City Natural Resources Growth and Income plc (LON:CYN) has announced its fact sheet as at 30 September 2026 is now available.
Commentary
September saw no resolution to the war in the Middle East, but tanker-tracking firms, such as Kpler, estimated that oil and product flows through the Strait of Hormuz had recovered to as much as 80% of pre-war levels, primarily via the southern Omani shipping route. This recovery was met with a pickup in Iranian attacks on ships. Over the month, strikes against key energy infrastructure continued, including on the East/West Pipeline in Saudi Arabia, a release valve for regional crude
supply, as well as numerous refineries across the region, as clashes with Iranian-backed Houthis in Yemen escalated. The duration of the war and resulting disruptions remain the most important factors driving commodities and arguably the global economy.
The fears of an oil crisis have shifted to fears of a product crisis, with refining crack spreads (gross margins), the cost of processing oil, increasing from $84.4 to $97.7/bbl over the month (against a more normal $19.8/bbl at the start of the year, when oil was $60/bbl). With Brent above $100/bbl, this equates to a c.$200/bbl product cost. Much of the month saw speculation that the US might impose a diesel export ban to contain record domestic diesel prices ahead of the midterm elections. In early October, the G7 agreed a coordinated 100M bbl release of diesel and crude from strategic reserves. The diesel shortage will have knock-on effects on the broader economy, not least miners’ costs, although we believe highermargin gold producers are better protected than high-altitude, large bulk copper miners that may see a greater margin squeeze. We believe this further supports our weighting to energy and precious metals relative to our low exposure to copper and other base metals.
City Natural Resources Growth and Income plc (LON:CYN) is a closed end UK investment trust providing shareholders with capital growth and income from a portfolio of mining and resource equities and mining, resource, industrial and other fixed interest securities.
