The 10-Point: Oil Prices, the Russian Economy, Airline Competition and More

More Oil to Market

A U.S.-led nuclear deal with Iran would change many things—perhaps none faster than the price of oil. Our story looks at how a possible deal to ease Western sanctions in Iran could hit an already-glutted global oil market. U.S. oil prices dropped to a six-year low yesterday and extended losses today on fresh signs that supplies are swamping the market. We note that such an agreement could eventually translate into half a million barrels or more a day in Iranian crude heading into the market, according to analysts. Meanwhile, talks resumed this week between the U.S. and Iran with both sides indicating that the open letter signed by 47 Republican senators had emerged as an issue. However, a senior U.S. official said the negotiators remained focused on forging a framework for a deal by the end of the month. (Pictured above: An Iranian worker at an oil refinery south of the capital Tehran. Direct sanctions on international purchases of Iranian oil, enacted in 2012, have gutted Iran’s exports, cutting crude sales in half to between 1 million to 1.2 million barrels a day over the past year. )

Russian Roulette

A new economic reality is dawning in Russia. Our story takes a deep look at how economic uncertainty is unsettling the once-booming city of Kaluga. Falling oil prices and Western sanctions over the conflict in Ukraine have raised the likelihood of a recession, and European and American investors are growing wary. That’s especially worrisome for the city of Kaluga, which had transformed its economy by enticing foreign companies to build factories to supply nearby Moscow. Meanwhile, following days of intense speculation over his whereabouts, Russian President Vladimir Putin appeared in public yesterday for the first time since March 5. He brushed off rumors about his health a few hours after he ordered nearly 40,000 troops be put on full alert as part of snap readiness exercises.

Air Combat

Leading U.S. airlines are mounting an intensifying political campaign against their Persian Gulf rivals. The growth of the big three in the region, Emirates, Etihad Airways and Qatar Airways, in the last few years has alarmed U.S. carriers who say they have benefitted unfairly from massive government subsidies. Our story looks at how the experiences of other countries’ airlines are serving as an example for U.S. carriers as they resist the entry of Gulf competitors into the U.S. market. For instance, Canada has so far contained the Gulf airlines’ growth, to the benefit of Air Canada. So now, as the Gulf trio recently began adding U.S. flights, we note that American Airlines, United Continental and Delta have requested government help to limit their expansion. The chiefs of Emirates and Etihad are expected to address the dispute in separate speeches in Washington today. Meanwhile, the growth of the Gulf trio has delighted many fliers, who rave about their service.

Double Vision

Cablevision will be the first cable operator to offer HBO’s new HBO Now streaming service. We note that the service will be available to Cablevision’s nearly 3 million broadband customers next month, just in time for the fifth season of the popular drama “Game of Thrones.” The deal comes a week after HBO announced that Apple would be its exclusive digital partner for launching HBO Now next month. Meanwhile, Apple’s lofty plans to build an online television service are coming into sharper focus. We report that the tech giant is in talks with programmers to offer a slimmed-down bundle of TV networks this fall, anchored by broadcasters such as ABC, CBS and Fox. The company is aiming to announce its new service in June and launch it in September, according to people familiar with the matter.

TOP STORIES

U.S.

Warning Prompts Shift In Surgeries on Women

Drop in Manufacturing Takes Shine Off Small Gain in Industrial Production

WORLD

A Chinese Fugitive’s Bet to Go Home

Brazilian President Faces More Heat After Protests

BUSINESS

Valeant Wins Battle for Salix Pharmaceuticals

Uber, Lyft Cases Focus on Drivers’ Legal Status

MARKETS

Free Advice Helps End a Dispute Over Advice

A Sibling of Jack Daniel’s Gets a Little Love

NUMBER OF THE DAY

$200 billion

The cost over 10 years of an emerging plan in the U.S. House of Representatives to permanently fix a flawed formula for calculating Medicare reimbursements to doctors and other health-care providers.

QUOTE OF THE DAY

‘Whoever ignores that is burying his head in the sand. The left is doing that, burying its head in the sand time after time.’

—In an interview with NRG, an online news site, Israeli Prime Minister Benjamin Netanyahu cautioned that any Israeli leader who advocates an Israeli withdrawal from the occupied West Bank to establish a Palestinian state was creating a staging area for Islamic extremists to attack Israel. Israel heads to the polls today.

TODAY’S QUESTION

What are your thoughts on how a nuclear deal with Iran would affect the oil market? Send your comments, which we may edit before publication, to [email protected]. Please include your name and location.

—Compiled by Khadeeja Safdar

READER RESPONSE

Responding to yesterday’s question about Israel’s election, Mikael Horenstein wrote from Tel Aviv: “Looks like Herzog’s center-left party will win but according to the polls no one will get an outright majority, so it will come down to coalition talks after the elections. Netanyahu may be down but he is not yet out. In the last election his Likud party did not win the greatest number of seats but were nevertheless able to form a coalition which the winner, Tzipi Livni’s Hatnuah party, was unable to do. History may repeat itself.” From Ohio, Rich Irwin commented: “Netanyahu may lose the election mainly because he has held the office so long that the Israelis simply want change. I suspect Netanyahu’s attitude was shaped in part due to his brother’s death in the raid on Entebbe. However, the concerns over Iran’s nuclear program remain, and perhaps a different approach to the Palestinian refugee situation is warranted.” And Robert Murdock weighed in from Virginia: “We can only hope Herzog wins. Netanyahu has no interest in peace. Period!”

This daily briefing is named “The 10-Point” after the nickname conferred by the editors of The Wall Street Journal on the lead column of the legendary “What’s News” digest of top stories. Technically, “10-point” referred to the size of the typeface. The type is smaller now but the name lives on.

Photo: Associated Press