Russia's Novak discusses global oil market situation with OPEC secretary general, government says

MOSCOW, June 18 (Reuters) - Russian Deputy Prime Minister Alexander Novak has discussed the situation on the global oil market with OPEC Secretary General Haitham Al Ghais, the Russian government said in a statement on Wednesday.
"The parties discussed the situation on the global oil market, in particular in connection with the escalation of the conflict in the Middle East, and cooperation between Russia and OPEC both bilaterally and within the framework of the OPEC+ agreement," the government said.
Russia highly appreciates the effectiveness of cooperation within OPEC+, Novak said.

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Times

33 minutes ago

• Times

What war in the Middle East means for your money

The conflict between Israel and Iran is the latest geopolitical shock set to hamper the outlook for the UK economy — and, ultimately, your bank balance. Since the attacks began on June 12, the price of oil has risen to a six-month high. Hopes for interest rate cuts have been dashed, fears of rising inflation have been amplified, and any respite from stock market turmoil appears to have been short-lived. • Read more money advice and tips on investing from our experts This week the prime minister, Sir Keir Starmer, said: 'I'm always concerned about the effect of international issues on people back at home. You saw with Ukraine the direct impact it had on energy bills. Equally, with this conflict, you can see the effect it's having on the economy, particularly on the price of energy.' From petrol prices to pension pots, here's what you need to know: Iran is the third-largest oil producer among the 12 members of the Organisation of the Petroleum Exporting Countries (Opec), and there are worries about how a wider regional war could affect the transport of oil through the Strait of Hormuz, which accounts for about 25 per cent of seaborne crude oil transportation, according to the consultancy Capital Economics. The price of a barrel of Brent crude hit a six-month high of about $78 after Israeli attacks on Iran began, up from about $65 at the start of this month. That is bound to have a knock-on effect on motorists, said David Oxley from Capital Economics: 'A rough rule of thumb is that a $10 rise in the oil price will add about 7p to the price at the pump.' It normally takes about two weeks for oil prices to feed into pump prices, Oxley said. Motorists have, however, had some recent respite from the cost of living crisis as petrol and diesel prices hit their lowest in almost four years. Petrol cost an average of 132p a litre last month, the lowest since July 2021, while diesel was at 138p, the lowest since September 2021, according to the motoring organisation the RAC. While prices are likely to rise, they are not expected to reach the high of March 2022, when Russia's invasion of Ukraine caused the oil price to reach $127 per barrel. The price in sterling peaked in July of that year at more than £100 with pump prices hitting 192p per litre for petrol and 199p per litre for diesel. More than a million homeowners whose fixed deals come to an end this year may have their hopes of further interest rate cuts dashed. The lowest two-year fix was 3.72 per cent last month, but rates are starting to tick up again, according to the property portal Rightmove. The lowest two-year deal is now 3.82 per cent from Lloyds Bank for those with a Club Lloyds account. The lowest five-year fixed rate has gone from 3.78 per cent to 3.88 per cent, also from Lloyds. Lenders had been cutting mortgage rates to compete for business, but changed tack after inflation went from 2.6 per cent for the year to March to 3.5 per cent in April. This makes cuts to the Bank of England base rate less likely — the Bank generally keeps the rate high when inflation is above its target of 2 per cent. The Consumer Prices Index inflation figure for the year to May, released this week, was 3.4 per cent. Uncertainty around President Trump's trade tariffs and conflict in the Middle East has also dampened hopes of further base rate cuts. The Bank held rates at 4.25 per cent this week, which, although a lot higher than the sub 2 per cent rates many mortgage holders will have fixed at three or five years ago, is down from the peak of 5.25 per cent in August last year. Fixed mortgage rates are based on swap rates (the rates at which banks lend to each other, which are in turn based on forecasts of where Bank rate is expected to be in the future), which have edged up over the past week or so, suggesting that mortgage rates could follow. Homeowners who want certainty can lock in a new deal up to six months before theirs ends yet still swap if a cheaper deal comes along. Rising oil prices could also cause other expenses to creep up, particularly if the Iran conflict continues or escalates. Lotanna Emediegwu, an economics lecturer at Manchester Metropolitan University, said that prolonged conflict could drive up energy bills. The price cap that limits how much suppliers can charge customers on standard variable tariffs will work out at an average bill of £1,720 a year for gas and electricity from July 1 (down 7 per cent from today's cap). At the moment analysts expect the cap to go up 2 to 3 per cent in October, but this could change dramatically. He said: 'Until recently, fuel prices had been rising less than other things, so actually mitigating some inflationary pressures. The recent conflict is expected to reverse this trend. 'The financial repercussions extend beyond immediate energy costs into transportation and logistics. Transport expenses are particularly vulnerable to fluctuations in fuel prices. This affects everything from airline fares to shipping costs for products, ultimately hitting consumer prices.' Before June 12, when Israel launched strikes on Iran, inflation had been expected to rise to 3.5 per cent by the autumn — now it could go further. A sustained $10 per barrel rise in the oil price typically pushes up annual inflation by 0.1 to 0.2 percentage points, according to The Economist, meaning that it could be closer to 3.7 per cent by September. Emediegwu said a prolonged blockade of the Strait of Hormuz shipping route could add a further 0.5 to 1 percentage points, which could take it close to 5 per cent. So far the stock market has been fairly resilient to the conflict in the Middle East. The UK's FTSE 100 is down about 0.77 per cent since the turmoil started, while the US's S&P 500 is down about 1.06 per cent. If a sustained conflict leads to an increase in the price of oil, stock valuations may fall — this is because higher oil prices lead to higher inflation, which means interest rates are likely to stay higher for longer, which makes it more expensive for companies to borrow money to grow and often curbs investors' risk appetite. Losers are likely to include airline and travel stocks, as well as so-called growth stocks, which include technology and healthcare companies. Many investors will have exposure to the US 'Magnificent Seven' tech stocks of Microsoft, Apple, Alphabet, Tesla, Amazon, Meta and Nvidia. These companies are often valued on their future earnings potential, which means their stock price can be volatile if company results or wider economic conditions point towards a slowdown of earnings. The good news is that Iran and Israel are a very limited part of the global stock market, so direct exposure for most UK investors will be immaterial. However, Michael Field from the research firm Morningstar said that the risk is that wider markets get jittery about the potential for the conflict to escalate further. Investors should avoid making any kneejerk changes to their portfolio. Ultimately, while geopolitical tensions may create short-term turmoil, historically markets have been resilient in the long term. Jacob Falkencrone from the investment bank Saxo said: 'As an investor, your greatest tool is a disciplined approach — staying informed, remaining calm and focusing on your long-term investment goals rather than reacting impulsively to temporary shocks.'

The Independent

2 hours ago

• The Independent

Two Middle East-related protests to be held in central London on Saturday

Protesters are set to rally at two high-profile demonstrations in central London on Saturday over flaring conflicts in the Middle East, the Metropolitan Police said. A protest organised by groups under the Palestine Coalition banner will gather in Russell Square from 12pm, before marching to Whitehall via Aldwych and the Strand for an assembly outside Downing Street. Former Scottish First Minister Humza Yousaf, former Labour leader Jeremy Corbyn and musician Paloma Faith are among those set to give speeches at the assembly. Meanwhile, a static counter-protest organised by pro-Israeli group Stop The Hate will be held at the same time just north of Waterloo Bridge at the junction with the Strand. The group said it would meet at the location from 12.30pm onwards. Police have set out conditions for the first protest under the Public Order Act which demands that any person taking part in the procession must remain within Russell Square ahead of the protest and must not deviate from its specified route. Demonstrators must then stay in a specified part of Whitehall for the assembly, which must finish by 5.30pm, the force said. The Palestine Coalition is comprised of a number of different groups, including the Palestine Solidarity Campaign (PSC) and Stop The War. Stop The War said in an advertisement for the event on its website: 'Israel's attacks on Gaza and the West Bank are intensifying. Their starvation policy continues. And now Israel attacks on Iran seem intended to lead us into a full-scale war in the Middle East. 'The UK Government has at last accepted that Israel's actions in Gaza are unconscionable. Now they must act – words are not enough.' Discussions are ongoing regarding possible conditions for the Stop The Hate protest, the Met said. In a post on X, Stop The Hate said: 'Our families in Israel are under attack: standing bravely in the face of threats and ballistic missiles, whilst the people of Iran are bravely facing down their totalitarian government — now it's our turn to stand proudly in solidarity with them.' The demonstrations come after reports on Friday that the Home Secretary will ban Palestine Action after the group vandalised two aircraft at RAF Brize Norton. Yvette Cooper has decided to proscribe the group, making it a criminal offence to belong to or support Palestine Action, after footage posted online showed two people inside the RAF base, with one appearing to spray paint into an aircraft's jet engine. PSC described the move on social media as 'outrageous', while the Campaign Against Antisemitism welcomed the news, saying: 'Nobody should be surprised that those who vandalised Jewish premises with impunity have now been emboldened to sabotage RAF jets.'

Sky News

2 hours ago

• Sky News

Putin says 'Ukraine is ours' and threatens nuclear strike - showing how he feels about Trump

He may have been speaking at an economic forum, but that didn't stop Vladimir Putin from issuing his most hawkish comments on Ukraine in a very long time. During a Q&A at Russia's flagship investment event in St Petersburg, the Kremlin leader was asked what his end game was in the conflict. He replied: "I have said many times that I consider the Russian and Ukrainian people to be one nation. In this sense, all of Ukraine is ours." The answer received rapturous applause from an auditorium full of fawning politicians and business figures. And there was more. "There is an old rule," he said. "'Where a Russian soldier sets foot, that is ours'." In short, he was saying that he wants the whole lot. The comments came as a surprise because they are in sharp contrast to the Kremlin's recent rhetoric. Ever since Donald Trump began his push for a peace deal, Moscow has adopted a softer tone, more conciliatory - in an apparent attempt to show Washington that it is interested in a settlement. But there was none of that kind of language here. Quite the opposite. The Russian president even, for the first time in months, threatened a nuclear strike on Ukraine. Asked how Moscow would respond if Kyiv used a dirty bomb against Russian forces, he promised "catastrophic" consequences for his enemy. "This would be a colossal mistake on the part of those whom we call neo-Nazis on the territory of today's Ukraine," he said. "It could be their last mistake. "We always respond and respond in kind. Therefore, our response will be very tough." The Kremlin's nuclear sabre-rattling was an almost weekly feature during the last days of the Biden administration, but the sabres stilled when Mr Trump came to power. But now, all of a sudden, he's returned to it. It felt like a very deliberate message from Vladimir Putin that, despite peace talks, Russia has no intention of backing down, neither on the battlefield nor at the negotiating table. I think it shows that Moscow is not too worried about upsetting Donald Trump. The American leader appears to have distanced himself from trying to mediate the conflict, but still seems to be pursuing warmer ties with Moscow.