China is seizing teachers' passports, says FT

Good morning. Here's what happened overnight and what you need to know today.

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1.

China’s control: Chinese authorities are reportedly requiring public sector employees, including schoolteachers, to hand over their passports, restricting international travel. The restrictions have expanded since 2023, with passports now being collected from employees in sectors such as education and state-owned enterprises, The Financial Times reported citing notices from education bureaus and interviews with Chinese public sector workers. It follows President Xi Jinping's increasing control over various aspects of Chinese society, including a crackdown on corruption and a heightened focus on curbing foreign espionage. Some teachers have expressed frustration on social media, while retirees and state enterprise workers have also been affected. Violations of the travel restrictions can result in penalties, including barred travel and scrutiny by China's anti-corruption authority. (FT)

2.

Oil surge: Brent crude surged above USD80 ($118.60), rising over 3% to a five-week high amid escalating Middle East conflict. Hamas launched rockets at Israel on the first anniversary of the 7 October attacks, triggering Israeli strikes on Gaza and Lebanon, and fears of supply disruptions, particularly in the Strait of Hormuz, are growing. Hedge funds, which had been betting on falling oil prices due to oversupply, have reversed positions, trimming short bets and increasing long ones, according to The Financial Times. Brent, having dropped sharply since April, gained over 8% last week—the largest weekly rise since January 2023. Goldman Sachs analysts estimate prolonged disruptions in Iran’s oil exports could push Brent to USD85, or into the mid-USD90s without Opec intervention. (Capital Brief)

3.

Criminal marketplace: The United Nations said that major criminal networks in Southeast Asia are utilising the messaging app Telegram for large-scale illegal operations. In a report published Monday, the UNODC said the operations include trading hacked data, selling deepfake software and offering money laundering services. The report claims the app’s lack of moderation has allowed a multi-billion-dollar criminal industry to flourish, with Chinese gangs operating from fortified compounds in the region. Unlicensed cryptocurrency exchanges are used to launder funds, while criminals trade in malware and cyber tools. The industry is estimated to generate between USD27.4 billion ($40.58 billion) and $36.5 billion annually. The report follows the arrest of Telegram’s founder, Pavel Durov, in Paris earlier this year over criminal activity on the platform. He has since agreed to cooperate with legal authorities by sharing user data upon request. (Reuters)

4.

ME conflict: Israel continued its military operations on two fronts, launching heavy airstrikes on southern Lebanon targeting Hezbollah and responding to Hamas rocket launches in Gaza aimed at Tel Aviv, a year after the group’s 7 October attack that killed 1,200 people and abducted over 200 in Israel. In retaliation, Israel bombarded Gaza, striking the rocket launcher used by Hamas and urging further evacuations in the north, signalling more intense operations ahead. Israel also deployed more troops to Lebanon, hitting Hezbollah targets in southern Lebanon and Beirut’s Dahiya region, and urged evacuations. Hezbollah fired over 130 projectiles at Israel, resulting in 10 people injured, Reuters reported citing local media. Meanwhile, Israelis commemorated the first anniversary of the Hamas attack that triggered the war, as protests erupted worldwide. In New York, vigils and rallies reflected support for both Israel and the Palestinian people, with demonstrations taking place in several countries, some calling for an end to the violence and others condemning Israel's military response in Gaza. (NYT) (Reuters)

5.

Wind bet: Norway’s Equinor has acquired a 9.8% stake valued at approximately USD2.5 billion ($3.7 billion) in Danish offshore wind developer Ørsted, positioning it as Ørsted’s second-largest shareholder after the Danish government. The investment, Equinor said, is part of its long-term strategy to expand its renewables portfolio, with the company targeting 12-16 gigawatts of renewable energy capacity by 2030. Ørsted, meanwhile, has struggled recently due to cost surges and project delays, leading to major writedowns and a suspension of its dividend until at least 2025. Ørsted’s shares rose 6% following the announcement, while Equinor’s fell 3.43%. “The offshore wind industry is currently facing a set of challenges, but we remain confident in the long-term outlook for the sector, and the crucial role offshore wind will play in the energy transition,” Equinor’s CEO Anders Opedal said. (Capital Brief)

6.

U turn: BP has scrapped its 2030 oil and gas output reduction target and is refocusing on boosting oil and gas projects in Iraq, Kuwait and the Gulf of Mexico, Reuters reported citing unnamed sources. When introduced in 2020, BP's plan to cut output by 40% while rapidly growing its renewable energy portfolio by 2030 was the industry’s boldest. Last year, BP scaled back that target to a 25% reduction, and CEO Murray Auchincloss, who took over in January, is realigning BP’s strategy, promising a simpler, more profitable approach. Auchincloss will present BP’s new strategy at an investor day in February 2025, but in practice the company has already abandoned the 2030 production target, the publication said. (Capital Brief)

7.

Cat-5 Milton: The US state of Florida is preparing for what could be the largest mass evacuation since hurricane Irma displaced 6.8 million people in 2017, as hurricane Milton intensified into a Category 5 storm. Milton’s top winds have reached 160 miles (257 kilometres) per hour, up from 90 mph in less than 12 hours as it approaches Florida’s west coast, triggering a state of emergency and evacuation orders across 51 counties. The hurricane centre forecasts Milton could bring a storm surge up to 12 feet (3.65 metres) in Tampa Bay and along the coast, with residents urged to flee due to the high risk of drowning. Fed by hot Gulf waters, Milton follows closely after category 4 hurricane Helene, which last month killed 227 people. Landfall is expected between 5pm and 9pm Wednesday (Thursday 8am and 12pm AEST). SpaceX and NASA have postponed the Europa Clipper rocket launch due to the storm. (NPR)(NYT)(Bloomberg)

8.

Green stall: Germany’s steel giant Thyssenkrupp is reviewing its plan to produce green steel at its Duisburg site due to rising costs, it said following a Handelsblatt report citing internal documents suggesting the company might halt its €3 billion ($4.87 billion) hydrogen-based project, central to its decarbonisation strategy. Backed by €2 billion in government subsidies, the project aims for climate-neutral steel by 2045. Shares fell over 5.5% after news of the review, amid leadership changes, high energy costs, and competition from Asia. The move follows moves by other multinational companies including BP, Shell, Maersk and Volvo to scale back energy-transition efforts. (Reuters)