2025-08-27 12:05
BUDAPEST, Aug 27 (Reuters) - Crude oil shipments via the Druzhba pipeline could resume as soon as August 27 or 28, though the pipeline from Russia might not run at full capacity, Hungarian oil company MOL's (MOLB.BU) , opens new tab executive chairman told website mandiner.hu. Hungary and Slovakia said on Friday that oil supplies via the Druzhba pipeline could be suspended for at least five days after Ukraine's latest attack on Russian energy infrastructure. Sign up here. MOL's Zsolt Hernadi said in the interview on mandiner.hu that his company was able to supply its refineries from operational reserves, but may have to fall back on strategic reserves. If MOL had to increase imports via the Adriatic pipeline, it would still import Russian oil because Hungary and Slovakia were granted an exemption from sanctions, Hernadi said. He added that he was not sure that MOL would be able to import sufficient volumes of crude via the Adriatic pipeline to run both of its refineries at full capacity if shipments via Druzhba were halted entirely. If Druzhba oil flows do not resume by September 1, Slovakia will need to tap its strategic reserves and its refinery will not be allowed to export, Hernadi said, cutting Hungary's fuel imports by 20% while also affecting Ukraine. "One seventh of Ukraine's diesel needs are supplied by the refinery in Slovakia through Hungary ... and this will immediately stop," Hernadi said. https://www.reuters.com/business/energy/head-hungarys-mol-says-druzhba-oil-flows-could-resume-august-27-or-28-2025-08-27/
2025-08-27 12:00
Petrochemicals supply to exceed demand by 20-25% by 2030 South Korea to cut capacity in reponse to US tariffs China considers closing loss-making plants LONDON, Aug 27 (Reuters) - U.S. President Donald Trump's trade wars are nudging the global plastics industry toward a painful but necessary restructuring to address acute overcapacity that has kept the industry’s profits in a prolonged slump. Demand for plastics – from packaging and manufactured goods to solar panels and car parts – is expected to grow sharply in the coming decades as middle classes grow in large economies, particularly in Asia. This means more oil demand. Sign up here. Consumption of petrochemical feedstocks – oil-derived products such as naphtha, propane and ethane – accounted for 95% of total oil demand growth between 2019 and 2024. Creation of these plastics building blocks is forecast to rise by 2.1 million barrels per day between 2024 and 2030, reaching 18.4 million bpd, according to the International Energy Agency. Given this growth, petrochemicals’ share of total oil consumption is expected to increase from 15.8% in 2024 to 17.4% by 2030, offsetting declines in demand for transportation fuel. It is therefore no surprise that oil and gas majors including Exxon Mobil (XOM.N) , opens new tab, Saudi Aramco (2222.SE) , opens new tab and the UAE’s Adnoc have invested heavily in petrochemicals, betting that rising demand for feedstocks will counterbalance the impact of electric vehicles on fuel consumption. China has also ramped up domestic production to boost petrochemical self-sufficiency. In the U.S., meanwhile, there has been a surge in cheap ethane production and thus petrochemical plants thanks to the shale boom that began in the early 2010s. GROWING PAINS Rapid petrochemicals production growth since 2022 has created a severe imbalance between supply and demand, putting heavy pressure on margins. Benchmark Chinese PDH margins, known as cracks, have been deeply negative for most of the past two years. Benchmark naphtha cracks have also turned negative in Asia, Europe and the U.S. in recent months. As a result, chemical producers worldwide have suffered a collapse in earnings. South Korean petrochemical producers LG Chem and Lotte Chemical posted losses in 2024. U.S. producer Dow Inc cut its dividend last month after reporting a second-quarter loss. Dow and German rival BASF (BASFn.DE) , opens new tab both cut full-year guidance, citing added pressure from global trade wars. Unfortunately for the sector, petrochemical overcapacity is expected to worsen. Supply is projected to exceed demand by 20–25% by 2030 as new plants come online, according to the Institute for Energy Economics and Financial Analysis. In short, the industry is in need of tightening. A CRISIS NOT WASTED Trump’s tariff might do just that. South Korea’s petrochemical industry – one of its top five export sectors and the backbone of its car and electronics industries – was hit hard after Trump announced 25% tariffs on imports from the Asian country on April 2. The tariffs were delayed and later reduced to 15% after a trade deal last month, but first-half revenue from South Korean petrochemical exports to the U.S. still fell by more than a fifth year on year, ING said in a note. The South Korean government, which has long urged the sector to restructure, responded by pushing 10 companies to cut annual naphtha-cracking capacity by 2.7 to 3.7 million metric tons, roughly a quarter of the country’s annual capacity of 14.7 million tons. In Europe, the petrochemicals sector’s distress has been compounded by high energy costs since the 2022 energy crisis, prompting plant closures in France, Germany and Britain. Dow said in July it will shut three sites in Germany and the UK. The weaker demand outlook because of the trade wars only adds to the pressure on plants. Crucially, China is reportedly considering an overhaul of its vast chemicals sector, targeting closure of ageing, loss-making plants as part of an “anti-involution” campaign, a buzzword for curbing destructive competition that erodes profit. Of course, cleaning up China’s petrochemical industry is likely to face resistance from local officials and will be dwarfed by new capacity additions, but any reduction would be welcome respite to the global market. LONG PATH The rapid expansion of petrochemical capacity, especially in China, has far outpaced demand growth, creating one of the worst crises in the sector’s history. Shrinking this bloated sector – and thus boosting profits – is likely to be a long process. Shell (SHEL.L) , opens new tab CEO Wael Sawan said last month that the “incredibly long” trough in the chemicals sector could persist for some time. So while Trump’s trade policies may feel like yet another painful blow, they could serve as the wake-up call the petrochemicals industry needs. Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis. Markets are moving faster than ever. ROI can help you keep up. Follow ROI on LinkedIn and X. https://www.reuters.com/markets/commodities/trump-tariffs-force-much-needed-petrochemicals-contraction-2025-08-27/
2025-08-27 12:00
LAUNCESTON, Australia, Aug 27 (Reuters) - The United States imposed tariffs of up to 50% on imports of goods from India on Wednesday in a move that is a textbook example of a lose-lose situation for both countries, but perversely is a win for the intended target, Russia. The additional 25% tariff on top of an existing 25% levy on Indian goods imposed by U.S. President Donald Trump is ostensibly because India keeps buying Russian crude oil. Sign up here. The severe tariffs, among the highest Trump has imposed on imports from any country, are unlikely to deliver what he wants, and may actually make New Delhi more determined to keep buying Russian oil. India has increasingly turned to Russian crude after the 2022 invasion of Ukraine led Western buyers to end purchases, with Russian oil rising to about 40% of India's imports. That reliance has helped hold crude prices lower by keeping Russian oil on the global market, which would have been much tighter from a supply perspective if Moscow had been unable to sell its crude. In turn India's refiners have also benefited as they have been able to source Russian crude at prices lower than competing grades from other suppliers in the Middle East and Africa. The question is whether it is better for India to face 50% tariffs on its exports to the United States and keep buying Russian oil, or whether it would be more sensible to bend to Trump's will and cut back imports from Russia to a level acceptable to the U.S. leader. On a strict economic basis it would probably make far more sense to give in to Trump. India's imports from Russia were 1.88 million barrels per day (bpd) in the first half of 2025, according to data compiled by commodity analysts Kpler. For the purposes of a back-of-the-envelope calculation, let's assume that Russian oil is $5 a barrel cheaper than what Indian refiners would pay for alternative grades. This is actually probably more generous than what Indian refiners actually get, given the current discount between Russia's Urals crude , the main grade India buys, and global benchmark Brent futures is $3.66 a barrel. But if a $5 discount is assumed and India buys an average of around 1.9 million bpd it means refiners save about $3.5 billion a year by purchasing Russian oil. India's exports of goods to the United States were worth $87 billion in 2024, and the new tariffs are estimated by exporter groups to affect about 55% of this. Since the 50% rate is high enough to end much of the trade, India is likely giving up far more economically in losing access to the U.S. market than it gains from buying Russian oil. POLITICS TO THE FOREFRONT But the decision to keep buying Russian oil is likely to be made with politics in mind, rather than economics. It will be hard for Indian Prime Minister Narendra Modi to be seen to be bending the knee to a bullying Trump, since it would lose him political capital at home. India is also likely to see Trump's actions as inconsistent, because the U.S. leader seems happy for China to keep buying Russian oil. That is perhaps a sign that Beijing has greater leverage over its trade relationship with the United States, stemming from its dominance in production of refined critical metals and rare earths. The real risk is that the dispute between the world's biggest and fifth-largest economies escalates. The problem for Trump is that tariffs are largely a one-and-done type of pressure. Once adopted and raised to a level that destroys the trade relationship, they lose leverage. This means that if the tariffs do not work and India keeps buying Russian oil, Trump will have to work out new ways to pressure New Delhi. India is also able to exert some pressure of its own, as from a political standpoint it can draw closer to other U.S. targets, such as Brazil and China. It can halt all purchases of U.S. energy, which have been rising in recent months. India imported 234,000 bpd of U.S. crude in the first half of 2025, and third-quarter imports are already estimated at 338,000 bpd by Kpler. India also imported 11.51 million tons of U.S. coal in the first half of 2025 and 1.22 million tons of liquefied natural gas (LNG). While losing India as a market will not be enough to hurt U.S. energy exporters, it would be a sign that geopolitics risks becoming more important in energy markets than supply and demand fundamentals. Overall, Trump's tariffs on India risk having the opposite effect of what he intended, with the side consequence of driving a country that had been something of an ally into the arms of U.S. opponents. India risks losing economically from the tariffs and also may face further action from the United States. The only real winner is Russian President Vladimir Putin, who keeps selling oil to India and has the added bonus of seeing the relationship between the United States and India crumble, a factor that works in his favour. Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI can help you keep up. Follow ROI on LinkedIn , opens new tab and X , opens new tab. The views expressed here are those of the author, a columnist for Reuters. https://www.reuters.com/markets/commodities/india-us-lose-trump-tariffs-russia-wins-2025-08-27/
2025-08-27 11:56
DUBAI, Aug 27 (Reuters) - UN nuclear inspectors have returned to Iran for the first time since it suspended cooperation with them in the wake of Israel's attacks on its nuclear sites, Iranian state media reported on Wednesday. Iranian Foreign Minister Abbas Araqchi told lawmakers Tehran had still not reached an agreement on how it would resume full work with the UN's IAEA watchdog, parliament news agency ICANA reported. Sign up here. But he said the inspectors would supervise the changing of fuel at Iran's Bushehr nuclear power plant, according to the report. Araqchi's comments come a day after Iran met with France, Britain and Germany to try to revive negotiations over its nuclear programme - which Western powers say is aimed at developing a bomb, but it says is focused on civilian projects. Iran has said it needs a new cooperation agreement with the International Atomic Energy Agency after the 12-day air war in June with Israel that was shortly joined by the United States. The Iranian parliament passed legislation in June suspending cooperation with the IAEA and stipulating that any future inspections will need a green light from Tehran's Supreme National Security Council. That Council had approved the visit by the inspectors, but "no draft for a new cooperation modality with the IAEA has been finalised or approved," Araqchi said according to ICANA. "The changing of the fuel of Bushehr nuclear reactor has to be done under the supervision of inspectors of the international agency," he added. IAEA chief Rafael Grossi told Fox News on Tuesday that "the first team of IAEA inspectors is back in Iran," but that the agency was still discussing how to resume inspections. After the June attacks, Iran argued the sites were no longer safe for inspectors. https://www.reuters.com/world/middle-east/un-nuclear-watchdog-back-iran-no-deal-yet-inspections-2025-08-27/
2025-08-27 11:55
WARSAW, Aug 27 (Reuters) - Poland will "radically increase" wind power capacity despite last week's decision by President Karol Nawrocki to veto a bill aimed at easing rules for building onshore wind farms, Prime Minister Donald Tusk said on Wednesday. The vetoed bill would have cut the distance required between planned installations and residential locations. Sign up here. "We will radically increase onshore wind capacity because this is the cheapest source of electricity," Tusk told reporters. He said the government was working on a resolution to allow more efficient wind turbines to be installed at existing wind farms. Government resolutions do not require legislative backing by parliament and so are not subject to presidential approval. Renewable energy production has been increasing in Poland at the expense of coal-fired power, though the latter still dominates the mix. In 2024, nearly 30% of Polish electricity was generated from renewable sources. https://www.reuters.com/business/energy/poland-boost-wind-capacity-despite-presidential-veto-pm-says-2025-08-27/
2025-08-27 11:55
Investors await Nvidia earnings for direction on AI trade Orsted and Novo Nordisk shares rebound Porsche seeks new CEO as Blume focuses on Volkswagen role German consumer sentiment expected to decline for third month Aug 27 (Reuters) - European shares edged higher on Wednesday, recovering from their largest drop in nearly a month, as investors bought the dip, keeping an eye on political risks in France and awaiting earnings from artificial intelligence behemoth Nvidia for cues. The pan-European STOXX 600 index (.STOXX) , opens new tab rose 0.4% by 0707 GMT. Sign up here. France's CAC 40 (.FCHI) , opens new tab gained 0.4%, following a three-week low hit in the previous session after concerns over a potential collapse of Prime Minister Francois Bayrou's government next month sparked a selloff in French assets. The more domestically exposed mid-cap stocks (.CACMD) , opens new tab were nearly flat, with banking giants BNP Paribas and Societe Generale extending slim losses to a third straight session. Three main opposition parties said on Monday they would not back Bayrou in a confidence vote, which he announced for September 8, over his plans for sweeping budget cuts. If the government falls, President Emmanuel Macron could name a new prime minister immediately or ask Bayrou to stay on as head of a caretaker government. He could also call a snap election. "A lot has already been priced in, especially for domestic names ... French banks, utilities, business services but I would expect uncertainty to remain for the next few weeks and that will be an overhang on French equities," said Christophe Hautin, equity portfolio manager at Allianz Global Investors. "As soon as we have clarity on the no-confidence vote, there could be some buying opportunities in the banking sector." Stock indexes in Germany (.GDAXI) , opens new tab, Italy (.FTMIB) , opens new tab and Spain (.IBEX) , opens new tab added between 0.1% and 0.3%. Investors are awaiting earnings from Nvidia (NVDA.O) , opens new tab, the world's most valuable company, later in the day for fresh cues on the AI trade, after a blistering rally in technology stocks hit a speed bump in August. Shares of Orsted (ORSTED.CO) , opens new tab and Novo Nordisk (NOVOb.CO) , opens new tab, which have lagged this week, climbed 3.5% and 2%, respectively. Porsche London-listed shares of Rio Tinto (RIO.L) , opens new tab rose nearly 1% after the Anglo-Australian miner said it will streamline operations into three business units, Iron Ore, Aluminium & Lithium, and Copper. Meanwhile, a survey on Wednesday showed sentiment among German consumers is expected to fall for the third time in a row in September, with households' growing concerns about possible job loss and uncertainty about inflation weighing on the mood. https://www.reuters.com/markets/europe/european-shares-rise-after-selloff-focus-shifts-nvidia-results-2025-08-27/
