S&P Global — 4 October 2024
Daily Update: October 4, 2024
Escalating Middle East Tensions Lead to Oil Market Jitters
By Nathan Hunt
Start every business day with our analyses of the most pressing developments affecting markets today, alongside a curated selection of our latest and most important insights on the global economy
Neither Israel, nor Gaza, nor Lebanon has much oil. That’s why as tensions have spread across the Middle East, oil markets have taken the conflict in stride. Attacks by Houthi rebels on shipping in the Red Sea have been inconvenient, but changing oil trade flows made these attacks far less inconvenient than they might have been a decade ago. However, when Iran launched a missile attack against Israel on Oct. 1, oil markets were forced to take notice.
"The escalation of the Middle East conflict into a large-scale military operation, potentially affecting energy assets upstream (e.g., attacks on Iranian production sites) or midstream (attacks on Iranian crude and fuel loading ports or Houthi retaliation strikes in the Red Sea or the Gulf of Aden), poses an upside risk to prices," oil analysts at S&P Global Commodity Insights said in a note.
The day of the attacks, Brent Crude prices rose 5% due to fears of further escalation. Iran is a major provider of crude and natural gas. Iran’s oil facilities would be a tempting target for Israeli Defense Forces since oil revenue is a crucial source of funding for the Islamic Republic and allows Iran to provide aid to Hezbollah and Hamas. Multiple Israeli officials confirmed that Iran’s oil facilities are a likely retaliatory target, according to US news website Axios.
Iran has one of the largest refining sectors in the region, with the massive Esfahān plant, the Abadan refinery and the Bandar Abbas site. The Bandar Abbas site is also an important source of gasoline, providing about 40% of Iran’s domestic needs. There are believed to be significant links between Iran’s refining assets and Iran's Revolutionary Guards.
Asian refiners appear unconcerned about the spike in tensions and the possibility of disrupted Persian Gulf oil flows, according to S&P Global Commodity Insights. Asian refiners assume that neither Israel nor Iran would do anything to disrupt flows to major Asian economies.
"If China ever faces any serious oil import flow disruption, I highly doubt Beijing will just sit and do nothing. ... Very tough measures will be taken, such as military actions," said a trading and inventory manager at a state-run Chinese refiner.
Today is Friday, October 4, 2024, and here is today’s essential intelligence.
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—Read the article from S&P Global Commodity Insights
US Community College District Fiscal 2023 Medians: A Reason For Optimism As A New School Year Gets Under Way
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—Read the article from S&P Global Ratings
Creative Cacophony
The ETF industry has hit a major milestone, reaching USD $10 trillion in assets under management in the US Commentary on the rise of index-based or passive investing may be widespread, but it is harder to find estimates of how truly “passive” their holders are. Secondary market volumes offer a fascinating, important and complementary perspective.
—Read the article from S&P Dow Jones Indices
Russian Wheat Price Hits Three-Months High Amid Drought And Supply Cuts
The Russian wheat market has surged to the highest price since late June amid worsening drought and reduced production forecast in the world's leading export country. The wheat price rose as much as 4.3% in just the last two weeks alone, and is now the highest price since June 26, 2024. As of Oct. 3, Platts, part of S&P Global Commodity Insights, assessed the price of FOB Russia's 12.5% protein content at $228.50 per metric ton for the end of October to the first half of November loading.
—Read the article from S&P Global Commodity Insights
Listen: EMEA Crude Spot Markets Navigate Volatility Amid Middle East Escalation
As oil derivatives and futures contracts navigate volatile seas, how are the more prompt physical spot markets reacting to an expected return of Libyan supply amid other regional developments? Join Joel Hanley in this episode of the Oil Markets podcast as he engages with market experts Luke Stuart, George Delaney and Joey Daly. They explore the impact of escalating tensions in the Middle East on crude prices in the Mediterranean, West Africa and North Sea, providing critical insights into current market sentiment and what it means for traders and stakeholders navigating this volatile landscape.
—Listen and subscribe to the podcast from S&P Global Commodity Insights
Crypto And AI: Shaping The Future Of The Internet
Over the last three decades, the emergence of web-based communication, online publication and e-commerce has driven the exponential growth of online information. More recently, AI’s harnessing of advanced data analytics has enhanced our ability to identify patterns, create new information and to derive meaningful insights from large datasets, providing new capacity for businesses and consumers to create, store and share data.
—Read the cross-divisional research from S&P Global
Webinar: Examining the Impact on Key US Business Sectors through 2024 and Beyond (Oct. 22, 2024)
The upcoming US elections are significant for a variety of industries, as the outcome has the potential to bring about significant changes in policies and regulations. Of particular concern are key areas such as energy, technology and finance, which are highly sensitive to shifts in administration. The election outcome may change the market, investment climate and consumer confidence. It is important for businesses to understand and prepare for the possible opportunities and challenges that lie ahead. Join S&P Global analysts as they discuss the potential opportunities and challenges of the US elections to key business sectors.
—Register for the webinar from S&P Global Market Intelligence