Business

Hormuz Strait may not fully reopen until H2 2026

Baker Hughes is working under the assumption that the Strait of Hormuz may not fully reopen for months, a senior executive at the influential oilfield services firm said Friday.

Baker is assuming in its financial guidance that the U.S.-Iran conflict continues through the end of June and the strait may not be fully operational until the second half of the year, Chief Financial Officer Ahmed Moghal told investors on the company’s first-quarter earnings call.

“There’s still a great deal of uncertainty regarding, ultimately, the duration and depth of the conflict,” Moghal said.

Baker is one of the most infuential oilfield drillers in the world with extensive business in the Middle East. The assumption that the strait may not reopen for months is widely shared in the energy industry.

The Federal Reserve Bank of Dallas found in a survey of nearly 100 oil and gas executives that nearly 80% believe the strait will not reopen until August or later. More than 80% of executives who responded see future disruptions in the strait as somewhat or very likely, the Dallas Fed Energy survey found.

Baker Hughes CEO Lorenzo Simonelli said “geopolitical risk has become a structural reality for oil and gas markets” after the Iran war. The closure of the strait has impacted 10% of global oil volumes and knocked offline 20% of global liquified natural gas (LNG) supplies, Simonelli said.

This will likely to result in “persistent risk premiums for oil and LNG prices,” the CEO said.

The strait is one of the most important trade routes in the world, particularly for energy markets with about 20% of global oil supplies passing through the sea lane before the war. Iran has managed to choke off exports through the strait by attacking tankers, triggering the biggest oil supply disruption in history.

Tanker traffic through the strait remains very low as the conflict enters its eighth week. The U.S. and Iran have both seized commercial ships as they try to enforce competing blockades in and around the strait during a fragile ceasefire agreement.

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Business

France fines Shein $26 million

(Reuters) – France has fined fast-fashion firm Shein about €22 million ($26 million) over issues ‌with returns, product information and order confirmations, a penalty the company described as disproportionate and vowed to challenge.

The Directorate General for Competition, Consumer Affairs, and Fraud Control said on Wednesday it had fined Shein €16.7 million for the order confirmation issues ⁠and €5.8 million for issues with returns and environmental quality information.

“Technical issues, with no impact on consumers and already addressed where necessary, have been used as the basis for an exceptional penalty,” a Shein spokesperson said in a statement. “We therefore intend to strongly contest both sanctions in their entirety.”

France fined Shein €40 million for misleading discounts in July. Authorities also sought to suspend its marketplace, but Paris’ ‌Court ⁠of Appeals rejected that move in March.

Shein, which has won over millions of cash-strapped shoppers around the world with rock-bottom prices on clothes, gadgets and accessories, has faced heightened scrutiny in France since November, when the ⁠consumer watchdog found sex dolls resembling children and banned weapons for sale on its site.

Since the discovery, “we have decided not to leave these platforms alone, ⁠and we will continue to take action until they completely change their practices – or leave our market,” Serge Papin, minister ⁠for small and medium-sized businesses, said in a post on X.

($1 = 0.8615 euros)

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Business

Middle East airlines face $4.3 billion loss in 2026, says IATA

Rio de Janeiro: Middle East airlines are expected to plunge into a collective $4.3 billion loss in 2026, with profit per passenger dropping from $31.50 last year to a loss of $21.40, International Air Transport Association (IATA) said in its latest financial outlook for the global airline industry.

The report, released at IATA’s annual general meeting in Rio de Janeiro, said global airlines are expected to achieve a combined total net profit of $23.0 billion in 2026, roughly half the previously projected $41 billion.

The Middle East is the only region globally expected to slip into the red as airlines battle the fallout from the US-Israel-Iran war, which has severely disrupted operations across key Gulf hubs.

Passenger demand in the region is forecast to fall 11.4 per cent, while airline capacity is expected to decline 4.4 per cent. Net margins are projected to tumble to minus 6.1 per cent, compared to a positive 9.4 per cent in 2025.

“Sitting at the centre of the shock from the war in the Middle East, the region is expected to generate a net loss in 2026,” IATA said.

Gulf carriers hit by airspace closures

IATA said Gulf airlines are facing operational uncertainty after widespread airspace restrictions and flight disruptions linked to the conflict.

“The Gulf carriers face operational uncertainty following a near complete shutdown of airspace at the outbreak of the war,” said Willie Walsh, IATA Director General. “These carriers are doing an amazing job maintaining connectivity, but major financial impacts are unavoidable,” said Walsh.

The industry body said flight cancellations, rerouting, reduced transfer traffic and elevated operating costs are all weighing heavily on profitability.

Middle Eastern airlines, particularly major Gulf hubs, depend heavily on transit passengers connecting between Asia, Europe and Africa. The loss of this transfer traffic is reducing load factors and increasing unit costs.

Global airline profits set to halve in 2026

The wider global airline industry is also heading into a significantly weaker year.

IATA forecasts global airline profits will fall from $45 billion in 2025 to $23 billion in 2026, while net profit margins will shrink from 4.2 per cent to 2.0 per cent. “War-related disruptions in the Middle East and rising fuel costs have shifted the outlook for airlines to the worse,” Walsh said.

“Globally, airlines are expected to see profitability halve compared to 2025.” Net profit per passenger globally is expected to drop to $4.50, compared to $9.10 last year.

“Under the circumstances, that shows resilience,” Walsh said. “But it won’t even buy you a hot dog at most of the FIFA World Cup venues and it does not leave much of buffer should other costs or taxes start rising,” said Walsh.

Jet fuel prices soar

Still, the biggest pressure point for airlines remains fuel. Jet fuel prices are expected to average $152 per barrel in 2026, almost 70 per cent higher than the $90 average seen in 2025. Fuel costs are forecast to jump from $252 billion to $350 billion globally this year, pushing fuel’s share of airline operating expenses to more than 31 per cent.

“No sooner did we put COVID behind us than we faced aerospace supply chain failures, war in Ukraine, geopolitical tensions, and tectonic shifts in trade policies. And, when war broke out in the Middle East in March, oil prices jumped, and jet fuel prices skyrocketed,” said Walsh.

“As a result, we expect average jet fuel prices to be 70 per cent higher year-on-year. That will add $100 billion to our collective fuel bill this year,” he said.

IATA said many airlines remain exposed because they hedge crude oil rather than jet fuel directly, leaving them vulnerable to widening refining margins, known as the crack spread.

Demand stays resilient, for now

Despite rising costs, passenger demand continues to hold up globally. Airline revenues are expected to rise 9.4 per cent to $1.165 trillion in 2026, supported by higher ticket prices, strong travel demand and growing ancillary revenues.

Passenger ticket revenues alone are forecast to hit $839 billion, up 9.2 per cent year-on-year. Passenger load factors are also expected to reach another record high of 84 per cent. “The positive however, is that demand is holding up, even as airlines are raising fares and rates to cope,” Walsh said.

IATA polling showed that 49 per cent of travellers expect to spend more on travel this year, while another 43 per cent plan to spend the same as last year.

Aircraft shortages, engine delays add billions in costs

The report also stated that airline industry is also struggling with persistent aerospace supply chain failures.

IATA said aircraft order backlogs have climbed beyond 18,000 jets, while the average age of the global fleet has reached a record 15.2 years.

“Supply chain failures cost airlines at least $11 billion in 2025.” Airlines are increasingly being forced to keep older aircraft in service longer, resulting in higher maintenance costs, increased lease rates and reduced fuel efficiency.

The shortage of newer aircraft has also halted fuel-efficiency gains for the first time in history during 2024 and 2025, according to IATA.

The outgoing IATA chief blasted engine makers. Without mincing words, Walsh said, “My message to the engine OEMs is simple – stop gouging us and get back to making great engines that work and that last. Allowing these failures to extend into the next decade is totally unacceptable to the customers.”

Business

Oman’s explosion hit oil terminal resumes operations

Oil prices fall after Oman says Mina al Fahal operations proceeding normally

Oil prices fell on Friday after Oman said operations at its Mina al Fahal port ‌were proceeding normally, following a Reuters report of disruption after an explosion.

Petroleum Development Oman said operations at Mina al Fahal port were unaffected, after three sources told Reuters that oil loading had been suspended following an explosion near its mooring berths.

Oman exports 800,000 to 900,000 barrels per day of crude from the terminal.

Brent crude futures were down 84 cents, or 0.9%, at $94.19 a barrel by 1318 GMT, after settling down 2.84% ⁠in the previous session.

U.S. West Texas Intermediate crude was at $91.91 a barrel, down $1.13, or 1.2%, following a 3.1% loss on Thursday.

Both contracts still looked set to post their first weekly gains in three weeks, with Brent up 2.4% and WTI around 5.1%.

The contracts rose after fighting flared in the Middle East as U.S.-Iran war peace talks dragged on while traffic in the Strait of Hormuz, where a fifth of the world’s oil passes, remained limited.

“As hopes for an agreement between the U.S. and Iran were dashed once again, the price of Brent crude and European natural gas rose slightly this week,” Commerzbank analysts said on Friday.

However, Brent’s gains have ‌been capped ⁠by oil inventories lasting longer than expected, rerouted exports and falling demand, Commerzbank added.

Hezbollah leader Naim Qassem rejected on Thursday a U.S.-brokered agreement between Israel and the Lebanese government to halt the fighting. Iran has made a ceasefire in Lebanon a condition for any peace deal with Washington.

U.S. President Donald Trump said on Thursday he believed progress was being made ⁠between Israel and Lebanon and that Lebanon deserved to have peace.

“Any optimism remains heavily clouded by a tangled web of headlines and counter-headlines,” IG market analyst Tony Sycamore said in a note.

OPEC is sticking to its oil demand growth forecast of ⁠1.2 million barrels per day for this year, Secretary General Haitham Al Ghais said on Thursday, despite the Middle East conflict and closure of the Strait of Hormuz.

Iranian oil exports have fallen to their lowest level ⁠in six years mainly due to the U.S. naval blockade, according to shipping data, although weak demand in China has depressed prices for the oil.

Reuters