Business live: Oil and gold jump on Israel-Iran conflict
Oil and gold prices have risen overnight as Israel continued its bombardment of Iran, further stoking fears of a broader regional conflict.
Brent crude was trading up 1.28 per cent at $75.18, having risen more than $4 a barrel in early trading. The benchmark rose 11.7 per cent last week.
Gold rose to a near two-month high as intensified clashes pushed investors towards safe-haven assets. The latest developments have heightened concerns about disruptions to the Strait of Hormuz, a vital shipping passage that carries about a fifth of the world's total oil consumption.
Spot gold reached $3,433 an ounce, having hit its highest level since April 22. Kelvin Wong, a senior market analyst, Asia Pacific, at Oanda, the foreign exchange business, said: 'We are seeing resistance level at $3,500, with the possibility of breaking new high above the $3,500 level.'
Asian stock markets were flat overnight, but longer-term US Treasury yields rose as higher oil prices threaten to increase inflationary pressures.
The chief executive of Renault is leaving the French carmaker amid speculation that he will become the new boss of Kering, the owner of Gucci.
Luca de Meo has turned around the troubled manufacturer in his five years at the helm, overhauling its strategic alliance with Nissan and doubling down on hybrid motors, while shifting towards electric vehicles.
The Italian will replace François-Henri Pinault, whose family controls the heavily indebted luxury conglomerate Kering and who has been leading it for 20 years, according to Le Figaro.
If confirmed, de Meo's move to Kering, which also owns the Yves Saint Laurent and Balenciaga labels, would mark a dramatic change.
Kering shares have lost more than 60 per cent of their value in the past two years, marked by a string of profit warnings and designer changes at Gucci, traditionally a cash cow for the company and still its most important brand by sales and profits.
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The Guardian
39 minutes ago
- The Guardian
Iran and Israel crisis: what does it mean for the price of oil?
The escalating crisis between Israel and Iran has already triggered the largest single-day oil price surge in the last three years, and the question for many is how much higher the oil markets might climb. The price of Brent crude has jumped by about $10 a barrel since the start of the month to a high of $78 a barrel on Friday, amid growing concerns that the conflict could wipe out Iran's oil exports or cut flows of crude from the wider Middle East region to the global market. For now, oil prices have cooled to below $75 a barrel and remain well below the peak of $115 a barrel following the invasion of Ukraine by Russia, which is one of the world's biggest oil and gas exporters. But banks and market forecasters have warned that the trajectory of oil prices will depend on how far the the unfolding military and humanitarian crisis between Israel and Iran escalates. At the upper end, oil prices could spiral to $120 a barrel, according to analysts at Deutsche Bank, surpassing the highs reached in the wake of the Ukraine crisis. The German investment bank warned that if an escalation were to engulf the wider region, shutting the Strait of Hormuz, then Middle Eastern oil could be blocked from the global market leading to a price surge. But this scenario is not the most likely. The bank believes that the oil market may have already accounted for a loss of some Iranian oil production, meaning that prices would most likely remain steady at the current price of about $75 a barrel. The theory was echoed by analysts at Rystad Energy, a globally recognised consultancy, which said that the conflict appeared likely to be contained by the involvement of the US, which hopes to keep oil prices low. The market would probably remain capped at below $80 a barrel if the White House can broker a period of relative calm in the region, it said. The market's muted reaction belies its intense focus on the Strait of Hormuz. The 21-mile wide waterway located south of Iran is a narrow chokepoint for the world's fossil fuel supplies, through which 20% of global oil supplies and 20% of liquefied natural gas (LNG) flow. Iran produced about 3.4m barrels of oil a day last month, and exported approximately 1.7m barrels a day, or 1.6% of global oil demand. Fears that the strait could be shut due to regional tensions are well-rehearsed within the global energy industry. Iran has threatened to close the strait in retaliation in the past so although this remains an unlikely scenario it is a key focus for oil market traders. Lloyd's List Intelligence, which monitors maritime traffic, said that loadings of vessels in the Gulf continued over the weekend but tankers waiting to load in Iran were keeping a greater distance from the port. The Joint Maritime Information Centre, which coordinates information from international navies, said the strait remained open but the threat to traffic was still significant. It has received reports of electronic interference stemming from the Iranian port of Bandar Abbas on the strait. The United Kingdom Maritime Trade Operations (UKMTO) said on Monday it had received multiple reports of increasing electronic interference in the waters of the Gulf and the Strait of Hormuz. It added that the interference was significantly impacting vessels' positional reporting through automated systems. In the UK, the most likely impact of the crisis on household finances would be on petrol prices and gas bills, although this may not be apparent for months. While the recent oil price hike by $10 a barrel may result in a 5p increase in petrol and diesel prices at the pump over the next couple of months, wholesale costs are still well below the highs seen in the first quarter of the year. Average UK petrol prices have so far remained stable at 132p a litre and diesel at 138.2p a litre, according to the AA, well below the 145.3p a litre and 153.9p a litre for petrol and diesel respectively in March last year. An escalation of the conflict that blocks UK imports of gas from Qatar, a major UK trading partner, would also have a significant impact on British heating bills. Europe's gas markets remain well above the levels before Russia's invasion of Ukraine. But the end of Russia's pipeline gas exports to most of Europe has left the continent more reliant on imports of gas from further afield, including LNG imports from the US, the Middle East and Africa. No. Although flaring geopolitical tensions are frequently used by some to argue for an increase in North Sea oil and gas production there is evidence to suggest that the small volumes produced domestically would do little to temper surging global oil prices. An oil market surge might mean higher profits for North Sea drillers, but their supplies would be unlikely to mean lower bills for households.
The Guardian
40 minutes ago
- The Guardian
Israeli stands at Paris airshow are shut down ‘by order of French government'
The four main Israeli company stands at the Paris airshow have been shut down after exhibitors reportedly refused to remove some weapons from display. The stands were hidden from view after pressure from the French government on the organisers of the aerospace industry event, a source told the Guardian. The stands were used by Elbit Systems, Rafael, IAI and Uvision. Three smaller Israeli stands, which did not have hardware on display, and an Israeli Ministry of Defence stand, remain open. The airshow is taking place amid an escalating conflict in the Middle East. Reuters reported that the instruction came from French authorities after Israeli companies failed to comply with a direction from a French security agency to remove offensive or kinetic weapons from the stands. The show, which was first held in 1909 and is organised by the French Aerospace Industries Association, is taking place in Le Bourget, in the north-east of Paris, from Monday until Sunday. France, a longtime ally of Israel, has gradually hardened its position on Benjamin Netanyahu's government over its actions in Gaza and military strikes abroad. The French president, Emmanuel Macron, last Friday reiterated France's support for Israel's right to protect itself, but in reference to its strikes on Iran he called on 'all parties to exercise maximum restraint and to de-escalate'. Israel's defence ministry said it had rejected the order to remove some weapons systems from displays, and that exhibition organisers responded by erecting a black partition that separated the Israeli industry pavilions from others. The ministry said: 'This outrageous and unprecedented decision reeks of policy-driven and commercial considerations. The French are hiding behind supposedly political considerations to exclude Israeli offensive weapons from an international exhibition – weapons that compete with French industries.' IAI's president and chief executive, Boaz Levy, said the black partitions were reminiscent of 'the dark days of when Jews were segmented from European society', according to Reuters. Earlier on Monday, images taken by the AFP agency showed yellow writing on one of the black walls around the stands. Accompanied by a drawing of an Israeli flag, it read: 'Behind these walls are the best defense systems used by many countries. These systems are protecting the state of Israel these days. The French government, in the name of discrimination, is trying to hide them from you.' Later, the section of black wall appeared to have been replaced by a white wall. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Two US Republican politicians attending the airshow also criticised the French move. Talking to reporters outside the blacked-out Israeli defence stalls, the Republican governor Sarah Huckabee Sanders described the decision as 'pretty absurd', and the Republican senator Katie Britt criticised it as 'shortsighted'. Meshar Sasson, senior vice-president at Elbit Systems, accused France of trying to stymie competition, pointing to a series of contracts that Elbit has won in Europe. 'If you cannot beat them in technology, just hide them, right? That's what it is because there's no other explanation,' he said, according to Reuters. Rafael described the French move as 'unprecedented, unjustified, and politically motivated'. The airshow's organiser said it was in talks to try to help 'the various parties find a favourable outcome to the situation'.
Telegraph
an hour ago
- Telegraph
Renault boss quits after warning of threat from Chinese rivals
The boss of French state-backed car giant Renault has quit unexpectedly after warning that European manufacturers were struggling to compete with cut-price Chinese rivals. Renault announced on Sunday night that Luca de Meo would step down after five years at the helm of the French car company. He will reportedly join Kering, the luxury goods conglomerate behind brands including Yves Saint Laurent and Gucci. Mr De Meo said: 'There comes a time in one's life when one knows the job is done.' The shock resignation, which will come into effect in mid-July, came just days after Mr De Meo gave an update to Renault's board on his latest five-year plan. The new strategy, dubbed 'Futurama', covers plans for future models as well as potential diversification into new areas including defence. Blindsided Mr De Meo's departure is thought to have blindsided members of Renault's board. Shares in Renault, whose biggest shareholder is the French state with a 15pc stake, dropped 8pc on Monday. Mr De Meo, an Italian car executive who previously held senior roles at Volkswagen, joined Renault in 2020. He was tasked with steering the carmaker through a pandemic-induced sales slump, which prompted a record €8bn (£6.2bn) loss. During his tenure, Mr De Meo carried out major job cuts and reduced the company's production capacity worldwide. But alongside its domestic rivals, Renault is now battling a slowdown in sales amid growing competition in the electric vehicle (EV) market from cheap Chinese rivals. Mr De Meo has repeatedly called for the EU to relax regulations to help the bloc compete, while saying the industry should 'find a deal' with China. The comments risked putting the executive at loggerheads with Emmanuel Macron, whose presidential car is made by Renault. Mr Macron split with his German counterpart last year when he backed EU tariffs on Chinese EVs. Despite the threat from China, Renault has remained relatively insulated from Donald Trump's car tariffs thanks to the company's heavy focus on European markets. Mr De Meo's resignation is the second high-profile departure from Europe's car industry in recent months. Carlos Tavares, chief executive of Citroen and Vauxhall owner Stellantis, stood down at the end of last year. Leadership vacuum The looming leadership vacuum will pose a challenge to Jean-Dominique Senard, Renault chairman, a seasoned industrialist who joined the carmaker in the wake of the high-profile arrest of Carlos Ghosn, the former chief executive. Renault said it had already started the process of appointing a new chief executive 'based on the already defined succession plan'. Mr Senard said: 'For five years, Luca de Meo has worked to restore Renault Group to its rightful place. Under his leadership, our company has returned to a healthy foundation, boasts an impressive range of products and has resumed growth. 'Besides being an exceptional captain of industry, Luca de Meo is also a creative, committed, passionate and inspiring individual.' Mr De Meo is now poised to join Kering at a torrid time for the luxury goods giant as waning demand among Chinese shoppers has hit sales. Gucci, the group's largest brand by revenues and profits, has been a particular laggard as wealthy shoppers have shunned its loud designs in favour of more minimalist luxury styles. Shares in Kering jumped 9pc on reports the company is planning to name Mr De Meo as its new boss. However, they remain down by more than two thirds in the last two years.
