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Dubai Airport handled 2.5 million passengers in March, a 65.7% decrease year-on-year.On May 4th, local time, on May 2nd, Ali Nikozadeh, Deputy Speaker of the Iranian Islamic Parliament, emphasized in an interview along the Strait of Hormuz that "the Strait of Hormuz will not return to its pre-war state, and Iran will absolutely not back down a single step from the Strait of Hormuz." Nikozadeh stated that Parliament will approve a "Strait of Hormuz Management Law," which includes: a permanent ban on Israeli ships passing through this crucial waterway; ships from "hostile states" must pay "war reparations" to obtain passage permits; and other ships will only need Iranian authorization to pass.Sources indicate that Qatar Energys official selling price for May marine crude oil is set at a premium of $17.05 per barrel to the Oman/Dubai price; and an official selling price for onshore crude oil is set at a premium of $18 per barrel.Asian stocks surged on Monday, boosted by strong earnings reports from major U.S. tech companies and comments from President Trump that the U.S. would begin guiding some neutral ships stranded in the Persian Gulf through the Strait of Hormuz. The MSCI Asia Pacific Index, excluding Japan, rose as much as 2.7%, a record high. Benchmark indices in South Korea and Taiwan, both dominated by tech stocks, soared by more than 3.5%. SK Hynix shares jumped nearly 10%, and TSMC shares jumped over 6%. Dilin Wu, research strategist at Pepperstone Group, said the current strength in markets like South Korea is due to AI-driven trading or speculation. She said she is “cautiously optimistic about Asian markets overall” because geopolitical uncertainty and high oil prices could constrain stock markets.On May 4th, Ryoo Sangdai, Senior Deputy Governor of the Bank of Korea, stated that its time to consider raising interest rates, as economic growth seems unlikely to fall significantly short of the central banks earlier forecasts, while inflation may exceed previous expectations. Ryoo, who is also a member of the Bank of Koreas Monetary Policy Committee, cited the stronger-than-expected economic resilience following the outbreak of the Middle East conflict and the rising inflationary pressures. The Bank of Korea has kept its benchmark policy rate unchanged since July of last year. In February, the Bank of Korea projected 2% economic growth and 2.2% inflation for the year. While policymakers initially expected the unrest in Iran to drag down economic growth and push up prices, recent data shows that the growth outlook has not deteriorated as feared due to strong semiconductor shipments, while inflation risks have increased. Regarding the won exchange rate, Ryoo stated that from an economic fundamentals perspective, the won remains weaker than in the past, although the market does not seem to see the current level as a major problem. The won recently hit its lowest level against the US dollar since the global financial crisis. Speaking about concerns about the economys reliance on semiconductors, Ryoo stated that the key risk lies in whether the cycle shifts or whether the spillover effects are lower than expected, rather than the industrys increasing share itself.

Germany Prepares For Russian Ban As Oil Becomes A Bull Market Again

Charlie Brooks

Apr 29, 2022 09:29

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After being stifled recently by the strong dollar and China's Covid problems and related lockdowns, crude received a full green light on Thursday from a Wall Street Journal report that Berlin was no longer opposed to a Russian oil embargo — a dynamic that could further constrain supplies in the already-stressed global energy market.


According to Reuters, the WSJ piece echoed statements made Tuesday by Germany's Economy Minister Robert Habeck, who said the EU's largest economy could deal with an EU embargo on Russian oil imports and was looking for alternative sources of supply.


Crude prices, which had been hovering in negative territory previous to the WSJ report, jumped more than $2 a barrel as the story expanded beyond Germany, with traders speculating on how some European countries that rely on Russia for practically all of their oil would survive the embargo. Germany imported 35% of its oil from Russia before the Ukraine invasion and the imposition of sanctions on Moscow.


Brent crude, the global oil benchmark traded in London, closed up $2.27, or 2.2 percent, at $107.59 a barrel.


WTI, or West Texas Intermediate, the New York-traded benchmark for US petroleum, settled $3.34, or 3.3 percent, higher at $105.36 per barrel.


With OPEC+ meeting in a week, the market may be on the verge of extending its rebound from this week's lows below $100.


OPEC+, led by the 13-member Organization of the Petroleum Exporting Countries and ten other oil producers led by Russia, has pushed prices higher each time it has met in the last year by offering a meager 400,000 barrels per day increase in monthly production — and then failing to deliver on that promise.


Prices could become volatile again following the OPEC+ meeting on May 5, some analysts predicted.


"The same reasons remain in play here and might act as a trigger for an eventual breakthrough, including further Chinese lockdowns, slow OPEC+ output growth, new supply interruptions, and higher reserve releases," said Craig Erlam, analyst at online trading platform OANDA.


"Ultimately, crude markets are consolidating, with the range contracting and potentially setting the stage for a violent breakout in the coming weeks."


John Kilduff, a partner at energy hedge fund Again Capital in New York, agreed.


"As a result, oil from the free world will become more expensive, while oil from the Iron Curtain will lose even more value and become more heavily discounted "Kilduff stated, referring to Russian oil in the Soviet era.


According to Adam Button, an expert with the ForexLive platform, politics could exacerbate the issue for some European countries. He was referring to allegations regarding intentions to provide non-Russian oil to a refinery in Gdansk, despite the fact that the refinery was owned by Russia's Rosneft.


"What is also not addressed here are the numerous other countries in eastern Europe that are completely reliant on Russian oil, including some that are 100 percent dependent," Button said.


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