Japanese megabanks consider evacuating staff located in Middle East
TOKYO, June 23 (Reuters) - Japan's Sumitomo Mitsui Financial Group (8316.T), opens new tab has begun evacuating staff from locations including Iran and Qatar to ensure their safety, a spokesperson said, amid elevated regional tensions.
Mitsubishi UFJ Financial Group (8306.T), opens new tab has begun evacuating some family members of staff from Dubai and the Saudi Arabian capital Riyadh, a spokesperson said, and is also considering allowing staff to leave at their own discretion.
Tensions in the region have increased since the United States struck three nuclear sites in Iran over the weekend, joining Israel, which began a military campaign against Iran on June 13.
Mizuho Financial Group (8411.T), opens new tab is urging its staff to be cautious and is considering measures including evacuations, a spokesperson said.
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The Guardian
an hour ago
- The Guardian
Reeves calls for Middle East de-escalation amid oil price fears
Rachel Reeves has called for de-escalation of the conflict in the Middle East, warning that rising global oil prices could hit the UK economy as she unveiled Labour's long-awaited industrial strategy. Launching the policy package at an engineering business in Nuneaton alongside Keir Starmer and the business secretary, Jonathan Reynolds, Reeves acknowledged the potential impact on companies of the conflict. 'We want de-escalation because it's the right thing for the Middle East, but we also want de-escalation because of the ramifications of conflict in the Middle East for the rest of the world, including the UK,' the chancellor said. 'We have seen increases in oil prices, in recent days, and weeks, which of course, will have an impact on the UK economy,' she added. 'We recognise the challenge that businesses and families faced with energy costs, which is part of the reason why we're doing what we're doing today, but also why, for example, we've extended the warm homes discount to try and take money off people's energy bills.' Reeves also said she understood US concerns about the risk of Iran developing a nuclear capability, saying: '60% enrichment of uranium is not for civil nuclear. And we've long shared those concerns.' As part of the industrial strategy, the government has announced a new scheme aimed at cutting the electricity bills of energy-intensive businesses, to come into force from 2027. Reynolds said the energy plan would bring the UK from being an 'outlier' in Europe on energy prices 'right into the middle of the pack'. Energy-intensive businesses in Britain have long complained that their electricity bills are uncompetitively high. Reynolds and Reeves said the government intended to fund the scheme by spreading the costs of the 'contracts for difference' through which it pays for renewable energy generation out over a longer period and earmarking increased future revenue from the emissions trading scheme from rising carbon prices. 'We are talking about a major shift in competitiveness for the sectors covered by the new British industrial competitiveness scheme: it moves us from being an outlier right into the middle of the pack – cheaper than Italy, Czech Republic, broadly comparable to, say Germany,' Reynolds said. He added: 'There's no increase in bills for anybody else and no implications for tax or borrowing from these policy interventions by the energy department that will create the headroom to allow us to exempt these businesses.' The business secretary also emphasised the cross-Whitehall nature of the industrial strategy, which covers eight sectors the government sees as having potential for significant growth – including advanced manufacturing, financial services and the creative industries. 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 The government published separate plans for five of the eight sectors on Monday, alongside the industrial strategy, with three more – life sciences, defence and financial services – expected before parliament goes into recess next month. 'This has got real, significant interventions in it that are not only very important in their own right, they do get to the core of what I wanted, what we wanted, which is, you know, this is not the Department for Business and Trade or the Treasury industrial strategy, this is the British government's industrial strategy,' he said. Reynolds also highlighted a new approach on preparing strategic sites for investment, the significant increase in the budget for the taxpayer-backed British Business Bank announced at the recent spending review and more powers for metro mayors to shape economic development.
The Independent
2 hours ago
- The Independent
How will your household costs be affected by conflict in the Middle East?
Donald Trump's decision for the US to bomb Iran has seen fears of a crisis in the Middle East deepen, with the world braced for a counter attack from Tehran. In one retaliatory move, the country has already voted to shut down a key shipping route, the Strait of Hormuz, prompting warnings of another spike in oil prices. The price of oil has been on the rise over the past three weeks – amid Israel strikes on Iran's nuclear sites – but there are concerns it could rocket even further, with one expert warning of a possible 40 per cent increase. As well as the effect on the price of gas and petrol, any move from Iran to close the shipping route could also affect the likes of transport, production and inflation domestically. Why do oil prices rise and fall? When talking about the price of oil, what we're typically looking at in the UK is Brent Crude, which relates to oil from the North Sea and is a worldwide benchmark of future prices of oil across most markets. There are others, such as WTI, but Brent is typically the focus. Brent was above $122 per barrel in 2022, a result of the Russian invasion of Ukraine which resulted in far higher energy costs, while the price was as low as $25 in mid-2020 when the Covid lockdown meant demand was incredibly low. Right now, it's just under $78. Like any market, a commodity like oil is primarily subject to supply and demand. Too much supply will lower prices so businesses buy it up; if there's more demand, prices can increase accordingly. But oil is subject to many other factors. Opec (the Organisation of the Petroleum Exporting Countries) can decide supply by setting quotas on barrels produced, while weather conditions can also affect production. The various costs of doing business in different parts of the world can also impact the supply line. What's the situation with Iran and Strait of Hormuz? Israel sent rockets into Iran on June 13, before President Trump demanded 'not a ceasefire, a real end' to the conflict. Following that, the US fired their own missiles into Iran across the weekend, hitting nuclear facilities and prompting the Asian nation to threaten retaliation. While the attacks centre around Iran's nuclear production, oil prices are impacted because that nation controls the Strait of Hormuz, a key shipping route for around 20m barrels a day, as well as producing more than 1.5m barrels of oil a day themselves. Should Iran opt to close the Strait due to escalated warfare, the restriction of oil supply would therefore be expected to see prices rise further - but so far markets aren't necessarily predicting that. 'Oil and gas prices are staying very calm, all things considered, and the gains in the immediate aftermath of the American bombings in Iran are perhaps more muted that you might have expected,' said Russ Mould, investment director at AJ Bell. Mr Mould suggested factors such as political interventions or Iran's lack of response so far may be a reason for that. Goldman Sachs has warned the price of Brent could rise to $100 and even peak at $110 if the Strait was closed and flows were cut by half for a month, then remained lower than usual for the rest of the year. Perhaps significantly, the investment bank analysts rate the chances of a closure of the Strait at 52 per cent at present. What rising oil prices mean for consumers The immediate link is of course regarding the price of fuel for vehicles, but that's not the only factor at play. 'Where oil and gas go, petrol and energy prices may follow, but regulators and consumers are watching and it may take a period of sustained strength or weakness for the forecourts to show big changes,' explained Mr Mould. 'There's generally about a 4 week gap between movements in oil prices and petrol prices – the chart below illustrates this quite well,' Thomas Pugh, chief economist from RSM UK told The Independent. Over the past month, Brent oil has risen from the mid-60s to its current price point - a rise of more than 18 per cent. How oil prices affect inflation As noted earlier, the spike seen in 2022 contributed enormously to rising energy bills. It's not just that higher oil (and gas) means higher bills for those commodities when businesses or households eventually use them, but also that it in turn means higher transport costs and production costs. All this is a contribution to rising inflation. Mr Mould noted that 'Israel's first missile strike on Iran 10 days ago will already have had some inflationary impact,' which in UK terms will be seen as another blow to efforts to get the economy growing. 'If oil and natural gas prices stay where they are currently, that will add about 0.1 percentage point to inflation in Q3,' predicted Mr Pugh. 'In terms of overall inflation impact, the rule of thumb is that a $10 per barrel rise in oil prices nudges up inflation by about 0.1ppt in the short term and closer to 0.2ppt in the long term, once the impact has filtered through the supply chain.' With UK inflation at 3.4 per cent last month, the danger now is that these external factors mean domestic inflation faces another threat, which in turn might force interest rates to remain higher for even longer than expected - in turn again slowing economic growth efforts.
Daily Mail
2 hours ago
- Daily Mail
Oil prices surge as Iran maintains global shipping route threat
Oil prices have surged as Iran maintains its threat to close its global shipping route after Donald Trump blew up the country's nuclear bases. Asian markets traded lower today amid concerns of disruption to energy markets after the US air strikes 'obliterated' Iran's nuclear facilities on Saturday night. The dollar strengthened as traders assessed the weekend's events, with Iran threatening US bases in the Middle East as fears grow of an escalating conflict in the volatile region. Iran is the world's ninth-biggest oil-producing country, with output of about 3.3million barrels per day. It exports just under half of that amount and keeps the rest for domestic consumption. If Tehran decides to retaliate, observers say one of its options would be to close the strategic Strait of Hormuz - which carries 20 per cent of global oil output. Brent crude futures were up $1.52 or 1.97 per cent to $78.53 a barrel as of 6am UK time. US West Texas Intermediate crude advanced $1.51 or 2.04 per cent to $75.35. Both contracts jumped by more than 3 per cent earlier in the session to $81.40 and $78.40, respectively, touching five-month highs before giving up some gains. Economists at MUFG warned of 'high uncertainty of the outcomes and duration of this war', publishing a 'scenario analysis' of an oil price increase of $10 per barrel. 'An oil price shock would create a real negative impact on most Asian economies' as many are big net energy importers, they wrote, reflecting the market's downbeat mood. Tokyo's key Nikkei index was down 0.6 per cent at the break, with Hong Kong losing 0.4 per cent and Shanghai flat. Seoul fell 0.7 per cent and Sydney was 0.8 per cent lower. The dollar's value rose against other currencies but analysts questioned to what extent this would hold out. 'If the increase proves to be just a knee-jerk reaction to what is perceived as short-lived US involvement in the Middle-East conflict, the dollar's downward path is likely to resume,' said Sebastian Boyd, markets live blog strategist at Bloomberg. US Defense Secretary Pete Hegseth said on Sunday that the strikes had 'devastated the Iranian nuclear programme', though some officials cautioned that the extent of the damage was unclear. It comes after Israel launched a bombing campaign against Iran earlier this month. Chris Weston at Pepperstone said Iran would be able to inflict economic damage on the world without taking the 'extreme route' of trying to close the Strait of Hormuz. 'By planting enough belief that they could disrupt this key logistical channel, maritime costs could rise to the point that it would have a significant impact on the supply of crude and gas,' he wrote.
