What to watch for at China's Two Sessions
China's annual Two Sessions is beginning this week to set out the policy priorities for the rest of the year, including its response to US tariffs. Al Jazeera's Katrina Yu says the US Trump administration, the military and global economic uncertainty will be part of the discussions.
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Qatar Tribune
2 hours ago
- Qatar Tribune
Oil market braces for glut amid weak demand and rising supply
Agencies Worries over the health of the global economy amid escalating trade protectionism together with an accelerated unwind of OPEC+ output cuts pushed Brent crude to a four-year low of $60/bbl in early May – though prices have risen off their lows. Responding to the weaker economic outlook, the IEA downgraded its 2025 oil demand growth projections to a multi-year low of 740 kb/d, which, in the context of faster OPEC+ supply increases and rising non-OPEC flows, risks a supply glut over the medium term. This is the central downside risk to oil prices, signaled by weaker oil futures and a spate of downward price revisions by forecasting agencies. Providing some upside potential is the prospect of supply disruptions from more stringent US sanctions on Iran and Venezuela or a de-escalation in the global trade tariff conflict. Largely unchanged in Q1,benchmark oil prices have dropped precipitously so far in Q2, after President Trump's 'Liberation Day' tariff deluge on US trading partners and OPEC+'s decision to accelerate the pace of its supply cut unwinding schedule. Brent fell to four-year lows in April, shedding 15 percent by the close of the month, the steepest monthly decline since November 2021, and then dropped further to $60.2 earlier in May. The marker has since struggled to break out of the low-to-mid-60s range, though President Trump's decision to slash tariffs on Chinese goods for 90-days did lift prices marginally. Prices are now ranging around $64/bbl, caught between bearish sentiment linked to unexpected crude inventory builds in the US and a third consecutive month of schedule-busting OPEC+ supply hikes on the one hand, and falling US oil rig counts and pessimism surrounding the prospects for a new Iran nuclear deal that would satisfy both the US and Iran on the other. President Trump's 'maximum pressure' strategy vis-à-vis Iran and threat to impose even more stringent sanctions on the country's energy exports has been one of the few bullish impulses for oil prices and could puncture the negative sentiment that has befallen the oil market in 2025. The pessimism has also been evident in the formation of a curious anomaly in Brent's forward curve: while the front end of the curve has been 'backwardated'(near-term prices higher than prices in the future), later month prices have shifted into a contango structure that see prices rising over earlier months. This so-called 'smiley' structure is fairly unprecedented and appears to signal that markets believe summer oil demand will be healthy enough to keep prices firm in the short term but insufficient to prevent a surplus and stock builds later on. And this is due to the potent combination of trade-tariff linked macroeconomic weakness and accelerating OPEC+ supply especially. Meanwhile, the bullish speculator positions that had built up in Q1 quickly reversed in Q2 amid the spike in risk and uncertainty that followed April's tariff onslaught and OPEC+'s accelerated resupply timetable. 'Net length', the difference between the number of 'long' (betting on prices rising) and 'short' contracts (positions staked on prices falling) declined by 155,838 lots w/w in the week-ending 4 April, the sharpest drop in the available data. Net length has recovered slightly more recently as hedge funds view some upside risk in US-Iran nuclear talks failing to progress. Near-term oil demand growth was revised sharply lower following the escalation of the trade war between the US and China. The International Energy Agency (IEA), taking its cue from the earlier downgrade by the IMF to global GDP growth in 2025 (and beyond), has lowered its forecast for oil demand growth this year to 740 kb/d and 760 kb/d in 2026. This is the weakest rate of growth since pandemic-affected 2020. The IEA pegs total oil demand at 105 mb/d in 2025. OPEC lowered its demand growth forecast by a less severe 150 kb/d to 1.3 mb/d for both years. OPEC cites higher petrochemical production, solid road and air mobility as well as robust industrial activity in support of its more bullish oil demand growth projection compared to peers. This would also not be incongruous with its recent policy of fast-tracking the unwinding of members' voluntary supply cuts. Despite broad demand-side worries, OPEC+ surprised the markets by accelerating the pace of unwind of 2.2 mb/d in voluntary output cuts by the 'OPEC-8' (which includes Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman) from 131 kb/d per month from April to 411kb/d in May and then again for both June and July. The move was ostensibly framed as a bid to 'punish' serial quota violators, such as Kazakhstan and Iraq, for failing to cut production in line with their quota obligations and compensatory cut promises. The Saudis hoped the fiscal discomfort of freefalling oil prices would bring about the discipline that has so far been absent among these overproducing members. Part of the deal was that overproducing members would in good faith compensate for their non-compliance by cutting production according to a mutually agreed timetable thereby offsetting some of the supply that was about to be released. According to OPEC secondary sources, the average aggregate volume of OPEC-8 compensatory cuts required as 'payback' for members' overproduction from January 2024 to March 2025 is 305 kb/d, which would have easily offset the 131 kb/d of monthly incremental production OPEC-8 had originally planned. This would have resulted in a de-facto output cut. That said, in April, the first month in the schedule that called for higher OPEC-8 supply, monthly supply gains from the group, at 23 kb/d, fell far short of the 131 kb/d that had been planned. Only four of the eight producers – Saudi, the UAE, Oman and Russia – increased production. Despite lowering output in April, Kazakhstan and Iraq were once again producing well above their respective quotas never mind honoring compensatory cut pledges. Declaration of Cooperation(DOC) production (excluding quota-exempt Iran, Libya, Venezuela and Mexico) fell slightly in April to 30.0 mb/d (-17 kb/d). In the US, crude production hovered near record levels of 13.4 mb/d by mid-May, as per Energy Information Administration (EIA) data. (Chart 6).Following the plunge in oil prices and the downturn in global macroeconomic prospects, the EIA lowered its forecast for US crude oil output growth this year by nearly half to 208kb/d, the slowest rate of expansion since 2021.
Qatar Tribune
2 hours ago
- Qatar Tribune
Ukraine, Russia still far apart after peace talks but agree prisoner swap
Agencies Istanbul A second round of peace talks between Russia and Ukraine have ended without a major breakthrough, and only an agreement between the warring sides to swap more prisoners of war. The Ukrainian negotiators said Russia again rejected an 'unconditional ceasefire' - a key demand by Kiev and its allies in Europe and the US. The Russian team said it had proposed a two-to-three day truce 'in certain areas' of the vast front line, but gave no further details. At Monday's talks, which were held in the Turkish city of Istanbul and lasted just over an hour, the two sides did agree to exchange all sick and heavy wounded prisoners of war, as well those aged under 25. Expectations were low even before the talks started, with both sides remaining deeply divided on how to end the war that has been raging since Russia launched its full-scale invasion of Ukraine in February 2022. Moscow currently controls about 20% of Ukrainian territory, including the southern Crimea peninsula, which it annexed in 2014. Speaking at a briefing after the meeting, Ukrainian Defence Minister Rustem Umerov, who led Kiev's negotiating team, said Ukraine was insisting on a 'full and and unconditional ceasefire' for at least 30 days to 'end the killings now'. He said Ukraine had handed over its truce proposals to Russia 'a few days ago' - but Moscow failed to do the same, only presenting its plan at the Istanbul talks. Ukrainian Deputy Foreign Minister Serhiy Kyslytsia then said that Russia rejected the unconditional ceasefire. Ukraine's negotiators said they were expecting Russia's response to Ukrainian proposals by the end of June, stressing on the need to prepare for direct talks between Ukrainian President Volodymyr Zelensky and Russia's Vladimir Putin. Speaking shortly afterwards at a separate news briefing, Russian delegation head Vladimir Medinsky confirmed that all sick and heavily wounded prisoners of war and those younger than 25 would be exchanged. No timeframe was given as to when this would happen. Medinsky also said that next week, Russia would hand over to Kiev the bodies of 6,000 Ukrainian soldiers. In the first round of direct peace talks, held on May 16, Ukraine and Russia failed to bridge their differences on how to end the war, agreeing only to swap 1,000 prisoners of war each. President Zelensky and his European allies have repeatedly accused Russia of deliberately delaying any meaningful negotiations to seize more Ukrainian territory. US President Donald Trump, who has been pushing for a quick settlement, has so far delayed hitting Russia with tough sanctions. In a rare rebuke last month, Trump called Putin 'absolutely crazy' following Russia's largest drone and missile attacks on Ukraine. In response, the Kremlin said Trump was showing signs of 'emotional overload'.
Al Jazeera
3 hours ago
- Al Jazeera
UN demands probe as Israeli forces kill more people near aid site in Gaza
Israeli forces have opened fire again on Palestinians seeking humanitarian aid from a distribution site in Gaza, killing at least three people and injuring more than 30, as the United Nations demands an independent investigation into the repeated mass shootings of aid seekers in the strip. The shooting erupted at sunrise on Monday at the same Israeli-backed aid point in southern Gaza where soldiers had opened fire just a day earlier, according to health officials and witnesses. 'The Israeli military opened fire on civilians trying to get their hands on any kind of food aid without any kind of warning,' Al Jazeera's Tareq Abu Azzoum reported from Deir el-Balah in central Gaza. 'This is a pattern that's been widely condemned by international aid organisations because it enhances the breakdown of civil order without ensuring humanitarian relief can be received by those desperately in need.' Witnesses said Israeli snipers and quadcopter drones routinely monitor aid sites run by the Gaza Humanitarian Foundation (GHF), which is backed by Israel and the United States. A Red Cross field hospital received about 50 people wounded in the latest shooting, including two who were dead on arrival, said Hisham Mhanna, a spokesperson for the International Committee of the Red Cross. Most had been hit by bullets or shrapnel. A third body was taken to Nasser Hospital in nearby Khan Younis. Moataz al-Feirani, 21, said he was shot in the leg while walking with thousands of others towards the food site. 'We had nothing, and they [the Israeli military] were watching us,' he told The Associated Press news agency, adding that surveillance drones circled overhead. The shooting began about 5:30am (02:30 GMT) near the Flag Roundabout, he said. The pattern of deadly violence around the GHF aid distribution site has triggered mounting international outrage, and UN Secretary-General Antonio Guterres on Monday demanded an independent inquiry into the mass shooting of Palestinians. 'It is unacceptable that Palestinians are risking their lives for food,' he said. 'I call for an immediate and independent investigation into these events and for perpetrators to be held accountable.' The Israeli military has denied targeting civilians, claiming its soldiers fired 'warning shots' at individuals who 'posed a threat'. The GHF has also denied the shootings occurred although doubts about its neutrality have intensified since its founding executive director, former US marine Jake Wood, resigned before operations even began after he questioned the group's 'impartiality' and 'independence'. Critics said the group functions as a cover for Israel's broader campaign to depopulate northern Gaza as it concentrates aid in the south while bypassing established international agencies. Aid is still barely trickling into Gaza after Israel partially lifted a total siege that for more than two months cut off food, water, fuel and medicine to more than two million people. Thousands of children are at risk of dying from hunger-related causes, the UN has previously warned. Elsewhere in the territory, Israeli air attacks continued to hammer residential areas. In Jabalia in northern Gaza, Israeli forces killed 14 people, including seven children, in an attack on a home, according to the Palestinian Civil Defence agency. At least 20 people remained trapped under the rubble. Two more Palestinians were killed and several wounded in another attack in Deir el-Balah, according to the Palestinian news agency Wafa, while a drone attack in Khan Younis claimed yet another life. Gaza's Ministry of Health reported that at least 51 Palestinians have been killed and 503 injured in Israeli attacks across the territory in the latest 24-hour reporting period alone. Despite growing international condemnation, Israel's military on Monday ordered the displacement of even more civilians from parts of Khan Younis, warning it would 'operate with great force'. Roughly 80 percent of the strip is now either under Israeli military control or designated for forced evacuation, according to new data from the Financial Times, as Gaza's 2.3 million residents are crammed into an ever-shrinking patch of land in southern Gaza near the Egyptian border. Israel has made little secret of its aim to permanently displace Gaza's population as officials openly promote 'voluntary migration' plans. The Financial Times reported that the areas Palestinians are being pushed into resemble a 'desert wasteland with no running water, electricity or even hospitals'. Satellite images showed Israeli forces clearing land and setting up military infrastructure in evacuated areas. Analysts who reviewed dozens of recent forced evacuation orders said the trend has accelerated since the collapse of a truce in March. 'The Israeli government has been very clear with regards to what their plan is about in Gaza,' political analyst Xavier Abu Eid told Al Jazeera. 'It is about ethnic cleansing.'
