Oil edges higher after EU new sanctions on Russia
Brent crude futures climbed 50 cents, or 0.72 per cent, to $70.02 a barrel as of 0912 GMT, U.S. West Texas Intermediate crude futures gained 61 cents, or 0.9 per cent, to $68.15 a barrel.
At those levels, the contracts were headed for a marginal weekly loss of 0.5 per cent and 0.4 per cent respectively.
Investors mulled the potential impact on global oil balances of the EU's agreement on an 18th sanctions package against Russia over its war in Ukraine, which includes measures aimed at dealing further blows to Russia's oil and energy industries.
Its latest sanctions package will lower the G7's price cap for buying Russian crude oil to $47.6 per barrel, diplomats told Reuters.
"Neither the price cap for Russian oil nor adding shadow fleet tankers on a sanction list managed to disrupt Russian oil exports so far, so the market remains sceptical of the impact of the latest sanctions," UBS analyst Giovanni Staunovo said.
Investors are awaiting news from the U.S. on possible further sanctions, after President Donald Trump earlier this week threatened sanctions on buyers of Russian exports unless Moscow agrees a peace deal in 50 days.
"Ultimately, it is now a matter of waiting for possible major changes in U.S. sanctions and tariff policy," Commerzbank analysts said in a note.
Four days of drone attacks on oilfields in Iraqi Kurdistan that shut down half the region's output have supported prices, pushing both contracts up by $1 on Thursday.
The attacks "are bound to take their toll as the region's output has been slashed from 280,000 bpd to around 130,000 barrels per day," said PVM analyst Tamas Varga.
Officials pointed to Iran-backed militias as the likely source of attacks this week on the region's oilfields, although no group has claimed responsibility.
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Straits Times
6 minutes ago
- Straits Times
Failed bid to oust Taiwan opposition gives China new leverage
TAIPEI – A failed campaign in Taiwan to unseat lawmakers has handed Beijing and the island's opposition new ammunition against President Lai Ching-te, potentially deepening a political deadlock that prevents his government from strengthening defenses against China. All 24 Kuomintang lawmakers survived recall votes over the weekend, dealing a blow to Mr Lai's Democratic Progressive Party and its hopes of regaining a parliamentary majority. Analysts had expected at least some of them to lose their seats. 'China will likely use Saturday's result to amplify the narrative that Taiwan President Lai Ching-te and his government don't have the support of the majority of Taiwanese people and try to use the narrative to discredit Lai's policies,' said Mr William Yang, a senior analyst for Northeast Asia at the Crisis Group. The outcome amounted to a landslide defeat for a movement that's been accusing the KMT of collaborating with China, which claims the self-ruled democracy as its own territory. The DPP initially kept its distance from the campaign – initiated by ad-hoc civil groups – but eventually supported the effort. Overturning the opposition's legislative control would have given Mr Lai more freedom to advance his policy agenda including increasing military spending. That would have helped placate US President Donald Trump, who has said Taipei needs to pay the US for its protection. Now the Lai administration might need to offer policy compromises to gain opposition support, analysts including Mr Yang said. The recall results may also embolden Beijing, which has sought to isolate Mr Lai while maintaining channels with opposition parties that favour closer ties with China. Top stories Swipe. Select. Stay informed. Singapore Sewage shaft failure linked to sinkhole; PUB calling safety time-out on similar works islandwide Singapore Workers used nylon rope to rescue driver of car that fell into Tanjong Katong Road sinkhole World Three dead, several injured after train derails in Germany World US and EU clinch deal with broad 15% tariffs on EU goods to avert trade war Singapore Not feasible for S'pore to avoid net‑zero; all options to cut energy emissions on table: Tan See Leng Singapore With regional interest in nuclear energy rising, S'pore must build capabilities too: Tan See Leng Singapore New Mandai North Crematorium, ash-scattering garden to open on Aug 15 Asia Displaced villagers at Thai-Cambodian border hope to go home as leaders set to meet for talks 'The outcome of this recall vote might lead Beijing to believe that Lai Ching-te's anti-China stance has hit a bottleneck,' said Prof Chang Chun-hao, a professor from the Department of Political Science at Tunghai University in Taichung. This may encourage Beijing to keep up its economic pressure on Mr Lai's government and give the KMT an opening to advocate for greater cross-strait exchanges, Prof Chang said. A day after the election, China's Taiwan Affairs Office said the voting results revealed that 'the DPP's political manipulation' lacks popular support, accusing the party of 'practicing authoritarianism in the guise of democracy', according to a CCTV report. The outcome preserves the opposition's 62-51 seat advantage in the legislature, keeping its veto power over the president's key initiatives including his target of raising defense spending to over 3 per cent of GDP. While the opposition has approved some military spending increases, it has imposed stringent oversight mechanisms that the DPP argues are slowing critical defense projects, including Taiwan's indigenous submarine program. With the recall threat now neutralised, the KMT may feel even more confident in challenging future military allocations. The failed recall could also remove any immediate pressure on opposition lawmakers to moderate their positions. Since taking control of the legislature in January 2024, the opposition bloc has passed a series of controversial bills that DPP supporters say is weakening the administration's authority and democratic governance. In the opposition's latest effort to derail Mr Lai's administration, legislators from the KMT and its ally, the Taiwan People's Party, on July 25 again rejected all seven of the government's nominees for Taiwan's highest court. The repeated rejections have left the Constitutional Court with only eight sitting justices, fewer than the 10 legally required for the body to operate. DPP Secretary-General Lin Yu-chang acknowledged the failure of the recall effort at a briefing on July 26 while downplaying its significance as a partisan showdown, saying instead that the vote reflected the spirit of democracy. He also repeated accusations that Beijing had interfered in Taiwan's internal affairs, including in the lead-up to the vote. 'This unprecedented civic movement was driven by anti-communist sentiment and a desire to safeguard Taiwan,' Mr Lin said. In a Facebook post, Mr Lai, who is also DPP's chairman, urged Taiwanese people to respect the result of the recall election and to unite in the spirit of democracy. Many analysts were surprised by the one-sided outcome. Prof Su Tzu-chiao, a professor of political science at Soochow University in Taipei, said the result showed that the campaign's central theme – protecting Taiwan from China and communism – failed to resonate with most voters, who he said are more concerned about livelihood and economic issues. Others pointed to voter fatigue with the DPP after nearly a decade in power. Prof Chang of Tunghai University said it could also reflect 'frustration over the party's unwillingness to accept last year's electoral results' where the DPP lost its legislative majority despite winning a third consecutive presidential term. The recall bid targets 31 of KMT's 52 legislators over two rounds, including seven who face the vote in August. The failure to unseat any of the 24 on July 26 means the DPP won't immediately regain control of the legislature even if all of the other seven lawmakers lose their seats. Bloomberg L.P.
Business Times
36 minutes ago
- Business Times
EU reaches broad tariff deal with US to avert painful trade blow
[LONDON/WASHINGTON] The US and European Union agreed on a hard-fought deal that will see the bloc face 15 per cent tariffs on most of its exports, including automobiles, staving off a trade war that could have delivered a hammer blow to the global economy. The pact was concluded less than a week before a Friday (Aug 1) deadline for US President Donald Trump's higher tariffs to take effect and was quickly praised by several European leaders, including German Chancellor Friedrich Merz and Italian Prime Minister Giorgia Meloni, who called it 'sustainable'. Trump and European Commission President Ursula von der Leyen announced the deal on Sunday at his golf club in Turnberry, Scotland, although they did not disclose the full details of the pact or release any written materials. 'It's the biggest of all the deals,' Trump said, while von der Leyen added it would bring 'stability' and 'predictability'. The euro advanced over all Group of 10 peers in early Sydney trading, with the spot up 0.3 per cent to 1.1773 after closing up 1 per cent last week. The deal would leave EU exports facing much higher tariffs than the bloc would charge for imports from the US, with von der Leyen saying the aim is to rebalance a trade surplus with the US. But those kinds of tradeoffs in the agreement angered some European industry groups, with Germany's main lobby saying it 'sends a fatal signal to the closely intertwined economies on both sides of the Atlantic'. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Von der Leyen and Trump also differed on some of the key terms of the deal they announced. The US president said the tariff level would apply to 'automobiles and everything else,' but not pharmaceuticals and metals. Steel and aluminium 'stays the way it is', the US president added, and drugs are 'unrelated to this deal'. The chief of the EU's executive arm said later at a news conference that the 15 per cent rate would be all inclusive, would not stack on top of industry-specific tariffs and would cover drugs, chips and cars. Metals duties 'will be cut and a quota system will be put in place,' she said. 'We have 15 per cent for pharmaceuticals. Whatever the decisions later on is, of the president of the US, how to deal with pharmaceuticals in general globally, that's on a different sheet of paper,' von der Leyen said, adding that the overall rate 'is not to be underestimated but it was the best we could get.' The EU agreed to purchase US$750 billion in American energy products, invest US$600 billion in the US on top of existing expenditures, open up countries' markets to trade with the US at zero tariffs and purchase 'vast amounts' of military equipment, Trump said. Von der Leyen said no decisions have been made on European wine and spirits, but the matter would be sorted out soon. Key to getting the 15 per cent rate to apply to pharmaceuticals and semiconductors was the bloc's promise to make US investments, according to sources familiar with the matter. Ahead of the meeting, the EU was expecting a 15 per cent charge on its imports to also apply to most pharmaceuticals. The products had been one of the negotiation's main sticking points. Without a deal, Bloomberg Economics estimated that the total US average effective tariff rate would rise to nearly 18 per cent on Aug 1 from 13.5 per cent under current policies. The new deal brings that number down to 16 per cent. For months, Trump has threatened most of the world with high tariffs with the goal of shrinking the US trade deficits. But the prospect of those duties, and Trump's unpredictable nature, put world capitals on edge. In May, he threatened to impose a 50 per cent duty on nearly all EU goods, adding pressure that accelerated negotiations, before lowering that to 30 per cent. The transatlantic pact removes a major risk for markets and the global economy, a trade war involving US$1.7 trillion worth of cross-border commerce, even though it means European shipments to the US are getting hit with a higher tax at the border. The goals, Trump said, were more production in the US and wider access for American exporters to the European market. Von der Leyen acknowledged part of the drive behind the talks was a reordering of trade, but cast it as beneficial for both sides. 'The starting point was an imbalance,' von der Leyen said. 'We wanted to rebalance the trade we made, and we wanted to do it in a way that trade goes on between the two of us across the Atlantic, because the two biggest economies should have a good trade flow.' The announcement capped off months of often tense shuttle diplomacy between Brussels and Washington. The two sides appeared close to a deal earlier this month when Trump made his 30 per cent threat. The EU had prepared to put levies on about 100 billion euros (S$151 billion), about a third of American exports to the bloc, if a deal was not reached and Trump followed through on his warning. US and European negotiators had been zeroing in on an agreement this past week, and the decision for von der Leyen to meet Trump at his signature golf property brought the standoff to a dramatic conclusion. Officials had discussed terms for a quota system for steel and aluminium imports, which would face a lower import tax below a certain threshold and would be charged the regular 50 per cent rate above it. The EU had also been seeking quotas and a cap on future industry-specific tariffs. The EU for weeks, indicated a willingness to accept an unbalanced pact involving a reduced rate of around 15 per cent, while seeking relief from levies on industries critical to the European economy. The US president has also imposed 25 per cent duties on cars and double that rate on steel and aluminium, as well as copper. Several exporters in Asia, including Indonesia, the Philippines and Japan, have negotiated reciprocal rates between 15 to 20 per cent, and the EU saw Japan's deal for 15 per cent on autos as a breakthrough worth seeking as well. Washington's talks also continue with Switzerland, South Korea and Taiwan. Trump said he is 'looking at deals with three or four other countries', but 'for the most part', others with smaller economies or less significant trading relationships with the US would receive letters simply setting tariff rates. Trump announced a range of tariffs on almost all US trading partners in April, declaring his intent to revive domestic manufacturing, help pay for a massive tax cut and address economic imbalances he has said are detrimental to US workers. He put them on pause a week later when investors panicked. Trump's decades-old complaints about the global trading system heap particularly sharp scorn on the EU, which he has accused of being formed to 'screw' the US. The bloc was established in the years following World War II in order to establish economic stability on the continent. The president has lashed out at non-tariff barriers for American companies to do business across the 27-nation bloc. Those include the EU's value-added tax, levies on digital services, and safety and environmental regulations. Weeks of negotiations tested the EU's willingness to digest what is seen as an asymmetrical outcome, a senior EU diplomat said, but one that offers an opportunity to continue the talks without escalating further. BLOOMBERG
Straits Times
36 minutes ago
- Straits Times
North Korea says South Korea's overtures ‘great miscalculation'
Ms Kim Yo Jong said South Korea President Lee Jae Myung's pledge of commitment to South Korea-US security alliance shows he is no different from his predecessor. SEOUL - North Korea has no interest in any policy or proposals for reconciliation from South Korea, the powerful sister of its leader Kim Jong Un said on July 28 in the first response to South Korean liberal President Lee Jae Myung's peace overtures. Ms Kim Yo Jong, who is a senior North Korean ruling party official and is believed to speak for the country's leader, said Mr Lee's pledge of commitment to South Korea-US security alliance shows he is no different from his hostile predecessor. 'If South Korea expects to reverse all the consequences of (its actions) with a few sentimental words, there could be no greater miscalculation than that,' Ms Kim said in comments carried by official KCNA news agency. Mr Lee, who took office on June 4 after winning a snap election called after the removal of hardline conservative Yoon Suk Yeol over a failed attempt at martial law, has vowed to improve ties with Pyongyang that had reached the worst level in years. In one measure aimed at easing tensions, Mr Lee suspended loudspeaker broadcasts blasting anti-North propaganda across the border and banned the flying of leaflets by activists that had angered Pyongyang. Ms Kim, the North Korean official, said those moves are merely a reversal of ill-intentioned activities by South Korea that should never have been initiated in the first place. 'In other words, it's not even something worth our assessment,' she said. Top stories Swipe. Select. Stay informed. Singapore Sewage shaft failure linked to sinkhole; PUB calling safety time-out on similar works islandwide Singapore Workers used nylon rope to rescue driver of car that fell into Tanjong Katong Road sinkhole World Three dead, several injured after train derails in Germany Singapore Not feasible for S'pore to avoid net‑zero; all options to cut energy emissions on table: Tan See Leng Singapore With regional interest in nuclear energy rising, S'pore must build capabilities too: Tan See Leng Business State-sponsored hackers eye Singapore's businesses for cyber ransom payoffs Singapore New Mandai North Crematorium, ash-scattering garden to open on Aug 15 World US and EU clinch deal with broad 15% tariffs on EU goods to avert trade war 'We again make clear the official position that whatever policy is established in Seoul or proposal is made, we are not interested, and we will not be sitting down with South Korea and there is nothing to discuss.' REUTERS
