PM works to keep fuel flowing, but Trump has other plans
News in brief
Prime Minister Anthony Albanese has appointed the Chief of the Navy, Vice Admiral Mark Hammond, as the new Chief of the Defence Force. And the Chief of Joint Capabilities, Lieutenant General Susan Coyle will be the new Chief of Army, becoming the first woman in the role.
David Jones is delaying payments to key suppliers and cutting head office staff as its private equity owners navigate a make-or-break turnaround of the loss-making department store chain.
More than 98 per cent of Insignia Financial shareholders have approved a $3.8 billion takeover by CC Capital. The deal will result in the company delisting from the ASX at the end of the week. Meanwhile, Monash IVF’s share price jumped 17 per cent after it received a revised $351 million non-binding takeover proposal from a consortium led by Genesis Capital and Washington H Soul Patts.
Eight in ten Australians have at least one long-term health conditions, and about 50 per cent have a chronic condition. The most common chronic conditions are mental and behavioural conditions, back problems and arthritis, according to the latest Australian Bureau of Statistics National Health Survey, released yesterday.
Time-sucking, tedious tasks such as being stuck on hold on a phone, clicking through endless pages to cancel a subscription or screening spam calls might be irritating in the moment, but not overly costly. However, a new report in the US said the “annoyance economy” adds up to $165 billion in lost time each year.
Fear-o-meter
David Bassanese, chief economist at Betashares
“We now face an extended blockage of the Strait and new geo-political flashpoints. Will the US really refuse Chinese linked ships from leaving and/or entering the Strait? Will the US really stop any ships that may have paid a toll to Iran – and how could the US verify the payment? Will the US Navy enter the Strait to clear mines and will Iran shoot at them?
“The lingering hope is that talks will resume and Trump’s bark will remain worse than its bite when it comes to actually stopping ships at sea. The political reality facing Trump remains as stark as ever: extended blockage of the Strait will only drive up global oil prices, US recession risks and the chance of a Republican wipe-out at the November mid-term elections.
“Can a deal be done? According to Trump, the main sticking point is US insistence that Iran renounce any desire for a nuclear bomb. But this is already Iran’s historic official position, although its advanced uranium enrichment program has left many experts long worried and suspicious of its true intentions. Iran could at least continue to pay lip service to its desire not to have a nuclear bomb, though Trump might also insist it give up its current enriched uranium reserves.
“A potential face-saving deal for Trump might be one in which Iran merely pledges (as it has previously done so) not to pursue a bomb, although whether Trump still pushes for the enriched uranium could be a sticking point for the Iranians. In exchange, Trump could promise to stop bombing, maybe release some confiscated Iranian wealth and leave the Strait to the Iranians (provided they don’t start charging tolls). These aspects at least seem to be at the heart of the ceasefire debate.”
Fear & Greed Q+A today
On how the Strait of Hormuz affects energy prices, and what lies ahead if the Middle East conflict continues:
“The longer this goes on, the higher prices need to rise to force demand destruction — particularly in emerging economies that simply won’t be able to afford cargoes.
For Brent crude, we think that means a range of about $120 to $150 a barrel, and for LNG spot prices in Asia, around $25 to $40. Those are the levels where demand really starts to fall away because people just can’t pay.
Our base case is that we do get a deal — hopefully by May — but the risk is clearly that it drags on. And if it does, then prices will need to rise to those levels to effectively ration demand.”
A blockade of the Strait of Hormuz would not affect fuel supplies that Australia has secured util the end of May, but after that, there are no guarantees, according to Energy Minister Chris Bowen. The country still has two months’ worth of oil, petrol and diesel, but when it comes to June and July, the government will need to manage things tightly. Yesterday morning, President Donald Trump said the US would blockade the Strait after Iran refused to give up its nuclear ambitions in failed peace talks over the weekend. PM Anthony Albanese is clearly getting frustrated with what’s going on in Washington. Albanese, who this week will visit Brunei and Malaysia to reaffirm contracted supplies of fuel and fertiliser, said the decision to blockade the vital shipping route was, like the decision to attack Iran in the first place, made without consulting allies.
Greed-o-meter
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