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Saudi maxes Yanbu flows, taps storage in March
Saudi maxes Yanbu flows, taps storage in March
Doha, 2 April (Argus) — Saudi Arabia's crude exports averaged 5.3mn b/d in March and refined products exports stood at around 800,000 b/d, sources told Argus , after Riyadh successfully rerouted flows to its west coast following the closure of the strait of Hormuz. Crude exports averaged 3.3mn b/d from the Red Sea port of Yanbu and 1.1mn b/d from the kingdom's main Ras Tanura hub, according to trade analytics firm Kpler, bringing the total to 4.4mn b/d. But Saudi Arabia also tapped into its "international storage in Japan, South Korea and the Netherlands for a few days, until rerouted cargoes began arriving at Yanbu," the sources said. Despite the shift, the March figure is well off from pre-war flows in February, when total Saudi crude exports were 7.2mn b/d and refined product exports 1.6mn b/d. The US-Israel war with Iran, which began on 28 February, has effectively halted flows through Hormuz after Tehran began threatening and targeting tankers in and around the strait. This has forced Saudi Arabia and other regional producers to shut in significant volumes of oil and gas output. The kingdom's 7mn b/d East-West pipeline has emerged as a critical strategic asset for both Saudi Arabia and global energy markets. Its ability to rapidly deploy spare infrastructure and reroute exports has reinforced its position as the world's primary supplier of last resort. State-controlled Saudi Aramco began offering Asia-Pacific buyers the option of loading crude from Yanbu during the first week of the war, accelerating the shift towards Red Sea export routes. The East-West pipeline — now Saudi Arabia's primary export outlet — reached full capacity around 25 March , enabling crude exports via Yanbu to climb to around 5mn b/d. The pipeline also supplies roughly 2mn b/d to domestic Red Sea facilities, including 1.5mn–1.6mn b/d to refineries near Yanbu and 400,000–500,000 b/d to the Jizan refinery, as well as power and desalination plants along the coast. Despite the pipeline operating at full capacity, flows remain insufficient to fully offset the loss of Hormuz transit, which previously handled around 15mn b/d of crude. Markets are closely watching the kingdom's ability to sustain flows, particularly after Yemen's Iran-backed Houthi militants launched missiles at Israel on 28 March — marking their first direct involvement since the conflict began. The move raises the risk of further escalation in the Red Sea and around the Bab el-Mandeb, a critical chokepoint for global oil flows. The 1,200km pipeline, linking Saudi Arabia's eastern oil fields to the Red Sea, was developed during the 1980s Iran-Iraq "Tanker War" as part of contingency planning for a potential Hormuz closure. Saudi Arabia has also cut production by around 2.5mn b/d , shutting in several offshore fields — including Safaniya, Marjan, Zuluf and Abu Safa — in response to Iranian missile and drone threats targeting Gulf energy infrastructure. By Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
US trade deficit widens in February
US trade deficit widens in February
Houston, 2 April (Argus) — The US trade deficit widened by 4.9pc in February as imports, including capital goods linked to the buildout of artificial intelligence (AI), grew faster than exports. The US trade deficit in goods and services rose to a seasonally adjusted $57.3bn in February from $54.7bn in January, the Bureau of Economic Analysis (BEA) reported Thursday. The deficit in goods rose to $84.6bn in February from $82.1bn in January, while the services surplus fell by $0.2bn to $27.3bn. Total US exports in February rose by 4.2pc to $314.8bn while imports rose by 4.3pc to $372.1bn. Exports of goods rose by $11.5bn to $206.9bn in February, led by shipments of non-monetary gold and industrial supplies including natural gas. Imports of goods rose by $14bn to $291.5bn in February, with capital goods imports up by $7.8bn and crude oil imports up by $1.1bn. "February's jump in imports was relatively broad-based, although imports of computer equipment and semiconductors leapt again, due to the ongoing surge in AI-related capex," Pantheon Macroeconomics said in a note. Exports of services increased by $1.2bn to $106.7bn, and services imports rose by $23bn to $79.3bn. Yearly trade gap shrinkage Still, the deficit in February shrank by more than half from $120bn a year earlier. But that could change with the Mideast Gulf war and the US high court's striking down President Donald Trump's tariffs. "The shake-up in tariff policy following the Supreme Court decision in late February, and disruptions to global supply chains due to the US-Iran war, could trigger more turbulence in the trade data," Oxford Economics' US economist Grace Zwemmer said in a note. The dollar index has climbed from 99.3 on 27 February, the day before the US-Israel war on Iran began, to 99.9 on Thursday, although it is down from 103.7 in early April last year. A stronger dollar makes US imports cheaper, while making exports less competitive. The US trade deficit edged higher to $911bn last year from $904bn in 2024, with the goods deficit rising to $1.24 trillion in 2025 from $1.215 trillion the prior year. Petroleum trade slows US exports of crude and petroleum products, including natural gas liquids, fuel oil and others on an end-use basis, totaled $20.6bn in February, little changed on the month, with imports at $16.8bn in February, up from 15.5bn in January, the report said. Exports of crude averaged 4.3mn b/d in February, up from 3.9mn b/d in January, with imports at 6.35mn b/d in February from 6.1mn b/d in January. Partners The US had a $16.5bn seasonally adjusted deficit with Vietnam in February, a $16.8bn shortfall with Mexico and a $13.1bn deficit with China. The US ran a $5.1bn deficit with the EU and a $7.6bn deficit with South Korea, a $4.7bn deficit with Japan and a $3.2bn shortfall with Germany. The US deficit with Canada narrowed to $741mn in February from January. The US had a $5.6bn surplus with the UK, a $6.8bn surplus with the Netherlands and a $3.8bn surplus with central and south America that included a $1.5bn surplus with Brazil in February. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
US seeks bids for 10mn bl crude release from SPR
US seeks bids for 10mn bl crude release from SPR
Washington, 2 April (Argus) — President Donald Trump's administration is offering to loan out up to 10mn bl of sour crude from the US Strategic Petroleum Reserve (SPR) as part of a release of 172mn bl intended to ease supply shortages caused by the war with Iran. The US Department of Energy's (DOE) second round of "exchange" contracts, announced on Wednesday, is offering 2mn bl of sour crude in April and 8mn bl of sour crude in May from the SPR's Bryan Mound site in Texas. Participating companies will be required to return the crude they borrow by no later than November 2027, in addition to providing an in-kind payment, which will result in the SPR holding more crude than before Trump authorized the drawdown. "Today's action furthers the United States' efforts to move oil quickly to the market and mitigate short-term supply disruptions," DOE assistant secretary of hydrocarbons Kyle Haustveit said. Bids for the second round of exchange contracts are due by 12pm ET on 6 April. DOE already awarded a first round of exchange contracts that will release 45.2mn bl of sweet and sour crude from the SPR by the end of May. Companies awarded contracts will be required to return crude to the SPR between November 2026 and the end of September 2028. For the second round, DOE switched to a formula that will reward companies for the early return of crude to the SPR. That will avoid a financial incentive for most of the returns to take place near the end of 2027. Nymex WTI crude futures at the end of 2027 are trading at a discount of nearly $3/bl compared to the first quarter, based on settlement prices on Wednesday. Under the formula for the 10mn bl release, bidders will be required to return a "minimum" of 17pc more crude than they borrowed for crude returned to the SPR in the first quarter of 2027. For each additional quarter they wait, the minimum will rise by 0.5 percentage points, reaching a maximum rate of 18.5pc for crude returned by November 2027. DOE said it will award contracts primarily based on which companies offer to return the most crude to the SPR. Trump last month granted a 60-day waiver of the Jones Act for crude and other commodities shipped between US ports. The waiver, which is set to expire at 11:59pm ET on 17 May, will enable crude from the SPR to be transported to other US ports without needing to charter US-flagged, US-built tankers that are compliant with the Jones Act. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
New furnaces to support Italian steel power demand
New furnaces to support Italian steel power demand
London, 2 April (Argus) — Rising steel demand and upcoming furnace expansions within Italy's highly electrified steel sector could increase the country's industrial power consumption. But high energy prices in the wake of the US-Iran conflict may limit sector growth. Italy is the second-largest steel producer in Europe, after Germany. It has the most electrified steel industry in the region, with 90pc of production coming from secondary steel made from scrap processed in electric arc furnaces in 2024, compared with an EU average of 45pc, according to steel association Federacciai. The country had 26 electric arc furnaces with a combined capacity of 23.9mn t/yr at the end of 2025, according to independent research body Global Iron and Steel Tracker ( see capacity graph ). Italy's wholesale power prices are consistently among the highest in Europe and prices have risen further since the onset of the US-Iran conflict, owing to Italy's strong gas marginality. Italy's second and third quarter power contracts were up by 39pc at the end of March compared with the end of February. Italian firms are constructing new electric furnaces that are expected to start operating in the next few years, which could increase steel sector electricity demand. Producer Acciaierie Venete announced a new 100t electric arc furnace in Padova, expected to be operational by this summer and projected to produce 750,000 t/yr of steel. This furnace alone would consume about 500 GWh/yr of power, assuming energy consumption of modern electric arc furnaces is around 670 kWh/t, based on steel output and power demand recorded in 2025. Fellow Italian steel producer Metinvest aims to break ground at a site in Piombino in central Italy by mid-2026. The new mill will have two electric arc furnaces and 2.7mn t/yr of hot-rolling capacity for low-emissions hot-rolled products, with production targeted for 2029. These furnaces would add a further 1.8 TWh/yr of power demand. And steelmaker Acciaierie d'Italia plans to phase out Italy's only coal-fired blast furnaces at its Taranto plant and replace them with electric furnaces. The firm's Taranto facility has operated below full capacity for more than 10 years and was placed under extraordinary administration in February 2024. The Italian government has put the Taranto assets up for tender, requiring any buyer to commit to replacing the furnaces with electric ones, with authorisation for 6mn t/yr. Private equity firm Flacks Group has been selected as the preferred bidder, proposing a plan for 4mn t/yr. The switch to electric furnaces was scheduled for 2027, but doubt has been case over the future of the Taranto site owing to production issues and a court order mandating a shutdown because of health concerns. State of play Italy's steel sector accounted for 42.4pc of total power demand from energy-intensive sectors in 2025, at 13.8TWh. This marks a 3.7pc increase from the previous year, according to transmission system operator Terna ( see sectoral graph ). Italy's crude steel output rose by 3.6pc to 20.7mn t in 2025, Federacciai data show. Steel power demand fell by 10pc on the year in 2022 and was stagnant over 2023-24 but turned to growth in 2025 ( see long-term demand graph ). Monthly power demand has consistently increased year on year since July 2025, driven by increased production in anticipation of higher steel demand in 2026 ( see monthly graph ). Steel sector power demand reached 1.3TWh in February, up by 3.7pc on the year, mirroring a 2.6pc increase in crude steel output to 1.9mn t. EU steel demand is forecast to rise by 1.3pc to around 134mn t in 2026, according to European sector association Eurofer. And the EU plans to cut import quotas for flat steel from 1 July. Italy is a major importer of flat steel so the lower quota could boost domestic production. Energy efficiency in the sector increased over 2015-21, with consumption falling from roughly 800 kWh/t to below 700 kWh/t, data from Federacciai show. But power demand per ton of output has been slowly edging up since 2021. Geopolitical worries The Italian government has taken steps to insulate industry from power price increases, but geopolitical risks continue to influence prices. Italy launched its Energy Release Scheme late last year, offering electricity to energy-intensive users at a fixed price of €65/MWh in exchange for commitments to develop renewable capacity and return equivalent power over 20 years. But high energy costs will continue to weigh on steelmakers this year, Eurofer director-general Axel Eggert said, pointing to the impact of the Middle East war on gas markets after the Dutch TTF benchmark moved above €50/MWh in early March. Italian steel and scrap association Assofermet flagged the conflict as a source of potential additional cost pressures in an already volatile market. "Operating complexity and growing concerns related to the Carbon Border Adjustment Mechanism (CBAM) and the upcoming entry into force of the new safeguard measure are significantly weighing on the market," it said. The rollout of the CBAM — which raises import costs — will be accompanied by a gradual reduction of free allowances under the Emissions Trading System, from which energy intensive industries have long benefited. As free allocations decline, steelmakers will need to buy more allowances, adding further cost burdens. By Ilenia Reale Electric arc furnace capacity by country mn t/yr Sectoral breakdown of industry power demand % Steel power demand, 12-month trailing average TWh/m Power demand vs steel output, monthly Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
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