UAE Could Downgrade Diplomatic Ties If Israel Annexes West Bank, Sources Say

Political

Summary:

UAE considers downgrading ties over potential West Bank annexation; UAE bars Israeli firms from Dubai Airshow, sources say; UAE-Israel relations strained post-2023 due to right-wing Israeli policies.

The United Arab Emirates could downgrade diplomatic ties with Israel if Prime Minister Benjamin Netanyahu's government annexes part or all of the Israeli-occupied West Bank, according to three sources briefed on the Gulf Arab state's deliberations.

UAE is one of just a few Arab states with diplomatic relations with Israel and downgrading ties would be a major setback for the Abraham Accords - a signature foreign policy achievement of U.S. PresidentDonald Trumpand Netanyahu.

Israel's government has recently taken steps that could presage annexation of the West Bank, which was captured along with East Jerusalem in a war in 1967. The United Nations and most countries oppose such a move.

For Netanyahu, whose coalition relies on right-wing nationalist parties, annexation could be seen as a valuable vote winner before an election expected next year.

NOT ALL TIES LIKELY TO BE CUT, SOURCE SAYS

Abu Dhabi warned Netanyahu's right-wing coalition this month that any annexation of the West Bank would be a "red line" for the Gulf state but did not say what measures could follow.

The UAE, which established ties with Israel in 2020 under the Abraham Accords, was considering withdrawing its ambassador in any response, the sources told Reuters.

The sources, who all spoke on condition of anonymity, said Abu Dhabi was not considering completely severing ties, although tensions have mounted during the almost two-year-oldGaza War.

A source in Israel said the government believed it could repair its strained ties with the UAE, a major commercial centre seen as the most significant of the Arab states to establish ties with Israel in 2020. The others were Bahrain and Morocco.

No other Arab state has since established formal ties with Israel, which also has diplomatic relations with Egypt and Jordan, and direct contacts with Qatar, though without full diplomatic recognition. Once-thriving business ties between the UAE and Israel have cooled due to the Gaza war and Netanyahu has yet to visit the Gulf state five years after establishing ties.

ISRAELI COMPANIES BARRED FROM UAE AIRSHOW

In a sign of growing tension with Israel, the Gulf state last week decided to bar Israeli defense companies from exhibiting at the Dubai Airshow in November, three of the sources said. Two other sources, an Israeli official and an Israeli defence industry executive, confirmed the decision.

Israel's defence ministry said it had been made aware of the decision but did not elaborate. A spokesperson for the Israeli embassy in Abu Dhabi said discussions over Israel's participation in the week-long trade show were continuing.

Israel's media were the first to report the move to block the firms from the UAE's flagship aerospace and defence event.

The UAE foreign ministry did not respond to questions on whether it was weighing downgrading diplomatic ties with Israel.

The spokesperson at the Israeli embassy in Abu Dhabi said that Israel was committed to the Abraham Accords and that it would continue to work towards strengthening ties with the UAE.

Emirati foreign ministry official Lana Nusseibeh had told Reuters and Israeli media on September 3 that any annexation of the West Bank would jeopardise the Abraham Accords and end the pursuit of regional integration.

That warning preceded Israel's air strike on Qatar last week, which targeted Hamas leaders, an attack that Anwar Gargash, diplomatic adviser to UAE President Sheikh Mohamed bin Zayed Al Nahyan, condemned as treacherous.

At an emergency meeting of Muslim nations in Qatar, convened in response to the strike, a communique was issued urging countries to review diplomatic and economic ties with Israel.

As part of the Abraham Accords, Netanyahu promised to hold off annexing the West Bank for four years. But that deadline has passed and some Israeli ministers are now pressing for action.

Finance Minister Bezalel Smotrich this month said that maps were being drawn up to annex most of the West Bank, urging Netanyahu to accept the plan. Itamar Ben-Gvir, the national security minister, also backs annexing the territory.

TIES WITH ISRAEL DETERIORATED AFTER 2023

After establishing ties, the UAE and Israel built a close relationship, focusing on economic, security and intelligence cooperation. This followed years of discreet contacts.

But differences began emerging after Netanyahu returned to power in 2023, leading the most right-wing government in Israel's history. Abu Dhabi has condemned repeated efforts by Ben-Gvir to alter the status quo of Jerusalem's Al Aqsa compound to allow Jews to be able to pray there. The site is sacred to Muslims and Jews and at present non-Muslims can visit but cannot pray.

The UAE has also criticised Israel's policies in the West Bank, including the expansion of settlements, and its military siege of Gaza, and said an independent Palestinian state alongside Israel was necessary for regional stability. Netanyahu this month declared there would never be a Palestinian state.

Source: Reuters

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Glendon

Economic

Forex

The Bank of England has held its main interest rate at 4% as inflation in the U.K. remains almost double its target of 2%.

Thursday’s decision was widely anticipated.

On Wednesday, figures showed inflation in the U.K. held steady at 3.8% in the year to August.

Since it started cutting borrowing costs in August 2024 after the unwinding of the previous spike in inflation in the wake of Russia’s invasion of Ukraine, the bank has done so in a gradual manner every three months.

If the bank were to continue to cut interest rates in the manner it has been doing so, the next meeting in November would see a further reduction.

However, economists remain split as to whether another cut will be forthcoming since inflation has proven to be stickier than anticipated, partly because of relatively high wage increases.

Source: Yahoo Finance

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Samantha Luan

Economic

Forex

Political

Consumer credit health: A key performance driver of securitized credit

In our 2025 outlook we emphasized the strong link between the health of the US consumer and the performance of securitized credit markets, especially asset-backed securities (ABS). In a bit of fortuitous programming, our Consumer Finance Symposium earlier this year brought together a broad mix of consumer lenders who were more than eager to dive into both the opportunities and risks ahead and how investors should think about their allocations.

Two key themes to watch as it relates to US consumer health include the increasing bifurcation in credit strength among consumer cohorts and how this will ultimately manifest itself, and the role the labor market will have on neutralizing the impact of inflation. In both cases, acute analysis is critical. Relying on just headline data (e.g., aggregate delinquencies, headline CPI, and unemployment) can mask the actual implications for consumer credit health and securitized credit performance and not tell the full story.

Bifurcation implications

The gap between the performance of higher-income consumers and lower-income cohorts is widening. Lower-come households are experiencing duress due to affordability challenges, which in turn are leading to higher delinquency rates and more reliance on credit. Other cohorts remain relatively healthy. As the chart below shows, credit card utilization and payoff rates — both of which tend to be effective performance measures — are healthy. Utilization, while higher than in recent years, has normalized. Credit card monthly payment rates remain elevated relative to history.

Figure 1

Managing cohort outliers

This bifurcation and its effects are important considerations for those lenders and investors most exposed to lower-income consumers and are also important to the overall health of the economy due to the notable, ongoing shift in consumption patterns. The top 40% of consumers by income account for more than 70% of total consumption — an all-time high. In our view, this is the cohort we should be focusing on to chart trends and develop big-picture ideas. Put simply, this cohort drives the health of the economy.

As for addressing this anomaly, bifurcations create pockets of both risk and reward and place a premium on precision over broad diversification. Some actions to take to stay on your front foot include:

● Proactively managing default risk – as weaker cohorts default disproportionately, overall portfolio performance becomes more tethered to segment exposure. Provisioning for losses in these distressed segments is important.

● Being more selective – bifurcations can exist in other cohorts as well, and investors may consider leaning more toward higher-quality consumer exposures or by underwriting subprime areas more tightly.

● Conducting cohort-sensitive analysis – investors should consider relying on more precise analysis — for example, by carefully segmenting exposures, stress-testing vintage performance, and selecting investment instruments (higher-quality tranches, robust credit protections) that may offer more protection.

Could improving labor markets help alleviate inflation pain?

The second dynamic revolves around the symbiotic relationship between labor market conditions and inflation. Inflation has been driving credit performance for some time, and we still see the potential for price increases on the horizon that will cause discomfort for many. That said, the key gauges of consumer health are steadily moving back to focusing on employment, on-time bill paying, and consumption.

While the payrolls report in July showed weaker-than-expected job growth, the unemployment rate remains at a relatively healthy 4.2%, and wages, as measured by average hourly earnings, are still growing, both supported by still-low labor supply. Steady employment in this market is a powerful stabilizer that helps credit consumers, particularly the most vulnerable ones, navigate inflation. A strong labor market provides consistent income streams, which in turn support debt servicing. Job stability also mitigates credit risk by lowering the lielihood of default on consumer products like credit cards, personal loans, and auto loans. For subprime and near-prime consumers, employment income is often their sole financial cushion — thus, robust job openings, wage growth, and low unemployment rates can provide a valuable buffer. Inflation reduces real wages, but a steady paycheck still allows for repayment. As a result, credit investors should keep in mind that any headline deterioration caused by inflation may be less acute than history suggests — that is, provided the job market holds beyond the weak July reading.

The nature and sequencing of fiscal policy will matter and will determine the actual impact experienced from tariffs and tax cuts. Investors should also be on the lookout for any signs of further labor market deterioration — particularly where that erosion comes from, i.e., in lower-income or higher-income jobs. If it is the former, the bifurcation challenge becomes that much more acute but if it is the latter, it will have bigger implications for macroeconomic vulnerability.

Four more trends to track

Several other top-of-mind trends to watch as we move through the second half of 2025:

1.New loan applications are slowing as consumers pull back on credit. Macro conditions and headlines may be driving this. But there has been more interest in home improvement loans. Aging housing stock creates more demand for these loans, which are well supported considering current home equity levels.

2.It’s time to repay student loan debt but this is not keeping lenders up at night. Most lenders report that about one-fifth of their borrowers have some type of federal or private loan. Student loans are accounted for in the underwriting process, and issuers, especially auto and mortgage lenders, are taking comfort in historically exhibited priority of payment (auto, home, student loan). This is intriguing because the priority of payment approach will not work if the government must resort to wage garnishment.

3.Credit builder apps: Good or bad? Many market participants see credit builder products as being counterproductive in some ways. They are doing what they purport to do, creating access to credit and offering ways to better manage it. The problem for lenders, however, is that these tools do not fully capture a borrower’s ability to pay back their debts. Because of this, lenders often downgrade consumers that use these products, which could end up hurting consumers more than helping.

4.Consumer Financial Protection Bureau (CFPB) closure. Last, on a regulatory note, there was no cheering or positive sentiment regarding the elimination of the CFPB. Given the risk of being subjected to disparate regulation, most lenders and investors plan to maintain their compliance policies and practices.

Closing thoughts

The health of the US consumer remains a cornerstone of securitized credit performance and will inform our security selection process within multisector credit portfolios. As we move through 2025, bifurcation across income cohorts and the evolving labor market will continue to shape credit dynamics. Investors must navigate this landscape with precision — recognizing that while lower-income consumers face acute affordability challenges, higher-income cohorts dominate consumption and drive macro trends. The resilience of the labor market offers a stabilizing force against inflationary pressures, reinforcing the importance of employment as a buffer for credit risk. Ultimately, cohort-sensitive analysis, selective exposure, and proactive risk management will be key to unlocking value and mitigating downside in a bifurcated consumer credit environment.

Source: Wellington Management

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Gerik

Economic

Nuclear Power Returns to Center Stage Amid Global Energy Demands

After years of skepticism and slow development, nuclear energy is being “rediscovered” as a scalable, clean, and reliable source of power amid the rise of artificial intelligence, data centers, electric vehicles, and industrial electrification. According to a report from Bank of America, nuclear energy could become a $10 trillion global industry by 2050, as nations race to meet rapidly increasing electricity demand and decarbonization targets. To achieve this, global nuclear capacity would need to triple by mid-century, requiring over $3 trillion in investment over the next 25 years.

This projected growth is not only about large-scale utility generation but also about innovation. Small Modular Reactors (SMRs) compact, factory-assembled nuclear reactors are emerging as the technological linchpin of the industry’s future.

Small Modular Reactors: Speed and Scalability for a Power-Hungry Era

Traditional nuclear plants often take more than a decade to construct. In contrast, SMRs can be built faster, cost less, and are more adaptable to different energy grids. These reactors, usually producing less than 500 MW, are designed with modular components that can be mass-produced, significantly accelerating deployment timelines.

NuScale Power (SMR), the only U.S. company with an SMR design approved by the Nuclear Regulatory Commission, targets commercial deployment by 2030. Oklo (OKLO), backed by tech entrepreneur Sam Altman, has promised even earlier delivery, aiming for operational power generation by 2027. Investor enthusiasm reflects these milestones: NuScale and Oklo shares have soared over 100% and 350% respectively year to date.

The interest in SMRs stems from their alignment with AI-driven infrastructure. As data centers become one of the largest consumers of electricity, their demand for stable, around-the-clock, low-emission power creates a natural fit for nuclear.

From Fuel to Fission: Building a Domestic Supply Chain

Beyond reactor development, the nuclear resurgence depends on secure fuel supply chains. Nuclear reactors operate on specific enriched fuels: low-enriched uranium (LEU) and, increasingly, high-assay low-enriched uranium (HALEU). With geopolitical tensions and Russia’s dominance in uranium enrichment, the U.S. is racing to rebuild its domestic capabilities.

Centrus Energy (LEU), the only U.S. company licensed to produce HALEU, has become a linchpin in the SMR expansion. Its stock has surged more than 265% in 2025, reflecting investor confidence in its strategic role. Louisiana Energy Services, the sole U.S. LEU producer, is similarly crucial as global supply chains pivot away from Russian imports, now restricted under the 2024 Prohibiting Russian Uranium Imports Act.

This geopolitical recalibration is shifting the entire uranium fuel cycle back to North America a move aimed at restoring energy security in one of the most sensitive sectors of global energy.

Uranium Miners See Surge as Demand Ramps Up

At the root of the supply chain, uranium miners are enjoying renewed attention. U.S.-based companies such as Uranium Energy Corp. (UEC), Ur-Energy (URG), and Energy Fuels (UUUU) have posted triple-digit stock gains this year as investor appetite intensifies. The Global X Uranium ETF (URA), which tracks these and other uranium-related firms, is up more than 65% year to date. Although uranium spot prices have only increased modestly (3.4% YTD), equity valuations suggest markets are betting on a long-term structural bull market in nuclear inputs.

This reflects both a causal and correlative relationship: the increase in projected reactor deployments, especially SMRs, is driving demand expectations, while government policy and strategic sourcing are adding urgency to that demand.

Policy Support and Energy Transition Narratives Fuel Market Momentum

Much of the nuclear revival is being driven by supportive policy from the Trump administration, which has consistently promoted nuclear as a key pillar of U.S. energy independence and emissions reduction. As policymakers look for reliable baseload generation to complement intermittent renewables, nuclear is increasingly viewed as a transitional bridge capable of delivering carbon-free electricity today while waiting for technologies like hydrogen and grid-scale storage to scale.

Kevin Mahn, CIO at Hennion & Walsh, believes nuclear’s share of U.S. power generation could triple within a decade from its current 19% share. This projection is underpinned by the sheer scale of new energy demands, especially from sectors such as artificial intelligence, industrial automation, and electric vehicles.

From Stagnation to Supercycle

After decades of stagnation, nuclear energy is entering a period of dynamic reinvention. The convergence of technological innovation, geopolitical realignment, rising power demands, and policy tailwinds has created conditions for a nuclear renaissance. From modular reactors to uranium mining and enrichment, every link in the supply chain is being re-evaluated and re-valued.

As Bank of America analysts put it, nuclear may no longer be a distant solution for future power needs it is rapidly becoming an essential component of the present energy mix. With momentum accelerating across markets and policymaking spheres, the next two decades may witness the transformation of nuclear energy from legacy infrastructure into a cornerstone of global electrification and climate resilience.

Source: Yahoo Finance

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Gerik

Economic

Rate Cut Fails to Deliver Clarity Amid Mixed Signals

The Federal Reserve’s decision to cut interest rates by 25 basis points to a range of 4.00% to 4.25% its first since December was met with a muted market response. While the move was seen as the start of a potential easing cycle, the Fed’s cautious tone and warnings about persistent inflation sowed uncertainty over whether further reductions will follow. This ambiguity was reinforced by the Fed’s own dot plot, which revealed diverging forecasts among policymakers and no unified trajectory for rates in the months ahead.

Investors had hoped for a more dovish pivot, especially after recent signs of labor market softening, including an uptick in unemployment to 4.3% and downward revisions to job growth figures. However, Fed Chair Jerome Powell’s remarks emphasized that inflation risks remain elevated, complicating the outlook for sustained monetary easing. His statement that policymakers are dealing with “a challenging situation” captured the dual threat: weakening employment on one hand, and sticky inflation on the other.

Markets React Tepidly Amid Policy Ambiguity

Financial markets, which had been rallying ahead of the Fed decision, responded with hesitation. The S&P 500 and Nasdaq both dipped slightly following the announcement, retreating from near-record highs in choppy trading. Investors seemed disappointed that the Fed did not commit to a longer or faster series of cuts, instead reiterating a meeting-by-meeting, data-dependent strategy.

Treasury yields, in contrast, moved higher an unusual reaction for a rate cut environment. The two-year yield rose by four basis points to 3.55%, and the benchmark 10-year yield climbed by seven basis points to 4.09%. The increase suggests that bond investors are reevaluating the likelihood and pace of further cuts, especially given the Fed’s reluctance to declare a clear policy path. The flattening of the yield curve in recent weeks, largely based on anticipated easing, now faces reversal if the Fed slows its pace.

Divergent Forecasts Reveal Deep Policy Divisions

The updated dot plot exposed a wide spectrum of expectations within the Federal Open Market Committee (FOMC). One member projected a year-end rate of 4.4%, while another anticipated 2.9%, reflecting sharp internal disagreements. This variation confirms that policymakers remain split on how to respond to the current economic crosswinds, and it reinforces the uncertainty investors now face in anticipating rate policy.

Stephen Miran, recently appointed to the Fed board by President Trump, dissented from the quarter-point cut, advocating instead for a larger 50 basis point move. His stance underscores the political pressure the central bank is under, as Trump has consistently pushed for deeper cuts to spur economic growth ahead of the election season. While Powell stressed the Fed’s commitment to independence, the overlapping political and monetary narratives are increasingly difficult to separate.

Stagflation Fears Gain Ground as Inflation and Labor Data Diverge

The Fed’s cautious stance is partly rooted in the risk of stagflation an economic condition characterized by sluggish growth, rising unemployment, and persistent inflation. August’s consumer price data showed the sharpest increase in seven months, driven by housing and food costs, keeping inflation well above the Fed’s 2% target. The labor market, meanwhile, is showing signs of cooling, with payroll growth slowing significantly.

This dual pressure puts the Fed in a difficult position. Aggressively cutting rates to support jobs could reignite inflation, while holding back risks worsening employment conditions. Michael Rosen of Angeles Investments warned that the current situation “argues for a more conservative outlook” on asset returns, signaling investor caution in both equity and bond markets.

Investor Confidence Wavers as Policy Path Remains Opaque

The combination of policy disagreement, persistent inflation, and political tension has created a market environment fraught with uncertainty. As Josh Hirt of Vanguard noted, the sheer range of opinions among Fed members has led to heightened confusion and potential volatility. Without a unified message, investors are left to interpret a mix of inflationary warnings and tentative support for growth, creating a landscape in which even a rate cut provides little reassurance.

While the Fed’s decision to cut rates reflects a growing concern about the weakening labor market, its cautious rhetoric and internal disagreements have left investors with more questions than answers. With inflation still elevated and political dynamics complicating the central bank’s narrative, the market’s response has been lukewarm. The path forward will depend heavily on upcoming inflation and jobs data, which will either justify additional easing or force the Fed to hold back in a precarious stagflationary environment. Until then, volatility and investor hesitation are likely to dominate.

Source: Reuters

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Michelle

Commodity

Freight rates for Very Large Crude Carriers soared to their highest in more than two years, according to industry sources and LSEG data, as tanker supply tightens with a rise in Middle East exports and more arbitrage supplies to Asia.

The key VLCC spot rate on the Middle East to China route, known as TD3C (DFRT-ME-CN), jumped to W108 on the Worldscale industry measure, the highest level since November 2022, based on data compiled by LSEG. That is equivalent to at least $6.6 million, according to calculations by industry sources.

The rate has increased by nearly 150% since the start of this year.

"We are seeing continuous cargoes from ex-MEG (Middle East loading) and ex-Atlantic while the vessel tonnage list is balanced to tight," a shipbroker told Reuters on Thursday.

Robust VLCC freight rates are yielding attractive earnings for shipowners this year, shipping industry sources said on the sidelines of the Asia Pacific Petroleum Conference in Singapore last week.

Crude exports from the Middle East are set to exceed 18 million barrels per day in September for the first time since April 2023, data from analytics firm Kpler showed, after the Organization of the Petroleum Exporting Countries (OPEC) and their allies, a group known as OPEC+, agreed to raise oil production.

Asia's robust demand is also pulling arbitrage supplies from the Atlantic Basin, which will require tankers to travel longer distances. For example, Indian refiners boosted U.S. crude purchases for delivery in October and November while Chinese independent refiners are buying oil from Brazil and West Africa.

"The main drivers behind the surge in September has been the open arbitrage for U.S. Gulf to East Asia flows and the subsequent tightness created by vessels committing to these very long-haul voyages," Sentosa Shipbrokers told Reuters, adding that this tightened vessel availability in the mainstream market.

Anoop Singh, global head of shipping research at Oil Brokerage, said Saudi Arabia is exporting more oil as demand for crude burn for power generation during summer ends while the arbitrage is wide open on strong Dubai crude prices.

"The short-term outlook is for the momentum to carry through till the end of the year and into Q1 next year," he said, adding that the strength in Dubai prices could be further amplified if there is a loss in medium-quality crude supply, such as those from Russia under geopolitical pressure.

U.S. President Donald Trump said on Saturday that the U.S. was prepared to impose fresh energy sanctions on Russia, but only if all NATO nations ceased purchasing Russian oil and implemented similar measures.

Source: Reuters

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Gerik

Economic

Japan’s Oil Dependence on the Middle East Spurs Diversification Debate

As Japan continues to import 95% of its crude oil from the Middle East, industry leaders are calling for greater diversification in supply sources. Shunichi Kito, president of the Petroleum Association of Japan (PAJ) and head of Idemitsu Kosan Japan’s second-largest refiner underscored this strategic need during a news conference on Thursday.

However, while acknowledging the importance of reducing overreliance on Middle Eastern suppliers, Kito expressed caution about shifting to Canadian sources, citing the technical limitations of Japanese refineries when dealing with Canada’s heavy crude oil.

Canada Explores Refining Partnerships in Asia to Expand Market Access

The Government of Alberta, Canada’s largest oil-producing province, is reportedly in preliminary discussions with Japanese refiners to form a joint venture that would involve financial support for new infrastructure. According to sources familiar with the matter, Alberta is considering investment in building a coker unit in Japan, which is essential for processing bitumen-rich oil from Canada’s oil sands. This move is driven by Canada’s desire to reduce its near-total dependence on the United States for crude oil exports and open new long-term markets in Asia.

However, no formal proposals have yet been submitted to Japanese refiners. “There is no specific request being made to us at this time,” Kito clarified when asked about Alberta’s intentions. Nonetheless, the notion of such a joint venture represents a strategic shift in North American oil diplomacy and could realign Japan’s import strategy if technical barriers are overcome.

Heavy Oil Characteristics Complicate Refining Viability in Japan

Kito emphasized that the physical properties of Canadian heavy oil make it difficult to refine within Japan’s existing infrastructure. Unlike the light and sweet crude oil varieties sourced from the Middle East, Canadian bitumen requires advanced conversion equipment such as coker units to handle its dense, sulfur-rich composition. Japanese refineries are largely optimized for lighter grades, and adapting them for heavy oil would require substantial capital investment, operational adjustments, and ongoing cost increases in processing.

These technical complications create a causal relationship between oil quality and Japan’s import preferences. Without compatible refining technology in place, Canadian crude remains economically unattractive unless subsidized or accompanied by long-term offtake guarantees.

Demand Decline Undermines Incentive for New Refining Infrastructure

Japan's structural decline in domestic oil demand estimated at roughly 2% annually further weakens the case for investing in new refining infrastructure tailored to Canadian oil. Kito noted that with consumption on a downward trajectory, it is difficult to justify long-term capital expenditures on equipment such as cokers.

While the decision to invest ultimately rests with individual companies, the macroeconomic environment discourages such moves. This signals that unless external financing or strong government policy incentives are introduced, refiner-led diversification away from Middle Eastern supply may remain limited in scope.

While Japan recognizes the strategic importance of diversifying its oil import sources, including potential collaboration with Canada, practical and economic barriers continue to limit immediate progress. The mismatch between Japan’s current refining capabilities and the physical characteristics of Canadian heavy crude, combined with structural declines in demand, make such ventures challenging. Unless Alberta offers compelling investment terms or Japan embarks on a broader restructuring of its refining sector, diversification efforts may remain focused on lighter crude sources in other regions or alternative energy strategies altogether.