2025-06-30 06:10

SYDNEY, June 30 (Reuters) - The Australian government said on Monday it will consider creating a gas reservation on the country's east coast as part of a sweeping review of market rules to prevent supply shortages. The competition regulator has warned of looming shortfalls for the country's populous east coast, with the latest forecast pointing to a gap by 2028 without new investment. Most reserves are located in the remote northwest. Sign up here. Australia, which exports more gas than it consumes, is also keen to maintain its reputation as a major reliable exporter of liquefied natural gas (LNG) and that will be a major aim of the review. Market regulations under review include export controls, a mandatory code governing sales of the fuel on the east coast and government agreements with major producers. "It's critical that we use this review to get the settings right in our gas market, ensuring we are securing affordable Australian gas for Australian use, while remaining a reliable energy exporter and delivering lasting energy security in our region," Climate Change and Energy Minister Chris Bowen said in a statement. Prime Minister Anthony Albanese's centre left government sees gas as playing a role beyond 2050 as the country moves rapidly away from its dependence on coal-fired power stations. The review will examine the "effectiveness and coherence" of the current rules, identify improvements and consider consolidating rules to create a more "stable regulatory environment" for investors. Areas of focus include supply security, pricing, transparency, market conduct, and the impact of regulations on the competitiveness of Australia's LNG export industry. Speaking about the potential for a gas reservation, Bowen told a news conference that any new requirements would be "prospective" without "ripping up existing contracts". Some of the government's policies have come under fire from industry players. In particular, it introduced caps on wholesale prices in 2022 to keep energy prices down in the wake of Russia's war on Ukraine. The price cap has since been incorporated into the mandatory industry code of conduct. Japanese LNG importers, some of Australia's biggest customers, have told Reuters that the Labor government's policies have increased supply uncertainty and hiked costs at gas facilities in which they have stakes. Major gas producers, including Shell (SHEL.L) , opens new tab, which exports gas from the Queensland Curtis LNG project, and ExxonMobil (XOM.N) , opens new tab, which produces gas in the Bass Strait, have also been critical. https://www.reuters.com/business/energy/australia-considers-gas-reservation-east-coast-sweeping-review-market-rules-2025-06-30/

2025-06-30 06:06

Israel halted gas exports to Egypt after start of war with Iran Exports were resumed on June 23, but highlight Egypt's gas supply challenges Egypt gas production declined sharply in recent years, unlikely to recover soon LONDON, June 30 - Egypt was one of the biggest economic losers of the Middle East's 12-day war after Israel shut down vital natural gas exports to its neighbour. The gas pipeline linking the two countries was turned back on after Israel and Iran agreed to U.S. President Donald Trump's ceasefire on June 23, but the episode highlights Egypt's vulnerability and fading hopes that the Eastern Mediterranean could become a major gas exporting region. Sign up here. The discovery and development of enormous offshore gas resources near Egypt, Israel and Cyprus in the 2000s has radically transformed the region's energy landscape, turning the region into a major production hub and attracting international energy companies. The surge in production was a huge boon for Egypt in particular. The discovery in 2015 of the Zohr field, the biggest gas deposit in the eastern Mediterranean, and its rapid development by 2017 offered Egypt critical energy for its domestic market as well as vital income from exports of liquefied natural gas (LNG), which reached 7 million tons in 2022, nearly 2% of global supply, according to data from analytics firm Kpler. But things started to go awry for Egypt early this decade when production began declining rapidly, particularly in the flagship Zohr field. The country's output dropped from a peak of over 6 billion cubic feet per day (bcf/d) in early 2021 to 3.5 bcf/d by April 2025, according to JODI data. Production is expected to average 4.4 to 4.6 bcf/d this year, according to Martin Sherriff, an analyst at consultancy Welligence Energy Analytics. It is, however, unlikely to increase significantly in the coming years given the country’s limited offshore gas exploration success in recent years, he added. Egypt's energy woes were compounded by the rapid growth in its population from 100 million in 2015 to 115 million by 2023. With domestic production insufficient to meet the population's needs, Egypt in 2020 started to import gas from Israel, which had also saw a surge in gas production last decade following the discovery of a number of big offshore resources. Israel's production rose by over 70% in the decade to 2024 to 2.5 bcf/d, with around half of the volume exported to neighbouring Egypt and Jordan, according to government data. The sharp production decline also led Egypt to resume LNG imports in 2024 for the first time since 2018. Egypt is expected to import up to 160 LNG cargoes this year and next at far higher prices than what it can produce domestically or import from Israel, where export pipelines are already at full capacity. WAR CASUALTY The recent war between Israel and Iran put a harsh spotlight on Egypt's energy vulnerability. Israel and Egypt, neighbouring countries who signed a peace agreement in 1979 after decades of intermittent conflict, saw their inter-dependency tighten significantly as the gas trade between them developed. These gas flows were largely uninterrupted following the outbreak of violence in the region on October 7, 2023. But that changed on June 13 when Israel halted operations at two of its three offshore gas fields, Leviathan and Karish, hours after it launched a surprise wave of airstrikes against Iran, leading to the suspension of natural gas exports. Egypt imported over 0.9 bcf/d from Israel in the first four months of 2025, around 17% of the former's gross observed consumption, according to Jodi data. So the drop in Israel gas deliveries just as demand for power was nearing its summer demand peak threatened to deal a harsh blow to Egypt's economy. Egyptian fertilizers producers were forced to shut down operations as part of a government emergency plan to deal with the drop in Israeli gas supplies. The country's power plants ramped up the use of fuel oil to the maximum level while others switched to diesel to protect the stability of the grid in a country that has experienced huge blackouts in recent years. A back of the envelope calculation suggested that for each week of disruption to Israeli gas imports, Egypt would have needed to buy an extra two LNG cargoes or find alternative fuel sources. RISING RELIANCE Thankfully for Cairo, Israel resumed gas exports to Egypt on June 25. But this hardly solves Egypt's underlying problems. It is true that energy majors including BP, Exxon Mobil, Shell and Chevron continue to explore for new gas resources in Egypt, which, if located, could help offset the natural decline in its current fields. Israeli gas exports to Egypt could increase when the Chevron-operated Leviathan field expands production to 14 bcm in 2026 from 12 bcm today, although delays in the expansion of pipeline capacity between the two countries could impede that expansion. But, for now, the country's natural gas production faces a grim outlook. Meanwhile, the nation is also struggling with sluggish growth and a significant loss of revenue from Suez Canal transit fees, as many ship operators have diverted vessels away from the Red Sea due to attacks by Iran-backed Houthi rebels in Yemen since 2023. And taking a broader regional perspective, the decline of Egypt's gas industry is dashing hopes that the Eastern Mediterranean will become a major LNG exporting hub in the coming years. Enjoying this column? Check out Reuters Open Interest (ROI), , opens new tabyour essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis. Markets are moving faster than ever. ROI , opens new tab can help you keep up. Follow ROI on LinkedIn , opens new tab and X. , opens new tab https://www.reuters.com/markets/commodities/mideast-war-highlights-egypts-energy-weak-spot-2025-06-30/

2025-06-30 05:57

ISTANBUL, June 30 (Reuters) - Firefighters in Turkey are battling wildfires for a second day raging in the western province of Izmir fanned by strong winds, the forestry minister and local media said on Monday Wildfires in Kuyucak and Doganbey areas of Izmir were fanned overnight by winds reaching 40-50 kph (25-30 mph) and four villages and two neighbourhoods had been evacuated, Forestry Minister Ibrahim Yumakli said. Sign up here. Helicopters, fire extinguishing aircrafts and other vehicles, and more than a thousand people were trying to extinguish the fires, Yumakli told reporters in Izmir. Media footage showed teams using tractors with water trailers and helicopters carrying water, as smoke billowed over hills marked with charred trees. Turkey's coastal regions have in recent years been ravaged by wildfires, as summers have become hotter and drier, which scientists relate to climate change. https://www.reuters.com/business/environment/firefighters-turkey-battle-contain-wildfires-second-day-2025-06-30/

2025-06-30 05:17

LAUNCESTON, Australia, June 30 (Reuters) - For decades, coal was the bedrock of Australia's commodity exports before it lost its top status to iron ore as shipments of the steel raw material to China soared. Now coal is at risk of being surpassed by gold. Sign up here. The latest quarterly report from the Australian government's commodity forecaster shows that earnings from exports of the precious metal are expected to rise to A$56 billion ($36.6 billion) in the fiscal year starting July 1. This is higher than the A$39 billion forecast for metallurgical coal and the A$28 billion for thermal coal, according to data released on Monday by the Department of Industry, Science and Resources. Of course, putting the two types of coal together brings a combined total of A$67 billion for expected export earnings in 2025-26, which is still higher than the forecast for gold. But here is where it gets interesting. By the 2026-27 fiscal year, it's quite possible that gold could overtake the combined total for metallurgical coal, used to make steel, and thermal coal, used mainly for power generation. The government expects gold exports to rise to 313 metric tons in 2026-27 from 289 tons in 2025-26 and 250 tons in 2024-25. This would cement Australia's status as the world's biggest net exporter of gold and the third-largest producer. However, the department has been cautious in its price forecast for gold, expecting it to retreat to $2,825 an ounce for 2026-27, down from $3,200 for 2025-26, which is in turn below the current spot price of around $3,273. The government forecaster is traditionally conservative in its price forecasts for commodities and an average of $2,825 for 2026-27 would be at the bottom end of the range expected by most analysts. It's possible that gold will continue its 29% rally since the November election of Donald Trump to a second term as U.S. president, which has seen a range of policies implemented and planned that are viewed as bullish for the precious metal. These include tax and spending policies that would dramatically increase the government fiscal deficit, putting pressure on U.S. Treasuries as a store of value. The sweeping tax cut and spending bill proposed is edging closer to being passed by the Republican-controlled Senate and House of Representatives, and if successfully signed into law it is estimated by the non-partisan Congressional Budget Office that it would add $3.3 trillion to U.S. debt over a decade. There is also considerable uncertainty over Trump's trade and tariff policies, with his early July deadline looming for the United States to reach deals with dozens of major trading partners. Even if deals are reached and they impose lower tariffs than Trump announced in April, it is still likely that imports into the United States will face far higher taxes than they did under former President Joe Biden and during Trump's first term. This adds a positive backdrop to gold as investors are likely to seek alternatives to U.S. Treasuries and other assets, with both investor and central bank buying expected to remain strong. PRICE ASSUMPTIONS If a more optimistic price is assumed for gold in 2026-27 of $4,000 an ounce, it would yield export revenue of A$61.6 billion, using the current Australian dollar exchange rate to the U.S. currency. That would still be below the government's forecast of a combined A$67 billion for both coal types, but unlike gold the price forecasts for coal may be too optimistic given the likely dynamics in the seaborne market. The government forecast expects metallurgical coal to average $201 a ton in 2026-27 and Newcastle Port benchmark thermal coal $110. Metallurgical coal contracts on the Singapore Exchange ended at $178.50 a ton on June 27, while globalCOAL assessed Newcastle thermal coal at $108.87 in the week to June 27, with both prices being close to recent four-year lows. This means that the government is expecting the prices of both types of coal to increase slightly in coming years, which would require seaborne demand in major Asian markets such as China, India, Japan and South Korea to at least hold steady, if not improve. China and India, the two largest coal producers and importers, are seeking to boost domestic output and lower imports, which may limit their seaborne imports. Japan and South Korea are seeking to use cleaner fuels such as liquefied natural gas, which may also end up being cost competitive with coal given the flood of new capacity expected to hit the market by 2027. If gold maintains its current uptrend and seaborne coal continues to come under pressure, then it is quite possible that gold overtakes coal as Australia's second-biggest commodity export by 2026-27. 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/coal-used-be-australias-commodity-export-king-gold-is-coming-russell-2025-06-30/

2025-06-30 04:32

A look at the day ahead in European and global markets from Wayne Cole. It was already a risk-on start to the week in Asia when news broke trade talks between the United States and Canada were back on after Prime Minister Carney agreed to rescind a digital tax as demanded by President Trump. The new deadline for this effort is July 21, extending Trump's original July 9 date. Sign up here. The latter looks like being extended for other talks as well, with Treasury Secretary Bessent last week suggesting they might be done by the September 1 Labor Day holiday. Wall Street futures are up around 0.4% at record highs as investors pile into mega caps for the new quarter, while European and German stock futures firmed around 0.3%. Most Asian markets are also in the black, helped by a further decline in oil prices as the Mideast ceasefire holds. Investors are keeping a wary eye on the progress of a huge U.S. tax-cutting and spending bill slowly making its way through the Senate, with signs it may not make it by Trump's preferred July 4 deadline. Stalling for time, the Democrats are making clerks read out every line in the 940-page bill, likely making them the only ones who know what's in it. The Congressional Budget Office estimates the bill will add $3.3 trillion to the nation's debt over a decade, a further test of foreign appetite for U.S. Treasuries and another blow to the cause of U.S. exceptionalism. The impact has been most evident in the dollar, with the euro clocking gains of 1.7% last week. James Reilly, an analyst at Capital Economics, noted the dollar had fallen by more at this stage in the year than in any previous year since the U.S. moved to a free-floating exchange rate in 1973. That slide must be pressuring foreign investors to hedge their dollar exposure, which creates yet more selling in a bearish cycle for the currency. Neither has it been helped by investors ratcheting up expectations for Federal Reserve policy easing to 65 basis points for the rest of the year. A July move is still an outside chance, though that might change if the payrolls report on Thursday springs a downside surprise. In particular, a rise in the jobless rate above 4.3% would take it to levels not seen since late 2021 and would surely ring alarm bells at the Fed. Key developments that could influence markets on Monday: - European Central Bank forum in Sintra, Portugal, begins - German, Italian CPI data - Fed's Bostic and Goolsbee speak https://www.reuters.com/world/china/global-markets-view-europe-2025-06-30/

2025-06-30 04:02

JAKARTA, June 30 (Reuters) - Indonesia has offered the United States the chance to jointly invest in a critical minerals project as part of its tariff negotiations with Washington, its senior economic minister said on Monday Indonesia's sovereign fund Danantara Indonesia will be involved in the project being offered, minister Airlangga Hartarto added. Sign up here. https://www.reuters.com/world/asia-pacific/indonesia-offers-us-opportunity-critical-minerals-joint-investment-part-tariff-2025-06-30/