Tension in the Middle East & Oil Prices | Weekly News Update

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Tensions Heat Up in The Middle East

Conflict in the Persian Gulf continues to heat up as multiple attacks have occurred in the past week.  On Thursday, Iran seized a British crude oil tanker amid tension between Iran and the US.  The tanker was captured while traveling through the Strait of Hurmuz, the largest crude oil chokepoint in the world.  Both Iran and the US claim they do not want a war, but as the attacks on crude tankers continue, it could open the door for a wider armed conflict.

This past week, the White House also reported that the US Military downed an Iranian drone just hours after Iran seized the British crude tanker.  The USS Boxer was monitoring the Strait of Hormuz when an Iranian drone flew too close to the warship, threatening the safety of the ship and the crew.  The USS Boxer used an electronic technique to down the drone.  The USS Boxer was able to detect the drone and jam the signal that connects the drone to the remote pilot, forcing them to crash.

Crude oil and diesel prices showed little to no impact from these tensions this past week.  Oil and diesel fundamentals, such as draws in crude oil inventories, and the US-China trade war outweighed the tension in the Persian Gulf and saw prices decrease.

Peloton Announces Level 4 Driverless Truck Platooning System

At the Automated Vehicle Symposium last week, Peloton CEO states that the company is doubling down on its technology efforts and releasing their new Level 4 driverless platooning system, called Automated Following.  The system uses vehicle-to-vehicle (V2V) technology to enable a single driver to operate two vehicles, ultimately doubling the productivity of drivers.  Along with the V2V technology, Automated Following will also incorporate radar-based braking systems and vehicle control algorithms.  Peloton is leveraging the skills, expertise, and intuition of the driver to continue to be the main input into the driving operation.  The technology works to mimic the driver for the following truck.  Peloton still believes human drivers are still and will be a crucial part of heavy-duty driving for the future.

In Other News

7/15

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CCJ: FMCSA Suspends Regs For Drivers Hauling Relief Loads After Hurricane Barry

The U.S. DOT’s Federal Motor Carrier Safety Administration has issued a regional emergency declaration that suspends hours of service regulations and size/weight regs for drivers hauling relief loads and supplies to areas affected by Hurricane Barry, which made landfall in Louisiana on Saturday.

Transport Topics: Louisiana’s Autonomous Truck Rules Will Take Effect Aug. 1

Louisiana’s recently approved regulations for autonomous commercial motor vehicles will take effect Aug. 1.  The law, signed by Gov. John Bel Edwards in June, establishes operational parameters and reporting requirements for autonomous trucks and their drivers.

7/16

JOC: US truckload spot rates slip, uncertainty stays

Spot truckload rates that increased sequentially in June are beginning to slip toward the summer doldrums, as the muted and late spring freight surge evaporates in the post-holiday summer heat. If nothing else, the pricing trajectory shows seasonal patterns still apply, although year-over-year comparisons remain skewed by an exceptionally strong June and July in 2018.

WSJ: U.S. Lobbies Oil Buyers and Producers to Secure Gulf Against Iranian Threat

The U.S. is lobbying nations that buy and sell Middle East oil to help protect the region’s waterways as concerns grow that Iran is stepping up efforts to disrupt crude exports, according to U.S. and European officials on Tuesday.

Bloomberg: Trump Says He Could Impose More China Tariffs If He Wants

President Donald Trump reiterated that he could impose additional tariffs on Chinese imports if he wants, after promising to hold off on more duties in a trade-war truce he reached with China’s Xi Jinping last month.

7/17

HDT: Peloton Announces Level 4 Driverless Truck Platooning System

Peloton is doubling down on its technology efforts, announcing a new, Level 4 driverless platooning system at the Automated Vehicle Symposium in Orlando, Florida, on July 17.  Also see, Peloton to Develop System for Driverless Following Truck in Platooning

WSJ: Texas Showdown Flares Up Over Natural-Gas Waste

A pipeline company is challenging Texas’ practice of allowing drillers to set unwanted natural gas on fire, in a case that could test state limits for how much of the fuel can legally go to waste.

JOC: CSX says lower truck rates hurting intermodal

CSX Transportation provided a grim outlook of the freight market in an earnings call July 16 — and lowered its guidance for 2019 — saying falling truck rates have hurt intermodal volume.

7/18

WSJ: Trump Says U.S. Ship Downed Iranian Drone in Strait of Hormuz

President Trump said the U.S. Navy downed an Iranian drone that was flying too close to a U.S. warship in the Strait of Hormuz, hours after Iranian forces said they had seized a foreign tanker, the latest in a series of incidents that have ratcheted up tensions in a vital oil shipping route.

WSJ: Union Pacific Cuts Costs, Bolsters Profit

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7/19

WSJ: Iran Pairs Diplomacy With Military Pushback as Gulf Tensions Soar

Ships plying the Strait of Hormuz are getting caught in the middle as Iran pushes back against U.S. sanctions and maneuvers around a more muscular American regional presence, raising the risk of direct military confrontation.

WSJ: Iran Seizes British-Flagged Oil Tanker

Iranian forces seized a British-flagged oil tanker in the Strait of Hormuz, as mounting tensions between Tehran and the West risked further disruption of commercial shipping in the strategically vital waterway.

This weekly publication is designed to highlight relevant industry news to provide professionals in the transportation, supply chain, and energy sectors with up-to-date information in a rapidly changing marketplace. This update is purely a compilation of industry news and as such, does not necessarily reflect the opinion of Breakthrough. We do not warrant or guarantee accuracy or completeness of information. For additional information, please contact us at info@breakthroughfuel.com.

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