ENERGY WATCH: Energy hubris
Oct 26 (Reuters) - War or no war? That's the question US President Donald Trump – and energy markets – are wrestling with. Last week, oil prices surged to nearly $117 a barrel, the highest level since April, after a wave of Iranian attacks on tankers around the Strait of Hormuz rattled traders. Yet Brent crude was down about $2 on Monday morning, a reminder of the continuing uncertainty hovering over energy markets.
With oil exports from the Middle East still relatively strong, investors are looking beyond the immediate headlines for clues about what comes next. And with Israelis heading to the polls on Tuesday and Americans voting just eight days later, all eyes are on Washington.
Trump summed up the dilemma he faces over the eight-month-old Iran war in an interview with Fox News on Sunday: "I have a decision to make: Do I finish it off, which would be very easy to do, or do I make a deal? That's all."
That leaves plenty of room for interpretation.
Meanwhile, markets are also closely watching the first high-level meeting between Mecca Pact members Saudi Arabia, Turkey and Pakistan and Iranian leaders in Tehran on Monday. The talks are expected to focus on efforts to contain the worsening conflict in Yemen, which has increasingly spilled across Saudi Arabia's borders, with the Iranian-backed Houthi movement claiming multiple attacks on energy infrastructure.
Can these diplomatic efforts prevent another direct confrontation between Iran and the United States? That remains anyone’s guess.
Stepping away from the daily twists and turns of the conflict, I took a closer look this week at how Trump's "energy dominance" agenda has shaped his foreign policy in the first half of this second term. With the November 3 US midterms fast approaching, that strategy could end up exacting a heavy political and economic price.
Read my latest column below for more on this.
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In other news:
Saudi Arabia plans to store crude oil at Singapore's Jurong Rock Caverns from the second half of 2027, a move aimed at strengthening energy security and supply flexibility across Asia.
How did sanctioned Iranian jet fuel end up in Myanmar, generating valuable foreign currency revenues for Tehran? I enjoyed this investigative piece on the network of traders, shippers and bankers that has helped Iran circumvent sanctions.
Shares in Portugal's Galp Energia fell 7.5% on Monday after the company said talks with Spain's Moeve to combine their refining, chemicals and fuel retail businesses had collapsed, derailing plans to create one of Europe's largest refining groups.
A years-long trade war between the United States and China has redirected manufacturing investment and export production toward Vietnam, helping push the country's coal-fired power generation to record highs, as ROI Energy Transition Columnist Gavin Maguire explains.
As ever, don't hesitate to contact me at ron.bousso@thomsonreuters.com or follow me on LinkedIn with any questions or thoughts.
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