Oil prices fell on Monday after the mutual shelling between the United States and Iran was suspended. This pause has increased optimism regarding the resumption of the ceasefire regime and the start of negotiations to restore operations in the Strait of Hormuz.
The United States halted fire over the weekend following 13 days of attacks on facilities in the Islamic Republic. According to Donald Trump's envoy to the UN, the US president 'is providing space for talks.' In turn, Tehran stated that it would cease retaliatory attacks on neighboring countries in the region, which provided a respite for shipping in the Persian Gulf and the oil and gas industry.
The conflict resumed this month, breaking a fragile truce, after Iran attacked vessels passing through Omani waters in the Strait of Hormuz, triggering a chain reaction of escalation. This jeopardized diplomatic efforts between Washington and Tehran. The situation worsened when Iran-backed Houthis in Yemen attacked Saudi Arabian vessels in the Bab el-Mandeb Strait, a critical route to the Red Sea.
During the spike in tension, crude oil prices rose sharply, with Brent exceeding $100 a barrel for the first time since May. However, news that shipping continued in the Red Sea helped investors reduce profits on Friday. Nevertheless, Trump's decision to refrain from further strikes and Iran's Sunday statement about progress in negotiations with Oman on managing the Strait of Hormuz brought welcome relief.
According to Esmail Bakaei, a spokesperson for the Iranian Foreign Ministry, discussions focused on 'general principles and operational mechanisms' to ensure safe passage for vessels through the strait while respecting the sovereign rights of both countries. Furthermore, it was reported that Pakistan is considering resuming peace talks between the US and Iran following China's initiative. Both major oil contracts fell on Monday; Brent temporarily lost more than seven percent, dipping below $90.
Sally Old from National Australia Bank noted: 'It seems that events in the Middle East over the weekend moved in a positive direction, which lends some weight to the idea that oil above $100 a barrel appears to be causing de-escalatory behavior on both sides.'
These positive changes weakened concerns about renewed inflation and another round of interest rate hikes, which in turn contributed to stock market growth. However, traders remain concerned about the sustainability of the AI boom and the huge amounts invested in the sector, as tech companies account for the majority of sales.
Seoul, which led the decline in recent weeks, rose by one percent, and chip giants SK hynix and Samsung received desired buyer interest. Tokyo also showed growth, although tech companies Advantest and Kioxia faced stronger selling pressure. Growth was recorded in Hong Kong, Sydney, Shanghai, Wellington, Singapore, Mumbai, and Manila. London, Paris, and Frankfurt opened in the green. Taipei and Bangkok declined, and Jakarta also retreated after the unexpected resignation of Indonesian central bank head Perry Wardjiyo for personal reasons.
Traders await earnings reports from SK hynix, Samsung, and Japanese Kioxia this week, as well as reports from American giants Microsoft, Meta, Apple, and Amazon, focusing on their forecasts and spending plans. Tim Waterer from KCM Trade noted: 'Traders remain somewhat nervous about the scale of capital expenditures, given ongoing concerns about how long the investment recovery phase can fully materialize.'
The Federal Reserve is also scheduled to make a decision this week, taking into account the recent escalation between the US and Iran and the latest data indicating slowing inflation. Bets on a hike increased last week, although analysts expect officials to maintain the current course on Wednesday. However, Jenny Zeng from Allianz Global Investors warned: 'Although the (advisory body) is likely to remain on hold in July, we continue to expect tightening by 50 basis points by the end of the year.'
In corporate news, China's leading memory chip manufacturer CXMT jumped 530 percent in its debut listing in Shanghai, surpassing mega-bank ICBC as the most valuable company in mainland China, before later correcting its rise to finish at 465 percent. This impressive surge occurred after the Anhui province company raised $9.8 billion in a large IPO, marking the largest technology stock sale on the mainland of China, according to Bloomberg News.
At an energy meeting on July 27, President Shavkat Mirziyoyev stated that there is a problem in Uzbekistan with the data transmission from more than 530 thousand gas and electricity meters.
Specifically, 300 thousand gas meters and 234 thousand electricity meters installed in residential buildings are not transmitting information to automated metering systems. Despite the fact that the AMSKUE and AMSKUG systems were put into operation more than four years ago, over 534 thousand measuring devices are still either not connected to data transmission or are not functioning normally.
The head of state emphasized that this situation hinders accurate accounting of energy resource consumption and control over timely payment. Consequently, in certain regions, accounts receivable debt is not decreasing but is instead continuing to grow.
A correspondent for 'Gazeta' encountered a similar problem: his gas meter has not been transmitting data for over a year due to modem failure. In such cases, a gas service employee is forced to visit the house every two or three months to manually read the meters and enter the data into the system, after which the charges are calculated and payment for the used gas is made.
The employee's suggestion was to temporarily dismantle the meter for repair. However, implementing this plan requires finding a gas service specialist and a plumber who can temporarily connect the gas pipe directly to the stove. This process of installing and subsequently dismantling the temporary connection will incur additional costs for the consumer.
During the meeting, the president drew attention to the lack of clear calculations regarding the development of energy infrastructure by some regional heads. It was noted that power losses in the grid reach 17.2%, and 4.8 billion kilowatt-hours were lost in the last six months.
In several districts, including Andijan, as well as Asakinsky, Yangiabadsky, Kasansky, Kukdalinsky, Baysunsky, Altynsaysky, Kushtepinsky, Tashlaksky, Kushrabatsky, and Samarkandsky districts, the loss rate exceeds 25%. The president also stressed that some leaders interpret energy efficiency solely as the installation of solar panels, which leads to the misuse of funds if the building itself does not have high energy efficiency.
In 2024, the company 'Khududgazta'minot' informed that electronic gas meters may stop transmitting data due to communication problems or battery failure. However, the devices retain hourly and daily consumption data for 90 days, and once communication is restored, the information is automatically uploaded for recalculation. The company advises consumers to regularly check the meter readings against their personal account and to contact 1104 or the mahalla gas worker if discrepancies or balance stagnation are found.
Furthermore, 'Technopark', established by the Tashkent city hokimiyat, has been producing gas smart meters under the Osten brand since the beginning of 2020. According to 'Gazeta.uz', a supply of 3.54 million electronic gas meters worth 5.28 trillion soms (equivalent to approximately 507 million US dollars at the Central Bank exchange rate on December 1, 2021) was planned before July 2021.
A major investment project is launching in the Khorezm region of Uzbekistan, which involves the creation of a biofuel production plant utilizing hydrogen technologies. The total investment for this project amounts to $6.1 billion.
A memorandum of strategic cooperation concerning this project was signed in the United Arab Emirates between the Emirati company Allied Biofuel Holding and Deem International Engineering. The construction of the plant is planned to take place from 2026 to 2030, with the enterprise reaching full production capacity by the third quarter of 2030.
Production will be carried out by processing sorghum, which is transformed into fuel using hydrogen technologies. This method allows energy to be extracted from plant raw materials instead of oil, contributing to reduced air pollution. Annually, the plant is designed to produce 110 thousand tons of aviation biofuel, 300 thousand tons of sustainable aviation fuel, and 5 thousand tons of green diesel.
It is planned that 70 percent of all produced products will be sold on the domestic market, while the remaining 30 percent is intended for export. Muhammad Alfalasi, CEO of Deem Engineering, noted that this new plant will serve as further confirmation of the partnership between Uzbekistan and the UAE. He emphasized that both countries are already actively cooperating in the fields of energy, industry, agriculture, and infrastructure, and the biofuel plant in Khorezm will continue this joint activity.
