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Oil Extends Climb on Fears of Escalating Iran Tensions

This image shows oil rigs in Cabimas, south of Lake Maracaibo, Zulia State, Venezuela, on January 31, 2026. (AFP)
This image shows oil rigs in Cabimas, south of Lake Maracaibo, Zulia State, Venezuela, on January 31, 2026. (AFP)
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Oil Extends Climb on Fears of Escalating Iran Tensions

This image shows oil rigs in Cabimas, south of Lake Maracaibo, Zulia State, Venezuela, on January 31, 2026. (AFP)
This image shows oil rigs in Cabimas, south of Lake Maracaibo, Zulia State, Venezuela, on January 31, 2026. (AFP)

Oil prices extended gains on Wednesday after the US shot down ​an Iranian drone and armed Iranian boats approached a US-flagged vessel in the Strait of Hormuz, rekindling fears of an escalation in tensions between Washington and Tehran.

Brent crude futures were up 56 cents, or 0.8%, at $67.89 per barrel at 0400 GMT. US West Texas Intermediate crude was up 63 cents, or 1.0%, at $63.84 per barrel.

Both benchmarks rose nearly 2% on Tuesday, as investors monitored developments between the US and Iran.

"Uncertainty about how these talks will play out ‌means the market will ‌likely continue to price in some risk ‌premium," said ⁠ING ​commodity strategists ‌on Wednesday.

The US military on Tuesday shot down an Iranian drone that "aggressively" approached the Abraham Lincoln aircraft carrier in the Arabian Sea, the US military said, in an incident first reported by Reuters.

Separately, in the Strait of Hormuz between the Arabian Gulf and the Gulf of Oman, a group of Iranian gunboats approached a US-flagged tanker north of Oman, maritime sources and a security consultancy said on Tuesday.

Meanwhile, Tehran ⁠is demanding that its talks with the US this week be held in Oman not Türkiye, and ‌that the scope be narrowed to two-way negotiations on ‍nuclear issues only, casting doubt on ‍whether the meeting will proceed as planned.

"Heightened tensions in the Middle East ‍provided support to the oil market," said Satoru Yoshida, a commodity analyst with Rakuten Securities.

OPEC members Saudi Arabia, Iran, the United Arab Emirates, Kuwait and Iraq export most of their crude via the Strait of Hormuz, mainly to Asia. Iran was the third-biggest OPEC ​crude producer in 2025, according to US Energy Information Administration data.

Oil prices also found support from industry data showing a sharp drop in US ⁠crude stockpiles. Inventories in the top producing and consuming nation fell over 11 million barrels last week, sources said, citing American Petroleum Institute figures.

Official data from the US Energy Information Administration is due on Wednesday at 10:30 a.m. EST (1530 GMT). Analysts polled by Reuters were expecting a rise in crude inventories.

On Tuesday, oil prices were also buoyed by a trade agreement between the US and India that raised hopes of stronger global energy demand, while continued Russian attacks on Ukraine added to concerns that Moscow's oil would remain sanctioned for longer.

"India's trade agreement with the US to halt purchases of Russian crude, along with the ongoing Russia-Ukraine war, is also providing support," ‌Yoshida said, projecting that WTI would likely continue to trade around $65 a barrel for now.

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Business

Australia Secures Jet Fuel from China to Keep Flying in Energy Squeeze

13 May 2026, Australia, Canberra: Australian Prime Minister Anthony Albanese is interviewed on morning television after delivering the 2026-27 Federal Budget in the House of Representatives at Parliament House in Canberra. (dpa)
13 May 2026, Australia, Canberra: Australian Prime Minister Anthony Albanese is interviewed on morning television after delivering the 2026-27 Federal Budget in the House of Representatives at Parliament House in Canberra. (dpa)
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Australia Secures Jet Fuel from China to Keep Flying in Energy Squeeze

13 May 2026, Australia, Canberra: Australian Prime Minister Anthony Albanese is interviewed on morning television after delivering the 2026-27 Federal Budget in the House of Representatives at Parliament House in Canberra. (dpa)
13 May 2026, Australia, Canberra: Australian Prime Minister Anthony Albanese is interviewed on morning television after delivering the 2026-27 Federal Budget in the House of Representatives at Parliament House in Canberra. (dpa)

Australia has secured three shipments of jet fuel from China totaling 600,000 barrels, Prime Minister Anthony Albanese said Tuesday, doubling the national supply.

The Middle East conflict and closure of the Strait of Hormuz have caused fuel prices to soar and left many Asia-Pacific nations facing an energy crisis.

Tourism and freight exports in the island continent are reliant on air travel, a sector heavily impacted by the climbing prices.

The jet fuel shipments are expected to arrive in June and follow talks between Albanese and Chinese Premier Li Qiang on energy security last month.

China supplied a third of Australia's aviation fuel last year and is a major importer of Australian iron ore, coal and liquefied natural gas (LNG).

Canberra has highlighted to Beijing that jet fuel supports the Australian resources sector, officials said.

Australia's Trade Minister Don Farrell is expected to meet his Chinese counterpart Wang Wentao in Suzhou this week on the sidelines of an APEC trade ministers meeting in the Chinese city.

Trade between Australia and China reached Au$326 billion ($233 billion) last year, dominated by Australian commodities exports.

Farrell is expected to arrive in Tokyo on Tuesday, to discuss energy security and trade.

Japan is another major buyer of Australian LNG and coal.

Australia said this month it will reserve the equivalent of 20 percent of gas exports for the domestic market to avoid supply shortfalls.

Business

Hormuz Crisis Saddles Global Companies with $25 Billion Bill

Oil/Chemical Tanker "Bald Man" at the Port of Fujairah, as the US-Israel conflict with Iran limits marine traffic in the Strait of Hormuz, in Fujairah, United Arab Emirates, May 6, 2026. (Reuters)
Oil/Chemical Tanker "Bald Man" at the Port of Fujairah, as the US-Israel conflict with Iran limits marine traffic in the Strait of Hormuz, in Fujairah, United Arab Emirates, May 6, 2026. (Reuters)
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Hormuz Crisis Saddles Global Companies with $25 Billion Bill

Oil/Chemical Tanker "Bald Man" at the Port of Fujairah, as the US-Israel conflict with Iran limits marine traffic in the Strait of Hormuz, in Fujairah, United Arab Emirates, May 6, 2026. (Reuters)
Oil/Chemical Tanker "Bald Man" at the Port of Fujairah, as the US-Israel conflict with Iran limits marine traffic in the Strait of Hormuz, in Fujairah, United Arab Emirates, May 6, 2026. (Reuters)

The US-Israeli war with Iran has already cost companies around the world at least $25 billion - and the bill is climbing, according to a Reuters analysis.

A review of corporate statements since the start of the conflict by companies listed in the United States, Europe and Asia offers a sobering look at the fallout.

Businesses are grappling with soaring energy prices, fractured supply ‌chains and trade routes severed by Iran's chokehold on the Strait of Hormuz.

At least 279 companies have cited the war as a trigger for defensive actions to blunt the financial hit, including price increases and production cuts, the analysis shows.

Others have suspended dividends or buybacks, furloughed staff, added fuel surcharges, or sought emergency government assistance.

“This level of industry decline is similar to what we have observed during the global financial crisis in 2008, and even higher than during other recessionary periods,” Whirlpool CEO Marc Bitzer told analysts after it slashed its full-year forecast in half and suspended its dividend.

As growth slows, pricing power will weaken and fixed costs will become harder to absorb, analysts say, threatening profit margins ⁠in the second quarter and beyond. Sustained price hikes are likely to fuel inflation, hurting already-fragile consumer confidence.

“Consumers are holding back on replacing products and rather repairing them,” Bitzer said.

The appliance maker is not alone. Companies including Procter & Gamble, Malaysia’s Karex company and Toyota have warned of the mounting toll as the conflict enters its third month.

Iran's blockade of the Strait of Hormuz - the world's most critical energy chokepoint - has pushed oil prices above $100 a barrel, more than 50% higher than before the war.

The closure has driven up shipping costs, squeezed supplies of raw materials and cut off trade routes vital to the flow of goods. Supplies of fertilizers, helium, aluminum, polyethylene and other key inputs have been hit.

One-fifth of companies in the review, which make everything from cosmetics to tires and detergent, to cruise operators and airlines, have flagged a financial hit due to the war.

A majority were based in the UK and Europe, where energy costs were already elevated, while almost a third were from Asia, reflecting those regions' deep reliance on Middle Eastern oil and fuel products.

To put the tally into context, hundreds of companies by October last year had flagged more than $35 billion in costs from US President Donald Trump’s 2025 tariffs.

Airlines account for the biggest share of quantified war-related costs, representing nearly $15 billion, with jet fuel prices having nearly doubled.

Sounding the alarm

As the bottleneck drags on, more companies from other industries are sounding the alarm. Japan's Toyota warned of a $4.3 billion hit while P&G estimated a $1 billion ‌post-tax profit ⁠blow.

Fast-food giant McDonald's said earlier this month it expected higher long-term cost inflation from ongoing supply-chain disruptions, the kind of assessment that until recently had been confined to industrial earnings calls.

The surge in fuel prices is hurting lower-income consumer demand, CEO Chris Kempczinski said, adding that “elevated gas prices are the core issue we're seeing right now.”

Nearly 40 companies in the industrials, chemicals, and materials industries have said they would raise prices due to their exposure to Middle Eastern petrochemical supply.

Newell Brands Chief Financial Officer Mark Erceg said earlier this month that every $5 rise in per-barrel oil prices adds about $5 million in costs.

German tiremaker Continental expects a hit of at least 100 million euros ($117 million) from the second quarter due to surging oil prices making raw materials more expensive.

Continental executive Roland Welzbacher said earlier this month that it would take three to ⁠four months before affecting the company's profit-and-loss statement. “It probably hits us late in Q2, and then it will come in full-blown in the second half,” he said.

Corporate profits have been buoyant through the first quarter, part of why major indexes like the S&P 500 have managed to scale new highs even as energy costs bite and bond yields rise on inflation-led worries.

Since March 31, second-quarter net profit margin forecasts have been cut by 0.38 percentage points for S&P 500 industrials, 0.14 percentage points for consumer discretionary companies and 0.08 ⁠percentage points for consumer staples, FactSet data show.

European STOXX 600-listed companies will face margin pressure beginning in the second quarter, as it will become harder to pass through extra costs and as protection from hedging expires, Goldman Sachs analysts said.

Consumer-facing sectors including autos, telecoms, and household products are seeing negative revisions of more than 5% for the next 12 months, Gerry Fowler, UBS head of European equity strategy, said.

In Japan, analysts have halved estimates for second-quarter earnings growth to 11.8% since the end of March.

“The ⁠true earnings hit has not yet materialized in most companies' results,” said Rami Sarafa, CEO of Cordoba Advisory Partners.

Business

Under Trump Pressure, EU Eyes Deal to End Trade Standoff

US President Donald Trump and EU chief Ursula von der Leyen sealed the deal in Turnberry, Scotland last year. Brendan SMIALOWSKI / AFP/File
US President Donald Trump and EU chief Ursula von der Leyen sealed the deal in Turnberry, Scotland last year. Brendan SMIALOWSKI / AFP/File
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Under Trump Pressure, EU Eyes Deal to End Trade Standoff

US President Donald Trump and EU chief Ursula von der Leyen sealed the deal in Turnberry, Scotland last year. Brendan SMIALOWSKI / AFP/File
US President Donald Trump and EU chief Ursula von der Leyen sealed the deal in Turnberry, Scotland last year. Brendan SMIALOWSKI / AFP/File

The EU hopes Tuesday to strike a deal towards implementing its nearly year-old trade pact with the United States -- with an increasingly impatient Donald Trump threatening steep new tariffs unless it is done by July 4.

The 27-nation bloc struck an accord with Washington last July setting levies on most European goods at 15 percent, but to the US president's frustration a final version of the text still needs nailing down on the EU side, AFP said.

"A deal is a deal," the US mission to the EU posted on X Monday, saying the bloc "must live up" to the agreement sealed in Turnberry, Scotland, between Trump and EU chief Ursula von der Leyen.

Negotiators from the EU's parliament and capitals will meet Tuesday night in Strasbourg to push for a compromise that would allow the bloc to meet Trump's deadline and hopefully turn the page on more than a year of transatlantic trade battles.

Short of that, Trump has warned the EU should expect "much higher" tariffs -- and has already vowed to raise duties on European cars and trucks from 15 to 25 percent.

The tariff blitz unleashed by Trump before the Turnberry accord, including hefty levies on steel, aluminium and car parts, jolted the bloc into cultivating trade ties around the world.

But the EU cannot afford to neglect the 1.6-trillion-euro ($1.9-trillion) relationship with the United States, its largest trade partner.

Cyprus, which holds the rotating presidency of the EU, said its goal "remains, the swift implementation of the EU-US joint statement".

To reach a compromise with member states, parliament is under pressure to renege on several amendments it added to the text in March which the Americans consider unacceptable.

The head of parliament's trade committee, Bernd Lange, struck an optimistic note, saying the sides had "already made a lot of progress".

"I hope we can reach a compromise, including new propositions," Lange said.

But first, he needs to hammer out a common stance between the parliament's different factions, which looked set to keep haggling until the last moment.

- 'Sunrise' to 'sunset' -

The EU parliament's conditional green light came after months of delay caused by Trump's designs on Greenland and a US Supreme Court ruling striking down many of the president's levies.

The assembly's largest force, the conservative European People's Party to which von der Leyen belongs, is now pushing hard to implement an accord it says is vital to ending a period of damaging uncertainty for EU businesses.

EPP lawmaker Zeljana Zovko told AFP she was "confident that we will get it done".

The EPP has firm support from the hard-right ECR party, whose shadow rapporteur on the file, Kris Van Dijck, also said he was "cautiously optimistic".

But several political groups had yet to make their position public as of Monday night, and it remained unclear how far the majority would compromise to get a deal.

Lawmaker Kathleen Van Brempt of the Socialists and Democrats, parliament's second-biggest group, said they would "engage constructively" but fight for safeguards "to guarantee stability, predictability and protection for European businesses and workers".

One bone of contention is a suspension clause toughened by parliament that would scrap favorable tariff conditions for US exporters, should the United States later breach the terms of the deal.

Another concerns so-called "sunrise" and "sunset" clauses under which the EU side of the accord would kick in once the United States makes fully good on its pledges, and would expire unless renewed in 2028.

Green lawmaker Anna Cavazzini said "the odds are good" but warned member states would need to "budge" on parliament's main priorities.

"These past weeks have shown time and again that Trump is not to be trusted, so the EU needs stronger tools at hand," she said.