Geopolitics

UFC Freedom 250, an MMA event staged on the White House South Lawn in Washington on June 14 to mark the US’s 250th birthday, was the first combat sports contest held at the venue. TKO Group said the event produced a US$30 million loss. Executives said it generated US$1 billion in “earned media,” drew 34 million global viewers and added 25 new marketing partners, according to Bloomberg.

Iran-backed Houthi forces said on 20 July they had imposed a blockade on Saudi Arabia’s Red Sea ports, after mounting multiple attacks on commercial vessels over the past week. Ship traffic through the Strait of Hormuz has fallen to single digits per day from more than 100 a day before the war, a chokepoint that previously carried about 20% of global oil and gas. Brent crude slid as much as 7.3% to $81.55 a barrel and settled at $84.05, down 4.4%. The developments underscore a material geopolitical shock to Middle East maritime energy routes.

Since mid-March, Iran’s Islamic Revolutionary Guard Corps (IRGC) has forced commercial shipping onto an alternative corridor near the Strait of Hormuz and collected transit payments that can reach $2 million per passage. On July 28, the IRGC also fired ballistic missiles at U.S. forces in Jordan after earlier drone attacks on U.S. forces and Saudi energy sites near Riyadh and the Eastern Province. All recorded transits have shifted to the IRGC-controlled route, and J.P. Morgan estimates a fully operational system could bring in $70 billion to $90 billion a year. The moves have lifted global shipping costs and increased the geopolitical risk premium, directly affecting conventional energy and shipping assets.

India’s three state-run oil marketing companies—HPCL, BPCL and IOC—reported losses for the June quarter as Brent crude surged to as high as $125 per barrel after the US-Iran conflict. HPCL posted the steepest loss at ₹11,526 crore, while BPCL and IOC reported losses of ₹3,962 crore and ₹2,661 crore, respectively. Strong refining margins helped cushion the hit from higher crude costs, with BPCL reporting a gross refining margin of $41.4 per barrel. Marketing profitability stayed under pressure, and LPG under-recoveries widened sharply during the quarter.

Indian polyolefin importers have slowed buying after the latest flareup in the USIran war lifted prices and raised uncertainty over delivery schedules. LLDPE CFR India was assessed at $1,1801,220/t for the week ended 31 July, up from $1,0901,150/t for the week ended 26 June, while PP raffia rose to $1,1901,240/t from $1,1001,140/t over the same period, according to Argus. Freight concerns have intensified after attacks on Saudi energy vessels, with shipping companies signalling surcharges of up to $140/t for transits through the Bab elMandeb strait. Indian producers have also raised local LLDPE and PP raffia prices since 23 July amid higher crude values and slower import bookings.

U.S. stock index futures advanced as signs of easing tensions in the Middle East weighed on energy prices and supported risk appetite. Dow futures rose 0.89%, S&P 500 futures gained 0.54% and Nasdaq 100 futures added 0.28%. Brent crude fell 5%, reflecting reduced concerns over supply disruption.

India has announced plans to invest up to Rs 45,000 crore ($4.7 billion) to upgrade railway infrastructure along its borders with China, Pakistan and Bangladesh. Railway-linked stocks rose on the news, with IRCTC up 5% to Rs 513 and Ircon International also up 5% to Rs 132. Titagarh Rail gained 3.64% to Rs 855, while RailTel advanced 2.25% to Rs 290.85. RVNL rose 3.19%, and Texmaco Rail and IRFC were up more than 1%.

Donald Trump said he had called off planned military strikes on Iran, easing geopolitical tensions. Brent fell 5% to $83.50 a barrel after touching $81.55, while US West Texas Intermediate dropped more than $5 to $79.47. Both benchmarks had gained more than 20% in July amid renewed US-Iran fighting and tanker attacks in the Strait of Hormuz. The pan-European Stoxx 600 rose 0.4%, with energy stocks down 2% and travel and leisure shares up 2.1%.

South Africa’s Mineral and Petroleum Resources Department is due to publish the official fuel price adjustment for August by Tuesday, with the new prices taking effect on Wednesday. Current data indicates petrol prices will see little change, with only 93-octane petrol expected to edge lower. Diesel users are projected to face increases of close to R2 a litre. The expected move follows higher global oil prices and a weaker rand after renewed tensions in the Middle East.

Oil fell after President Donald Trump said new US-Iran talks would begin Monday, lifting hopes of a deal tied to reopening the Strait of Hormuz. Brent for October sank 7.3% to $81.55 a barrel, while S&P 500 and Nasdaq 100 futures rose 0.3% and 0.5%. MSCI’s gauge of Asian equities dropped 1% and South Korea’s Kospi slid more than 4%, while gold climbed to around $4,080 an ounce as oil’s decline eased inflation worries.