Supertankers U-turn, zig-zag, pause around Strait of Hormuz as strikes continue
Disruption is already evident, with tankers avoiding spending more time than needed in the strait, industry sources said.Singapore-based Sentosa Shipbrokers said that over the past week, empty tankers entering the Gulf are down 32% while loaded tanker departures are down 27% from early May levels.The Coswisdom Lake, a very large crude carrier (VLCC), reached the strait on Sunday before making a U-turn and heading south, Kpler and LSEG data showed. On Monday it turned back again, resuming its journey towards the port of Zirku in the United Arab Emirates.The South Loyalty, also a VLCC, made a similar U-turn and remained outside the strait on Monday, LSEG data showed. It was scheduled to load crude from Iraq's Basra terminal, according to Kpler data and two shipping sources.advertisementThe Coswisdom Lake was scheduled to load crude at Zirku for delivery to China. It was chartered by Unipec, a trading arm of China's state-run Sinopec 600028.SS, LSEG and Kpler data showed.Sinopec did not immediately respond to a request for comment.NO LINGERINGShipowners will try to minimise time that vessels spend inside the Strait of Hormuz due to the conflict, KY Lin, spokesperson at Taiwan's Formosa Petrochemical Corp."Vessels will only enter the region when it is nearer to their loading time," he said on Monday.Japanese shipping firms Nippon Yusen 9101.T and Mitsui O.S.K. Lines 9104. T said on Monday they will continue to transit the strait but have instructed their vessels to minimise time spent in the Gulf.Several oil traders and analysts told Reuters that they had been warned to expect possible shipping delays as vessels wait for their turn outside the area.Iran's parliament on Sunday approved a measure to close the strait, Iran's Press TV reported, but any such move would require approval from the Supreme National Security Council.Iran has threatened to close the strait in the past but has never done so.- EndMust Watch
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Business Standard
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- Business Standard
Saudi Arabia rapidly losing appetite for oil amid renewables push
You know that horror movie trope where the babysitter gradually realises the crazed killer is phoning, not from some distant location, but from inside the house? Something similar is happening in the oil market. That's because Saudi Arabia, the world's biggest net exporter of crude, is using renewables to drastically reduce its petroleum consumption. The threat to the kingdom's producers isn't coming from the heartlands of electric vehicle adoption in Shenzhen, Oslo, or San Francisco — it's right inside the house. Between a quarter and a third of the country's consumption goes into crude- and fuel oil-fired generators that provide electricity to ride out summer heatwaves. The government wants to replace all of that with renewables, with a target of 130 gigawatts by 2030 — roughly equivalent to all the solar power in India. Such a switch could represent the single largest decline in oil demand over the next five years, according to the International Energy Agency. It's not news that the country has such ambitions. One of the cornerstones of Vision 2030, the program announced in 2016 to wean the kingdom's economy off hydrocarbons, was to switch the grid to an exclusive gas-renewables mix. However, such bold pronouncements are typically heavily discounted where Saudi Arabia is concerned. This is a country that's been working on an unfinished one-kilometer (0.62 mile) skyscraper since 2013, and recently called in consultants to review the feasibility of The Line — an implausible science fiction city being built to house nine million people inside a 170 kilometer-long tower. Kpler, a data company that tracks commodities flows, reckons only 11.6 GW of the planned 130 GW will be online by 2030. Such a serious shortfall would be enough to sustain crude in power generation well into the future. It might be time to start reevaluating whether that skepticism is warranted, however. There's certainly a huge gap between promise and execution where the kingdom's megaprojects are involved. Still, when it comes to building humdrum energy infrastructure (as opposed to, say, a cube-shaped hollow tower as tall as the Empire State Building), one of the world's biggest petroleum producers has a decent track record. That's now finally showing up not just in wells and export facilities, but in renewables, too. After years in which the only major solar project connected was a relatively modest 0.3 GW plant in the deserts between Jordan and Iraq, generators are now being plugged in at a rapid pace. Since the start of 2024 alone, ACWA Power Co., the country's biggest electricity and water developer, started commercial operations at four solar facilities totaling about 4.9 GW. Roughly the same amount is due to start up by the end of next year, the company told investors recently, shortly after completing a 7.125 billion riyal ($1.9 billion) capital raising. Last month, it signed deals with Saudi Arabia's main utility to build another 15 GW, to be delivered by the middle of 2028. The broader plan is for ACWA to hit 78 GW by 2030, sufficient on its own to provide all the electricity that Saudi Arabia generated from oil last year. Much more is in the pipeline from other developers. With ACWA giving investors detailed timelines of further near-term completion dates, the onus is increasingly on the skeptics to explain why the recent run of successful project execution is going to be broken. Thanks to abundant sunlight, Saudi solar plants deliver electricity at less than half of the cost of the grid. Arrays of panels also tend to be much more simple, in engineering terms, than the petroleum extraction, transport and refining complexes in which the kingdom has long excelled. Getting those renewables built is also crucial for the country's overriding obsession: its position in the oil market. One justification given by Saudi Arabian Oil Co. President Amin Nasser for cutting back maximum output capacity last year was that removing crude from the domestic grid would boost exports as effectively as drilling extra wells. The plans to eliminate oil from the grid by 2030 are still 'on track,' he told Aramco investors last week. Saudi Aramco's competitors might want to reflect on that. For Nasser, the country's transition is reason enough to trim investments intended to meet hypothetical future demand. The kingdom's grid uses more oil than all the cars and scooters in India. If such an enormous consumer of the world's crude is going away by the end of the decade, an already oversupplied market risks heading still deeper into glut.
Mint
3 hours ago
- Mint
Indian stock market: 8 key things that changed for market overnight- Gift Nifty, Nasdaq to Bitcoin prices at record high
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Business Standard
12 hours ago
- Business Standard
Dollar extends losses as Fed rate cut hopes and political pressure grow
The dollar fell for a second straight session on Wednesday, a day after a US inflation reading increased expectations of a Federal Reserve rate cut next month, and renewed pressure from President Donald Trump for lower rates added to the sell-off. The dollar index, measuring the currency against a basket of peers, fell 0.2 per cent to 97.81, its lowest since July 28, extending its 0.5 per cent drop on Tuesday. US consumer prices increased marginally in July, data showed on Tuesday, in line with forecasts and as the pass-through from Trump's sweeping tariffs to goods prices has so far been limited. Investors priced in a 98 per cent chance the central bank would ease rates next month, according to LSEG data. On Wednesday, Treasury Secretary Scott Bessent called for a "series of rate cuts," and said the Fed could kick off the policy rate easing with a 50 basis point cut. The day before, US President Donald Trump, who has repeatedly criticised Fed Chair Jerome Powell for not easing rates sooner, had added to the pressure on the Fed. White House spokeswoman Karoline Leavitt said that the president was considering a lawsuit against Powell in relation to his management of renovations at the central bank's Washington headquarters. "I think there is quite significant pressure on the Fed from the political side of Washington to get moving on interest rates," Shaun Osborne, chief currency strategist at Scotiabank, said. Michael Pfister, FX analyst at Commerzbank, said these political developments carried echoes of autocratic countries, where heads of statistics agencies or central banks are replaced and critical data series often discontinued or manipulated. "I'm not saying that this will necessarily happen here. But the developments of the last few days and weeks do not exactly fill me with optimism about the future, or the US dollar," Pfister said. Trump also hit out at Goldman Sachs CEO David Solomon, saying the bank had been wrong to predict US tariffs would hurt the economy. Trump questioned whether Solomon should lead the Wall Street institution. The dollar's weakness supported the euro and sterling. The single currency was last up 0.3 per cent to $1.1705, briefly hitting its highest since July 28. Similarly, the British currency rose 0.5 per cent to $1.3572, briefly hitting its highest since July 24. Britain's jobs market weakened again, though wage growth stayed strong, according to data on Tuesday, underscoring why the Bank of England is so cautious about cutting interest rates. The Australian dollar was up 0.3 per cent to $0.6550, while the New Zealand dollar rose 0.5 per cent to $0.5982. The Reserve Bank of Australia on Tuesday cut interest rates as expected, and signalled further policy easing might be needed to meet its inflation and employment goals as the economy lost some momentum. In cryptocurrencies, ether scaled a nearly four-year high of $4,734.47. "Ethereum's quiet breakout is being fuelled by real-world adoption and capital confidence," said Gracie Lin, Singapore CEO of crypto exchange OKX. "On our platform, ETH has now overtaken BTC as the most traded asset over the past month." (Reporting by Joice Alves and Rae Wee; Editing by Kate Mayberry, Giles Elgood and Barbara Lewis) (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
