Bloomberg: Iran keeping moving its own oil through Hormuz
Iran has been moving its crude through the Strait of Hormuz at rates “broadly comparable to transit before the war began”, according to Bloomberg this morning.
They report:
Iranian crude exports through the corridor accounts for nearly three-quarters of the 27.2 million barrels that have left the Persian Gulf since March 1, data from intelligence firm Kpler Ltd. show. That amounts to about 1.2 million barrels a day of crude for Tehran, compared to a pre-war daily level of 1.5 million barrels.
By contrast, nearly three weeks into the war, cargoes from others in the region added up to just 400,000 barrels a day, versus an average 14 million barrels per day in peace time.
Beer prices could be pushed up by Iran war
UK beer prices could rise as the Iran war sends oil and energy costs soaring, an insolvency expert is warning today.
Insolvency practitioner Molly Monk of Parker Walsh has pointed out that the Middle East conflict is pushing up energy and fuel costs for pubs and brewers across the UK.
If that continues, pubs and other hospitality venues will have to choose between absorbing some of the costs, increasing prices or buying less stock.
Monk says:
“Beer businesses are particularly vulnerable when oil and gas prices rise because the impact is felt at several different points in the chain.
“Breweries face higher production and distribution costs, while pubs and bars are then hit again through refrigeration, lighting, heating and other day-to-day running costs.”
European stock markets are mostly higher this morning, with Germany’s DAX up 0.47% and France’s CAC 40 gaining 0.64%.
The news that Iraq has agreed a deal with Turkey to resume oil exports through the port of Ceyhan has lifted investor sentiment, reports Susannah Streeter, chief investment strategist at Wealth Club:
“The FTSE 100 has made another tentative step in early trade to recover losses sparked by the outbreak of war with Iran. Stocks on Wall Street are also set to resume a rally as investor sentiment recovers.
Iraq has clinched a deal with Turkey to resume exports through the port of Ceyhan, instead of using the dangerous Strait of Hormuz. This is leading to hopes that a severe, prolonged oil shock will not materialise, as more crude supplies are able to filter out of the region through other routes, while Iran continues to allow tankers heading for China, India and Pakistan to use the Strait. Hopes have also risen slightly for more diplomatic moves to come, which could force a faster end to the fighting.
UK borrowing costs fall to lowest in a week
Government bonds are rallying this morning too, pushing down borrowing costs.
The UK is benefitting, with gilt prices rising which is pushing down the yield (or interest rate) on the bonds, reversing the rise seen early in the Middle East conflict.
Two-year bond yields are down 4 basis points (0.04 percentage points) at 4.01%, the lowest in a week. That’s the third daily fall in a row, as the weakening oil price eases inflation worries.
Ten-year bond yields are down at a one-week low of 4.656%, a drop of 4.4 basis points.
FTSE 100 opens higher
Stocks have opened higher in London, where the FTSE 100 index is up 24 points or 0.23% at 10,427 points.
Technical products and services firm Diploma (+17%) are soaring, after lifting its financial guidance for this year due to resilient aerospace demand and continued growth in its North American seals business.
Copper producer Antofagasta (+2.6%), and engineering firm Weir Group (+2.4%) are following, while airlines are benefitting from the drop in oil prices today.
Switzerland cuts 2026 growth forecast due to Middle East war
Switzerland has lowered its forecast for growth this year, due to the Middle East conflict.
The Federal Government Expert Group on Business Cycles (the official body which assesses the Swiss economy) has trimmed its forecast for growth in 2026 to 1.0%, down from 1.1% predicted last December.
It declared (pdf) that “the war in the Middle East is driving up energy prices and further increasing uncertainty”, adding:
The war in the Middle East has led to a sharp rise in international energy prices since the end of February. This is dampening the international economic outlook and is expected to result in higher inflation rates, including in European and Asian trading partner countries.
here is a great deal of uncertainty regarding the further development of the conflict in the Middle East and its economic impact. Against this backdrop, the Expert Group is raising its technical assumption for average oil prices in the current and coming year.
Updated
Iraq at risk of downgrade as Hormuz shutdown hurts oil output
Last night, Iraq was put on risk of a credit rating downgrade by S&P, due to the drop in its oil output this month.
S&P put Iraq on CreditWatch with negative implications, which could lead to a downgrade.
S&P said:
Iraq’s oil production has fallen to around 1.2 million barrels a day (bpd), from 4.2 million bpd, due to the effective closure of the Strait of Hormuz since the regional conflict started on Feb. 28, 2026.
A prolonged disruption to Iraq’s oil production will pressure the country’s fiscal and external position over 2026, even with sizable international reserves, which currently cover about 10 months of current account receipts.
We have therefore placed our ‘B-’ long-term foreign and local currency sovereign ratings on Iraq on CreditWatch with negative implications.
The Iraqi state news agency is reporting that Kirkuk has resumed pumping oil via Turkey’s Ceyhan port at a rate of 250,000 barrels.
That would only be a fraction of the country’s normal output. Before the Iranian war began, Iraq was producing 4.5 million barrels of crude oil per day. But it was forced to slash output once tankers couldn’t travel safely through the strait of Hormuz.
introduction: Oil falls after Iraq signs deal to resume exports via Turkey
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The conflict in the Middle East continues to grip the markets, as ship traffic through the strait of Hormuz continues to be slowed by the crisis.
But this morning, oil has dropped after Iraq reportedly struck a deal with Turkey to resume oil exports through their territory, having agreed with Kurdistan to pump oil through a pipeline in its region.
According to Reuters, crude exports from Iraq’s Kirkuk fields by pipeline to Turkey’s Ceyhan port have resumed, giving an alternative route rather than braving the strait.
But, the rerouting of some Iraqi oil through Turkey will only partially relieve supply concerns, Bloomberg reports, adding that Iraq’s oil production has fallen to about 1.4 million barrels a day — about a third of levels before the closure of Hormuz.
Brent crude is down 1.55% this morning at $101.80 a barrel, while US crude is almost 3% lower at $93.42 a barrel.
Ipek Ozkardeskaya, senior analyst at Swissquote, says:
This morning, oil is sharply down on news that Iraq signed a deal to resume oil exports via Turkey, bypassing the Strait of Hormuz, while Saudi Arabia is also rerouting exports toward the Red Sea. The region is reorganizing, preparing for the possibility of a prolonged conflict.
Restoring oil exports fully will take time, and we may soon see physical-market shortages — likely keeping oil prices under upward pressure. Yet, as flows adapt to alternative routes, the initial surge in oil prices seen at the start of the war could ease.
Stock markets are responding to this too – Japan’s Nikkei has gained 2.8% this morning, while South Korea’s KOSPI has jumped by 5.7%.
Investors are also hoping that central bankers will ‘look through’ the approaching spike in inflation, rather than reacting by raising interest rates. We’ll hear from America’s top central banker, Jerome Powell, tonight, when the Federal Reserve is widely expected to leave US interest rates on hold.
Jim Reid of Deutsche Bank reports:
There is also a bit more calm in markets at the moment and a small hint that there is a decoupling from the price of oil as the last 24 hours have seen more positive risk markets and lower [bond] yields.
The agenda
10am GMT: Eurozone inflation report for February
12.30pm GMT: US producer prices inflation (PPI) report for February
1.45pm GMT: Bank of Canada interest rate decision
6pm GMT: US Federal Reserve interest rate decision
6.30pm GMT: Federal Reserve press conference
Updated
