Chapter 1: What is the main topic discussed in this episode?
Good morning from the Financial Times. Today is Monday, May 11th, and this is your FT News Briefing. We've got a few updates on the situation in the Strait of Hormuz, and despite warnings of jet fuel shortages, some airlines are not upping their ticket prices. Plus, Britain's Prime Minister will step up to the podium today as calls for him to resign get louder.
This is being billed as the speech of Starmer's career after the absolutely dismal results for the ruling Labour Party in the local elections.
I'm Victoria Craig, and here's the news you need to start your day. We've been talking for months about how oil tankers have been stuck in the Gulf. That's because the Strait of Hormuz has been effectively shut since the U.S.-Israeli war on Iran began back in February. But just yesterday, a Qatari gas shipment made it through.
It's bound for Pakistan and is the first from Qatar to make it through the strait with Iran's sign-off since the war started.
Chapter 2: What recent developments occurred in the Strait of Hormuz?
The tanker's lonely journey through the waterway comes as European oil majors are reaping billions of dollars from the energy market turmoil. Analysts estimate that Shell, BP, and Total Energies raked in as much as $4.75 billion from volatile price swings. But as these oil giants earn a windfall from the war, Asian nations are forced to look at oil and gas alternatives, namely coal.
Shipments of the carbon-intensive fuel typically slow down by this time in the year as the heating season nears an end. But analysts estimate that global coal imports in May are expected to be the third highest monthly figure on record. One of the big questions around the energy crisis is how soaring fuel prices will impact the summer travel season.
Industry insiders say airlines and their customers are locked in a confidence game over whether there will even be flights available to take people to their destinations. Despite that, and surprisingly, some airlines are cutting prices instead of raising them. Peter Campbell covers the global transport industry for the FT and joins me now. Hi, Peter.
So I think price cuts really are the opposite of what I was expecting to read in your latest story. Just walk me through what's happening here.
So the picture is quite complicated. There's a number of different things going on. Flights between Europe and Asia at the moment are very expensive. That is because no one can travel through the Gulf. But in Europe in particular, something funny is happening, and that is on short haul, predominantly on classic holiday destinations like Italy and Spain. Some of the prices are coming down.
And that is because a lot of jet fuel comes through the Strait of Hormuz. There are concerns that if it remains closed, there are going to be some places that will just not have enough come the middle of summer. And so consumers, holidaymakers reading this, are understandably worried about whether there will be flights in the summer and so are pushing back, booking their holidays.
And so what you've seen from some of the budget airlines, particularly in Europe, is that they have started to drop prices in order to try and encourage people to book now.
All right. So it sounds like there are some deals to be had. But on the other end of the spectrum, our colleagues reported last week that the EU has told airlines that they need to continue to reimburse passengers for any flight cancellations that are caused by these high energy prices. I'm just curious, Peter, what are the airlines pushing for on this regulatory front?
Do they want to see looser regulations in a sense to help deal with this issue?
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Chapter 3: How are European oil majors benefiting from the ongoing war?
That's after disastrous local election results at the end of last week, in which his Labour Party lost hundreds of seats and its share of the national vote plunged to just 17%, according to the latest BBC projections. In a bid to quell the unrest in the party, Starmer is due to make a speech later today laying out his values. Lucy Fisher will be listening keenly to that speech.
She covers Whitehall for the FT and hosts our Political Fix podcast. Hi, Lucy. Hi, Beth. So what are we expecting from Starmer's speech today?
This is being billed as the speech of Starmer's career after the absolutely dismal results for the ruling Labour Party in the local elections. We've got swirling speculation in Westminster about whether a challenger might launch a coup attempt against him.
And therefore Downing Street know that they have to try and reset Starmer's administration and give faith to his MPs and ministers that he can turn the government around and restore the public's faith in his own leadership. So we are expecting him to talk a lot about Europe and make a big play on closer relations with the EU. It's obviously 10 years this summer. since the Brexit referendum.
And I think that will be the main play from this speech. Whether it's enough, it remains to be seen.
And it's not, we should mention, just Starmer that voters are upset with. Labour's main rival, the Conservative Party, also did not fare well in those local elections last week. And instead, they heavily favoured third parties. What's going on with voters? What was it about those third parties that they liked?
I think these elections marked the death knell for the two-party system that has been dominant in England for decades. I think there's a sense in the UK that living standards have been stagnant for so long, essentially, since the financial crash of 2008, 2009.
So I think there's a sense that after 14 years of Conservative-led rule ended in 2024, there were high hopes that the new Labour regime could really get things done. That has stalled. And I think there is a willingness now among the public to roll the dice and try something fresh with one of these third parties that have, you know, shot up in the polls in recent months.
Okay, so Starmer is going to try to get things back on track for labor today. And then in a very pomp and pageantry event on Wednesday, we have what's called the King speech in Parliament. And Lucy, for those who are not familiar with this, just walk us through what that is and why it does actually relate to this political conversation we're having here.
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