Aramco warns of oil market ‘catastrophe’ unless strait of Hormuz reopens soon
Saudi Arabia’s state oil company has warned of “catastrophic consequences” for the world’s oil markets if the US-Israeli war with Iran continues to block shipping in the strait of Hormuz,The world’s biggest oil exporter expects to be able to supply the market with about 70% of its usual crude output despite the stranglehold on the vital trade artery, but its chief executive warned that there would still be “drastic” consequences for the world economy if the disruption continued,Oil shipments from the Middle East have been blocked from passing through the narrow waterway since the US strikes on Iran 11 days ago, erasing about 20m barrels of oil from the global market every day,Despite the warning, oil prices fell on Tuesday after Donald Trump suggested the war could end “very soon”,The price of a barrel of Brent crude, the international benchmark, was down 14% on Tuesday evening, at about $85.
That was still well above the $72 a barrel before the US-Israel attacks on Iran, but lower than the peak of $119 this week, which was the highest price since 2022, when Russia invaded Ukraine, raising fears for the global economy.Markets on both sides of the Atlantic also staged a partial relief rally.The FTSE 100 in London rose 1.6% on Tuesday, Germany’s DAX was up 2.4% and France’s CAC rose 1.
8%.US markets were also trading higher in early afternoon trading on Wall Street.Amin Nasser, the chief executive of Aramco, said: “While we have faced disruptions in the past, this one by far is the biggest crisis the region’s oil and gas industry has faced.”Aramco has been unable to ship crude cargoes out of the Gulf owing to the disruption, but it hopes to meet customer demands by flowing crude through the east-west pipeline to the Red Sea port of Yanbu, from where it could be shipped to buyers.The company plans to increase shipments through the pipeline to reach its full capacity of 7m barrels a day in the next couple of days, it said.
About 2m barrels a day will be sent to Saudi Arabia’s refineries in the west of the country, leaving 5m barrels a day for the global crude market.This represents about 70% of the kingdom’s usual exports.Typically, about 100 tankers a day pass through the narrow waterway lying south of Iran, but the number has dwindled to single digits after the Islamic Revolutionary Guard Corps threatened to “set ablaze” any vessel using the trade route, which carries a fifth of the world’s oil and liquefied natural gas.Aramco said that it was now meeting most of its customers’ needs, partly by tapping crude held in storage outside the Gulf region.Nasser said these stores could not be used for “an extended period of time, but for the time being, we are capitalising on it”.
He said: “There would be catastrophic consequences for the world’s oil markets, and the longer the disruption goes on … the more drastic the consequences for the global economy,”G7 leaders on Tuesday called on the world’s energy watchdog to prepare scenarios for the release of emergency oil stockpiles to help cool the markets after historic market price gains recorded in recent days,However, the bloc stopped short of giving the green light to a stock release, which has happened on only five occasions in the history of the market,The International Energy Agency (IEA), which was set up after the Middle East oil crisis in the 1970s, requires its 32 member countries to hold at least 90 days of emergency crude supplies in reserve so they can be released to the market in the event of a supply shock,In total, IEA members hold more than 1.
2bn barrels of public oil reserves, and a further 600m barrels of industry stocks held under government obligation,In addition, China is estimated to have record-high levels of crude in storage,The world’s biggest energy importer, which is not a member of the IEA, may have up to 1,4bn barrels of oil in reserves,The hope that global leaders may be inching towards an intervention to temper the oil market volatility helped prices ease from the four-year highs earlier this week.
The price of Brent crude fell to just below $90 a barrel by the end of the trading day.
Farage delivers energy sermon at the pump – just don’t mention the war
Let’s try to look on the bright side. At least Nigel Farage wasn’t personally out of pocket. There again, he seldom is. The whole point of being Nige is to never pay for anything if you can help it. Unless you fancy buying a few shares in Kwasi Kwarteng’s “get rich quick” crypto scheme
Lammy defends jury reforms against claims they will worsen racial bias in legal system – as it happened
As we have already mentioned in the blog, MPs will debate and vote on the principles of the proposals in the Courts and Tribunals Bill during its second reading today, with the legislation facing a significant backbench rebellion in the Commons.The justice secretary, David Lammy, has been defending the plans to cut the number of jury trials in England and Wales after intense criticism from legal professionals who argue they erode constitutional principles. Critics also say the plans risk worsening racial bias within the criminal justice system and won’t be that effective at clearing the backlog.Defending his proposed changes, Lammy said:double quotation markThe status quo of the broken system does produce injustice, and the burden of that delay is not evenly shared.Black people are 14% more likely to be victims of crime
Nigel Farage accused of U-turn as he says UK should keep out of Iran war
Nigel Farage has been accused of making a U-turn after he said Britain should not get involved in Donald Trump’s war with Iran.His comments on Tuesday contrasted with his previous assertion that the “gloves need to come off” when dealing with Iran.Anna Turley, chair of the Labour party, said: “Reform wanted the UK to go to war in Iran and are now trying to cover up the consequences for British families, including higher fuel prices.”While Farage has insisted he does not heed public opinion, a YouGov poll showed Reform’s 2024 voters are split, with nearly a quarter (24%) wanting the UK to actively join the attack on Iran and 63% supporting either a retaliatory or defensive position.The conflict has exposed existing fault lines among senior Reform figures over foreign policy and the extent to which the UK should take a more isolationist “Britain First” position – an echo of splits in Trump’s own conservative base in the US
Ministers to ask 100 UK citizens to advise on digital ID plans
Ministers will ask 100 people randomly selected from across Britain to feed into the government’s consultation on digital IDs as the government hopes to combat conspiracy theories about how it intends to use the technology.Darren Jones, the chief secretary to the prime minister, will announce the details of the consultation on Tuesday, amid scepticism from parts of the public and within the government about the idea.As part of the consultation, ministers will announce a “citizens’ assembly” of people to feed in their views in an effort to hear the concerns of non-experts.Jones is also facing resistance from some of his own colleagues, with the education secretary, Bridget Phillipson, understood to have ruled out using the technology to help allocate special educational needs funding.Jones said: “Public trust in the state has been declining for years, whoever has been in power – and people too often feel shut out of decisions
So Badenoch, Farage and Blair think the Iran war is a great idea? Hmm … | John Crace
There have been any number of opportunities for people to decide they wanted no part of America’s war with Iran. The first was after the US had launched its first wave of strikes. To be fair, this was the moment Keir Starmer and most of the UK reckoned enough was enough and that our involvement would be limited to defensive strikes only.You couldn’t really fault the logic. Did the UK really want to be part of a war that was illegal in most versions of international law and for which the Americans had no clear vision of how it might end? Other than Donald Trump gets bored and lets everyone else clear up his mess
Ministers must act more quickly on deepfakes to protect women and girls, Kendall says
Ministers need to act more quickly to combat fast-changing threats from technology such as deepfakes, the technology secretary has said, as she warned about the risks women and girls face online.Liz Kendall said on Monday that technology was developing at such a pace that it was outstripping the government’s ability to regulate it, even suggesting there could be regular annual reviews of regulations as happens at the budget.The technology secretary was speaking to the Guardian after hosting a roundtable with tech companies including Meta, Snapchat, Reddit, Match Group, Google, TikTok and OnlyFans, during which she urged them to do more to tackle online misogyny.She said: “It took eight years for [the Online Safety] Act to come in, and the technology has developed so rapidly it hasn’t kept pace. Every year MPs have a finance bill to deal with the budget
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