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Tanker traffic through the Strait of Hormuz on Wednesday had declined around 90% compared with last week, NBC News reported, citing ship tracker MarineTraffic, as oil and gas tankers clustered just outside of the strait.
President Donald Trump on Tuesday said the U.S. Navy could begin accompanying tankers through the strait if necessary and also announced steps aimed at alleviating high insurance costs.
“Naval escorts would help reduce the threat for the ships being protected,” Jakob Larsen, chief safety and security officer at global shipping organization BIMCO, told NBC. “That said, providing protection for all tankers operating in areas currently threatened by Iran is unrealistic as this would require a very high number of warships and other military assets.”
Calmer markets: Crude oil, which has surged in the wake of the closure of the strait, took something of a breather on Wednesday, enough to allow U.S. stocks to bounce higher. Brent crude ended a choppy session unchanged at $81.40 a barrel.
The tech-heavy Nasdaq Composite rose 1.3%, while the Dow Jones Industrial Average gained 237 points, or 0.5%. The S&P 500 rose 0.8%, leaving it not far below where it finished last Friday.
- Investors turned their focus back to economic data, which was largely positive. In particular, the Institute for Supply Management’s purchasing managers index for services providers came in at a stronger-than-expected 56.1 in February compared with 53.8 in January.
Ethanol production at 4-week low: U.S. ethanol production in the week ending Feb. 27 fell 1.6% to a four-week low of 1.1 million barrels a day, equivalent to 45.99 million gallons daily, according to a Renewable Fuels Association analysis of Energy Information Administration data.
Output remained 0.2% higher than the same week last year and 4.0% above the three-year average for the week, the RFA said. The four-week average ethanol production rate rose 3.3% to 1.11 million barrels a day, equivalent to an annualized rate of 17.05 billion gallons.
Middle East food imports threatened: Most of the attention around the Strait of Hormuz has focused on the difficulty of getting energy commodities and fertilizer out of the Middle East. But efforts to bypass the waterway also threaten to cut off parts of the region from food shipments.
The Financial Times, citing data from commodities analytics company Kpler, noted that of around 30 million tons of grain imported into the Gulf region last year, around 14 million tons went to Iran, with most of the flows going through Hormuz.
The report said Saudi Arabia imports about 40 percent of its grains and oilseeds through its eastern Gulf ports. The United Arab Emirates brings in about 90 per cent of those commodities through Jebel Ali in Dubai, and it also handles containerized food and perishables for at least four countries — the UAE, Saudi Arabia, Bahrain and Qatar — serving roughly 45 million to 50 million people.
“There’s an immediate risk of food insecurity within the region,” Christian Henderson, an assistant professor of Middle East studies and international relations at Leiden University in the Netherlands, told the FT. “The Gulf states are extremely dependent on imported food.”
China wants fewer hogs: China is urging hog producers to cut output and rein in production, Reuters reported, citing financial media outlet CLS. The call comes as Beijing battles a supply glut and sluggish consumer demand in its massive pork sector.
At a meeting with hog producers, the agriculture ministry urged them to pursue and achieve production limits set in 2025 as well as set up a registration system to improve control efforts, the report said. China, the world’s largest hog producer, slaughtered 720 million pigs last year.
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