Inflation in major developed economies is yet to be tamed. The UK’s situation is currently the most acute as wages and “core” prices, excluding food and energy, are rising by approximately 7% on an annualized basis. Yet even as headline rates elsewhere have dropped as the energy shock has faded, core inflation has been stubborn. In both the US and the Euro area, CPI for May dropped slightly but still exceeded 5%.
Many governments are adding fuel to the fire by running budget deficits on a scale typically seen during economic slumps. In the UK, mortgage rates are surging ...
Tanker Newbuilding Market: Cautiously Optimistic
June 23, 2023
Tanker newbuilding prices have been on an upward trend since 2021, bolstered by rising prices of raw materials (Figure 1), inflationary pressures in labor markets post Covid, and the tight shipyard capacity due to an orderbook full of container ships and gas carriers. Tanker owners scarred by the low earnings environment from 2017 to 2021 were not ready to jump on that bandwagon resulting in historically low tanker newbuilding orders in the past two years. The year 2023 had only 9% of the global yard capacity used for tankers, compared to 38% for container ships. However, now that container freight ...
Saudi Arabia Production Cuts
June 16, 2023
Saudi Arabia announced last week a unilateral production cut of 1 million b/d. This output cut is slated for July and comes on top of previously announced curbs, which would be extended until the end of 2024 while Russia, the second largest OPEC+ producer, made no commitment to cut output further. The Saudi announcement came soon after OPEC+ (including Russia) said the group had agreed to stick to current production targets until the end of the year. The broader 23-member group accounts for close to half of the world’s oil output. Saudi Arabia will now produce 9 million ...
KRG Pipeline Update
June 2, 2023
Oil production in Iraq’s Kurdistan region has experienced a significant decline due to the prolonged outage of the export pipeline to Turkey’s Ceyhan port. The pipeline shutdown, which has lasted almost two months, was initiated by Turkey following an arbitration ruling by the ICC. As a result, Iraq’s nationwide crude oil production has been adversely affected, with the Kurdistan Regional Government (KRG) incurring substantial financial losses. The pipeline outage originated from an ICC ruling that ordered Turkey to pay damages of US $1.5 billion to Iraq’s central government for unauthorized oil exports conducted by the ...
