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Oil jumps after tankers warned to avoid Red Sea following US and UK strikes

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Oil jumps after tankers warned to avoid Red Sea following US and UK strikes

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Oil prices on Friday jumped above $80 a barrel for the first time in 2024 after the world’s largest tanker body warned members to avoid the waters off Yemen following US and UK air strikes on Houthi militants.

Brent crude rose 4 per cent to $80.50 a barrel while West Texas Intermediate, the equivalent US benchmark, gained a similar amount to $74.91 a barrel.

The International Association of Independent Tanker Owners (Intertanko), which represents almost 70 per cent of all internationally traded oil, gas and chemical tankers, said in an advisory to members on Friday to “stay well away” from the Bab al-Mandab strait, and for vessels travelling south via the Suez Canal to pause north of Yemen.

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“The threat period for shipping is expected to last for several days,” Intertanko said.

While the majority of container ships have avoided the Red Sea area in recent weeks, the drop-off in oil tanker sailings has so far been less pronounced, with many still choosing to transit the route despite more than 25 attacks by Houthi militants on shipping since November.

US President Joe Biden confirmed overnight that he had ordered strikes, supported by the UK RAF, in response to “unprecedented” attacks by the Iran-backed militants on both merchant and military vessels.

Oil prices have been relatively calm since the start of the Israel-Hamas war in October, with only brief rises that have been faded by traders betting that a serious supply disruption is unlikely if the conflict can be contained.

The market is also viewed as relatively well supplied, with output rising from producers outside the Opec+ cartel and demand growth weighed down by a tepid global economy.

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But the risk of an expanded conflict that affects oil supplies has grown, with Iran seizing an oil tanker near the Strait of Hormuz — the world’s most important oil route — on the other side of the Arabian peninsula on Thursday.

Traders said the growing risks meant those who had been betting against the price would be cautious ahead of the weekend, and may buy back positions.

“The oil market has largely shrugged off risk that the Israel-Hamas war would disrupt oil supplies,” said Bob McNally, founder of Rapidan Energy and a former adviser to the George W Bush White House. “But as Iran and its proxies continue to escalate attacks on commercial shipping and US and allied military bases in the region, that premium is likely to return.”

Denmark-based Torm, which operates a fleet of 80 tankers for oil products, said after the Intertanko warning that it would stop sending vessels into the southern Red Sea.

“Torm has decided to pause all transits through the southern part of the Red Sea for now,” the company told the Financial Times, and was expected to instruct some vessels to pause and send others via the longer route round the Cape of Good Hope.

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While oil supply chains are more robust than many manufactured products, with huge volumes of crude and fuel held in storage by refiners, shippers are likely to face higher freight and insurance costs.

Goldman Sachs said this week that implied oil shipments through the Bab al-Mandab strait had declined by only about 15 per cent or less than 1mn barrels a day. Clarksons, a shipping brokerage, put the decline in tanker transit at about 25 per cent this week compared with the same period last year.

Total crude and refined product oil flows through the strait were as high as 8.8mn b/d in the first half of 2023, according to the US Energy Information Administration.

Western governments have been debating how to respond since Houthi rebels started attacks late last year in an area through which nearly 15 per cent of global sea trade passes.

A US-led military coalition and shipowners had tried to strengthen security in the Red Sea last month but it has done little to deter attacks, increasing pressure on the governments to strike the rebels in Yemen.

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Bjarne Schieldrop, a commodities analyst at SEB, warned that the air strikes may prompt retaliation by Iran and its allies. “The fear in the oil market is that the region is on an unpredictable escalating path where at some point down the road supply of oil will indeed in the end be lost,” he said.

Additional reporting by Stephanie Stacey in London

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Supreme Court blocks redrawing of New York congressional map, dealing a win for GOP

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Supreme Court blocks redrawing of New York congressional map, dealing a win for GOP

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Win McNamee/Getty Images

The Supreme Court on Monday intervened in New York’s redistricting process, blocking a lower court decision that would likely have flipped a Republican congressional district into a Democratic district.    
  
At issue is the midterm redrawing of New York’s 11th congressional district, including Staten Island and a small part of Brooklyn. The district is currently held by a Republican, but on Jan. 21, a state Supreme Court judge ruled that the current district dilutes the power of Black and Latino voters in violation of the state constitution.  
  
GOP Rep. Nicole Malliotakis, who represents the district, and the Republican co-chair of the state Board of Elections promptly appealed to the U.S. Supreme Court, asking the justices to block the redrawing as an unconstitutional “racial gerrymander.” New York’s congressional election cycle was set to officially begin Feb. 24, the opening day for candidates to seek placement on the ballot.  
  
As in this year’s prior mid-decade redistricting fights — in Texas and California — the Trump administration backed the Republicans.   
 
Voters and the State of New York contended it’s too soon for the Supreme Court to wade into this dispute. New York’s highest state court has not issued a final judgment, so the voters asserted that if the Supreme Court grants relief now “future stay applicants will see little purpose in waiting for state court rulings before coming to this Court” and “be rewarded for such gamesmanship.” The state argues this is an issue for “New York courts, not federal courts” to resolve, and there is sufficient time for the dispute to be resolved on the merits. 
  
The court majority explained the decision to intervene in 101 words, which the three dissenting liberal justices  summarized as “Rules for thee, but not for me.” 
 
The unsigned majority order does not explain the Court’s rationale. It says only how long the stay will last, until the case moves through the New York State appeals courts. If, however, the losing party petitions and the court agrees to hear the challenge, the stay extends until the final opinion is announced. 
 
Dissenting from the decision were Justices Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson. Writing for the three, Sotomayor  said that  if nonfinal decisions of a state trial court can be brought to highest court, “then every decision from any court is now fair game.” More immediately, she noted, “By granting these applications, the Court thrusts itself into the middle of every election-law dispute around the country, even as many States redraw their congressional maps ahead of the 2026 election.” 

Monday’s Supreme Court action deviates from the court’s hands-off pattern in these mid-term redistricting fights this year. In two previous cases — from Texas and California — the court refused to intervene, allowing newly drawn maps to stay in effect.  
  
Requests for Supreme Court intervention on redistricting issues has been a recurring theme this term, a trend that is likely to grow.  Earlier last month  the high court allowed California to use a voter-approved, Democratic-friendly map.  California’s redistricting came in response to a GOP-friendly redistricting plan in Texas that the Supreme Court also permitted to move forward. These redistricting efforts are expected to offset one another.     
   
But the high court itself has yet to rule on a challenge to Louisiana’s voting map, which was drawn by the state legislature after the decennial census in order to create a second majority-Black district.  Since the drawing of that second majority-black district, the state has backed away from that map, hoping to return to a plan that provides for only one majority-minority district.    
     
The Supreme Court’s consideration of the Louisiana case has stretched across two terms. The justices failed to resolve the case last term and chose to order a second round of arguments this term adding a new question: Does the state’s intentional creation of a second majority-minority district violate the constitution’s Fourteenth and Fifteenth Amendments’ guarantee of the right to vote and the authority of Congress to enforce that mandate?    
Following the addition of the new question, the state of Louisiana flipped positions to oppose the map it had just drawn and defended in court. Whether the Supreme Court follows suit remains to be seen. But the tone of the October argument suggested that the court’s conservative supermajority is likely to continue undercutting the 1965 Voting Rights Act.   

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Map: Earthquake Shakes Central California

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Map: Earthquake Shakes Central California

Note: Map shows the area with a shake intensity of 3 or greater, which U.S.G.S. defines as “weak,” though the earthquake may be felt outside the areas shown.  All times on the map are Pacific time. The New York Times

A minor earthquake with a preliminary magnitude of 3.5 struck in Central California on Monday, according to the United States Geological Survey.

The temblor happened at 7:17 a.m. Pacific time about 6 miles northwest of Pinnacles, Calif., data from the agency shows.

As seismologists review available data, they may revise the earthquake’s reported magnitude. Additional information collected about the earthquake may also prompt U.S.G.S. scientists to update the shake-severity map.

Source: United States Geological Survey | Notes: Shaking categories are based on the Modified Mercalli Intensity scale. When aftershock data is available, the corresponding maps and charts include earthquakes within 100 miles and seven days of the initial quake. All times above are Pacific time. Shake data is as of Monday, March 2 at 10:20 a.m. Eastern. Aftershocks data is as of Monday, March 2 at 11:18 a.m. Eastern.

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US says Kuwait accidentally shot down 3 American jets

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US says Kuwait accidentally shot down 3 American jets

The U.S. and Israel have been conducting strikes against targets in Iran since Saturday morning, with the aim of toppling Tehran’s clerical regime. Iran has fired back, with retaliatory assaults featuring missiles and drones targeting several Gulf countries and American bases in the Middle East.

“All six aircrew ejected safely, have been safely recovered, and are in stable condition. Kuwait has acknowledged this incident, and we are grateful for the efforts of the Kuwaiti defense forces and their support in this ongoing operation,” Central Command said.

“The cause of the incident is under investigation. Additional information will be released as it becomes available,” it added.

In a separate statement later Monday, Central Command said that American forces had been killed during combat since the strikes began.

“As of 7:30 am ET, March 2, four U.S. service members have been killed in action. The fourth service member, who was seriously wounded during Iran’s initial attacks, eventually succumbed to their injuries,” it said.

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Major combat operations continue and our response effort is ongoing. The identities of the fallen are being withheld until 24 hours after next of kin notification,” Central Command added.

This story has been updated.

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