Iranian lawmaker says Tehran considering closing waterway, described as ‘world’s most important oil transit chokepoint’.
By Al Jazeera Staff
Published On 14 Jun 202514 Jun 2025
Iran is considering closing the Strait of Hormuz, Iranian news agency IRINN has reported, citing key conservative lawmaker Esmail Kosari, as the conflict with Israel intensifies.
The move would send oil prices soaring and risk expanding the war. So what is the strategic waterway and why is it vital to global trade?
Hormuz is the only marine entryway into the Persian Gulf. It splits Iran on one side and Oman and the United Arab Emirates on the other, and it links the Persian Gulf to the Gulf of Oman and the Arabian Sea in the Indian Ocean.
According to the US Energy Information Administration, about 20 percent of global oil consumption flows through the strait, which the agency describes as the “world’s most important oil transit chokepoint”. At its narrowest point, it is 33km (21 miles) wide, but shipping lanes in the waterway are even narrower, making them vulnerable to attacks and threats of being shut down.
During the Iran-Iraq conflict between 1980 and 1988, which killed hundreds of thousands on both sides, both countries targeted commercial vessels in the Gulf in what became known as the Tanker War, but Hormuz was never completely closed.
More recently, in 2019, four ships were attacked near the strait off the coast of Fujairah, UAE, amid heightened tensions between Iran and the United States during Donald Trump’s first presidency. Washington blamed Tehran for the incident, but Iran denied the allegations.
Attacking shipping lanes has long been used to apply pressure amid conflict. Since the outbreak of the war in Gaza, the Houthis in Yemen have been attacking ships around Bab al-Mandeb Strait, the entryway into the Red Sea on the other side of the Arabian Peninsula.
While the Houthi campaign has affected global commerce, ships can avoid the Red Sea by sailing around Africa – a longer but safer journey. However, there is no way to ship anything by sea out of the Gulf without going through Hormuz.
Even countries that do not import petrol from Gulf countries would be affected if the strait were to be closed because a major drop in supply would spike the price per barrel on the global market.
Despite the Iranian lawmaker’s threat, it is unclear whether Iran has the ability or willingness to shut down the strait.
Such a move would almost certainly invoke retaliation from the US, which has naval military assets in the region.
After Israel launched a wave of attacks across Iran early on Friday, targeting military leaders, residential buildings, army bases and nuclear sites, Iran responded with hundreds of ballistic missiles.
Although the US helped shoot down the Iranian missiles, Washington has not directly attacked Iran. US officials have stressed that Washington was not involved in the Israeli strikes.
Tehran has not targeted US troops or interests in the region, either.
Closing Hormuz, however, would hit Americans in the wallet and could spark a military response from Trump.
While an Iranian move against the strait may not be imminent, Kosari’s comments underscore that attacking shipping lanes is a card that Tehran may play amid the hostilities.
In April 2024, Iranian armed forces seized a container ship near the Strait of Hormuz amid rising tensions across the region after a deadly Israeli attack on Iran’s consulate in Damascus, Syria. A limited Iranian strike on Israel in response was followed by an Israeli one on Iran. At the time, they were the most serious direct military exchanges between the two foes.
US President Donald Trump on Sunday warned Iran against any retaliation on US assets, saying, "If we are attacked in any way, shape or form by Iran, the full strength and might of the US armed forces will come down on you at levels never seen before."
Trump's remarks came as Israel targeted Iran's defence ministry headquarters in Tehran and struck the world's largest natural gas processing unit linked to South Pars gas field along the Persian Gulf in Iran's Bushehr Province on Saturday.
Stating that the US had no role in Israel's overnight attacks on Iran, Trump claimed on his Truth Social platform that he could "easily get a deal done between Iran and Israel and end this conflict," even as Tehran cancelled the sixth round of nuclear talks with Washington DC, on Sunday.
Calling Israel's attack on the world’s largest natural gas refinery -- shared by Iran and Qatar -- "a blatant aggression and a very dangerous act," Foreign Minister Abbas Araqchi claimed it was aimed at derailing Tehran's ongoing nuclear talks with the US and expanding the war.
In response to Israel’s Operation Rising Lion, which targeted Iran’s nuclear facilities, scientists, and top military officials, Tehran launched Operation True Promise 3. Waves of Iranian attacks began on Saturday and continued throughout the night and early morning.
At least ten people were killed and over 200 injured in the Israeli cities of Tamra, Bat Yam, and Rehovot. While four people were killed in Tamra, six deaths were reported in Bat Yam. Israeli President Isaac Herzog spoke to the mayors of the three affected cities and stressed the importance of shielding every civilian from future Iranian strikes.
One of the deadliest strikes occurred in Tehran, where an Israeli missile hit a residential high-rise, killing at least 60 people, including 29 children, according to Iranian authorities. In a separate earlier strike near a home in northern Israel, three women were reported dead and ten others injured.
Inputs from Reuters
Published By: Ajmal Published On: Jun 15, 2025
As Israeli jets streaked over the Middle East last evening, President Donald Trump’s key aides were making preparations for their next round of nuclear talks with Iran, hoping to cement their boss’s reputation as the world’s top dealmaker.
For weeks, Trump had been warning Iran to accept the agreement that his envoy, Steve Witkoff, had offered, under which Tehran would receive sanctions relief in exchange for dismantling its nuclear program and ending its uranium enrichment. Trump had told Israeli Prime Minister Benjamin Netanyahu during a call earlier in the week he believed that a deal was still possible and didn’t want to risk a wider war, a White House official told us. When Netanyahu raised the possibility of a preemptive strike, Trump said he preferred the diplomatic route.
But by this morning, everything had changed. Israel’s largest-ever attack on Iran had left senior leaders of the Islamic Republic dead, its nuclear facilities badly damaged, and the outlook for Trump’s dealmaking in shambles. What remains of Iran’s leadership appears even less likely to accept the embarrassing prospect of surrendering its enrichment capability, and will feel the need to hit back against Israel without restraint. More threatening for Trump, the president now faces the prospect of Iranian attacks on U.S. interests and an unpredictable, economically damaging wider war across the Middle East. The question that has dominated international attention on the Middle East for well over a decade—whether the standoff over Iran’s nuclear aspirations would be resolved with force or at the negotiating table—appears to be careening toward an answer.
“Dead,” one person familiar with the matter said of Trump’s diplomatic push. “Yes, Iran is an authoritarian state, but they care about how they’re viewed domestically and internationally. They can’t be seen as negotiating from a position of weakness.”
A diplomat from a Middle Eastern country said that Trump is being naive if he thinks Iran will resume talks “in any meaningful way any time soon.”
“Also,” the diplomat added, “Israel just killed their negotiators.”
Israel dubbed its operation “Rising Lion,” and it included air strikes on more than 100 nuclear and military sites as well as the assassinations of a number of top officials, including the chief of staff of Iran’s military, the senior-most Revolutionary Guard commander, and the diplomat overseeing negotiations with Washington. The details of the attack suggest that Israel had invested months or years of planning and had deeply penetrated Iran’s security establishment, even beyond the espionage required to assassinate a senior Hamas operative at a Tehran guesthouse last year.
Netanyahu promised there would be more to come. “Today the Jewish state refuses to be the victim of a nuclear Holocaust,” he said in a message to the Iranian people.
Former officials who have followed Israel’s decades-long standoff with Iran described yesterday’s assault as the “big one” for Israel, which was hoping to take advantage of the setbacks it dealt its adversary’s air and missile defenses in a series of tit-for-tat attacks over the past 18 months. Netanyahu said Israel was attacking to preempt a breakthrough moment for Iran in which the country develops nuclear-weapons capability. But the aims appeared even broader than that. “They’re not just trying to take out the nuclear program for a time,” the individual familiar with the issues said. “They’re trying to permanently set it back and potentially to destabilize the regime.”
What happens next may not only change the balance of power in the Middle East—it may also come to define a chapter of Trump’s presidency. A senior White House official told us that Trump continues to believe that a diplomatic solution is possible—a view that is not universally shared by those around him. He had hoped to keep Israel from striking but thinks that Tehran, which had been stalling in the talks, may now be compelled to negotiate to avoid further destruction. Trump is clearly attempting to push this message, in any case. He took to social media and spoke with reporters early this morning, touting the success of the strikes—while exaggerating his support for them—and declaring that peace was possible. “There is still time to make this slaughter, with the next already planned attacks being even more brutal, come to an end,” Trump wrote early this morning on Truth Social. “Iran must make a deal, before there is nothing left.”
While the president is projecting strength, he is also playing catch-up. The administration was given notice about the attacks only in the hours before they began, a White House official told us. The Department of Defense briefed some key congressional committees yesterday afternoon that they had been told Israel would soon attack, though the exact timing of the strikes was still unclear, according to a person familiar with the briefing. While Secretary of State Marco Rubio distanced the United States from the attacks, saying the country did not take part, the U.S. had taken steps in the days after Trump and Netanyahu’s call on Monday to move personnel out of the region in anticipation of possible violence.
Senator Lindsey Graham, the South Carolina Republican and Trump ally who has been a staunch supporter of Israel, told us that Trump was not perturbed by the attack: “He sees Israel as the winner right now.” If Iran doesn’t reengage with talks, the senator added, his perspective is that Washington should “help Israel finish off the nuclear program.”
After Israel attacked Iran, Rubio’s statement did not address whether the U.S. would help with Israel’s defense in the event of an Iranian counterattack. When Tehran launched two major aerial attacks at Israel last year, the Biden administration authorized the U.S. military to help Israel shoot down the onslaught of missiles. Iranian Supreme Leader Ayatollah Ali Khamenei warned that Israel “should anticipate a harsh punishment,” and after nightfall in the Middle East today, dozens of rockets arced toward Israel; explosions echoed across Jerusalem and Tel Aviv. Most of the incoming missiles were shot down by Israel’s Iron Dome defense system, but some broke through and crashed into populated areas. A U.S. official who spoke to us on the condition of anonymity confirmed that American forces based on land and at sea helped shoot down the Iranian missiles. Since Hamas’s October 7, 2023, attacks on Israel, the United States has maintained a heightened military presence in the Middle East, giving it greater ability to come to Israel’s aid.
The Pentagon must also be ready for strikes against U.S. troops or other American interests in the region. While Iran’s proxies, including Hezbollah in Lebanon and Hamas in Gaza, have been weakened, the ability of Iranian-backed groups to wreak havoc with asymmetric attacks remains significant, as the Houthi militants in Yemen have continued to demonstrate. In addition to major bases in Bahrain, Qatar, and the United Arab Emirates, the Pentagon has an array of naval assets in the region that could mount defenses for an Iranian counterattack, including the USS Carl Vinson aircraft carrier, with some 5,000 sailors aboard and its suite of F-18 and F-35 jets, along with five guided-missile destroyers. Since the October 7 attacks, the United States has also moved additional air-defense assets to Israel.
Daniel Shapiro, who served as U.S. ambassador to Israel during the Obama administration and was a senior Pentagon official during the Biden administration, told us the moment posed a significant dilemma for Iran: It would also want to hit back against the United States, Israel’s chief military backer, but the prospect of war with Washington in a moment of internal chaos and military weakness was likely to be daunting.
Ironically, the blows to Iran’s conventional military might make Iran’s leaders less willing to accept limits to their nuclear ambitions than they would have been otherwise. “It’s more likely that Iran will now feel a desperate need to sprint toward breakout capability, because they’re now so damaged,” said Shapiro, who is a fellow at the Atlantic Council. “They’ve always viewed the nuclear program as part of their regime survival strategy.”
Yesterday’s attack revealed the extent to which the Middle East has been remade since October 7, allowing Israel to extend its military advantage against Iran and its allies far more than most imagined possible. But that altered reality may pose a political danger to Trump, driving a wedge between his duties as Israel’s chief foreign ally and the wishes of his political base.
If Iran does attempt to accelerate its drive to obtain nuclear weapons, it would pull the United States more deeply into the conflict. Trump has vowed that Iran will not get a bomb and that only the United States has the military capabilities to reach the deeply buried facilities at the Fordow nuclear site.
But some “America First” influencers, such as Tucker Carlson and Charlie Kirk, denounced the possibility of the U.S. becoming further embroiled overseas. In the hours after the attack, the stock market went down while the price of oil went up. And a president who campaigned on promises of quickly ending foreign wars was suddenly on the precipice of another conflict.
https://www.theatlantic.com/politics/archive/2025/06/trump-attack-iran-israel/683175/
(Bloomberg) — Israel’s air strikes on Iran, followed by the Islamic Republic’s retaliation, rippled through markets Friday, prompting traders to pile into options for protection amid ongoing questions of long the conflict can last.
“The escalation between Israel and Iran, including strikes on nuclear and military targets, marks a turning point in Middle Eastern geopolitics and its ripple effects are already being felt across global markets,” said Tamas Varga, an analyst at energy brokerage PVM. “The Strait of Hormuz — through which 20 million barrels of oil pass daily — now sits on a geopolitical knife’s edge.”
Here are some of the ways traders are positioning for the uncertainty gripping markets:
OIL
As tensions ratcheted up in the days leading up to the attack, some analysts had speculated that a strike could push prices well over $100 a barrel. Traders snapped up bullish call options, a pattern that went into overdrive once Israeli planes started dropping bombs after markets opened Friday in Asia.
Brent and West Texas Intermediate crude’s implied volatility soared as futures spiked as much as 14%. The panic buying of call options pushed the bullish premium to levels not seen since Russia’s invasion of Ukraine in 2022, with the retaliatory strike drawing additional bidding.
“The way speculators play it is to buy whatever calls are on the screen as fast as possible with no regard for how much they are paying,” said Robert Yawger, director of the energy futures division at Mizuho Securities USA. “Not to mention some speculators are hedging against a short position.”
The ramifications extend beyond flat price, with the shape of the forward curve changing drastically in just a few days, affecting millions of barrels of so-called WTI calendar spread options betting on the difference between delivery months. The unusual “hockey-stick” shape that reflected fears of a glut of oil next year has given way to a backwardated market, where traders pay up for immediate delivery.
Open interest in these options reached a fresh record high Friday, with the equivalent of almost 38 million barrels worth of positions added during the week across a wide range of strikes.
GOLD
The rush into gold during the tariff turmoil of April is recurring to a smaller extent as geopolitics bubble up. The one-month call skew on the SPDR Gold Shares ETF (GLD) has risen to the highest since April 16 as the metal flirts once again with a record high.
“Any time there is geopolitical escalation investors are going for risk-off investments” such as gold, said Phil Streible, chief market strategist at Blue Line Futures. Investors may expand and move to silver too, according to Streible.
STOCKS
The latest flare-up in Middle East tensions had the expected impact on equity volatility markets, with the front-month Cboe Volatility Index future taking a strong bid.
However, market players have become accustomed to volatility, and moves related to geopolitics tend to fade quickly when de-escalation rhetoric starts. And even with stocks down late on Friday, the drop of more than 1% in the S&P 500 Index will do little to stem the contraction in realized volatility, either on an intraday or closing basis. So long as markets continue to have a playbook for the latest headline risk crisis, owning volatility may continue to disappoint.
“Usually geopolitical events create a knee-jerk reaction that doesn’t have much of a lasting impact, unless there’s some very specific reason,” said Benn Eifert, managing partner and co-chief investment officer at QVR Advisors. The equity volatility reaction was “not that big of a move and it will probably dissipate,” he said.
US Dollar
While the dollar hit a three-year low on Thursday, ahead of this week’s Federal Reserve rate decision options positioning already showed signs that the decline was running out of steam. The attack did little to change that.
One-month implied volatility on the Bloomberg Dollar Spot Index has been trending lower since early April, and risk reversals Friday were the least bearish since April 9.
The resurgence of geopolitical risk comes on top of domestic unrest in parts of the nation and uncertainty over the impact of US economic and trade policies on the economy.
“The events overnight in the Middle East are diverting attention away from immigration protests in the US, trade policy/wars and the focus on the Senate’s OBBBA,” said Nicky Shiels, head of metals strategy at Geneva-based MKS PAMP SA.
--With assistance from Elise Harris, George Lei, Yvonne Yue Li, Christian Dass, Alex Longley and Bernard Goyder.
https://finance.yahoo.com/news/traders-dive-options-market-geopolitical-140000441.html
Chancellor Rachel Reeves says the government will do "everything in [its] power" to protect people in the UK from the knock-on economic effects of the conflict between Iran and Israel.
She would not "take anything off the table" in response to the threat of rising energy costs, she told the BBC's Sunday with Laura Kuenssberg programme.
The global oil price rose sharply on Friday following the initial attacks by Israel and Iran's subsequent response.
A rise in the cost of oil pushes up petrol and diesel prices and can fuel inflation more broadly.
Following Russia's full scale invasion of Ukraine in 2022, oil prices spiked to nearly $130 a barrel, contributing to higher prices for UK shoppers on everything from transport to food.
However the cost of a barrel of oil, currently around $75, is still lower than it was in January.
"There is no complacency from myself or the Treasury," Reeves told the BBC.
In 2022, following the start of the Ukraine war, the Conservative government responded to higher energy prices by stepping in to help households with their bills.
"We are not anywhere near that stage at the moment," the chancellor said.
Household energy bills respond slowly to rising wholesale energy prices, and average bills, as set by the price cap, are due to come down in July.
If the conflict continues, and in particular if there is disruption to shipping in the Strait of Hormuz, the waterway off the south coast of Iran, the price of oil and gas could rise further.
However, oil market experts say there is currently less upward pressure on the price of oil than there was three years ago.
Reeves said the situation in the Middle East was part of the reason that she had raised spending on both defence and energy security, in her announcement last week, which outlined the government's budgets for the rest of the parliament.
"A lack of investment in our own domestic energy production has left us exposed," she said.
"The investment [announced in the Spending Review] in nuclear energy, in offshore wind, in onshore wind, in carbon capture and storage, is all about ensuring we are more self-sufficient as a nation," she said.
Many of those investments will take several years to complete, but some of the government's planned investments could have an impact "in the shorter term" such as investment in home insulation, she added.
Lord John Browne, former chief executive of the energy giant BP, said he also believed it was time to "push very hard" on energy security, and on the transition away from fossil fuels.
Lord Browne, who now chairs BeyondNetZero, a fund investing in carbon transition technologies, told Laura Kuenssberg some of the government's plans were "too bullish" and would take more time than planned.
Shadow chancellor Sir Mel Stride said the implications of the latest conflict for "oil prices, equity prices... trading and inflation and therefore interest rates and the general state of the world economy" were very important.
He said the UK economy needed to be "much stronger" to cope with the challenges it is now facing, adding that the government had made the wrong choices by increasing taxes on business.
Plans for borrowing and spending had kept inflation higher, he said.
Bratislava, 15 June (TASR) - Slovakia will ask the European Union (EU) foreign ministers to postpone the vote on the next package of anti-Russian sanctions, Prime Minister Robert Fico (Smer-SD) stated at a press conference on Sunday, adding that the issue of a complete ban on Russian gas imports after 2027 and possible compensation for damages Slovakia would be incurred in such a case should be addressed first.
"I've asked the foreign minister [Juraj Blanar (Smer-SD)] to officially request the meeting of foreign ministers to postpone the discussion on these sanctions until the problem of so-called repowering, that is, stopping the flow of gas, oil and nuclear fuel from the Russian Federation to Europe, has been resolved," said Fico. The government thus wants to use the vote on the sanctions, which must be approved unanimously, to negotiate concessions for Slovakia on a deal to end Russian energy imports, which is expected to be adopted by a majority and Slovakia is likely to be outvoted on it.
The premier again warned of the risks associated with the rejection of Russian energy carriers. "We ask, will there be enough gas for Slovakia? Do we have any guarantees that if there is a shortage of gas in Germany, in the Czech Republic, that gas will come to us?" Another problem is the expected increase in gas transportation prices or the existing contract with Russia's Gazprom, which expires in 2035. According to the prime minister, the Russian company could sue Slovakia for around €20 billion if gas off-take is cancelled.
The prime minister went on to say that in the case of oil it is assumed that the restrictions won't be voted on by qualified majority at the EU, but through sanctions, where a unanimous decision is needed. There is currently no proposal to restrict imports of Russian nuclear fuel. am
Iran has partially suspended production at South Pars, the world's largest gas field, due to a fire at one of its key processing units caused by an Israeli drone strike on Saturday, the Iranian media reported.
The fire broke out in one of the four units of Phase 14 of South Pars, and led to a halt in the production of 12 million cubic metres of gas.
The blaze has since been extinguished, according to the Iranian oil ministry.
About South Pars
An offshore site, South Pars is located in the Islamic Republic's southern Bushehr province. The world's largest natural gas reserve, Iran shares it with Qatar, where it is called the "North Field."
Why South Pars matters to Iran?
The field is responsible for the "lion's share" (around 66 per cent) of gas production in Iran, the world's third-largest producer after the United States and Russia,
The country generates around 275 billion cubic metres of gas annually, or about 6.5 per cent of the global output. Due to international sanctions, most of this gas is consumed domestically, though some of it is exported to countries like Iraq.
On the other hand, Qatar, with help from global energy firms such as Shell and ExxonMobil, exports 77 million tonnes of liquefied natural gas every year from the same field to Europe and Asia.
Why attack on South Pars is significant?
Until now, under its Operation Rising Lion, launched on Thursday, Israel's focus was on the Iranian nuclear and military assets. Indeed, this would be Israel's first strike on the oil and gas sector of Iran.
This would mark a major escalation in the conflict, as Iran could retaliate by targeting Israel's own oil and gas infrastructure.
"The strike on South Pars was reckless. The attack threatens global energy security," news agency Reuters quoted a US official as saying.
The crisis had already pushed oil prices up 9 per cent on Friday, the second day of clashes.
By Elias Ferrer - Jun 14, 2025, 6:00 PM CDT
After coming into office, the administration of President Donald Trump has eliminated licenses for oil companies to operate in Venezuela, despite initial hints that it would continue them, with presidential envoy Richard Grenell’s visits to Caracas. This means that sanctions on state-owned PDVSA are fully back on. Chevron, the main U.S. corporation on the ground, is back to having only a secret license for minimum maintenance and security, as it still a shareholder in four joint ventures.
In the last few months, this has sparked a question. Is the U.S. government leaving the South American country at the mercy of Beijing? Could Chinese companies replace Chevron in Venezuela?
There are two short answers. In terms of oil exports, yes. And this has already happened. Before the first round of economic and financial sanctions hit in 2017, the U.S. took almost 800,000 barrels per day from Venezuela. This figure went all the way down to zero in 2019, with the highest level of restrictions known as “maximum pressure.” This happened again in May of this year, as Chevron, Repsol and others were blocked by the Treasury Department’s Office of Foreign Assets Control (OFAC).
So, where does all the oil go? In past years, Caracas was able to strike agreements with Rosneft or with Indian buyers. But as the U.S. introduced secondary sanctions, and now secondary tariffs, there was only one buyer left, the only one that does not fear Washington’s threats: China.
Reuters has already reported that crude that was produced in joint ventures with Chevron has been on its way to East Asia. And the Chinese market does have the capacity to absorb Venezuelan oil. The only problem is how much PDVSA gets paid, when there is only one buyer on the block—a monopsony.
When it comes down to Chinese companies taking over Chevron’s operations, this is unlikely to happen in the near to medium term. More than anything else, because it does not need to happen for Beijing to expand its influence and control. The same goes for Moscow or Iran.
First, investors have plenty of options before them, from greenfield opportunities to mature fields that only need repairs. Venezuela has thousands of square kilometres with billions of barrels of oil underneath. And most joint ventures are effectively dormant: just 20 out of 64 areas of operation are producing more than 10,000 barrels per day of crude, while most are stuck at 0 or below the 1,000 mark.
Second, regime officials will prefer to keep the fields where Chevron invested for themselves. 240,000 barrels per day is a great business opportunity. This means millions of dollars in contracts for goods and services, that used to be managed by a foreign corporation—not anymore, courtesy of President Trump.
Can Chinese companies take over Chevron’s oil fields?
Now, Chinese companies entering Chevron’s former operations can definitely happen. Let us start with Productive Participation Contracts (known as CPP for their initials in Spanish), which are a form of production-sharing agreement coupled with exclusive rights to contract goods and services.
Hong Kong-based China Concord Petroleum (CCP) has started working in oil fields which are part of a joint venture with Belorusneft, using a CPP. Given that “Petrolera Bielovenezolana” was not productive—with an average output of just 200 barrels per day—the Venezuelan government effectively put it up for rent.
The Venezuelan government is not just signing production sharing agreements in areas where there are joint ventures; it is even figuring a way to normalise this framework. This could include that not just PDVSA, but the other shareholders in the joint venture get paid dividends as well by the CPP company.
Thanks to the minimum maintenance license, Chevron is still a partner to PDVSA. But with no way to pay, the Venezuelan government feels entitled to remove it from operational control. In the coming years, it should be no surprise if a new company—Chinese or from any other country—effectively takes over.
Here is another point that cannot be overlooked: CPPs are negotiated and signed in secret, since they were created under a special law to bypass sanctions. So far, we only know that CCP, Anhui Guangda Mining Investment and Kerui Petroleum Group have been eyeing up opportunities in Venezuela, but there could be more companies out there that we just do not know of yet.
While Anhui Guangda has signed a deal for a greenfield project in the Orinoco Oil Belt—the Ayacucho 2 block—there are reports that these firms have also shown interest in the joint ventures where Petrobras was involved.
China’s mineral monopsony
Oil is only one part of the story. In the mining sector, China and Iran are the only major foreign states. Initially, many U.S. and other Western companies left due to expropriations, especially during Hugo Chávez’s expropriation spree between 2007 and 2012. But now, while there is more openness to foreign capital, the OFAC is sanctioning the gold sector, which makes the entire mining industry riskier. India’s Jindal Steel & Power was nonetheless able to start up at the Cerro Bolívar iron mines last year.
For some minerals, China is the only game in town. An example is cassiterite, a type of rock which contains tin (about 65%) and smaller quantities of tantalum, platinum and other rare minerals. Buyers are keeping production at arm’s length, which is mostly done by artisanal mining. But they nonetheless have an outsized influence on the sector—this is a monopsony—and the same is happening with oil.
By Elias Ferrer for Oilprice.com
Key Points
Billionaire Elon Musk is fighting to make sure federal tax incentives for electric vehicles (EVs) -- a key subsidy that makes buying EVs more affordable -- remain in place. President Donald Trump's new bill seeks to eliminate these tax incentives, which would otherwise be in place until 2032.
Musk's company Tesla (NASDAQ: TSLA) has already seen sales struggle to grow across many key geographies. Deliveries last quarter fell by 32% quarter over quarter, and by 13% year over year. Could the elimination of EV tax credits be a lethal blow to the struggling automaker? You might be surprised by the answer.
Tesla has a massive capital advantage
When it comes to potential regulation "killing" an operating business like Tesla, the first thing investors must consider is the effect on sales growth. Already, demand growth has been stagnating for Tesla. And while the company has teased new potential revenue sources like its robotaxi venture, there aren't many high-visibility milestones ahead that will meaningfully boost revenue over the next year or two. Analysts expect the company to refresh its existing lineup, but details are scarce on releasing any brand new models in 2025 or 2026. Even if a new model is released, it's unlikely that production will scale meaningfully over the next 12 to 24 months.
Where does this leave Tesla over the near term? In the same position it is in today, attempting to stoke demand for an increasingly stale lineup. Making the company's vehicles $4,000 to $7,500 more expensive -- the range of Federal incentives that Trump is proposing to eliminate -- could ultimately accelerate sales declines for Tesla. Any potential demand boost from releasing a more affordable Model Y or Model 3, meanwhile, could be completely offset by eliminated tax credits, resulting in minimal net savings for customers. In return, Tesla may need to compress its profit margins in order to keep demand growth on track.
Fortunately, Tesla has the capital to withstand a multiyear stagnation in sales growth. It has $16 billion in cash and equivalents on the books, more than every other competitor. Its profit margins are also positive -- a rarity in the EV world -- meaning it can afford to cut profits a bit without going into the red. Though it should be mentioned that Tesla has also relied on selling automotive regulator credits -- earned by selling carbon-free vehicles -- to maintain profitability. The company earned $595 million last quarter by selling these credits versus a net income of $409 million. But most of this "free" income from selling credits comes from states like California and New York, as well as incentive programs in the E.U., making them unlikely to be cut should U.S. federal incentives change.
https://finance.yahoo.com/news/trumps-bill-end-ev-subsidies-160500598.html
By Felicity Bradstock - Jun 14, 2025, 10:00 AM CDT
For years, automakers have been betting big on electric vehicles (EVs), as several governments attempt to phase out the sale of internal combustion engine (ICE) vehicles in favour of cleaner electric alternatives. As governments introduced financial incentives for EV uptake alongside emissions fees and eventual bans on ICE vehicles, automakers expected the sale of EVs to soar. However, due to a range of factors, EV sales are lower than they were expected in many parts of the world, with no sign of increasing significantly any time soon. This has encouraged many automakers to reassess their strategies, with some turning their attention back to hybrid vehicles that offer the best of both worlds.
EV sales are gradually increasing, but not at anywhere near the rate previously anticipated for most automakers. Some of the main reasons cited for the slowdown in the growth in EV sales include the high cost of EVs, difficulties in charging – from the high cost of installing a home charger to the lack of public charging infrastructure, and the low range of many existing EV models. Fears over the inability to charge an EV on a journey, the time wasted at a charging station, and the low range of EVs, as perceived by consumers, have led many to view EVs as a supplement rather than a replacement for ICE vehicles.
In 2023 and 2024, the growth in sales of hybrid vehicles increased while EV sales growth slowed, suggesting that many consumers are looking to make the switch but are more open to a compromise than to taking the leap to fully electric. In the U.S. market, several automakers have increased their hybrid vehicle production capacity over the last year in response to the growing market demand. The global sale of EVs and plug-in hybrid vehicles increased by 29 percent year-on-year in April, with growth in both China and Europe. However, North America recorded the first decline since last September, amid growing economic uncertainty.
One type of vehicle that is gaining increasing attention is the extended-range electric vehicle (EREV). This is a type of plug-in hybrid that is positioned between conventional hybrids and wholly electric vehicles, relying on battery-powered motors for propulsion and containing a small gas engine that can be used as a generator to charge batteries. The batteries are bigger than those of a traditional hybrid vehicle, while the gas engines are smaller.
EREVs appeared to go out of fashion, or perhaps were never in fashion, with low sales figures for the Chevy Volt and Fisker Karma in the U.S. when they entered the market in 2011. GM did manage to sell around 157,000 of its Volt over nine years, making it the best-selling EREV in the U.S., but it is still comparatively low compared to other types of vehicles. Since BMW’s i3 was discontinued in 2022, there have been no new EREVs in the U.S. market, but that is soon expected to change.
There are several EREVs in the pipeline, including a version of the Ram 1500 pickup truck and the Jeep Grand Wagoneer, as well as Volkswagen models under the Scout brand name. Hyundai and Nissan are also reportedly planning to develop their EREV models in response to increased market demand. Some of these models could offer over 560 miles of range, making them much more appealing to consumers concerned about charging restrictions. Because they use smaller batteries than conventional EVs, they are also generally cheaper to produce, bringing the sales price down.
Eric Anderson, the associate director of Americas light vehicle powertrain forecasting for S&P Global Mobility, explained that hybrids, including EREVs, are a “relatively affordable way for consumers to move up the electrification ladder without a significant monthly payment increase.”
And it’s not only in the U.S. that automakers are turning their attention to hybrid vehicles, as Chinese automakers are seeing a rising demand for hybrids at the international level. In 2024, Charles Lester, a data manager at Rho Motion, said China-based EV makers were continuing to increase domestic sales of battery EVs while responding to growing demand for plug-in hybrids offshore. Lester stated, “The plug-in hybrids have almost doubled year to date in the rest of the world, but the main reason for that is the Chinese exports.”
However, hybrid vehicles even appear to be becoming more popular among Chinese consumers. The Chinese automaker BYD announced in January that it had sold around 4.3 million passenger cars in 2024, almost 2.5 million of which were hybrid vehicles. Joe McCabe, the president and CEO of AutoForecast Solutions, said, “We still see growth in the Chinese market in terms of battery electric, but we see it sort of capping.” McCabe expects that by 2031, there will still be demand for ICE vehicles, including hybrid vehicles.
As consumers worldwide battle growing economic uncertainty, particularly in the wake of the U.S. sanctions on a wide range of foreign goods, many are reluctant to invest in a wholly electric vehicle. Meanwhile, EV makers have failed to provide consumers with the confidence needed to invest in EVs, such as ensuring a lower price tag, adequate access to charging infrastructure, and a long range. This has driven many consumers to invest their money in a hybrid vehicle, seeing it as the best of both worlds and showing their openness to gradually shifting away from fossil fuels to electric.
NEW YORK, June 14 (Reuters): Robusta coffee futures on ICE hit a 10-month low on Friday amid good harvest progress in Indonesia and Brazil and improved prospects in top grower Vietnam, while sugar hit a fresh four-year low despite Israel's attack on Iran.
The attack sent oil prices surging, raising energy prices more broadly and increasing the incentive for cane mills in top grower Brazil to produce less sugar and more ethanol, a cane-based biofuel.
COFFEE
Robusta coffee settled down $27, or 0.6%, at $4,287 a metric ton, having hit a 10-month low of $4,133. Robusta posted losses for the last seven weeks.
Dealers said the weather in No. 2 robusta exporter Brazil remains benign and that with ICE stocks rising again, the market does not have many reasons to stay elevated.
In top robusta producer and exporter Vietnam, the weather remains favourable, dealers said, with rains coming at the right time, cutting down irrigation costs and allowing farmers to spend more on fertilizers.
The US Department of Agriculture expects Vietnam's robusta output to rise around 7% from a year earlier to a four-year high of 30 million bags in 2025/26.
Arabica coffee rose 0.2% to $3.46 per lb.
SUGAR
Raw sugar settled down 0.14 cents, or 0.9%, at 16.13 cents per lb, the lowest since April 2021. The contract lost 2.2% in the week, the fifth consecutive week of losses.
Sugar rose earlier in the session amid Israel'sstrike on Iran, whichraised worries over a disruption to oil supplies, sending energy prices higher.
Sugar's fundamentals, however, remain bearish given ample rains in key producers India, Thailand and China.
Thailand's sugarcane planting area for the 2025/26 season was up just over 8% from the previous season, boosting crop prospects, a senior sugar official told Reuters.
In the EU, however, early hopes for strong sugar beet yields were dampened by a dry spring, while reduced plantings are set to result in a smaller overall harvest.
TEMPO.CO, Jakarta - Mining activities in the regency of Raja Ampat, Southwest Papua, have garnered attention due to environmental damage. Out of five mining companies, the government has revoked the mining business permit, or IUP, for four of them. PT Gag Nikel, located on Gag Island, is the only company still holding their operating permit.
The Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, claimed that PT Gag Nikel differs in legal status as they hold a working contract that has been in place since 1998. He stated that Gag Island, the mining location, is not within a conservation area.
"Gag Island is also not situated within the Raja Ampat Geopark. Its location is approximately 42 km from Piaynemo, the main tourist area, and geographically closer to North Maluku," Bahlil said during a press conference on Tuesday, June 10, 2025.
So, who owns PT Gag Nikel and is still able to mine in Raja Ampat?
According to their company page, PT Gag Nikel has its headquarters at Antam Office Building Tower B, MZ Floor, Jalan TB. Simatupang No. 1, South Jakarta. Initially, the majority of PT Gag Nikel's shares were held by Asia Pacific Nickel Pty Ltd at 75 percent and PT Aneka Tambang or PT Antam Tbk at 25 percent. However, since 2008, PT Antam Tbk has acquired all the shares of Asia Pacific Nickel Pty Ltd.
As for PT Antam Tbk, it is a state-owned mining company or BUMN. PT Antam is engaged in various mining commodities, including nickel, gold, ferro-nickel, bauxite, alumina, and coal. As a public company (Tbk), part of PT Antam's shares is owned by the government through MIND ID, the state mining BUMN holding.
At present, PT Antam is led by Achmad Ardianto as the new President Director, who replaced Nicolas D. Kanter. Achmad was appointed through the Annual General Meeting of Shareholders (RUPST) of PT Antam, held on June 12, 2025. Before being appointed as President Director, Achmad Ardianto had served as the Director of Human Resources at PT Antam since June 15, 2023.
Riri Rahayu contributed to the writing of this article.
https://en.tempo.co/read/2017810/the-controversy-of-pt-gag-nikels-mining-operation-in-raja-ampat
Seadrill (SDRL) shares surged 2.42% today, marking the seventh consecutive day of gains, with a 19.12% increase over the past week. The share price reached its highest level since February 2025, with an intraday gain of 3.06%.
The strategy of buying SDRL shares after they reached a recent high and holding for 1 week showed poor performance over the past 5 years. The annualized return was -14.8%, significantly underperforming the market. This indicates that waiting for a recent high before buying SDRL shares and holding for 1 week did not lead to favorable returns, suggesting a need for a more robust trading strategy.
Seadrill's recent stock performance can be attributed to several key factors. On May 13th, BWS Financial reiterated a "buy" rating for Seadrill, setting a target price of $80.00. This positive outlook from the financial institution likely boosted investor confidence, contributing to the stock's upward trajectory. The reiteration of the "buy" rating and the target price provided a strong signal to investors, encouraging them to buy into the company's shares.
Additionally, the company's strategic initiatives and operational improvements have been well-received by the market. Seadrill has been focusing on cost-cutting measures and enhancing operational efficiency, which has helped in improving its financial performance. These efforts have been instrumental in driving the stock price higher, as investors recognize the company's commitment to improving its bottom line.
Furthermore, the positive sentiment surrounding the offshore drilling industry has also played a role in Seadrill's stock performance. With increasing demand for oil and gas, the industry is experiencing a resurgence, and Seadrill, as a key player in the sector, is well-positioned to benefit from this trend. The company's strong market position and its ability to capitalize on industry opportunities have further bolstered investor confidence in its stock.
https://www.ainvest.com/news/seadrill-shares-soar-2-42-positive-rating-industry-trends-2506/
Peru's economy grew 1.40% year-over-year in April, driven by the important mining sector, the local statistics institute known as INEI reported on Sunday.
The April figure was below the 4.67% expansion in March.
Between January and April, the Peruvian economy grew 3.26%, compared with 2.38% growth in the same period last year, the INEI said. The economy expanded 3.62% year-over-year in the past 12 months through April, it added.
Among the main economic sectors, mining and hydrocarbons grew 8.55% year-over-year in April, while transportation and lodging and restaurants grew 4.84% and 4.64%, respectively.
The mining and hydrocarbon sector grew thanks to the positive performance of the metallic mining subsector, which increased by 10.64% as a result of higher copper and zinc production.
Peru is the world's third-largest copper producer.
The Peruvian government expects economic expansion of between 3.5% and 4% this year, which would be one of the largest growth rates in Latin America. In 2023, the Andean country grew by 3.3%.
