allocations.
Sources said that they were notified of a delay in loading, but weren't given any specific dates.
Three other people said that they were not informed whether the cargoes being loaded from the Red Sea port of Yanbu will be delayed or suspended. However, they did expect delays in shipments as well as a tightening of crude oil supplies.
"Getting sour oil is a difficult task. "We will have to pay more as everyone will be chasing the limited supply from?Iraq and UAE, among others," said one refining source.
Aramco has not responded to the request for immediate comments.
Saudi Arabia's exports through the Red Sea have already dropped sharply over the past few months.
ANZ analysts wrote in a Monday note that the yanbu loadings dropped in July to between 500,000-1 million barrels a day, from around 6 million barrels a day in June. This was after Yemen's Houthis announced a blockade.
Some ships were loading into ports with their AIS transponders turned off, making it difficult to track flows.
Kpler shiptracking showed that the Suezmax-sized tanks Lahore, Aspen, and Kenya B were expected to load crude oil from Yanbu, on Monday. At least one large crude carrier is also expected to load within the next few days.
Due to the Houthi Blockade, few refiners from the top-buying region of Asia are willing to load in Yemen.
"For China, it is indirect as Chinese refiners stopped loading from the Red Sea including Yanbu and Sidi Kerir since August," Emma?Li said, an analyst at shiptracker Vortexa.
Li stated that the pipeline shutdown has pushed Gulf-to Asia tanker rates to new highs and increased costs for Chinese refiners who are transferring Gulf crude by ship to ship.
(source: Reuters)