Brazil's presidential election heads to runoff

Spanish Market: Agriculture, Crude oil, Metals, Natural gas, Petrochemicals
05/10/26

Brazil's presidential election will go to a runoff after no candidate secured more than 50pc of valid votes in a first round on Sunday.

With 99.8pc of the votes counted, senator Flavio Bolsonaro leads with 47pc, beating incumbent president Luiz Inacio Lula da Silva who secured 45.1pc.

They will face off in a second-round vote on 25 October.

Lula is seeking a fourth, non-consecutive term at the age of 80, while Bolsonaro is standing in for his father, former president Jair Bolsonaro. The elder Bolsonaro is serving a 27-year sentence under house arrest for attempting a coup after losing the 2022 election to Lula.

Polls had suggested the race would be tight but gave Lula a slight edge throughout the campaign. The incumbent campaigned on his legacy of social welfare programs and defense of national sovereignty, while Bolsonaro capitalized on anti-Lula sentiment in the wake of long-standing corruption allegations and voter fatigue with crime and the cost of living.

Bolsonaro is expected to emulate much of his father's far-right agenda if elected. He has spoken of revoking a temporary 12pc tax on crude exports that Lula's government added to ease the price impact of the Middle East war. He may have an advantage in the run-off, with votes from a handful of right-wing candidates expected to transfer to him.

Bolsonaro's Liberal party performed strongly in legislative and gubernatorial elections also held on Sunday, sweeping 19 of 54 available seats in the senate, to six for Lula's Workers' party.

By Constance Malleret

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04/10/26

Opec+ to keep output targets steady in November

London, 4 October (Argus) — A core group of seven Opec+ producers have agreed to keep their crude production quotas unchanged in November, as the US-Iran war continues to disrupt supplies from several members. Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman said after their monthly virtual meeting on Sunday that they would roll over their October quotas into November. Production in several Mideast Gulf countries has been severely affected by the war and disruptions to shipping through the strait of Hormuz and Bab el-Mandeb strait. This has left the Gulf members of the Opec+ alliance unable to meet their quotas, meaning today's decision is unlikely to affect production in the near term. Opec+ production by members with quotas in August was still around 5.7mn b/d below the pre-war level in February, according to Argus estimates. Although production has risen in recent months as more crude has made it through the southern Hormuz route, ongoing attacks on shipping and infrastructure remain a risk to regional output. The seven producers said they would continue to meet monthly to assess market conditions, with their next meeting scheduled for 1 November. The accompanying meeting of the Joint Ministerial Monitoring Committee (JMMC) reiterated the importance of safeguarding maritime routes and expressed concern over attacks on energy infrastructure. The JMMC said it would next meet on 29 November. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Hormuz crude flows, ship attacks on the rise

02/10/26

Hormuz crude flows, ship attacks on the rise

New York, 2 October (Argus) — Record high tanker freight rates are pushing strait of Hormuz crude flows — and Iranian attacks on tankers — to some of the highest levels since the outbreak of war between Iran and the US. Total Middle East crude oil exports are up by 36pc for the week ending 30 September at 17.92mn b/d, including 12.34mn b/d through the strait of Hormuz, according to vessel information firm TankerTrackers.com. This would place weekly Hormuz crude flows at around 80pc of their levels in February, prior to the joint US-Israeli attacks on Iran, which is estimated by vessel tracking service Vortexa to be around 15.14mn b/d. The US and Iran have not reached any sort of agreement for ending the war, so the risks to ships continue to be as significant as they were earlier in the war when less oil was flowing. But the risks, combined with a limited pool of vessels available to transit Hormuz, has kept freight rates high, incentivizing the dangerous work. The rate for a very large crude carrier (VLCC) to move Middle Eastern crude through Hormuz to Asia-Pacific has been at $34.31/bl since 18 September, its highest level since Argus began assessing the route in November 2016. The spot tanker market is moving from strength-to-strength following the start of the war in Iran, according to Harrys Kosmatos, executive at tanker shipowner TEN, speaking at a forum in New York on Wednesday. He highlighted a deal from earlier in the week for a 2004-built VLCC that a charterer provisionally hired at $2mn per day to transit through the strait of Hormuz. In comparison, a VLCC from the US Gulf coast-China was at $366,704/d on 1 October, per Argus assessments. "You don't even need peace now in Iran, you just need the oil to come out," Robert Bugbee, president of shipowner Scorpio Tankers said. Iran steps up attacks The increased ship traffic has been accompanied by more attacks from Iran, particularly on ships transiting the strait on the southern US-assisted transit route. There were six attacks in the last five days, per the UK Maritime Trade Operations Centre (UKMTO). This includes an attack reported Friday against a tanker exiting the strait which caused a fire onboard. The vessel remains in transit. Iran continues to target crude exports from countries in the Gulf, including the UAE and Kuwait. "Several oil tankers have been hit in the strait of Hormuz in recent days, three of the latest of which are owned or leased by entities in the UAE," according to a statement by the Persian Gulf Strait Authority published by Iranian-government affiliated news agency IRNA on Friday. The Kuwaiti VLCC Kazimah III was hit on 1 October, according to Martin Kelly, former head of advisory at EOS Risk Group, the second Kuwaiti state VLCC hit since 28 September. Since the start of July, 31 of 48 projectile strike incidents reported to UKMTO occurred on the southern US-assisted transit lane. UKMTO acknowledged in its weekly report that there are likely "other projectile strikes occurring that have NOT been reported to UKMTO." By Charlotte Bawol Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Brazil prepares for knife-edge election

02/10/26

Brazil prepares for knife-edge election

Rio de Janeiro, 2 October (Argus) — Brazilians go to the polls on 4 October for what looks set to be the tightest presidential race in recent history, with candidates' energy platforms also closer than in past elections. Incumbent president Luiz Inacio Lula da Silva, who is seeking re-election for a fourth, non-consecutive term, leads voting intentions with 40pc. He is statistically tied with Senator Flavio Bolsonaro with 36pc, according to The Economist 's 30 September poll tracker, which aggregates results from the main national polls. No other candidate is polling above the low single digits. If no candidate secures more than 50pc of the valid vote on 4 October, there will be a runoff between the two leading candidates on 25 October. Lula has campaigned on his legacy of social welfare programs and the defense of national sovereignty. In recent weeks, the government announced a flurry of measures designed to appeal to poorer voters, including an increase in benefits payments and a ban on online betting. Bolsonaro is standing in for his father, former president Jair Bolsonaro, who is serving a 27-year sentence under house arrest for attempting a coup after losing the last election to Lula. Although the son cuts a more moderate figure, he is widely expected to emulate much of his father's far-right agenda. The younger Bolsonaro promises a hard line on crime and has said he will seek an amnesty for his father if elected. In a tepid campaign marked by voter fatigue with corruption and the cost of living, and overshadowed by a multi-billion reais banking scandal implicating top judges and politicians, concrete proposals on issues like energy policy have taken a backseat. Both candidates are expected to seek more investment in oil and natural gas production alongside developing greener energy sources like biofuels, although their approach may differ. Lula, a statist, has indicated that state-controlled Petrobras would remain at the center of Brazil's energy policy and has spoken of the state re-entering the fuel distribution market. By contrast, Bolsonaro would likely pursue a more market-friendly route. He has spoken of revoking a temporary 12pc tax on crude exports — introduced by the Lula government to mitigate the price impact of the Middle East war — and of dropping the widespread production-sharing model of oil exploration contracts for the industry-preferred concession regime. A US-shaped shadow Hanging over the elections are concerns with possible interference by the US. On 1 October, Brazil's solicitor general asked the federal police to investigate alleged financing of far-right agendas by President Donald Trump's administration. Lula's Workers' party filed a similar request with the supreme court last week, raising concerns about foreign meddling to benefit Bolsonaro. In a 24 September letter to secretary of state Marco Rubio, Democratic members of Congress denounced "a sustained, multifaceted campaign of interference and destabilization in Brazil" by US officials. President Trump is a long-standing ally of the Bolsonaro family and has leaned on elections elsewhere in the region to help get allies into office. Bolsonaro plans to join Trump's Shield of the Americas security alliance if elected and is perceived as a more pliable partner on matters like rare earths cooperation. Trump said on 1 October that he is watching the Brazilian elections "very closely". By Constance Malleret Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Low gas stocks set to test Germany's winter resilience

02/10/26

Low gas stocks set to test Germany's winter resilience

London, 2 October (Argus) — Germany's readiness for winter was a source of debate at the Handelsblatt Gas 2026 conference in Berlin, with storage operators cautioning that low inventories could leave the country exposed to demand spikes, while THE argues that shortages can be avoided through imports from neighbouring markets. Stocks could still technically reach almost 75pc of capacity by 1 November if injections were maximised at all booked capacity, down from 77pc at the start of September , Sebastian Heinermann, managing director of German storage operators' association INES, told Argus on the sidelines of the conference. But this is highly unlikely unless further measures are introduced to incentivise users to fill their capacity, such as subsidising variable storage costs, which currently make the THE October-January spread uneconomic, INES said. Maintaining the injection pace of the past 21 days would leave sites only around 63pc full. Sefe's instruction from the energy ministry to fill an additional 8TWh by 15 December could provide an additional 3pc boost. But that would still create a 26TWh year-on-year storage deficit, equivalent to about 30 days of three-year average November-March withdrawals, leaving Germany with significantly thinner buffer than in previous years. The risk is not simply how much gas is stored underground, but how quickly it can be withdrawn. Heinermann compares a storage facility to a balloon: when full, pressure is high and gas can escape quickly. As it empties, pressure falls, and so does its ability to deliver gas. Depleted facilities could therefore still contain gas while being unable to deliver it rapidly enough to meet peak requirements during a late-winter cold spell. This is why German storage law sets a minimum fill level target of 40pc by 1 February. Assuming 66pc start-of-winter stocks and three-year average total November-January withdrawals, sites would miss this target and stand only 29pc full on 1 February. INES illustrated the risk of deliverability issues using a recent demand episode. German consumption and demand for exports from neighbouring markets climbed to 6.5TWh on 7 January. Imports, including LNG, could only supply around 3TWh, leaving storage to meet more than half of total demand. Withdrawals were able to ramp up well above the three-year average January rate of 1.42 TWh/d, providing a level of short-term flexibility that pipeline imports and LNG cannot match, making storage critical for supply security on cold days. Weather remains the critical uncertainty, as a colder-than-average winter could accelerate withdrawals and deplete stocks much faster. Heinermann cautioned against relying on an El Nino-driven mild winter, as long-range weather forecasts are notoriously unreliable and weather phenomena can shift quickly. The World Meteorological Organization expects El Nino to persist until February, but there is a possibility it gives way to a La Nina, increasing the risk of colder temperatures later in the winter. "That's the bottom line for me: we shouldn't have to watch the weather and hope we make it through the winter," Heinermann said. Austrian stocks provide a potential backstop Despite concerns over low storage levels, Germany's market area manager Trading Hub Europe (THE) does not expect shortages this winter. Speaking to Argus at the Handelsblatt Gas 2026 conference, chief executive Torsten Frank said safeguards are in place. THE's Long-Term Options (LTOs), announced last week , are designed to ensure grid balancing through March 2027, Frank said. Suppliers awarded the contracts must have gas available to meet their obligations, creating an incentive to inject or retain stocks. The action includes a "special tender" requiring delivery from storage sites in southern and eastern Germany, the regions most at risk of an early stock depletion. The four Bavarian storage sites — Bierwang, Breitbrunn, Inzenham-West and Wolfersberg — are only 31pc full, according to GIE data, compared with 58pc nationwide. Germany could also draw on stocks elsewhere in Europe's integrated gas network if needed, Frank added. Austrian storages would likely be the first port of call because of their proximity to Germany. The Austrian sites 7 Fields and Haidach, both directly connected to the German grid, are already 66pc full and hold around 25TWh of gas. But widespread cold weather beyond northwest Europe could run down Austrian stocks too and limit export availability to Germany. Italian stocks are also a very healthy 87pc full and can flow through Switzerland to Germany, although longer transport distances mean they would be less suitable for short-term balancing needs. By Hannah McMichael Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

G7 starts immediate 100mn bl oil stock release

02/10/26

G7 starts immediate 100mn bl oil stock release

London, 2 October (Argus) — The G7 will immediately begin a co-ordinated release of 100mn bl of oil stocks over the next four months, including a substantial diesel release within 20 days, its leaders said today. The group asked the IEA to monitor the "immediate and full implementation" of stock-release commitments made in March. It said members would carry out the 100mn bl release "in this regard" and while "taking into account commitments that have already been fulfilled". This indicates the 100mn bl is a portion of the commitments made in March, rather than an additional pledge. The "frontloaded" diesel release will be carried out by G7 members and partners. The statement did not specify the amount of diesel or how the 100mn bl would be divided between crude and refined products. G7 members will meet through the IEA in the coming days to discuss additional diesel releases if needed. They will also co-ordinate refinery maintenance schedules to avoid simultaneous shutdowns and temporarily raise refinery utilisation where possible, and will encourage countries with significant refining capacity to increase production of refined products, particularly diesel. IEA members agreed in March to make 400mn bl of oil available from emergency reserves in response to supply disruption caused by the war in the Middle East. The IEA subsequently put members' planned contributions at 426mn bl , comprising 301mn bl of crude and 125mn bl of oil products. The IEA will monitor the effect of the stock release and other supply measures on energy security and market stability and report within 20 days. Its report will include recommendations on further action, including replenishing emergency stocks, the G7 said. The G7 statement today also addresses the possibility of a US diesel export ban. Members pledged not to restrict trade in energy and energy products between G7 countries and called on other producers to avoid bans that could exacerbate market tensions. The US is considering restricting diesel exports to reduce domestic prices ahead of its midterm elections. The European Commission said earlier today such a ban would undermine its trust in the US as a reliable partner. EU diesel supplies are stable for now, although prices are high because of tight global markets, the commission said. Europe has become increasingly dependent on US diesel since Mideast Gulf flows were constrained by the near-closure of the strait of Hormuz and Russia halted diesel exports. The EU, UK and Norway received around 430,000 b/d of US diesel and other gasoil in August, according to Kpler. US supplies have accounted for around 40pc of the region's diesel and gasoil imports on average this year. Any US export ban would intensify competition between Europe, Latin America and other importing regions for alternative supplies. Some market participants have questioned whether a full ban would be sustainable. Excess diesel would accumulate in the US, potentially forcing refiners to cut crude runs and reducing domestic gasoline production. The G7 also addressed the wider conflicts behind the disruption to energy markets. It condemned Iran's attacks on neighbouring countries and its disruption of international trade, energy security and the global economy, and called for the immediate and full restoration of navigational rights through the strait of Hormuz. The group pledged to maintain sanctions against Russia while working with the IEA and other partners to "prevent further spillovers" into fuels, gas and other commodity markets. By James Keates Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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